<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File Number 1-12280
BELDEN INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 76-0412617
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7701 FORSYTH BOULEVARD, SUITE 800
ST. LOUIS, MISSOURI 63105
(Address of Principal Executive Offices and Zip Code)
(314) 854-8000
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirement for the past 90 days.
Yes No
------------ ------------
Number of shares outstanding of the issuer's Common Stock, par value
$.01 per share, as of April 26, 1998: 26,179,968 shares
================================================================================
Exhibit Index on Page 13 Page 1 of 14
<PAGE> 2
PART I -- FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, December 31,
1998 1997
- -------------------------------------------------------------------------------------------------------------------
(Unaudited)
(in thousands)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,532 $ 916
Receivables 132,133 120,761
Inventories 112,252 107,340
Deferred income taxes 5,167 5,186
- -------------------------------------------------------------------------------------------------------------------
Other 3,659 3,065
- -------------------------------------------------------------------------------------------------------------------
Total current assets 259,743 237,268
Property, plant and equipment, less
accumulated depreciation 170,633 151,933
Intangibles, less accumulated amortization 83,860 85,540
- -------------------------------------------------------------------------------------------------------------------
Other assets 393 388
- -------------------------------------------------------------------------------------------------------------------
$ 514,629 $ 475,129
===================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 77,034 $ 74,719
- -------------------------------------------------------------------------------------------------------------------
Income taxes payable 16,610 8,358
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 93,644 83,077
Long-term debt 139,021 124,047
Postretirement benefits other than pensions 15,266 16,026
Deferred income taxes 13,133 13,141
Other long-term liabilities 11,444 9,884
Stockholders' equity:
Preferred stock -- --
Common stock 262 262
Additional paid-in capital 48,906 49,370
Retained earnings 203,323 189,163
Treasury stock, at cost (336) (1,241)
Accumulated other comprehensive income(loss) (10,034) (8,600)
- -------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 242,121 228,954
- -------------------------------------------------------------------------------------------------------------------
$ 514,629 $ 475,129
===================================================================================================================
</TABLE>
See accompanying notes
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<PAGE> 3
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1998 1997
- ---------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C>
Revenues $190,434 $175,974
- ---------------------------------------------------------------------------
Cost of sales 140,784 129,916
- ---------------------------------------------------------------------------
Gross profit 49,650 46,058
- ---------------------------------------------------------------------------
Selling, general and administrative expenses 22,166 21,118
- ---------------------------------------------------------------------------
Amortization of goodwill 470 441
Operating earnings 27,014 24,499
- ---------------------------------------------------------------------------
Interest expense 1,760 1,643
- ---------------------------------------------------------------------------
Income before income taxes 25,254 22,856
- ---------------------------------------------------------------------------
Income taxes 9,786 8,971
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Net income $ 15,468 $ 13,885
- ---------------------------------------------------------------------------
Basic earnings per share $ .59 $ .53
- ---------------------------------------------------------------------------
Diluted earnings per share $ .59 $ .53
- ---------------------------------------------------------------------------
</TABLE>
See accompanying notes
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<PAGE> 4
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1998 1997
- -------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 15,468 $ 13,885
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,451 4,419
Amortization 983 614
Deferred income taxes 86 1,243
Changes in operating assets and liabilities(*):
Receivables (5,042) (1,266)
Inventories (788) (3,838)
Accounts payable and accrued liabilities (4,619) (8,281)
Income taxes payable 8,478 7,460
Other assets and liabilities, net (5,503) 1,965
- -------------------------------------------------------------------------------------
Net cash provided by operating activities 13,514 16,201
Cash flows from investing activities:
Capital expenditures (8,790) (6,275)
Cash paid for acquired businesses (14,948) (73,332)
Proceeds from sales of property, plant and equipment - 28
- -------------------------------------------------------------------------------------
Net cash used for investing activities (23,738) (79,579)
Cash flows from financing activities:
Net borrowings under long-term credit facility and
credit agreements 16,680 63,129
Exercise of stock options 441 515
Cash dividends paid (1,308) (1,315)
- -------------------------------------------------------------------------------------
Net cash provided by financing activities 15,813 62,329
Effect of exchange rate changes on cash and cash equivalents 27 7
- -------------------------------------------------------------------------------------
Increase(Decrease) in cash and cash equivalents 5,616 (1,042)
Cash and cash equivalents, beginning of period 916 1,795
Cash and cash equivalents, end of period $ 6,532 $ 753
=====================================================================================
</TABLE>
See accompanying notes
(*)Net of the effects of exchange rate changes and acquired business.
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<PAGE> 5
CONSOLIDATED STOCKHOLDERS' EQUITY STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other Common Stock Treasury Stock
Comprehensive -------------------- Paid-In Retained --------------------
Income/(Loss) Shares Amount Capital Earnings Shares Amount Total
- ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 ($4,460) 26,138 $ 261 $ 51,443 $ 133,739 (53) ($1,276) $ 179,707
Net Income 13,885 13,885
Foreign currency translation
adjustments (1,422) (1,422)
----------
Comprehensive income 12,463
Issuance of common stock for:
Stock Options 0 (478) 41 993 515
Cash dividends ($.05 per share) (1,315) (1,315)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1997 ($5,882) 26,138 $ 261 $ 50,965 $ 146,309 (12) ($283) $ 191,370
==================================================================================================================================
Balance at December 31, 1997 ($8,600) 26,180 $ 262 $ 49,370 $ 189,163 (38) ($1,241) $ 228,954
Net Income 15,468 15,468
Foreign currency translation
adjustments (1,434) (1,434)
----------
Comprehensive income 14,034
Issuance of common stock for: (464) (28) 905 441
Stock Options
Cash dividends ($.05 per share) (1,308) (1,308)
==================================================================================================================================
Balance at March 31, 1998 ($10,034) 26,180 $ 262 $ 48,906 $203,323 (66) ($336) $ 242,121
==================================================================================================================================
</TABLE>
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<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Consolidated Financial Statements include Belden and all of its
subsidiaries. All significant intercompany accounts and transactions are
eliminated in consolidation. The financial information presented as of any date
other than December 31, 1997 has been prepared from the books and records
without audit. The accompanying Consolidated Financial Statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the information and the footnotes required by generally accepted accounting
principles for complete statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of such financial statements have been included. These
Consolidated Financial Statements should be read in conjunction with the
Consolidated Financial Statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.
NOTE 2: ACQUISITIONS
On February 28, 1998, the Company purchased substantially all of the assets of
the Olex communication cable operations (Olex) of Pacific Dunlop Limited for
cash of approximately Australian $26 million (U.S. $15 million). The Company
financed the acquisition utilizing funds available under its existing credit
agreement. Olex designs, manufactures and markets metallic and fiberoptic cables
serving primarily the computer networking and telephony industries. Located near
Melbourne, Australia, Olex had fiscal 1997 revenues of approximately Australian
$40 million (U.S. $27 million). The acquisition was accounted for under the
purchase method of accounting. Accordingly, the purchase price was allocated to
the net assets acquired based on their estimated fair market value. The Company
has not recorded any goodwill with respect to the acquisition. Olex's operating
results have been included in the Company's consolidated results from March 1,
1998.
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<PAGE> 7
NOTE 3: SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for income taxes during the first three months of 1998 and 1997
amounted to $1,400,000 and $600,000, respectively.
Total interest paid, net of amounts capitalized, during the first three months
of 1998 and 1997 amounted to $2,897,000 and $1,401,000, respectively.
NOTE 4: INVENTORIES
<TABLE>
<CAPTION>
MARCH 31, December 31,
1998 1997
- -------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Raw materials $ 23,500 $ 25,195
Work-in-process 22,495 16,203
Finished goods 76,662 75,794
- -------------------------------------------------------------------------------------------------------------
Perishable tooling and supplies 4,302 4,365
- -------------------------------------------------------------------------------------------------------------
Total 126,959 121,557
- -------------------------------------------------------------------------------------------------------------
Allowances (primarily LIFO reserves) (14,707) (14,217)
Net inventories $112,252 $107,340
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 5: PER SHARE INFORMATION
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1998 1997
- ------------------------------------------------------------------------------------------------
Numerator: (in thousands)
<S> <C> <C>
Net Income $15,468 $13,885
- ------------------------------------------------------------------------------------------------
Denominator:
Denominator for basic earnings per share - weighted 26,155 26,126
average shares
Effect of dilutive employee stock options 221 227
- ------------------------------------------------------------------------------------------------
Denominator for dilutive earnings per share - adjusted 26,376 26,353
weighted average shares
- ------------------------------------------------------------------------------------------------
Basic earnings per share $ .59 $ .53
- ------------------------------------------------------------------------------------------------
Diluted earnings per share $ .59 $ .53
- ------------------------------------------------------------------------------------------------
</TABLE>
On February 26, 1998, the Company declared a quarterly cash dividend of $.05 per
share payable on April 3, 1998.
-7-
<PAGE> 8
NOTE 6: OTHER COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) 130, Reporting Comprehensive Income. SFAS 130 establishes new
rules for the reporting and display of comprehensive income and its components;
however, the adoption of this Statement has no impact on the Company's net
income or shareholders' equity. SFAS 130 requires foreign currency translation
adjustments, which prior to adoption were reported separately in shareholders'
equity, to be included in other comprehensive income. Prior year financial
statements have been reclassified to conform to the requirements of SFAS 130.
During the first quarter 1998 and 1997, total comprehensive income amounted to
$14.0 million and $12.5 million, respectively.
The Company has not recognized any tax benefits on its foreign currency
translation adjustment because their recognition does not effect the Company's
U.S. residual tax liability on its foreign subsidiaries unremitted earnings.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
Revenues
Revenues for the three months ended March 31, 1998 were $190.4 million compared
with $176.0 million in the same period last year, an increase of 8%, 1% of which
was due to the acquisition of Olex. The following table shows the components of
the 8% increase in the Company's revenues for the first three months of 1998 in
each of the Company's four served markets.
<TABLE>
<CAPTION>
% Increase (Decrease)
% of Total in 1998 Revenues
Revenues Compared with 1997
---------- ---------------------
<S> <C> <C>
Computer 42% 32%
Audio/video 20 (10)
Industrial 18 4
Electrical 20 (6)
</TABLE>
<PAGE> 9
The increase in the computer market revenues was primarily due to continued
growth in the computer networking and telephony markets. The comparison of the
first quarter of 1998 with 1997 was made easier due to a normalized order
pattern in 1998 of a major customer who was adjusting inventory levels in 1997.
Sales of the Company's computer interconnection products, which link personal
computers to discrete peripheral devices and mainframes to terminals, were down
slightly compared to the first three months of 1997.
The revenue decline in the audio/video market was primarily due to soft demand
for cable television (CATV) drop cable in both the United States and export
markets. This soft demand not only affected volume growth, but also negatively
impacted selling prices. The soft demand for CATV drop cable in the United
States and export markets is expected to continue throughout the remainder of
the year. Broadcast revenues were down in the first three months of 1998, which
was attributable to the delay of stadium and studio projects during the year as
well as broadcasters' delayed spending related to indecision about alternative
digital formats. The decision on digital formats may not be made for several
months further delaying spending on upgrading from analog to digital
broadcasting.
Industrial market revenues grew 4%. This increase is primarily due to increased
capital investment by manufacturers. Electrical market revenues declined 6% in
the first three months of 1998 compared with 1997. The decline is primarily due
to lower prices, foreign currency translation and a decrease in demand for power
cords.
Average prices for the Company's products declined in the first three months of
1998 compared to 1997. The decline was primarily attributable to the pass
through of cheaper copper and increased competition partially offset by price
increases for computer networking cable due to strong demand and the pass
through of increases in the cost of Teflon, a major raw material in certain
cables.
The Company's supply of Teflon is constrained due to an industry wide shortage.
This shortage has resulted in increased costs for Teflon and a reduced
allocation from the Company's major supplier. If the shortage continues the
Company may have difficulty meeting the market demand for certain cables or
passing on increased costs.
U.S. revenues, which represented approximately 69% of total revenues in the
first three months of 1998, increased 11% from 1997 due primarily to the strong
computer networking market. Sales to export markets during the first three
months of 1998 were $16 million, which represented an increase of 4% from 1997.
This increase was attributable to strong sales in the Middle East and Latin
America regions partially offset by a 21% decline in sales to the Pacific Rim
region. The decline in Pacific Rim revenues was attributable to the difficult
economic conditions facing those markets, which will likely result in continued
declines in demand for the Company's products. European revenues increased 3% in
the first three months of 1998 compared with 1997, but increased 8% in local
currencies due primarily to stronger demand for both networking and CATV
products. Canadian revenues increased 1% in the first three months of 1998
compared with 1997 due primarily to higher demand for industrial products.
European and Canadian revenues represented 17% and 5% of total revenues,
respectively, for the first three months of 1998.
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<PAGE> 10
Costs, Expenses and Earnings
The following table sets forth information regarding the components of earnings
for the first three months of 1998 compared with the same period in 1997.
<TABLE>
<CAPTION>
Three Months Ended
March 31, % Increase
---------------------- 1998 Compared
1998 1997 With 1997
- -----------------------------------------------------------------------------------------------------------
(in thousands, except % data)
<S> <C> <C> <C>
Gross profit $49,650 $46,058 7.8%
As a % of revenue 26.1% 26.2%
Operating earnings $27,014 $24,499 10.3%
As a % of revenue 14.2% 13.9%
Income before income taxes $25,254 $22,856 10.5%
As a % of revenue 13.3% 13.0%
Net income $15,468 $13,885 11.4%
As a % of revenue 8.1% 7.9%
</TABLE>
The increase in the gross profit amount was due to higher revenues and increased
profitability, partially offset by the impact of unfavorable foreign currency
exchange rates in Europe. The decline in gross profit as a percent of revenues
in 1998 was primarily attributable to the effect of the Olex acquisition,
unfavorable foreign exchange rates, as well as the need to outsource production
of certain computer networking cable due to capacity constraints. The Company
expects to continue outsourcing production of certain networking cables until it
can add sufficient capacity to meet demand which may not be until late 1998.
The Company reduced employment at Olex by approximately 25% since its
acquisition on March 1, 1998. The reduction in employment and other
restructuring actions were made to better adjust the size of this operation to
match the decline in business activity in the Pacific Rim region due to
difficult economic conditions facing those markets. These actions are expected
to improve the profitability of this operation, however the Company expects
Olex's results will continue to negatively impact gross profit as a percent of
revenues for the rest of 1998.
Operating earnings increased during the first three months of 1998 compared to
the first three months of 1997 due to greater gross profit. This increase was
partially offset by an increase in selling, general and administrative costs.
Operating earnings as a percent of revenues for the first three months of 1998
increased from the same period in 1997 due primarily to the leveraging of
selling, general and administrative costs which declined as a percent of revenue
from 12% in 1997 to 11.6% in 1998.
-10-
<PAGE> 11
Income before income taxes increased due to greater operating earnings. This
increase in operating earnings was partially offset by higher interest costs,
which was related to the higher debt levels incurred in connection with the Olex
acquisition and higher average interest rates. Average debt during the first
three months of 1998 and 1997 was $134 million and $86 million, respectively.
The Company's average daily interest rate for the first three months of 1998 was
6.3% compared to 5.1% for the same period in 1997.
The Company's effective tax rate was 38.8% and 39.3%, respectively, for the
first three months of 1998 and 1997. The decline in effective tax rate was
attributable to various tax planning strategies of the Company.
-11-
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $200 million Credit Agreement with a group of seven banks. The
Credit Agreement is unsecured and expires in November 2001. At March 31, 1998,
the Company had $177 million available under the Credit Agreement. In addition,
as of March 31, 1998, the Company had unsecured, uncommitted arrangements with
five banks under which it may borrow up to $75 million at prevailing interest
rates. At March 31, 1998, the Company had $36 million available under these
arrangements. The Company also had privately placed debt of $75 million
outstanding at March 31, 1998.
The Company expects that cash provided by operations and borrowings available
under the Credit Agreement will provide it with sufficient liquidity to meet its
operating needs and fund its normal dividends and anticipated capital
expenditures.
Working Capital
During the first three months of 1998, operating working capital (defined as
receivables and inventories less payables and accrued liabilities, excluding the
effect of exchange rate changes and business combinations) increased $2 million.
The increase was primarily due to an increase in receivables and inventories
mainly attributable to higher sales values and a decrease in accounts payables
and accrued liabilities related to spending on restructuring accruals. Those
increased in working capital were partially offset by an increase in income
taxes payable.
Capital Expenditures
For the first three months in 1998, the Company had capital expenditures of $8.8
million, primarily for modernization and enhancement of machinery and equipment
and the implementation of an integrated business information system. The Company
plans on spending approximately $35 million during 1998 on similar projects,
including approximately $13 million for the building of a new manufacturing
facility in Lancaster County, South Carolina.
Forward-Looking Statements
Certain statements in this Form 10-Q are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These statements are subject
to various risks and uncertainties many of which are outside the control of the
Company, such as the level of market demand for the Company's products,
competitive pressure, the ability to achieve reductions in costs and to continue
to successfully integrate acquisitions, price fluctuations of materials and the
potential unavailability thereof, foreign currency fluctuations, technological
obsolescence, and the other specific factors discussed in the Company's Form
10-K and other Securities and Exchange Commission filings. The information
contained in this Form 10-Q represents the Company's best judgment at the date
of this report based on information currently available. However, the Company
does not intend to update this information to reflect developments or
information obtained after the date of this report and disclaims any legal
obligation to do so.
-12-
<PAGE> 13
PART II -- OTHER INFORMATION
SEQUENTIALLY
NUMBERED
PAGES
(a) Exhibit 10.1: Change of Control Agreement, dated as
of August 16, 1997, between Belden Inc. and Cathy O. Staples.
Exhibit 10.2: Indemnification Agreement dated as of
August 16, 1997, entered into between Belden Inc. and
Cathy O. Staples
Exhibit 27.1: Financial Data Schedule
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<PAGE> 14
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BELDEN INC.
Date: By: /s/ C. Baker Cunningham
--------------------------------------
C. Baker Cunningham
Chairman of the Board, President
and Chief Executive Officer
Date: By: /s/ Richard K. Reece
--------------------------------------
Richard K. Reece
Vice President, Finance,
Treasurer and Chief Financial Officer
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<PAGE> 15
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BELDEN INC.
Date: By:
--------------------------------------
C. Baker Cunningham
Chairman of the Board, President
and Chief Executive Officer
Date: By:
--------------------------------------
Richard K. Reece
Vice President, Finance, Treasurer
and Chief Financial Officer
-15-
<PAGE> 1
Exhibit 10.1
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 16th day of August, 1997, by Belden Inc., a
Delaware corporation (the "Company"), and Cathy O. Staples ("Executive").
R E C I T A L S
The Executive is an officer of the Company and is employed by Belden Wire &
Cable Company ("BWC"), a wholly-owned subsidiary of the Company, in a key
executive capacity. The Executive's services are valuable to the Company. The
Executive possesses intimate knowledge of the business and affairs of the
Company and has acquired certain confidential information with respect to the
Company.
The Company desires to insure that it will continue to have the benefit of the
Executive's services and to protect its confidential information and goodwill.
The Company recognizes that circumstances may arise in which a change in control
of the Company occurs, through acquisition or otherwise, causing uncertainty
about the Executive's future employment with the Company without regard to the
Executive's competence or past contributions. Such uncertainty may result in the
loss of valuable services of the Executive to the detriment of the Company and
its stockholders.
The Company and the Executive desire that any proposal for a change in control
or acquisition of the Company will be considered by the Executive objectively
and with reference only to the best interests of the Company and its
stockholders. The Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which could
result from any such change in control or acquisition.
NOW, the Company and the Executive (collectively the "Parties" or individually a
"Party"), agree as follows:
1. CERTAIN DEFINITIONS.
1.1 ACT. The term "Act" means the Securities Exchange Act of
1934, as amended.
1.2 AFFILIATE AND ASSOCIATE. The terms "Affiliate" and
"Associate" shall have the meanings given them in Rule 12b-2 of the General
Rules and Regulations of the Act.
1.3 BENEFICIAL OWNER. A Person shall be deemed to be the
"Beneficial Owner" of any securities:
(i) that such Person or any other Person's Affiliates or
Associates has
<PAGE> 2
the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
(A) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase, or
(B) securities issuable upon exercise of Rights
issued pursuant to the terms of the Rights Agreement between the Company and
First Chicago Trust Company of New York (the "Rights Agreement"), dated at July
6, 1995, as amended from time to time (or any successor to such Rights
Agreement), at any time before the issuance of such securities;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Act), including pursuant to
any agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this subparagraph (ii) as a result of an agreement, arrangement
or understanding to vote such security if the agreement, arrangement or
understanding:
(A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Act and
(B) is not also then reportable on a Schedule 13D
under the Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in Subsection 1.3 (ii) above) or disposing of any voting securities of
the Company; provided, however, that nothing in this paragraph (iii) shall cause
a Person engaged in the business as an underwriter of securities to be deemed
the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days (40) after the date of such
acquisition.
1.4 CAUSE. "Cause" for termination by the Company of the
Executive's employment with the Company, BWC or any of their Affiliates after a
Change of Control of the Company shall, for purposes of this Agreement, be
limited to:
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<PAGE> 3
(i) the engaging by the Executive in intentional
conduct taken in bad faith which has caused demonstrable and serious financial
injury to the Company, as evidenced by a determination in a binding and final
judgment, order or decree of a court or administrative agency of competent
jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an
action, suit or proceeding, whether civil, criminal, administrative or
investigative;
(ii) conviction of a felony (as evidenced by a
binding and final judgment, order or decree of a court of competent
jurisdiction, in effect after exhaustion of all rights of appeal) which
substantially impairs the Executive's ability to perform his duties or
responsibilities; and
(iii) continuing willful and unreasonable refusal by
the Executive to perform the Executive's duties or responsibilities (unless
significantly changed without the Executive's consent).
1.5 CHANGE IN CONTROL OF THE COMPANY. A "Change in Control of
the Company" shall be deemed to have occurred if:
(i) any Person (other than any employee benefit plan
of the Company or any subsidiary of the Company, any entity holding securities
of the Company for or pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan) is or becomes the Beneficial Owner of
securities of the Company representing at least 30% of the combined voting power
of the Company's then outstanding securities (other than acquisitions directly
from the Company);
(ii) a Section 11(a)(ii) Event shall have occurred
under the Rights Agreement (or a similar event shall have occurred under any
successor to such Rights Agreement) at any time any Rights are issued and
outstanding thereunder;
(iii) one-third or more of the members of the Board
are not Continuing Directors; or
(iv) there shall be consummated any merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger.
1.6 CODE. The term "Code" means the Internal Revenue Code of
1986, as amended.
1.7 CONTINUING DIRECTOR. The term "Continuing Director" means
(i) any
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<PAGE> 4
member of the Board of Directors of the Company (the "Board") who was a member
of such Board on August 15, 1996, (ii) any successor of a Continuing Director
who is recommended to succeed a Continuing Director by a majority of the
Continuing Directors then on the Board, and (iii) any appointee who is
recommended by a majority of the Continuing Directors then on the Board.
1.8 COVERED TERMINATION. The term "Covered Termination" means
any termination of the Executive's employment where the Termination Date is any
date prior to the end of the Employment Period.
1.9 EMPLOYMENT PERIOD. The term "Employment Period" means a
period beginning on the date of a Change in Control of the Company (as defined
in Section 1.5 above), and ending at 11:59 p.m. St. Louis Time on the earlier of
the third anniversary of such date or the Executive's Normal Retirement Date.
1.10 GOOD REASON. The Executive shall have a "Good Reason" for
termination of employment after a Change in Control of the Company in the event
of:
(i) any breach of this Agreement by the Company,
including specifically any breach by the Company of its agreements contained in
Sections 4 (Duties), 5 (Compensation) or 6 (Annual Compensation Adjustments)
hereof;
(ii) the removal of the Executive from, or any
failure to reelect or reappoint the Executive to, any of the positions held with
the Company, BWC or any of their affiliates on the date of the Change in Control
of the Company or any other positions with the Company, BWC or any of their
affiliates, to which the Executive shall thereafter be elected, appointed or
assigned, except when such removal or failure to reelect or reappoint relates to
the termination by the Company of the Executive's employment for Cause or by
reason of disability pursuant to Section 12;
(iii) a good faith determination by the Executive
that there has been a significant adverse change, without the Executive's
written consent, in the Executive's working conditions or status with the
Company, BWC or any of their affiliates from such working conditions or status
in effect immediately prior to the Change in Control of the Company, including
but not limited to;
(A) a significant change in the nature or
scope of the Executive's authority, powers, functions, duties or
responsibilities, or
(B) a significant reduction in the level of
support services, staff, secretarial and other assistance, office space and
accoutrements; or
(iv) failure by the Company to obtain the Agreement
referred to in
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Section 17.1 (Successors) below; or
(v) any voluntary termination of employment by the
Executive where the Notice of Termination is delivered within 30 days of the
first anniversary of the Effective Date (Window Period).
1.11 NORMAL RETIREMENT DATE. The term "Normal Retirement Date"
means the date Executive attains the age of 70.
1.12 PERSON. The term "Person" shall mean any individual,
firm, partnership, corporation or other entity, including any successor (by
merger or otherwise) of such entity, or a group of any of the foregoing acting
in concert.
1.13 TERMINATION DATE. For purposes of this Agreement, except
as otherwise provided in Section 10.2 (Death) and Section 17.1 (Successors), the
term "Termination Date" means:
(i) if the Executive's employment is terminated by
the Executive's death, the date of death;
(ii) if the Executive's employment is terminated by
reason of voluntary early retirement, as agreed in writing by the Company and
the Executive, the date of such early retirement which is set forth in such
written agreement;
(iii) if the Executive's employment is terminated
for purposes of this Agreement by reason of disability pursuant to Section 12,
the earlier of thirty days after the Notice of Termination is given or one day
prior to the end of the Employment Period;
(iv) if the Executive's employment is terminated by
the Executive voluntarily (other than for Good Reason), the date the Notice of
Termination is given; and
(v) if the Executive's employment is terminated by
the Company (whether or not for Cause), or by the Executive for Good Reason, the
earlier of thirty days after the Notice of Termination is given or one day prior
to the end of the Employment Period. Notwithstanding the foregoing;
(A) If termination is for Cause pursuant to
Section 1.4(iii) of this Agreement and if the Executive has cured the conduct
constituting such Cause as described by the Company in its Notice of Termination
within such thirty day or shorter period, then the Executive's employment under
this Agreement shall continue as if the Company had not delivered its Notice of
Termination.
(B) If the Company shall give a Notice of
Termination for Cause
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or by reason of disability and the Executive in good faith notifies the Company
that a dispute exists concerning the termination within the applicable period
following receipt of notice, then the Executive may elect to continue his
employment (or, if the Executive ceased performing his duties under this
Agreement at the request of the Company at the time of delivery of Notice of
Termination, resume and continue employment) during such dispute and the
Termination Date shall be determined under this paragraph. If the Executive so
elects and it is thereafter determined that Cause or disability (as the case may
be ) did exist, the Termination Date shall be the earliest of (1) the date on
which the dispute is finally determined, either (x) by mutual written agreement
of the parties or (y) in accordance with Section 22 (Governing Law; Resolution
of Disputes), (2) the date of the Executive's death, or (3) one day prior to the
end of the Employment Period. If the Executive so elects and it is subsequently
determined that Cause or disability (as the case may be ) did not exist, then
the employment of the Executive under this Agreement shall continue after such
determination as if the Company had not delivered its Notice of Termination and
there shall be no Termination Date arising out of such Notice. In either case,
this Agreement continues, until the Termination Date, if any, as if the Company
had not delivered the Notice of Termination except that, if it is finally
determined that the Company properly terminated the Executive for the reason
asserted in the Notice of Termination, the Executive shall in no case be
entitled to a Termination Payment (as defined below) arising out of events
occurring after the Company delivered its Notice of Termination.
(C) If the Executive shall in good faith
give a Notice of Termination for Good Reason and the Company notifies the
Executive that a dispute exists concerning the termination within the applicable
period following receipt of notice, then the Executive may elect to continue his
employment during such dispute and the Termination Date shall be determined
under this paragraph. If the Executive so elects and it is subsequently
determined that Good Reason did exist, the Termination Date shall be the
earliest of (1) the date on which the dispute is finally determined, either (x)
by mutual written agreement of the parties or (y) in accordance with Section 22
(Governing Law; Resolution of Disputes), (2) the date of the Executive's death
or (3) one day prior to the end of the Employment Period. If the Executive so
elects and it is subsequently determined that Good Reason did not exist, then
the employment of the Executive under this Agreement shall continue after such
determination as if the Executive had not delivered the Notice of Termination
asserting Good Reason and there shall be no Termination Date arising out of such
Notice. In either case, this Agreement continues, until the Termination Date, if
any, as if the Company had not delivered the Notice of Termination except that,
if it is finally determined that Good Reason did exist, the Executive shall in
no case be denied the benefits described in Sections 8 and 9 (including a
Termination Payment) based on events occurring after the Executive delivered his
Notice of Termination.
(D) If an opinion is required to be
delivered pursuant to Section 9.2(ii) hereof and such opinion shall not have
been delivered, the Termination Date shall be the earlier of the date on which
such opinion is delivered or one day prior to the end of the Employment Period.
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(E) Except as provided in Paragraphs (B) and
(C) above, if the party receiving the Notice of Termination notifies the other
Party that a dispute exists concerning the termination within the appropriate
period following receipt of notice and it is finally determined that the reason
asserted in such Notice of Termination did not exist, then (1) if such Notice
was delivered by the Executive, the Executive will be deemed to have voluntarily
terminated his employment and the Termination Date shall be the earlier of the
date thirty days after the Notice of Termination is given or one day prior to
the end of the Employment Period and (2) if delivered by the Company, the
Company will be deemed to have terminated the Executive other than by reason of
death, disability or Cause.
2. TERMINATION PRIOR TO CHANGE IN CONTROL. The Company and the
Executive shall each retain the right to terminate the employment of the
Executive at any time prior to a Change in Control of the Company. If the
Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall be terminated and all rights and obligations of
the parties under it shall cease.
3. EMPLOYMENT PERIOD. If a Change in Control of the Company occurs when
the Executive is employed by BWC, BWC will continue subsequently to employ the
Executive during the Employment Period, and the Executive will remain in the
employ of BWC, in accordance with and subject to the provisions of this
Agreement.
4. DUTIES. During the Employment Period, the Executive shall, in the
same capacities and positions held by the Executive at the time of the Change in
Control of the Company or in such other capacities and positions as may be
agreed to by the Company and the Executive in writing, devote the Executive's
best efforts and all of the Executive's business time, attention and skill to
the business and affairs of the Company, as such business and affairs now exist
and as they may subsequently be conducted. The services that are to be performed
by the Executive under this Agreement are to be rendered in the same
metropolitan area in which the Executive was employed at the time of such Change
in Control of the Company, or in such other place or places as shall be agreed
upon in writing by the Executive and the Company from time to time. Without the
Executive's consent, the Executive shall not be required to be absent from such
metropolitan area more than 45 days in any fiscal year of the Company.
5. COMPENSATION. During the Employment Period, the Executive shall be
compensated as follows:
5.1 The Executive shall receive, at reasonable intervals (but
not less often than monthly) and in accordance with such standard policies as
may be in effect immediately prior to the Change in Control of the Company, an
annual base salary in cash equivalent of not less than the Executive's annual
base salary as in effect immediately prior to the Change in Control of the
Company (which base salary shall, unless otherwise agreed in writing by the
Executive, include the current receipt by the Executive of any amounts that,
prior to the Change in Control of the Company, the Executive had elected to
defer, whether such compensation is deferred under
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Section 401(k) of the Code or otherwise), subject to adjustment as provided
below.
5.2 The Executive shall receive fringe benefits at least equal
in value to those provided for the Executive immediately prior to the Change in
Control of the Company, and shall be reimbursed, at such intervals and in
accordance with such standard policies as may be in effect immediately prior to
the Change in Control of the Company, for any monies advanced in connection with
the Executive's employment for reasonable and necessary expenses incurred by the
Executive on behalf of the Company, BWC or their affiliates, including travel
expenses.
5.3 The Executive shall be included, to the extent eligible
thereunder (which eligibility shall not be conditioned on the Executive's salary
grade or on any other requirement that excludes persons of comparable status to
the Executive unless such exclusion was in effect for such plan or an equivalent
plan immediately prior to the Change in Control of the Company), in any plan
providing benefits for the Company's salaried employees in general of the
Company, BWC or their Affiliates, including but not limited to the Management
Incentive Plan, the Long- Term Incentive Plan, group life insurance,
hospitalization, medical, dental, savings, profit sharing and stock bonus plans.
However, in no event shall the aggregate level of benefits under such plans in
which the Executive is included be less than the aggregate level of benefits
under plans of the Company, BWC or their Affiliates of the type referred to in
this Section 5.3 in which the Executive was participating immediately prior to
the Change in Control of the Company.
5.4 The Executive shall annually be entitled to not less than
the amount of paid vacation and not fewer than the number of paid holidays to
which the Executive was entitled annually immediately prior to the Change in
Control of the Company or such greater amount of paid vacation and number of
paid holidays as may be made available annually to other executives of the
Company, BWC or their Affiliates of comparable status and position to the
Executive.
5.5 The Executive shall be included in all plans providing
additional benefits to executives of the Company, BWC or their Affiliates of
comparable status and position to the Executive, including deferred
compensation, split-dollar life insurance, supplemental retirement, stock
option, stock appreciation, stock bonus and similar or comparable plans.
However, in no event shall the aggregate level of benefits under such plans be
less than the aggregate level of benefits under plans of the Company, BWC or
their Affiliates of the type referred to in this Section 5.5 in which the
Executive was participating immediately prior to the Change in Control of the
Company. Moreover, the obligation of the Company, BWC or their Affiliates to
include the Executive in bonus or incentive compensation plans shall be
determined by Subsection 5.6.
5.6 To assure that the Executive will have an opportunity to
earn incentive compensation after a Change in Control of the Company, the
Executive shall be included in a bonus plan of the Company, BWC or their
Affiliates that shall satisfy the standards described below (such plan, the
"Bonus Plan"). Bonuses under the Bonus Plan shall be payable with respect to
achieving such financial or other goals reasonably related to the business of
the Company as the
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Company shall establish (the "Goals"), all of which Goals shall be attainable,
prior to the end of the Employment Period, with approximately the same degree of
probability as the goals under the bonus plan of the Company, BWC or their
Affiliates as in effect immediately prior to the Change in Control of the
Company (the "Company Bonus Plan") and in view of the Company's existing and
projected financial and business circumstances applicable at the time. The
amount of the bonus (the "Bonus Amount") that the Executive will be eligible to
earn under the Bonus Plan shall be no less than the amount of the Executive's
maximum award provided in such Company Bonus Plan (such bonus amount is referred
to as the "Targeted Bonus"). If the Goals are not achieved such that the entire
Targeted Bonus is not payable, the Bonus Plan shall provide for a payment of a
Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that
portion of the Goals that were achieved. Payment of the Bonus Amount shall not
be affected by any circumstance occurring subsequent to the end of the
Employment Period, including termination of the Executive's employment.
6. ANNUAL COMPENSATION ADJUSTMENTS. During the Employment Period, the
Board of Directors of the Company (or an appropriate committee or officer
thereof) will consider and review, at least annually, the contributions of the
Executive to the Company, BWC or their Affiliates and in accordance with the
practice of the Company, BWC or their Affiliates prior to the Change in Control
of the Company, due consideration shall be given to the upward adjustment of the
Executive's base compensation rate, at least annually, (i) commensurate with
increases generally given to other executives of the Company, BWC or their
Affiliates of comparable status and position to the Executive, and (ii) as the
scope of the operations of the Company, BWC or their Affiliates or the
Executive's duties expand.
7. TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If there is a Covered
Termination for Cause or if the Executive voluntarily terminates his employment
other than for Good Reason (any such terminations to be subject to the
procedures set forth in Section 13), then the Executive shall be entitled to
receive only Accrued Benefits pursuant to Section 9.1.
8. TERMINATION GIVING RISE TO A TERMINATION PAYMENT.
8.1 If there is a Covered Termination by the Executive for
Good Reason, or by the Company other than by reason of (i) death, (ii)
disability pursuant to Section 12, or (iii) Cause (any such terminations to be
subject to the procedures set forth in Section 13), then the Executive shall be
entitled to receive, and the Company shall promptly pay, Accrued Benefits
pursuant to Section 9.1 and, in lieu of further base salary for periods
following the Termination Date, as liquidated damages and additional severance
pay the Termination Payment pursuant to Section 9.2.
8.2 If there is Covered Termination and the Executive is
entitled to Accrued Benefits and the Termination Payment, then the Executive
shall be entitled to the following additional benefits:
(i) The Executive shall receive, at the expense of the
Company,
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outplacement services, on an individualized basis at a level of service
commensurate with the Executive's status with the Company, BWC or their
Affiliates immediately prior to the Change in Control of the Company (or, if
higher, immediately prior to the termination of the Executive's employment),
provided by a nationally recognized executive placement firm selected by the
Company.
(ii) For two years after the date of Termination,
the Executive shall continue to be covered, at the expense of the Company, by
the same or equivalent life insurance, hospitalization, medical and dental
coverage as was required under this Agreement with respect to the Executive
immediately prior to the date the Notice of Termination is given.
9. PAYMENTS UPON TERMINATION.
9.1 ACCRUED BENEFITS. The Executive's "Accrued Benefits" shall
include the following amounts, payable as described in this Agreement:
(i) all base salary for the time period ending with
the Termination Date;
(ii) reimbursement for any monies advanced in
connection with the Executive's employment for reasonable and necessary expenses
incurred by the Executive on behalf of the Company, BWC or their Affiliates for
the time period ending with the Termination Date;
(iii) any other cash earned through the Termination
Date and deferred at the election of the Executive or pursuant to any deferred
compensation plan then in effect;
(iv) a lump sum payment of the bonus or incentive
compensation otherwise payable to the Executive with respect to the year in
which termination occurs under all bonus or incentive compensation plans in
which the Executive is a participant; and
(v) all other payments and benefits to which the
Executive (or in the event of the Executive's death, the Executive's surviving
spouse or other beneficiary) may be entitled as compensatory fringe benefits or
under the terms of any benefit plan of the Company, BWC or their Affiliates, and
severance payments under the Company's severance policies and practices as in
effect immediately prior to the Change in Control of the Company. Payment of
Accrued Benefits shall be made promptly in accordance with the Company's
prevailing practice with respect to Subsections (i) and (ii) or, with respect to
Subsections (iii), (iv) and (v), pursuant to the terms of the benefit plan or
practice establishing such benefits.
9.2 TERMINATION PAYMENT.
(i) Subject to the limits set forth in Subsection
9.2(ii), the Termination Payment shall be an amount equal to (A) the Executive's
annual base salary, as in effect
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immediately prior to the Change in Control of the Company, as adjusted upward,
from time to time, pursuant to Section 6, plus (B) the amount of the highest
annual bonus award (determined on an annualized basis for any bonus award paid
for a period of less than one year) paid to the Executive with respect to the
two complete fiscal years preceding the Termination Date (the aggregate amount
set forth in (A) and (B) hereof shall be referred to as "Annual Cash
Compensation"), times (C) a factor of 2. The Termination Payment shall be paid
to the Executive in cash equivalent ten business days after the Termination
Date. Such lump sum payment shall not be reduced by any present value or similar
factor, and the Executive shall not be required to mitigate the amount of the
Termination Payment by securing other employment or otherwise, nor will such
Termination Payment be reduced by reason of the Executive's securing other
employment or for any other reason. The Termination Payment shall be in addition
to any other severance payments to which the Executive is entitled under the
Company's severance policies and practices as in effect immediately prior to the
Change in Control of the Company.
(ii) Notwithstanding any contrary provision, if any
portion of the Termination Payment would constitute an "excess parachute
payment," then the Termination Payment shall be reduced such that the value of
the Termination Payment the Executive will receive shall be One Dollar ($1) less
than the maximum amount which the Executive may receive without becoming subject
to the tax imposed by Section 4999 of the Code (or any successor provision) or
which the Company may pay without loss of deduction under Section 280G(a) of the
Code (or any successor provision). The terms "excess parachute payment" and
"parachute payments" shall have the meanings assigned to them in Section 280G of
the Code (or any successor provision), and such "parachute payments" shall be
valued as provided therein. Present value for purposes of this Agreement shall
be calculated in accordance with Section 1274(b)(2) of the Code (or any
successor provision). If the provisions of Sections 280G and 4999 of the Code
(or any successor provisions) are repealed without succession, then this Section
9.2(ii) shall be of no further force or effect.
(iii) (A) If, notwithstanding the provisions of
Subsection (ii) of this Section 9.2, but subject to paragraph (B)below, it is
ultimately determined by a court or pursuant to a final determination by the
Internal Revenue Service that any portion of Total Payments (as defined below)
is subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or
any successor provision), the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive after deduction of any Excise Tax and any interest charges or
penalties in respect of the imposition of such Excise Tax (but not any federal,
state or local income tax) on the Total Payments, and any federal, state and
local income tax and Excise Tax upon the payment provided for by this Subsection
(iii), shall be equal to the Total Payments. As used in this Section 9.2(iii),
the term Total Payments" means the Termination Payment and any other payment
payable to the Executive under this Agreement or under any other agreement or
plan of the Company or any affiliate of the Company. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal
income taxes 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 rates of taxation
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in the state and locality of the Executive's domicile for income tax purposes on
the date the Gross- Up Payment is made, net of the maximum reduction in federal
income taxes which could be obtained from reduction of such state and local
taxes.
(B) If legislation is enacted that would
require the Company's stockholders to approve this Agreement, prior to a Change
in Control of the Company, due solely to the provision contained in paragraph
(A) of this Subsection 9.2(iii), then;
(1) from and after such time as stockholder approval
would be required, until stockholder approval is obtained as required by such
legislation, paragraph (A) shall be of no force and effect;
(2) the Company and the Executive shall use their
best efforts to consider and agree in writing upon an amendment to this
Subsection 9.2(iii) such that, as amended, this Subsection would provide the
Executive with the benefits intended to be afforded to the Executive by
paragraph (A) without requiring stockholder approval; and
(3) at the reasonable request of the Executive, the
Company shall seek stockholder approval of this Agreement at the next annual
meeting of stockholders of the Company.
10. DEATH.
10.1 Except as provided in Section 10.2, in the event of a
Covered Termination due to the Executive's death, the Executive's estate, heirs
and beneficiaries shall receive all the Executive's Accrued Benefits through the
Termination Date.
10.2 In the event the Executive dies after a Notice of
Termination is given (i) by the Company or (ii) by the Executive for Good
Reason, the Executive's estate, heirs and beneficiaries shall be entitled to the
benefits described in Section 10.1 hereof and, subject to the provisions of this
Agreement, to such Termination Payment as the Executive would have been entitled
to had the Executive lived. For purposes of this Subsection 10.2, the
Termination Date shall be the earlier of thirty days following the giving of the
Notice of Termination, subject to extension pursuant to Section 1.14, or one day
prior to the end of the Employment Period.
11. RETIREMENT. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from the Company, or the Executive shall otherwise give notice that he
is voluntarily choosing to retire early from the Company, the Executive shall
receive Accrued Benefits through the Termination Date. However, if the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than by reason of death, disability or Cause and the Executive
also, in connection with such termination, elects voluntary early retirement,
the Executive shall also be entitled to receive a Termination Payment pursuant
to Section 8.1 hereof.
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12. TERMINATION FOR DISABILITY. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or injury
(regardless of whether such illness or injury is job-related), the Executive
shall have been absent from the Executive's duties under this Agreement on a
full-time basis for a period of six consecutive months and, within thirty days
after the Company notifies the Executive in writing that it intends to terminate
the Executive's employment (which notice shall not constitute the Notice of
Termination contemplated below), the Executive shall not have returned to the
performance of the Executive's duties under this Agreement on a full-time basis,
the Company may terminate the Executive's employment for purposes of this
Agreement pursuant to a Notice of Termination given in accordance with Section
13. If the Executive's employment is terminated on account of the Executive's
disability in accordance with this Section, the Executive shall receive Accrued
Benefits in accordance with Section 9.1 hereof and shall remain eligible for all
benefits provided by any long term disability programs of the Company, BWC or
its Affiliates in effect at the time of such termination.
13. TERMINATION NOTICE AND PROCEDURE. Any Covered Termination by the
Company or the Executive shall be communicated by written Notice of Termination
to the Executive, if such Notice is given by the Company, and to the Company, if
such Notice is given by the Executive, all in accordance with the following
procedures and those set forth in Section 23:
13.1 If such termination is for disability, Cause or Good
Reason, the Notice of Termination shall indicate in reasonable detail the facts
and circumstances alleged to provide a basis for such termination.
13.2 Any Notice of Termination by the Company shall have been
approved, prior to the giving thereof to the Executive, by a resolution duly
adopted by a majority of the directors of the Company (or any successor
corporation) then in office.
13.3 If the Notice is given by the Executive for Good Reason,
the Executive may cease performing his duties under this Agreement on or after
the date fifteen days after the delivery of Notice of Termination and shall in
any event cease employment on the Termination Date. If the Notice is given by
the Company, then the Executive may cease performing his duties under this
Agreement on the date of receipt of the Notice of Termination, subject to the
Executive's rights under this Agreement.
13.4 The Executive shall have thirty days, or such longer
period as the Company may determine to be appropriate, to cure any conduct or
act, if curable, alleged to provide grounds for termination of the Executive's
employment for Cause under this Agreement pursuant to Subsection 1.4(iii).
13.5 The recipient of any Notice of Termination shall
personally deliver or mail in accordance with Section 23 written notice of any
dispute relating to such Notice of Termination to the party giving such Notice
within fifteen days after receipt thereof. However, if the
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Executive's conduct or act alleged to provide grounds for termination by the
Company for Cause is curable, then such period shall be thirty days. After the
expiration of such period, the contents of the Notice of Termination shall
become final and not subject to dispute.
14. FURTHER OBLIGATIONS OF THE EXECUTIVE. The Executive agrees that, in
the event of any Covered Termination where the Executive is entitled to and
receives Accrued Benefits and the Termination Payment, the Executive shall not,
for a period of one year after the Termination Date, without the prior written
approval of the Company's Board of Directors, participate in the management of,
be employed by or own any business enterprise at a location within the United
States that engages in substantial competition with the Company or its
subsidiaries, where such enterprise's revenues from any competitive activities
amount to 40% or more of such enterprise's net revenues and sales for its most
recently completed fiscal year. However, nothing in this Section 14 shall
prohibit the Executive from owning stock or other securities of a competitor
amounting to less than five percent of the outstanding capital stock of such
competitor. The Executive also shall perform his obligations under the "Secrecy
Agreement" and the "Invention Assignment and Confidentiality Agreement" entered
into by the Company and the Executive.
15. EXPENSES AND INTEREST. If, after a Change in Control of the
Company, (i) a dispute arises with respect to the enforcement of the Executive's
rights under this Agreement or (ii) any legal or arbitration proceeding shall be
brought to enforce or interpret any provision contained in this Agreement or to
recover damages for breach, in either case so long as the Executive is not
acting in bad faith, the Executive shall recover from the Company any reasonable
attorneys' fees and necessary costs and disbursements incurred as a result of
such dispute, legal or arbitration proceeding ("Expenses"), and prejudgment
interest on any money judgment or arbitration award obtained by the Executive
calculated at the rate of interest announced by Boatman's Bank, St. Louis,
Missouri from time to time as its prime or base lending rate from the date that
payments to him should have been made under this Agreement. Within ten days
after the Executive's written request, the Company shall pay to the Executive,
or such other person or entity as the Executive may designate in writing to the
Company, the Executive's reasonable Expenses in advance of the final disposition
or conclusion of any such dispute, legal or arbitration proceeding.
16. PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation during and
after the Employment Period to pay the Executive the amounts and to make the
benefit and other arrangements provided in this Agreement shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which
the Company may have against him or anyone else. Except as provided in Section
15 of this Agreement, all amounts payable by the Company hereunder shall be paid
without notice or demand. Each payment made under this Agreement by the Company
shall be final, and the Company will not seek to recover any part of such
payment from the Executive, or from whoever may be entitled to such payment, for
any reason.
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17. SUCCESSORS.
17.1 If the Company sells, assigns or transfers all or
substantially all of its business and assets to any Person or if the Company
merges into or consolidates or otherwise combines (where the Company does not
survive such combination) with any Person (any such event, a "Sale of
Business"), then the Company shall assign all of its right, title and interest
in this Agreement as of the date of such event to such Person, and the Company
shall cause such Person, by written agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform from and
after the date of such assignment all of the terms, conditions and provisions
imposed by this Agreement upon the Company. Failure of the Company to obtain
such agreement prior to the effective date of such Sale of Business shall be a
breach of this Agreement constituting "Good Reason" for termination hereunder,
except that for purposes of implementing the foregoing the date upon which such
Sale of Business becomes effective shall be deemed the Termination Date. In case
of such assignment by the Company and of assumption and agreement by such
Person, as used in this Agreement, "Company" shall subsequently mean such Person
which executes and delivers the agreement provided for in this Section 17 or
that otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law, and this Agreement shall inure to the benefit of, and be
enforceable by, such Person. The Executive shall, in his discretion, be entitled
to proceed against any of such Persons, any Person which theretofore was such a
successor to the Company and the Company (as so defined) in any action to
enforce any rights of the Executive under this Agreement. Except as provided in
this Subsection, this Agreement shall not be assignable by the Company. This
Agreement shall not be terminated by the voluntary or involuntary dissolution of
the Company.
17.2 This Agreement and all rights of the Executive shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under Sections 7, 8, 9, 10, 11, 12 and 15 if the
Executive had lived shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs and representatives. However, the foregoing shall not
be construed to modify any terms of any benefit plan of the Company, as such
terms are in effect on the date of the Change in Control of the Company, that
expressly govern benefits under such plan in the event of the Executive's death.
18. SEVERABILITY. The provisions of this Agreement shall be regarded as
divisible, and if any provision or any part is declared invalid or unenforceable
by a court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts and the applicability thereof shall not be
so affected.
19. AMENDMENT. This Agreement may not be amended or modified at any
time except by written instrument executed by the Company and the Executive.
20. WITHHOLDING. The Company shall be entitled to withhold from amounts
to be paid to the Executive under this Agreement any federal, state or local
withholding or other taxes or charges which it is from time to time required to
withhold. However, the amount so withheld shall not exceed the minimum amount
required to be withheld by law. The Company shall be
-15-
<PAGE> 16
entitled to rely on an opinion of nationally recognized tax counsel if any
question as to the amount or requirement of any such withholding shall arise.
21. CERTAIN RULES OF CONSTRUCTION. No Party shall be considered as
being responsible for the drafting of this Agreement for the purpose of applying
any rule construing ambiguities against the drafter or otherwise. No draft of
this Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company.
22. GOVERNING LAW; RESOLUTION OF DISPUTES. This Agreement and the
rights and obligations under it shall be governed by and construed in accordance
with the laws of the State of Delaware. Any dispute arising out of this
Agreement shall, at the Executive's election, be determined by arbitration under
the rules of the American Arbitration Association then in effect (in which case
both parties shall be bound by the arbitration award) or by litigation. Whether
the dispute is to be settled by arbitration or litigation, the venue for the
arbitration or litigation shall be St. Louis, Missouri or, at the Executive's
election, if the Executive is no longer residing or working in the St. Louis,
Missouri metropolitan area, in the judicial district encompassing the city in
which the Executive resides. However, if the Executive is not then residing in
the United States, the election of the Executive with respect to such venue
shall be either St. Louis, Missouri or in the judicial district encompassing
that city of the United States among the thirty cities having the largest
population (as determined by the most recent United States Census data available
at the Termination Date) that is closest to the Executive's residence. The
Parties consent to personal jurisdiction in each trial court in the selected
venue having subject matter jurisdiction regardless of their residence or situs,
and each party irrevocably consents to service of process in the manner provided
in Section 23.
23. NOTICE. Notices given pursuant to this Agreement shall be in
writing and, except as otherwise provided by Section 13.4, shall be deemed given
when actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company, to
Belden Inc., Attention: Secretary (or President, if the Executive is then
Secretary), 7701 Forsyth Blvd., Suite 800, St. Louis, Missouri 63105, or if to
the Executive, at the address set forth below the Executive's signature to this
Agreement, or to such other address as the Party to be notified shall have given
to the other Party in writing.
24. NO WAIVER. No waiver by either Party at any time of any breach by
the other Party of, or compliance with, any condition or provision of this
Agreement to be performed by the other Party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
25. HEADINGS. The headings are for reference only and shall not affect
the meaning
-16-
<PAGE> 17
or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first written above.
BELDEN INC.
By:
---------------------------------------
Attest:
-----------------------------------
EXECUTIVE
-------------------------------------------
Cathy O. Staples
456 Oakley
St. Louis, MO 63105
-17-
<PAGE> 1
Exhibit 10.2
INDEMNIFICATION AGREEMENT
AGREEMENT between Belden Inc., a Delaware corporation (the "Company"),
and Cathy O. Staples (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors, officers and representatives the most capable persons available; and
WHEREAS, Indemnitee is a director, officer or representative of the
Company; and
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors, officers and
representatives of public companies in today's environment; and
WHEREAS, the Articles of Incorporation of the Company and the Delaware
General Corporation Law each provide that the indemnification provided therein
shall not be exclusive; and
WHEREAS, in recognition of the Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued
service to the Company in an effective manner, the Company wishes to provide in
this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
(a) Change in Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding
Voting Securities without the prior approval of the Board of Directors,
or (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of
<PAGE> 2
Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or
(iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
(b) Claim shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted
by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative, investigative or
other.
(c) Expenses shall mean include all costs, expenses (including
attorneys' fees) and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal) or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event (including
all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing).
(d) Judgments shall mean judgments, fines, penalties and amounts
paid in settlement that are paid or payable in connection with any
Claim relating to any Indemnifiable Event (including all interest,
assessments and other charges paid or payable in connection with or in
respect of any of the foregoing).
(e) Indemnifiable Event shall mean any event or occurrence
related to the fact that Indemnitee is or was a director, director
nominee, officer or representative of the Company, or is or was serving
at the request of the Company as a director, trustee, officer,
employee, agent or representative of another corporation, domestic or
foreign, nonprofit or for profit, partnership, joint venture, employee
benefit plan, trust or other enterprise, or by reason of anything done
or not done by Indemnitee in any such capacity.
(f) Reviewing Party shall mean any appropriate person or body
consisting of a member or members of the Company's Board of Directors
or any other person or body appointed by the Board (including the
special, independent counsel referred to in Section 3) who is
2
<PAGE> 3
not a party to the particular Claim for which Indemnitee is seeking
indemnification.
(g) Voting Securities shall mean any securities of the Company
that vote generally in the election of directors.
2. Scope of Indemnification.
(a) Indemnification for Judgments and Expenses. In the event
Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of)
an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law against any and all Expenses and
Judgments arising from or relating to such Claim. Except as otherwise
provided in Section 2(b), such indemnification shall be made as soon as
practicable, but in any event not later than thirty (30) days, after
written demand therefor is presented to the Company by or on behalf of
the Indemnitee.
(b) Indemnification and Advance Payment of Expenses. Any and all
Expenses and any and all expenses referred to in Section 2(c) shall be
paid by the Company promptly as they are incurred by Indemnitee (any
such payment of expenses by the Company is hereinafter referred to as
an "Expense Advance"). Indemnitee shall be obligated, and hereby
agrees, to repay the amount of Expenses so paid only to the extent that
it is proved by clear and convincing evidence in a court of competent
jurisdiction that his action or failure to act involved an act or
omission undertaken with deliberate intent to cause injury to the
Company or violate the law or undertaken with reckless disregard for
the best interests of the Company. Indemnitee hereby further agrees to
cooperate reasonably with the Company concerning any Claim.
(c) Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) that are incurred by Indemnitee in connection with any claim
asserted against or action brought by Indemnitee for (i)
indemnification of Expenses or Judgments or advance payment of Expenses
by the Company under this Agreement or under any other agreement, the
Company's articles, statute or rule of law now or hereafter in effect
relating to Claims for Indemnifiable Events and (ii) recovery under any
directors' and officers' liability insurance policy or policies
maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
(d) Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some
or a portion of the Judgments and Expenses arising from or relating to
a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof
to which
3
<PAGE> 4
Indemnitee is entitled.
(e) Indemnification of Successful Defense Expenses.
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
3. Reviewing Party Determinations.
(a) General Rules. Notwithstanding the provisions of Section 2,
the obligations of the Company under Section 2(a) shall be subject to
the condition that the Reviewing Party shall not have determined (in a
written opinion, in any case in which the special, independent counsel
referred to in Section 4 hereof is involved) that Indemnitee would not
be permitted to be indemnified under applicable law; provided, however,
that if Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should
be indemnified under applicable law, any determination made by the
Reviewing Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding until a final
judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed) and any such
determination by the Reviewing Party shall be modified, to the extent
necessary, to conform to such final judicial determination.
(b) Selection of Reviewing Party. If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board of
Directors. If there has been such a Change in Control, the Reviewing
Party shall be the special, independent counsel referred to in Section
4 hereof.
(c) Judicial Review. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantially would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents
to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
(d) Burden of Proof. In connection with any determination by the
Reviewing Party
4
<PAGE> 5
pursuant to Section 3(a), or by a court of competent jurisdiction
pursuant to Section 3(c) or otherwise, as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proof shall be on
the Company to establish by clear and convincing evidence that
Indemnitee is not so entitled.
4. Change in Control. The Company agrees that if there is a Change in
Control of the Company then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments under
this Agreement or under any other agreement, the Company's Certificate
of Incorporation, statute or rule of law now or hereafter in effect
relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from special, independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed services
for the Company or Indemnitee within the last five years (other than in
connection with such matters); provided, however, a majority of the
Company's Board of Directors, which majority were directors immediately
prior to such Change in Control, may waive this requirement. The
Company agrees to pay the reasonable fees of the special, independent
counsel referred to above and to indemnify fully such counsel against
any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
5. No Presumption. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have
any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
6. Nonexclusivity. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may now or hereafter have to
indemnification by the Company. More specifically, the Parties intend
that Indemnitee shall be entitled to indemnification to the maximum
extent permitted by any or all of the following:
(a) The fullest benefits provided by the Company's Certificate of
Incorporation and By-Laws or their equivalent of the Company in effect
at the time the Indemnifiable Event occurs or at the time Expenses are
incurred by Indemnitee;
(b) The fullest benefits allowable under Delaware law in effect
at the date hereof or as the same may be amended to the extent that
such benefits are increased thereby;
(c) The fullest benefits allowable under the law of the
jurisdiction under which
5
<PAGE> 6
the Company exists at the time the Indemnifiable Event occurs or at the
time Expenses are incurred by the Indemnitee; and
(d) Such other benefits as are or may be otherwise available to
Indemnitee pursuant to this Agreement, any other agreement or
otherwise.
The parties intend that combination of two or more of the benefits
referred to in (a) through (d) shall be available to Indemnitee to the
extent that the document or law providing for such benefits does not
require that the benefits provided therein be exclusive of other
benefits. The Company hereby undertakes to use its best efforts to
assist Indemnitee, in all proper and legal ways, to obtain all such
benefits to which Indemnitee is entitled.
7. Liability Insurance. The rights of the Indemnitee hereunder shall also
be in addition to any other rights Indemnitee may now or hereafter have
under policies of insurance maintained by the Company or otherwise. To
the extent the Company maintains an insurance policy or policies
providing directors' and officers' liability insurance, Indemnitee
shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for any
Company director, officer or representative.
The Company shall maintain such insurance coverage for so long as
Indemnitee's services are covered hereunder, provided and to the extent
that such insurance is available on a basis acceptable to the Company.
In the event that such insurance becomes unavailable in the amount of
the present policy limits or in the present scope of coverage at
premium costs and on other terms acceptable to the Company, then the
Company may forego maintenance of all or a portion of such insurance
coverage. However, in the event of any reduction in (or cancellation
of) such insurance coverage (whether voluntary or involuntary), the
Company shall, and hereby agrees to, stand as a self-insurer with
respect to the coverage, or portion thereof, not retained, and shall
indemnify the Indemnitee against any loss arising out of the reduction
in or cancellation of such insurance coverage.
8. Escrow Fund. As collateral security for its obligations hereunder
(including specifically its indemnity obligations [other than
Judgments] and other obligations pursuant to Sections 2,6 and 7) and
under similar agreements with other directors, officers and
representatives, in the event of a Change in Control, the Company shall
dedicate and maintain, for a period of five years following the Change
of Control, an escrow account in the aggregate of ten million dollars
($10,000,000) by depositing assets or bank letters of credit in escrow
or reserving lines of credit that may be drawn down by an escrow agent
in said amount (the "Escrow Reserve"). The Company shall promptly
following establishment of the Escrow Reserve provide Indemnitee with a
true and complete copy of the agreement relating to the establishment
and operation of the Escrow Reserve, together with such additional
6
<PAGE> 7
documentation or information with respect to the Escrow Reserve as
Indemnitee may from time to time reasonably request. The Company shall
promptly following establishment of the Escrow Reserve deliver an
executed copy of this Agreement to the escrow agent for the Escrow
Reserve to evidence to that agent that Indemnitee is a beneficiary of
that Escrow Reserve and shall deliver to Indemnitee the escrow agent's
signed receipt evidencing that delivery.
9. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse,
heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of
action, and any claim or cause of action of the Company or its
affiliate shall be extinguished and deemed released unless asserted by
the timely filing of legal action within such two-year period;
provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period
shall govern.
10. Amendments. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions thereof
(whether or not similar) nor shall such waiver constitute a continuing
waiver.
11. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, article or otherwise) of the
amounts otherwise indemnifiable hereunder.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company,
spouses, heirs, and personal and legal representatives. This Agreement
shall continue in effect regardless of whether Indemnitee continues to
serve as a director, officer or representative of the Company of or any
other enterprise at the Company's request.
7
<PAGE> 8
14. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable,
and the remaining provisions shall remain enforceable to the fullest
extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
8
<PAGE> 9
Executed and effective as of this 16th day of August, 1997.
BELDEN INC.
By
-------------------------------------
Name: Kevin L. Bloomfield
Title: Vice President, Secretary
and General Counsel
Date:
INDEMNITEE:
By:
-------------------------------------
Name: Cathy O. Staples
Title: Vice President Human Resources
Date:
9
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