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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
|X| Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999
or
| | Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to ___________
Commission File No. 1-12280
BELDEN INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 76-0412617
(State or Other Jurisdiction of (IRS 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)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
Common Stock, $.01 par value The New York Stock Exchange
Preferred Stock Purchase Rights The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No | |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
Exhibit Index on Page ___ Page 1 of ___
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The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant at March 16, 2000 is $611,124,147.
The number of shares outstanding of the registrant's Common Stock at March 16,
2000 is 24,387,928.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Belden Inc. Proxy Statement for the Annual Meeting of
Stockholders to be held on May 4, 2000 (the "Proxy Statement") (incorporated by
reference into Part III).
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PART I
ITEM 1. BUSINESS
GENERAL
Belden designs, manufactures and markets wire, cable and fiber optic products
for electronics, electrical, and telecommunications applications. It has been in
the business of manufacturing wire and cable for over 95 years. The business was
founded as Belden Manufacturing Company, which began manufacturing silk
insulated wire and insulated magnet wire in Chicago in 1902. In 1980, the
business was acquired by Crouse-Hinds Company and, in 1981, by Cooper
Industries, Inc. ("Cooper") as part of Cooper's acquisition of Crouse-Hinds
Company. From 1981 until July 1993, the business was operated as an
unincorporated division of Cooper.
In 1993, the business was transferred to Belden Wire & Cable Company ("BWC"), a
wholly-owned subsidiary of Belden Inc., in connection with the October 6, 1993
initial public offering by Cooper of 23,500,000 shares of common stock of Belden
Inc. In 1995 and 1996, an additional 2,500,000 shares of common stock, which
were originally retained by Cooper, were sold to the public. In June 1999,
Belden Inc. acquired all the outstanding shares of Cable Systems Holding Company
and its subsidiary Cable Systems International Inc., now Belden Communications
Company ("BCC"). With the acquisition of BCC, Belden began operating under two
business segments: Electronics, headquartered in Richmond, Indiana, and
Communications, headquartered in Phoenix, Arizona. For more information
regarding Belden acquisitions, see "Note 4: Acquisitions" of Belden's
consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Belden Inc., the publicly-traded parent company, is a Delaware corporation
incorporated in 1993. Substantially all of its operations are conducted through
BWC, BCC and its other subsidiaries.
As used herein, unless a business segment is identified or the context otherwise
requires, "Belden" and the "Company" refer to Belden Inc. and its subsidiaries
as a whole and their respective predecessors, including the Belden Division of
Cooper. Financial information about Belden's two business segments appears in
"Note 18: Industry Segments, Major Customers and Geographic Information" of
Belden's consolidated financial statements in Item 8 of this Annual Report on
Form 10-K.
The Company's major product markets are:
- Networking, consisting of premise products for the transmission of
voice, data or video, generally utilized as the backbone of computer
networks
- Industrial, including products used in factory automation, signal and
control, industrial equipment and instrumentation equipment
- Entertainment & OEM, including products used in broadcast (such as
professional broadcasters, sports stadiums and arenas) and OEM
applications, and deflection coil products
- Communications, consisting of, for telecom applications, exchange
cable (also called "PIC" for "plastic insulated cable") and service
distribution wire, and broadband products.
Belden meets the demands of these product markets with various product
configurations, which include multiconductor products, coaxial cables, fiber
optic cables, heat-shrinkable tubing and wire management products, cordage, and
lead, hook-up and other wire products. A more detailed description of certain of
these product configurations follows.
Multiconductor Product Configurations. A multiconductor cable consists of two or
more insulated conductors that are cabled together, individually twisted into
pairs or run in a parallel configuration as a flat cable. Insulation may be
extruded or laminated over bare conductors, or separately insulated conductors
may be bonded or woven together. A cable may be unshielded, have individually
shielded pairs or have an overall shield. The cable is covered with an overall
jacket.
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Coaxial Product Configurations. Coaxial cable consists of a central inner
conductor surrounded by a concentric outer conductor or shield. A dielectric
material separates the two conductors and a jacket covers the overall
construction. The inner conductor is usually copper or copper-covered steel,
while the outer conductor is usually a metallic tape or a wire braid. Various
insulating and jacketing materials are used.
Fiber Optic Product Configurations. Fiber optic cables transmit light signals
through glass or plastic fibers. Fiber optic cables may be either multimode or
single mode.
Lead, Hook-up and Other Wire Product Configurations. Lead and hook-up wire
consists of single conductor wire that is used for electrical leads. In Europe,
Belden makes enamel coated wire used exclusively in the manufacture of precision
deflection coils that are used with computer video screens and television
monitors.
MARKETS AND PRODUCTS FOR ELECTRONICS SEGMENT
The Company's Electronics business segment designs, manufactures and markets
various wire, cable and fiber optic product configurations that serve the
Networking, Industrial, Entertainment & OEM and Communications product markets,
as described in more detail below.
Networking. In the Networking product market, Belden supplies both shielded and
unshielded multiconductor cables, and to a lesser extent coaxial cables, for use
within the premises (hence the use of the term "premise" products) for the
transmission of voice, data, video or a combination of these. Networking
products are generally used as the backbone of computer networks, linking local
area networks ("LANs"), workstations, equipment and other peripheral devices to
each other or to telecommunications service wire. Belden's multiconductor
product line for the Networking market includes plenum cable, which is jacketed
with special flame retardant materials, and its DataTwist(R) cables for high
speed transmission. It also includes MediaTwist(R) cables, which are multimedia
cables supporting diverse applications in video, data, and voice technologies.
Belden also sells fiber optic cables for utilization in LAN applications. In
these systems, fiber optic cables are used to provide data communications
between buildings in close proximity or to provide a "backbone" to carry
information between floors within a building.
Belden's primary channels to the Networking product market include distributors,
computer original equipment manufacturers ("OEMs") and systems integrators who
design and install multivendor data/voice systems. Networking product sales by
both of Belden's business segments constituted approximately 22%, 24% and 21% of
Belden's consolidated revenues in 1999, 1998 and 1997, respectively.
Industrial. The Industrial product market requires a broad range of products for
industrial signal, instrumentation and control applications involving
programmable controllers, robotics, process control and computer-integrated
manufacturing, as well as traffic signal cable and cable for fire alarm, smoke
detection, sprinkler control and security systems. Many industrial environments,
such as refineries or other natural resource manufacturing facilities, require
cables with exterior armor or jacketing materials that can endure exposure to
chemicals, extreme temperatures and outside elements. Belden manufactures and
markets multiconductor products and, to a lesser degree, coaxial and fiber optic
products, that are designed for all these applications. Belden also manufactures
electrical wire used for the industrial power markets. Belden sells these
industrial signal, instrumentation and control products primarily through wire
specialist distributors and redistributors.
Also within the Industrial product market, computer equipment requires various
multiconductor, flat, coaxial and fiber optic product configurations to
interconnect peripheral pieces of equipment, such as printers, to computers.
Belden supplies these product configurations for such applications. Belden also
supplies heat-shrinkable tubing and wire management products to protect and
harness wire and cable assemblies. Belden's primary market channels for these
products are direct sales to computer and instrumentation OEMs and sales through
assembly houses and distributors.
Belden-wide Industrial product sales constituted approximately 33%, 35% and 37%
of Belden's consolidated revenues in 1999, 1998 and 1997, respectively.
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Entertainment & OEM. Belden manufactures a variety of multiconductor and coaxial
products which distribute audio and video signals for use in broadcast
television (including digital television and HDTV), broadcast radio, pre-and
post-production facilities, recording studios and public facilities such as
arenas and stadiums. Belden's audio/video cables are also used in connection
with microphones, musical instruments, audio mixing consoles, effects equipment,
speakers, paging systems and consumer audio products. Belden's primary market
channels for these broadcast, music and entertainment products are broadcast
specialty distributions and audio systems installers. Belden also sells directly
to music OEMs and the major networks including NBC, CBS, ABC and FOX.
On the OEM side of the Entertainment & OEM product market, Belden makes flat
cable products for use in internal computer component wiring, and to interface
internal components such as circuit boards, switching devices and other active
components. Belden primarily sells these products directly to computer and
instrumentation OEMs and through assembly houses and distributors.
Belden's OEM products also include lead and hook-up wire that is used for
electrical leads in motors, internal wiring and test equipment, which Belden
sells primarily to OEMs that manufacture motors, transformers, ballasts and
lighting, electronic equipment and coil winders. Belden also markets these
products through electrical apparatus parts distributors, wire specialist
distributors and electrical wholesalers. In Europe, Belden manufactures enamel
coated wire used exclusively in the manufacture of precision deflection coils
that are used with computer video screens and television monitors. These
products are sold directly to OEMs. Belden also fabricates and sells directly to
OEMs wire for components used in the production of active and passive electronic
components which provide the circuitry connections for electronic data
equipment.
Belden-wide Entertainment & OEM product sales constituted approximately 21%, 25%
and 27% of Belden's consolidated revenues in 1999, 1998 and 1997, respectively.
Communications. Within the Communications product market, Belden supplies
products that transmit voice, video, and data signals through the public
telephone network. Because these are principally manufactured by the
Communications business segment, they are discussed in connection with that
segment below.
Also within the Communications product market, Belden manufactures flexible,
copper-clad coaxial cable, sometimes generically referred to as "broadband",
which provides high speed transmission of voice, data and video. This coaxial
cable made by Belden is used for the "drop" section of a cable television (CATV)
system and Direct Broadcast Satellite (DBS) system. The drop cable section
distributes the signal from the "trunk" portion of the CATV system or the
satellite dish in a DBS system into the home. Belden also has a composite cable
capability for a combination of CATV and telephone pair to meet the changing
needs of the converging CATV and telecommunication markets. Further, Belden
manufactures a copper base trunk distribution cable widely used throughout
Europe meeting local specifications within the region. In addition, Belden makes
fiber optic single mode cable for CATV applications.
The CATV drop cable market includes both new cable installations and the repair
and replacement of existing cable. Belden's CATV cable is sold directly to
multiple systems operators (MSOs) who operate CATV systems throughout the world
and through CATV and electronic distributors.
Also within the Communications product market, Belden sells coaxial cables used
in connection with wireless applications, such as cellular, PCS, PCN and GPS.
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MARKETS AND PRODUCTS FOR COMMUNICATIONS SEGMENT
The Company's Communications business segment designs, manufactures and markets
wire and cable products that serve the Communications and Networking product
markets. Within the Communications product market, Belden supplies products that
transmit voice, video, and data signals through the public telephone network.
Sophisticated digital network and switching equipment used in many of the
advanced telephone systems require specialty cable. Belden supplies exchange
cable--a type of multiconductor cable also known as "PIC" or plastic insulated
cable--which is used to provide telephone and data circuits from the central
office (where switching equipment is located) or distribution cabinets to
neighborhoods or buildings (where circuits are required), and service
distribution wire, also a multiconductor cable which extends the voice, video,
or data circuit from the exchange cable to a business or home. Belden also makes
some fiber optic products for communications applications. Belden's PIC cable
products, and the majority of its service distribution wire products, are
manufactured by its Communications business segment, and are sold generally to
the regional bell operating companies (RBOCs) directly and through distributors,
and to other major communications companies.
Communications product sales by both of Belden's business segments constituted
approximately 24%, 16% and 15% of Belden's consolidated revenues in 1999, 1998
and 1997, respectively.
CUSTOMERS
Belden's Electronics business segment sells through distributors and directly to
OEMs and installers of equipment and systems. Belden's Communications business
segment sells primarily to Regional Bell Operating Companies (RBOCs) both
directly and through distributors, and to other major communications companies.
Sales to several business units of Anixter International Inc., primarily by the
Electronics business segment, represented approximately 16% of Belden-wide sales
in 1999, 18% in 1998 and 17% in 1997.
In general, Belden's customers are not contractually obligated to buy Belden
products exclusively, in minimum amounts or for a significant period of time.
They could purchase products that compete with Belden's products in lieu of
purchasing products from Belden, and the loss of one or more large customers
could, at least in the short-term, have an adverse effect on the Company's
results of operations. However, the Company believes that its relationships with
its customers are satisfactory and that the customers choose Belden products due
to, among other reasons, the breadth of Belden's product offering and the
quality and performance characteristics of its products.
Apart from this, the ongoing relationship that the Company's Electronics
business segment has with its distributors raises other potential risks. For
example, adjustments to inventory levels maintained by distributors (which
adjustments may be accelerated through consolidation among distributors) may
adversely affect sales on a short-term basis. Further, certain distributors have
been and may in the future be allowed to return inventory at the distributor's
original cost, in an amount not to exceed three percent of the prior year's
purchases, in exchange for an order of equal or greater value. The Company has
recorded a liability for the estimated impact of this return policy.
The Company's Communications business segment sells telecommunications products
primarily to RBOCs and other telecommunication companies under long term
contracts, generally three to five years in duration. Due to the size of these
contracts, the award or loss of a contract may have a material impact on the
operating performance of the Company. In addition, the order pattern for these
customers can vary due to their operational priorities, weather, budget
constraints, increasing system upgrades, and other factors.
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INTERNATIONAL OPERATIONS
Belden's international sales consist primarily of products sold by the
Electronics business segment into all four product markets. Belden's primary
channels to international markets are through distributors, and direct sales to
end users and OEMs.
Changes in the relative value of currencies take place from time to time and
their effects on the Company's results of operations may be favorable or
unfavorable. Belden sometimes engages in foreign currency hedging transactions
to mitigate these effects. For more information about Belden's foreign currency
exposure management, See "Note 2: Summary of Significant Accounting Policies" of
Belden's consolidated financial statements in Item 8 of this Annual Report on
Form 10-K.
As Belden continues to expand internationally, the increased opportunities are
accompanied by increased risks arising from economic and political
considerations in the countries served. For example, the improving, but still
unsettled economic climate in the Asia/Pacific region and South America may
adversely affect sales in those areas.
Financial information about Belden's geographic areas is shown in "Note 18:
Industry Segments, Major Customers and Geographic Information" of Belden's
consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
COMPETITION
Belden faces substantial competition in its major markets. The number and size
of Belden's competitors varies depending on the product line and business
segment.
For the Company's Electronics business segment, competition can be generally
categorized as highly competitive with many players. Primary competition is
either global in scope with competitors that have substantial financial,
engineering, manufacturing and marketing resources, or regional in scope with
competitors that have more limited product offerings with price as the
differentiating feature. In recent years, competition has been further
stimulated by the addition of several large wire and cable companies to the
public marketplace through initial public offerings.
For Belden's Communications business segment, there are a handful of competitive
players in the exchange cable and service distribution wire product area. There
are numerous competitors in the segment's other product areas. Due to the buying
power of the RBOCs and other factors, the Communications segment faces highly
competitive conditions.
The principal competitive factors in all product markets are availability,
customer support, distribution coverage, price and product features. The
relative importance of each of these factors varies depending on the specific
product category.
Some of the Company's competitors have greater financial, engineering,
manufacturing and other resources than the Company. The Company's competitors
can be expected to continue to improve the design and performance of their
products and to introduce new products with competitive price and performance
characteristics. Although the Company believes that it has certain technological
and other advantages over its competitors, realizing and maintaining such
advantages will require continued investment by the Company in engineering,
research and development, marketing and customer service and support. There can
be no assurance that the Company will continue to make such investments or that
the Company will be successful in maintaining such advantages.
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RESEARCH AND DEVELOPMENT
The Company engages in a continuing research and development program, including
new and existing product development, testing and analysis; process and
equipment development and testing; and compound materials development and
testing. For information about the amount spent on research and development, see
"Note 2: Summary of Significant Accounting Policies" of Belden's consolidated
financial statements in Item 8 of this Annual Report on Form 10-K.
PATENTS AND TRADEMARKS
The Company has a policy of seeking patents when appropriate on inventions
concerning new products, product improvements and process and equipment
development as part of its ongoing research, development and manufacturing
activities. The Company owns numerous patents and registered trademarks
worldwide, with numerous others for which applications are pending. Although in
the aggregate its patents and trademarks are of considerable importance to the
manufacturing and marketing of many of its products, the Company does not
consider any single patent or trademark or group of patents or trademarks to be
material to its business as a whole, except for the Belden(R) trademark. The
Company has the right to use the Belden(R) trademark in connection with all of
its current products. The Company, however, granted to Cooper, around the time
of the Company's initial public offering, the exclusive royalty-free right to
use the Belden(R) trademark for wire and cable products in the automotive
markets and certain other markets in which the Company does not currently
compete. Other important trademarks used by Belden include DataTwist(R),
MediaTwist(R), Flamarrest(R), UnReel(R), Duobond(R), Beldfoil(R),
Conformable(R), Pope(R), Alpha(R), FIT(R), XTRA GUARD(R) and New Generation(R).
Belden's patents and trademarks are primarily used by the Electronics business
segment.
RAW MATERIALS
The principal raw material used in many of Belden's products is copper. The
Company has a copper hedging policy that attempts to match the period of the
futures contract with the estimated time required to reflect the change in
copper cost in the sales price of the Company's products. For additional
information, see "Note 2: Summary of Significant Accounting Policies" and "Note
15: Commitments" of Belden's consolidated financial statements in Item 8 of this
Annual Report on Form 10-K.
Other raw materials used by Belden include, for the Electronics business
segment, Teflon(R) FEP and other insulating materials such as plastic and
rubber, shielding tape, plywood reels, corrugated cartons, aluminum and optical
fiber; and for the Communications business segment, the preceding materials as
well as flooding and filling compound, bronze tape, color chips, steel, reemay,
mylar and polyester film. With respect to all major raw materials used by the
Company, Belden generally has either alternative sources of supply or access to
alternative materials. Supplies of these materials are generally adequate and
are expected to remain so for the foreseeable future.
Belden sources a minor percentage of its finished products from a network of
manufacturers under private label agreements, and resells these products under
various names, especially Alpha Wire Company.
BACKLOG
The Company's business is characterized by short-term order and shipment
schedules rather than volume purchase contracts. Accordingly, the Company does
not consider backlog at any given date to be indicative of future sales. The
Company's backlog consists of product orders for which a customer purchase order
has been received or a customer purchase order number has been communicated and
which are scheduled for shipment within six months. Orders are subject to
cancellation or rescheduling by the customer, generally with a cancellation
charge. At December 31, 1999, the Company's backlog of orders believed to be
firm was $59.2 million, most of which is attributable to the Electronics
business segment, compared to $48.9 million at December 31, 1998. The Company
believes that all such backlog will be filled in 2000.
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ENVIRONMENTAL MATTERS
The Company is subject to numerous federal, state, local and foreign laws and
regulations relating to the storage, handling, emission and discharge of
materials into the environment, including the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"), the Clean Water Act, the
Clean Air Act (including the 1990 amendments) and the Resource Conservation and
Recovery Act. The Company believes that its existing environmental control
procedures are adequate and it has no current plans for substantial capital
expenditures in this area.
A former Belden facility in Shrewsbury, Massachusetts was sold to a third party
in 1992, but Belden has agreed to indemnify the buyer for certain preexisting
environmental liabilities, principally caused by a former owner. Contaminated
soil has been removed, and groundwater remediation will continue over the coming
months, at which time the Company will monitor the groundwater to verify
compliance with state requirements.
The facility in Venlo, The Netherlands was acquired in 1995 from Philips
Electronics N.V. Soil and goundwater contamination were identified on the site
as a result of material handling and past storage practices. Various soil and
groundwater assessments are being performed, and some form of remediation will
be necessary. The Company has recorded a liability for the costs.
The Company has been identified as a potentially responsible party ("PRP") with
respect to five sites designated for cleanup under CERCLA or similar state laws,
which impose liability for cleanup of certain waste sites and for related
natural resource damages without regard to fault or the legality of waste
generation or disposal. Persons liable for such costs and damages generally
include the site owner or operator and persons that disposed or arranged for the
disposal of hazardous substances found at those sites. Although CERCLA imposes
joint and several liability on all PRPs, in application, the PRPs typically
allocate the investigation and cleanup costs based upon the volume of waste
contributed by each PRP. Settlements can often be achieved through negotiations
with the appropriate environmental agency or the other PRPs. PRPs that
contributed less than 1% of the waste are often given the opportunity to settle
as "de minimis" parties, resolving their liability for a particular site. The
number of sites with respect to which the Company has been identified as a PRP
has decreased in part as a result of "de minimis" settlements.
Belden does not own or operate any of the five waste sites with respect to which
it has been identified as a PRP. In each case, Belden is identified as a party
that disposed of waste at the site. With respect to four of the sites, Belden's
share of the waste volume is estimated to be less than 1%. At the fifth site,
Belden contributed less than 10% of the waste. Although no estimates of cleanup
costs have yet been completed for most of these sites, the Company believes,
based on its preliminary review and other factors, including its estimated share
of the waste volume at the sites, that the costs to the Company relating to
these sites will not have a material adverse effect on its results of operations
or financial condition. The Company has an accrued liability on its balance
sheet to the extent such costs are known and estimable for such sites.
The Company does not currently anticipate any material adverse effect on its
results of operations, financial condition or competitive position as a result
of compliance with federal, state, local or foreign environmental laws or
regulations, or cleanup costs at the facilities and sites discussed above.
However, some risk of environmental liability and other costs is inherent in the
nature of the Company's business, and there can be no assurance that material
environmental costs will not arise. Moreover, it is possible that future
developments, such as increasingly strict requirements of environmental laws and
enforcement policies thereunder, could lead to material costs of environmental
compliance and cleanup by the Company.
EMPLOYEES
As of December 31, 1999, the Company had approximately 5,400 full-time
employees.
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IMPORTANCE OF NEW PRODUCTS AND PRODUCT IMPROVEMENTS;
IMPACT OF TECHNOLOGICAL CHANGE; IMPACT OF ACQUISITIONS
Many of the markets that Belden serves are characterized by advances in
information processing and communications capabilities, including advances
driven by the expansion of digital technology, which require increased
transmission speeds and greater bandwidth. These trends require ongoing
improvements in the capabilities of wire and cable products. The Company
believes that its future success will depend in part upon its ability to enhance
existing products and to develop and manufacture new products that meet or
anticipate such changes. The failure to introduce successfully new or enhanced
products on a timely and cost-competitive basis could have an adverse impact on
the Company's operations and financial condition.
Because of patents owned by others and high capital requirements, the Company
does not currently manufacture its own optical fibers, but purchases its
requirements from others for further manufacturing. The Company has been a fiber
optic cable supplier in niche, specialty markets since 1976, now manufacturing
such cables on three continents, and believes that growth in fiber optic
products presents a significant growth opportunity for the Company. At the same
time, fiber optic technology presents a potential substitute for certain of the
copper-based products that comprise the vast majority of Belden's sales.
Fiber optic cables have not to date significantly penetrated the copper-based
markets served by Belden due to the high relative cost required to interface
electronic and light signals and the high cost of fiber termination and
connection. Further, advances in data transmission equipment and copper cable
technologies have increased the relative performance of copper solutions. For
example, asynchronous transfer mode (ATM) technology using copper cable may
further improve the attractiveness of copper-based solutions. However, a
significant and rapid decrease in the cost of fiber optic systems relative to
the cost of copper-based systems could make such systems superior on a
price/performance basis to copper systems and could adversely effect the
Company.
To date, the development of wireless devices has required the development of new
wired platforms and infrastructure. In the future, wireless communications
technology may represent a threat to both copper and fiber optic-based systems.
Belden believes that the reduced signal security and the relatively slow
transmission speeds of current systems restrict the use of wireless systems in
many data communications markets. However, there are no assurances that future
advances in wireless technology may not have an adverse effect on the Company's
business.
The Company does not presently anticipate that the commercialization of video
delivery technology -- direct broadcast technology ("DBS") -- will have a
material adverse effect on its CATV drop cable business. With DBS, a small
satellite dish antenna is placed on the roof of a subscriber's facility. DBS
does not require wiring from a central location to each subscriber, as does a
CATV system. The Company sells cables that meet the requirements of a DBS
system, specifically the cable that connects the DBS satellite dish antenna with
a subscriber's home or business television set.
Continued strategic acquisitions are an announced part of Belden's future
strategy, and as discussed in "Note 4: Acquisitions" to Belden's consolidated
financial statements in Item 8 of this Annual Report on Form 10-K, the Company
completed six acquisitions in 1997, 1998 and 1999. However, there can be no
assurance that future acquisitions will occur or that those that do occur will
be successful. In particular, the addition of several large wire and cable
companies to the public marketplace in recent years through initial public
offerings has increased competition for acquisition candidates.
FORWARD-LOOKING STATEMENTS
The statements set forth in Item 1 of this Annual Report on Form 10-K other than
historical facts are forward-looking statements made in reliance upon the safe
harbor of the Private Securities Litigation Reform Act of 1995. Actual results
could differ materially from such forward-looking information for the reasons
set forth below. The improving but still unsettled economic climate being
experienced in the Asia/Pacific
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and South American regions and its impact on sales, heightened competition from
domestic and foreign competitors, including new entrants; the success in
identifying, acquiring and integrating acquisitions, including but not limited
to cost saving and profit improvement initiatives at CSI; results from transfers
of production to new facilities; developments in technology; the threat of
displacement from competing technologies including wireless and fiber optic
technologies; acceptance of Belden's products; changes in raw material costs and
availability; foreign currency rates; pricing of Belden's products; changes in
the global economy; the success of cost-saving initiatives and programs and
other specific factors discussed elsewhere in this Annual Report on Form 10-K
and other Securities and Exchange filings will have an impact on Belden's actual
results. The information contained herein represents management's best judgement
as of the date hereof based on information currently available; however, the
Company does not intend to update this information to reflect developments of
information obtained after the date hereof and disclaims any legal obligation to
do so.
EXECUTIVE OFFICERS
The following sets forth certain information with respect to Belden's executive
officers. All executive officers are elected to terms which expire at the
organizational meeting of the Board of Directors following the Annual Meeting of
Shareholders.
<TABLE>
<CAPTION>
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NAME AGE POSITION
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<S> <C> <C>
C. Baker Cunningham 58 Chairman of the Board, President, Chief Executive
Officer and Director
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Paul Schlessman 43 Vice President, Finance, Treasurer and Chief
Financial Officer
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Peter J. Wickman 51 Vice President, Operations and
President, Belden Electronics
- --------------------------------------------------------------------------------------------------------------------
Richard K. Reece 44 Vice President, Operations and
President, Belden Communications
- --------------------------------------------------------------------------------------------------------------------
Kevin L. Bloomfield 48 Vice President, Secretary and General Counsel
- --------------------------------------------------------------------------------------------------------------------
Cathy O. Staples 49 Vice President, Human Resources
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
C. Baker Cunningham has been Chairman of the Board, President, Chief Executive
Officer and Director of the Company since 1993. From February 1982 until July
1993, he was an Executive Vice President, Operations of Cooper, a manufacturer
of electrical equipment and tools and hardware. Mr. Cunningham has a B.S. degree
in civil engineering from Washington University, an M.S. degree in civil
engineering from Georgia Tech and an M.B.A. from the Harvard Business School.
Paul M. Schlessman has been Vice President, Finance, Treasurer and Chief
Financial Officer of the Company since July 1999. He was Vice President and
General Manager of the Alpha Wire Division from February 1997 to July 1999.
Prior to that, he was Vice President, Finance for Clarke American, a financial
service subsidiary of Caradon, plc, from August 1996 to February 1997. From 1989
to August 1996 Mr. Schlessman worked in financial capacities with Cooper's
Automotive Division. He has a B.S. degree in finance and accounting from Bowling
Green State University and an MBA from the University of Toledo and is a
Certified Public Accountant.
Richard K. Reece has been Vice President, Operations of the Company and
President, Belden Communications since June 1999. He was Vice President,
Finance, Treasurer and Chief Financial Officer of the Company from August 1,
1993 until June 1999. He was associated with the public accounting firm of Ernst
& Young LLP from 1978 until June 1993 and was a partner with that firm since
1989. He has a B.S. degree in accounting from Auburn University and is a
Certified Public Accountant.
10
<PAGE> 11
Peter J. Wickman has been Vice President, Operations of the Company since 1993,
and President, Belden Electronics since June 1999. He was Vice President,
Finance and Planning for the Belden Division of Cooper from 1989 to July 1993.
He was Controller of Cooper's Bussmann Division from 1983 to 1989. Mr. Wickman
has a B.S. degree in accounting from Walton School of Commerce and is a
Certified Public Accountant.
Kevin L. Bloomfield has been Vice President, Secretary and General Counsel of
the Company since August 1, 1993. He was Senior Counsel for Cooper from February
1987 to July 1993, and had been in Cooper's Law Department from 1981 to 1993. He
has a B.A. degree in economics and a J.D. degree from the University of
Cincinnati and an M.B.A. from Ohio State University.
Cathy Odom Staples has been Vice President, Human Resources of the Company since
May 1997. She was Vice President, Human Resources for the Electronic Products
Division of the Company from May 1992 to May 1997. Ms. Staples has a B.S.B.A.
degree in human resources from Drake University.
11
<PAGE> 12
ITEM 2. PROPERTIES
Belden has an executive office and various manufacturing plants, distribution
centers and sales offices. The significant facilities are as follows:
1. Used by Belden generally:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
OWNED
LOCATION FACILITY TYPE SQUARE OR
FEET LEASED
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
St. Louis, Missouri Executive Office 13,261 Leased
- -------------------------------------------------------------------------------------------------------
</TABLE>
2. Used by the Electronics business segment:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
OWNED
LOCATION FACILITY TYPE SQUARE OR
FEET LEASED
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richmond, Indiana Sales and Administrative Office 53,575 Owned
- -------------------------------------------------------------------------------------------------------
Richmond, Indiana Engineering Center 70,000 Owned
- -------------------------------------------------------------------------------------------------------
Richmond, Indiana Manufacturing - electronics wire & cable 693,372 Owned
- -------------------------------------------------------------------------------------------------------
Richmond, Indiana Distribution Center 145,000 Owned
- -------------------------------------------------------------------------------------------------------
Monticello, Kentucky Manufacturing - electronics wire & cable 222,800 Owned
- -------------------------------------------------------------------------------------------------------
Tompkinsville, Kentucky Manufacturing - CATV and flat cable 228,800 Owned
- ----------------------------------------------------------------------------------------- -------------
Leominster, Massachusetts Manufacturing - electronics wire & cable 61,200 Leased
- -------------------------------------------------------------------------------------------------------
Elizabeth, New Jersey Sales and Administration Office 7,064 Owned
- -------------------------------------------------------------------------------------------------------
Elizabeth, New Jersey Distribution Center 197,250 Owned
- -------------------------------------------------------------------------------------------------------
Fort Mill, South Carolina Manufacturing - electronics wire & cable 240,000 Owned
and fiber optics cable
- -------------------------------------------------------------------------------------------------------
Essex Junction, Vermont Manufacturing - high temperature 77,400 Owned
electronics wire & cable
- -------------------------------------------------------------------------------------------------------
Cobourg, Ontario, Canada Manufacturing - electrical and 215,000 Owned
electronics wire & cable; Sales and
Administrative Office and Distribution
Center
- -------------------------------------------------------------------------------------------------------
Tottenham, Victoria, Manufacturing--electrical and electronics
Australia wire & cable; Sales and Administrative 140,000 Leased
Office and Distribution Center
- -------------------------------------------------------------------------------------------------------
Klosterneuburg, Austria Manufacturing--electrical and electronics 43,000 Leased
wire & cable; Sales and Administrative
Office
- -------------------------------------------------------------------------------------------------------
Villingen-Schwenningen, Manufacturing - electrical and 125,000 Owned
Germany electronics wire & cable; Sales and
Administrative Office and Distribution
Center
- -------------------------------------------------------------------------------------------------------
Budapest, Hungary Manufacturing--electrical and electronics 79,000 Owned
wire & cable; Sales and Administrative
Office
- -------------------------------------------------------------------------------------------------------
Venlo, The Netherlands Manufacturing - electrical and 585,000 Owned
electronics wire & cable and fiber optics
cable; Distribution Center; and Sales and
Administrative Office
- -------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 13
3. Used by the Communications business segment:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
OWNED
LOCATION FACILITY TYPE SQUARE OR
FEET LEASED
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Phoenix, Arizona Manufacturing - Communications and 1,300,000 Owned
networking wire & cable; Sales and
Administrative Office and Distribution
Center
- --------------------------------------------------------------------------------------------------------
</TABLE>
The Company believes its physical facilities are suitable for their present and
intended purposes and adequate for the Company's current level of operations.
ITEM 3. LEGAL PROCEEDINGS
In connection with its public offering in 1993, the Company made an election
under Section 338(h)(10) of the Internal Revenue Code, with the effect that the
tax basis in the Company's assets was increased to the deemed purchase price of
the assets. This election resulted in an increase in the Company's tax basis and
available income tax deductions. Pursuant to a Tax Sharing and Separation
Agreement (the "Tax Agreement") entered into by the Company and Cooper in
connection with the offering, the Company agreed to pay to Cooper the amount of
the benefit realized with respect to the increase in its tax basis (retaining
10% of the tax benefit relating to the amortization of capitalized costs of
certain intangibles, such as goodwill), as realized on a quarterly basis.
Following an audit of the Company's tax years for 1993 through 1995, the IRS
issued a deficiency disallowing the increase in the Company's tax basis for
intangibles, and the related amortization deductions claimed by the Company. The
Company believes this deficiency is contrary to tax law, and in January 1999,
filed a petition in the United States Tax Court requesting a redetermination.
Under the Tax Agreement, Cooper would be responsible for 90% of any amount which
is finally determined to be owed by the Company and would be contractually
obligated to defend the Company against such matters. During October 1999, the
parties entered a Stipulation as to Settled Issues, which allows in full the
Company's increase in tax basis for intangibles, and the related amortization
deductions. It is anticipated that this case will be closed in 2000 pending
resolution of some other, immaterial tax issues. Accordingly, the Company
believes that it is unlikely that the outcome of this matter will have a
material adverse effect on the Company.
Apart from the above, the Company is a party to various legal proceedings and
administrative actions which are incidental to the operations of the Company. In
the opinion of the Company's management, such proceedings and actions should
not, individually or in the aggregate, have a material adverse effect on the
Company's results of operations or financial condition.
See "Item 1. Business -- Environmental Matters" regarding certain proceedings
arising under environmental laws.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no matters
were submitted to a vote of security holders of the Company.
13
<PAGE> 14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
At March 16, 2000, there were 1,065 record holders of Common Stock of Belden
Inc. Belden's common stock is traded on the New York Stock Exchange (NYSE),
under the ticker symbol "BWC". The Company anticipates that comparable cash
dividends will continue to be paid in the foreseeable future.
COMMON STOCK PRICES AND DIVIDENDS
<TABLE>
<CAPTION>
1999 (by quarter)
-------------------------------------------------------------------------------
1 2 3 4
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividends per common share $.05 $.05 $.05 $.05
Common stock prices:
High 22 24 1/2 25 1/2 21 11/16
Low 15 9/16 15 3/4 20 5/16 17 1/16
</TABLE>
<TABLE>
<CAPTION>
1998 (by quarter)
-------------------------------------------------------------------------------
1 2 3 4
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividends per common share $.05 $.05 $.05 $.05
Common stock prices:
High 42 1/4 43 7/8 33 1/8 21 3/16
Low 33 9/16 29 7/8 13 1/8 11 1/4
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
(in thousands, except per share amounts and number of employees)
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income statement data:
Revenues $818,614 $ 664,148 $ 676,898 $ 586,731 $ 536,642
Operating earnings 79,890 65,802 104,309 91,303 78,157
Income from continuing operations 40,991 35,927 60,024 53,589 45,344
Diluted earnings per share from
continuing operations 1.68 1.40 2.28 2.04 1.73
- -----------------------------------------------------------------------------------------------------------------------------
Balance sheet data:
Total assets $712,464 $ 500,472 $ 475,129 $ 371,645 $ 332,787
Long-term debt 283,817 162,850 124,047 71,630 81,458
Other long-term obligations 61,334 44,155 39,051 37,573 36,181
Stockholders' equity 247,527 219,667 228,954 179,707 131,902
- -----------------------------------------------------------------------------------------------------------------------------
Other data:
Average number of employees 4,500 3,400 3,300 3,000 3,000
Dividends per common share $ .20 $ .20 $ .20 $ .20 $ .20
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Description of Business Segments
The Company's operations are conducted within two business segments, the
Electronics segment and the Communications segment. The Electronics segment
designs, manufactures and markets wire, cable, and fiber optic products
primarily for the electronics and electrical markets, including products used
for the transmission of data, audio, video and electrical signals. These
products are sold primarily through distributors. The Communications segment
designs, manufactures, and markets wire and cable primarily for the
telecommunications market. The segment includes products used for the
transmission of voice, video, and data. These products are sold primarily to
major communications companies directly and through distributors.
Change in Reported Served Markets
During 1999, the Company revised the reported served markets for which revenues
are publicly reported. This was done to provide information that is more closely
associated with underlying markets and economic activities. The markets are
Communications, Networking, Industrial, and Entertainment & OEM. All prior
period served market information presented has been restated for comparative
purposes. The following describes each of the markets.
Communications Market
This market consists of (1)"Exchange Cable", also known as "PIC" or plastic
insulated cable, which is used to provide telephone and data circuits from the
central office (where switching equipment is located) or distribution cabinets
to neighborhoods or buildings (where circuits are required), (2)"Service
Distribution Wire", which extends the voice, video, or data circuit from the
exchange cable to a business or home, and (3)"CATV", sometimes generically
referred to as "broadband", which provides high speed transmission of voice,
video, and data.
Networking Market
This market consists of premise products, those used within the premises, for
the high speed transmission of voice, data, video, or a combination of these
products. These products are generally utilized as the backbone of computer
networks, linking local area networks, workstations, equipment, and other
peripheral devices to each other or to telecommunications service wire.
Constructions can utilize twisted pair technology, coaxial, or fiber optics.
Industrial Market
Included in this market are those products utilized in factory automation,
signal and control, industrial equipment, and instrumentation equipment. Many of
these products are designed to withstand harsh environment usage such as in
refineries or other natural resource manufacturing facilities, or require high
count repetitive motion such as in robotics or automated machinery.
Entertainment & OEM Market
This market consists primarily of Belden's broadcast products, which service the
professional broadcasters in television or radio studios, sports stadiums and
arenas, casinos, major sporting events, and the like. In addition to broadcast
products, this market also includes products servicing the OEM market such as
lead wire and connectorized cables, as well as deflection coil used in the
manufacture of televisions and computer monitors.
RESULTS OF OPERATIONS 1999 COMPARED WITH 1998
Revenues
Belden's revenues for the year ended December 31, 1999 were $818.6 million
compared with $664.1 million in 1998, an increase of 23%. Average copper prices
paid in 1999 were approximately 4% less than in 1998 (16% decrease in the first
half of 1999, 9% increase in second half of 1999). Since changes in the cost of
copper are generally passed through in the price of the Company's products
containing copper, changes in the cost of copper are likely to continue to
affect the Company's revenues. Revenues were higher in 1999 compared with 1998
by
15
<PAGE> 16
approximately $131 million due primarily to the inclusion of Cable Systems
International Inc. (CSI), which was acquired June 28, 1999, and Dorfler
Kabelwerk GmbH (Dorfler) and Duna Kabel Kft. (Duna), which were acquired on
October 26, 1999. The remaining increase in revenues is attributable to both the
performance of businesses acquired in the prior year as well as internal growth
in the U.S. offset by declines in the European region. This increase was
dampened by approximately $5 million, or less than 1%, due to the impact of
foreign currency exchange rates. The Company experienced a devaluation of the
dollar as it converted some of its foreign-based revenues into dollars. The
following table shows the components of the reported 23% increase in the
Company's 1999 revenues compared with 1998 in each of Belden's four served
markets.
<TABLE>
<CAPTION>
% Increase
% of Total In 1999 Revenues
1999 Revenues Compared with 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Communications 24.3% 85.5%
Networking 22.0 13.0
Industrial 33.2 17.4
Entertainment & OEM 20.5 1.0
- ------------------------------------------------------------------------------
</TABLE>
Communication products include wire and cable for telecom applications such as
exchange cable, service distribution wire, and broadband audio/video products.
Communications market revenues were up 86% due primarily to the acquisition of
CSI. Without the impact of acquisitions, revenues for the period would be down
5%. The reason for this decline was that strong recent demand for the Company's
CATV products servicing the direct broadcast satellite ("DBS") market in the
United States was offset by the continued weakness in the European region.
Communication products for telecom applications are sold primarily to RBOC's and
other telecommunication companies under long term contracts, generally three to
five years. Due to the size of these contracts, the award or loss of a contract
may have a material impact on operating performance of the Company. In addition,
the order pattern for these customers can vary due to their operational
priorities, weather, budget constraints, increasing system upgrades, and other
factors, leading to potential variations in the reported quarterly operating
results of the Company.
Networking products include wire and cable installed in buildings (premise) for
the high speed transmission of voice, data, or video generally used as the
backbone of computer networks. Networking market revenues for the year were up
13% compared to the same period of 1998. This increase was primarily due to the
Company's acquisition in November 1998 of ABB-Electro-Isolierwerke GmbH (EIW)
and CSI in June 1999, offset by declines in U. S. Excluding the impact of
acquisitions, this would be a decline of 8%. The decrease in revenues is
primarily attributable to three factors affecting the first two quarters of
1999. First, certain major distributors reduced inventory levels in late 1998
and during the first part of 1999, dampening the Company's sales. Second,
average pricing levels for most networking products in 1999 were lower than the
prior year primarily due to increased competition. Third, copper costs were
approximately 4% lower in 1999 from 1998 and contributed further to the negative
pricing environment for the Company's products. At the end of the year,
distributor inventories appear to be at reasonable levels while end user demand
for the Company's data products continues to be strong. Pricing for networking
products has stabilized in the market and has recently increased, primarily in
response to increased material costs as well as strong demand.
Industrial products include wire and cable used in factory automation, signal
and control, and instrumentation applications. Industrial market revenues were
up 17% in 1999 over 1998. Without the addition of revenues from acquisitions,
revenues would be up 5% in 1999 compared to the same period in 1998. Lower
average copper costs for the period have kept pricing pressure on this market.
Increasing volumes and improved product mix have led to higher industrial
revenues in North America, reflecting a shift from lower margin electrical
products to higher margin industrial instrumentation cable. While the industrial
market has been under pressure from lower raw material prices and weak capital
spending for most of the year, recent increased demand has been seen for the
Company's products in the North American markets.
16
<PAGE> 17
Entertainment & OEM products include wire and cable used in broadcast (such as
sports stadiums and media studios) and OEM applications, and television and CRT
deflection coils. Entertainment & OEM market revenues increased 1% in 1999
compared with 1998. Without the impact of acquisitions, this would be a decrease
of 4%. This decline is due primarily to the impact of lower demand and lower
copper costs on TV monitor deflection coils manufactured in Europe. The softness
for these products in Europe is expected to continue at least through the
remainder of 2000. Partially offsetting the revenue decline in Europe was an
increase in broadcast revenues in the U.S. driven by strong demand for stadium
projects as well as continued upgrading projects necessary for the conversion
from analog to digital broadcasting. The Company expects to continue to benefit
from the digital conversion of professional broadcasters due to its broad,
quality mix of audio/video products.
Average prices for the Company's products were down in 1999 compared with 1998.
This decline was primarily attributable to the decline in market prices for both
high temperature and low temperature networking cable, as well as the impact of
lower average copper costs on other product lines.
United States revenues, which represented approximately 68% of 1999 total
revenues, increased 29% from 1998, due primarily to the acquisition of CSI.
Revenues from the Asia/Pacific, Latin America, and other export regions
represented approximately 10% of 1999 total revenues and increased 12% from
1998, reflecting improving stability in those regions. European revenues
increased 18% from 1998, and increased 23% in local currency. The increase is
primarily due to the carryover effect of the acquisition of EIW late in 1998,
partially offset by an unfavorable pricing environment and general weakness in
most of the Company's served markets in the European community. Canadian
revenues decreased 3% from 1998 due primarily to a softening for the Company's
industrial products. Revenues from European and Canadian customers represented
17% and 5% of 1999 total revenues, respectively.
Costs, Expenses and Earnings
The following table sets forth information comparing the 1999 components of
earnings with 1998.
<TABLE>
<CAPTION>
% Increase in
1999 Compared
1999 1998* with 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in thousands, except % data)
Gross profit $179,632 $162,800 10.3%
As a percent of revenues 21.9% 24.5%
Operating earnings $ 79,890 $ 65,802 21.4%
As a percent of revenues 9.8% 9.9%
Income from continuing operations before
taxes $ 65,848 $ 58,657 12.3%
As a percent of revenues 8.0% 8.8%
Income from continuing operations $ 40,991 $ 35,927 14.1%
As a percent of revenues 5.0% 5.4%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* 1998 results include the impact of the $5,564 ($9,084 pretax) nonrecurring
charges related to employee separation, discontinued product lines, and costs
related to a failed Asia/Pacific distributor.
The increase in the gross profit amount was due to higher revenues resulting
from 1999 acquisitions, internal growth in the United States, the carryover
effect of acquisitions completed in the prior year, and improved profitability
within the Electronics segment. Gross profit as a percent of revenues declined
as improved profitability in the Electronics segment was offset by the impact of
the results of the Company's currently lower margin Communications segment.
Cable Systems International (CSI), which makes up most of the Communications
segment, was acquired at the end of June 1999.
The increase in gross profit led to higher operating earnings during the year.
Also contributing to this was an improvement in selling, general, and
administrative expenses to 12% of revenues in 1999 versus 13% in 1998.
17
<PAGE> 18
This improvement was primarily due to the effect of cost reduction programs put
in place in the Electronics segment in late 1998, as well as the impact of the
CSI acquisition which has a lower selling, general, and administrative cost base
as a percent of revenues than the other business segment of the Company.
Included in operating earnings in 1998 was $9.1 million ($5.6 million after tax)
of nonrecurring items related to employee separation, discontinued product lines
and costs related to a failed Asia/Pacific distributor.
Income from continuing operations before income taxes increased to $65.8 million
in 1999 from $58.7 million in 1998, or 12% due to higher operating earnings,
which were partially offset by an increase in interest expense because of
greater borrowings at higher interest rates. The increase in borrowings
resulting from the 1999 acquisitions was partially offset by cash flow from
operations. Average debt outstanding during 1999 and 1998 was $229 million and
$146 million, respectively. The Company's average daily interest rate was 6.4%
in 1999 compared with 6.1% in 1998.
The Company's effective tax rate was 37.8% and 38.8% in 1999 and 1998,
respectively. The decrease is the result of various tax saving strategies
implemented by the Company during the year.
RESULTS OF OPERATIONS 1998 COMPARED WITH 1997
Description of Changes to Reported Results
On May 7, 1999, the Company completed the sale of its Cord Products Division,
which had comprised the Cord Products segment. The operating results of the Cord
Products segment, including a first quarter of 1999 provision for a loss on the
sale of $5.2 million net of tax, has been segregated from continuing operations
and reported separately in the consolidated income statements. The net assets
have been classified within the current assets section of the December 31, 1998
balance sheet as "Net assets of discontinued operations". The following
discussion and analysis has been revised to exclude the results of this segment
as well as the change in reported served markets.
Revenues
Belden's revenues for the year ended December 31, 1998 were $664.1 million
compared with $676.9 million in 1997, a decrease of 2%. Revenues were
approximately $24 million or 4% lower in 1998 compared with 1997 due to the
pass-through of lower copper costs. Since changes in the cost of copper are
generally passed through in the price of the Company's products containing
copper, further changes in the cost of copper continue to affect the Company's
revenues. Revenues also were reduced in 1998 by approximately $5 million, or
less than 1%, due to the negative impact of converting local currencies from
foreign operations into U.S. dollars. This decline in revenues was offset by
approximately $20 million, or 3% due to the inclusion of Olex Communications
Cable (Olex), acquired in February 1998, and EIW, acquired in November 1998. The
following table shows the components of the reported 2% decrease in the
Company's 1998 revenues compared with 1997 in each of Belden's four served
markets.
<TABLE>
<CAPTION>
% Increase/(Decrease)
% of Total In 1998 Revenues
1998 Revenues Compared with 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Communications 16.1% 9.7%
Networking 24.0 10.5
Industrial 34.9 (6.9)
Entertainment & OEM 25.0 (10.9)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The revenue growth in the communications market was primarily due to the
inclusion of Olex and the increase in demand for the Company's telecommunication
products, partially offset by weakness in demand for CATV products in Europe,
Asia/Pacific and Latin American regions.
Networking market revenue growth was fueled by the continued networking of
computers, workstations, and servers; upgrades of existing computer networks;
and increased use of the internet. While revenues for computer networking
products increased in 1998 compared with 1997, the Company experienced sales
declines in the
18
<PAGE> 19
second half of 1998 compared with 1997 primarily due to distribution customers
reducing their inventories of Belden products. These customers had previously
increased their levels of the Company's products in excess of their customers'
demand. During the period in which they reduced their inventory levels, they
purchased lower levels of products from the Company.
Industrial market revenues declined in 1998 compared with 1997. This decrease
was due primarily to lower prices, principally from the pass-through of lower
copper costs. In addition, the drop in prices for many commodities such as
metals and petroleum, and the slowed capital spending partially due to the
impact of declining Asian demand, reduced demand for certain of the Company's
products. Offsetting some of the decline in revenues for industrial products was
the inclusion of EIW. Sales of the Company's computer interconnect products
declined in 1998. The demand for computer interconnect products decreased as
newer technologies displaced certain of these products with new computer
networking and industrial cable supplied by the Company. Additionally, as the
manufacturing of certain electronic equipment shifted to contract manufacturers
in lower cost international markets, the Company lost business to local
competitors.
The revenue decline in the entertainment and OEM markets reflected weakness
during 1998 in the professional broadcast markets. Revenues from products
serving the broadcast market were down in 1998 primarily due to broadcasters'
continued delay of spending related to indecision about alternative digital
formats. The remaining revenues for this market principally consist of
electrical cordage, lead and hookup wire, and television set deflection coils.
These revenues declined due to lower prices primarily from the pass-through of
lower copper costs, lost business as certain electronic and electrical equipment
manufacturers moved their production to lower cost international markets and
economic slowdown in certain of the Company's served markets.
United States revenues, which represented approximately 65% of 1998 total
revenues, were flat from 1997. Revenues from the Asia/Pacific, Latin America,
and other export regions represented approximately 11% of 1998 total revenues
and increased 4% from 1997. Without the 1998 acquisition of Olex, revenues to
these regions would have decreased by 23% primarily due to the decline in the
Asia/Pacific region. European revenues decreased 7% from 1997, and decreased 2%
in terms of local currency. Without the acquisition of EIW late in 1998,
European revenues would have decreased 9%. Canadian revenues decreased 15% from
1997 with currency translation accounting for almost 40% of this decline. This
decrease is the result of lower capital spending by manufacturers in the natural
resource sector due primarily to lower commodity prices and weak export demand.
Revenues from European and Canadian customers represented 18% and 6% of 1998
total revenues, respectively.
Costs, Expenses and Earnings
The following table sets forth information comparing the 1998 components of
earnings with 1997.
<TABLE>
<CAPTION>
% (Decrease)
1998 Compared
1998* 1997** With 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in thousands, except % data)
Gross profit $ 162,800 $ 188,012 (13.4)%
As a percent of revenues 24.5% 27.8%
Operating earnings $ 65,802 $ 104,309 (36.9)%
As a percent of revenues 9.9% 15.4%
Income from continuing operations before $ 58,657 $ 97,990 (40.1)%
taxes
As a percent of revenues 8.8% 14.5%
Income from continuing operations $ 35,927 $ 60,024 (40.1)%
As a percent of revenues 5.4% 8.9%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
+* 1998 results include the impact of the $5,564 ($9,084 pretax) nonrecurring
charges related to employee separation, discontinued product lines, and costs
related to a failed Asia/Pacific distributor.
** 1997 results include the impact of the $980 ($1,600 pretax) nonrecurring
charge taken in the third quarter relating to plant consolidation and workforce
reductions pursuant to a plan adopted in the third quarter. These costs relate
to employee severance and plant closure expenditures.
The decrease in the gross profit amount was due to lower revenues and reduced
profitability. Profitability declined primarily due to the impact of lower
average prices in excess of the pass-through of lower copper costs and the
"deleveraging" of certain production costs. The deleveraging resulted from
making production declines at a
19
<PAGE> 20
greater rate than cost reductions. In addition, the impact of the inclusion in
1998 of the less profitable Olex and EIW acquisitions and the need early in 1998
to outsource production of certain computer networking cable due to capacity
constraints contributed to the decline in gross profit and gross profit as a
percent of revenues.
The decrease in gross profit led to lower operating earnings during the year.
Also contributing to this decrease was an increase in selling, general, and
administrative expenses to 13.0% of revenues in 1998 versus 11.9% in 1997. This
was primarily due to additional depreciation and amortization related to the
capitalization of computer system conversions early in 1998.
In 1998, the Company announced the following actions designated to improve its
operating efficiencies:
- - Accelerating the closing of the Electronics segment's Hudson, Massachusetts
and Charlotte, North Carolina, facilities and transferring production into
its new facility in Fort Mill, South Carolina. The new facility was
completed late in 1998 and the closings and production transfer completed
in mid-1999.
- - Reducing salaried employment by approximately 7% in the Electronics segment
through voluntary and involuntary programs. These reductions were complete
by December 31, 1998.
- - Discontinuing certain less profitable lines within the Electronics segment.
In connection with these actions and other items, the Company took nonrecurring
charges of $9.1 million ($5.6 million after tax). The above actions, as well as
other cost reduction programs, generated annual savings of approximately $12
million before tax beginning in mid-1999.
Income from continuing operations before income taxes decreased to $58.7 million
in 1998 from $98 million in 1997, or 40% due to lower operating earnings and an
increase in interest expense because of greater borrowings at higher interest
rates. The increase in borrowings resulted from the 1998 acquisitions and the
purchase of approximately 1.9 million shares of Company common stock, which was
partially offset by cash flow from operations. Average debt outstanding during
1998 and 1997 was $146 million and $135 million, respectively. The Company's
average daily interest rate was 6.1% in 1998 compared with 5.7% in 1997.
The Company's effective tax rate was 38.8% in 1998 and 1997.
FINANCIAL CONDITION
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 December 31,
1999, the Company had $116 million available under the Credit Agreement. In
addition, as of December 31, 1999, the Company had unsecured, uncommitted
arrangements with five banks under which it may borrow up to $82 million at
prevailing interest rates. At December 31, 1999, the Company had $33 million
available under these arrangements. The Company also had privately placed debt
of $75 million outstanding at December 31, 1999 that will mature in 2009, in
addition to the $125 million private placement described below.
On September 9, 1999, the Company completed a private placement of $125 million
in unsecured debt. The private placement was issued in tranches of $64 million,
$44 million, and $17 million, which will mature in five, seven, and ten years
from closing with interest rates of 7.60%, 7.74%, and 7.95%, respectively. The
proceeds of the private placement were used to pay off borrowings under a $125
million short-term bridge loan issued in connection with the acquisition of CSI.
The Note Purchase Agreement effecting this private placement contains
affirmative and negative covenants including a minimum net worth, and a maximum
ratio of debt to total capitalization.
The Company expects that cash provided by operations and borrowings available
under its credit agreements will provide it with sufficient liquidity to meet
its operating needs and fund its normal dividends and anticipated capital
expenditures.
During 1999, the Company increased debt by $121 million due primarily to the
acquisitions of CSI, Dorfler and Duna. As a result, the Company's debt to total
capitalization ratio increased from 42.6% at December 31, 1998, to 53.4% at the
end of 1999.
20
<PAGE> 21
Working Capital
During 1999, operating working capital (defined as receivables and inventories
less payables and accrued liabilities, excluding the effect of exchange rate
changes and business combinations) increased $7 million. This increase resulted
primarily from higher receivables associated with higher revenues late in the
year partially offset by the favorable impact of higher payables.
During 1998, operating working capital decreased $29 million. This decrease
resulted primarily from lower receivables associated with lower revenues late in
the year and lower inventories as the Company has stressed strong cash flows in
response to more challenging markets partially offset by lower taxes payable.
Capital Expenditures and Commitments
Capital expenditures currently planned for 2000, as well as actual expenditures
for 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
2000 1999 1998
Years Ended December 31, Plan Actual Actual
- ----------------------------------------------------------------------------------------------------------------------
(in millions)
<S> <C> <C> <C>
Modernization and
Enhancement $ 19 $ 12 $ 19
Capacity expansion 12 6 11
Other 10 7 10
- ----------------------------------------------------------------------------------------------------------------------
$ 41 $ 25 $ 40
======================================================================================================================
</TABLE>
EFFECTS OF INFLATION
During the years presented, inflation has had a relatively minor effect on the
Company's results of operations. In recent years, the U.S. rate of inflation has
been relatively low. In addition, because the Company's inventories are valued
primarily on the LIFO method, current inventory costs are matched against
current sales so that increases in costs are reflected in earnings on a current
basis.
ENVIRONMENTAL REMEDIATION
The Company has been identified as a potentially responsible party with respect
to five sites designated for cleanup under the Comprehensive Environmental
Response, Compensation and Liability Act or similar state laws. Belden does not
own or operate any of these waste sites. Although estimates of cleanup costs
have not yet been completed for most of these sites, the Company believes that,
based on its review and other factors, including its estimated share of the
waste volume at the sites, the existence of other financially viable,
potentially responsible parties and the anticipated nature and scope of the
cleanups, the costs to the Company relating to these sites will not have a
material adverse effect on its results of operations or financial condition.
Ground water contamination has been identified on the site of the Venlo, The
Netherlands, manufacturing facility, which the Company acquired in 1995. The
Company has recorded a liability for the remediation costs, which are currently
estimated at approximately $1 million.
YEAR 2000 READINESS
The Company completed its Year 2000 readiness preparations during 1999. The
Company's operations and the financial position of the Company as of December
31, 1999 or the period subsequent to December 31, 1999 until the date of this
filing has not been impacted by any event related to Year 2000 issues. Impact of
Pending Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) 133, Accounting for Derivative Instruments
and Hedging Activities, which the Company is required to adopt by January 1,
2001, however the Company may adopt the Statement before this deadline. The
Company expects to adopt the Statement effective with the first quarter of 2001.
The Statement will require the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If a derivative is a hedge, depending on the nature
of the hedge,
21
<PAGE> 22
changes in the fair value of the derivative will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings, or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The Company does not
expect the adoption of SFAS 133 to have a material effect on the earnings or
financial position of the Company.
FORWARD-LOOKING STATEMENTS
The statements set forth other than historical facts are forward-looking
statements made in reliance upon the safe harbor of the Private Securities
Litigation Reform Act of 1995. Actual results could differ materially from such
forward-looking information for the reasons set forth below. The improving but
still unsettled economic climate being experienced in the Asia/Pacific and South
American regions and its impact on sales, heightened competition from domestic
and foreign competitors, including new entrants; the success in identifying,
acquiring and integrating acquisitions, including but not limited to cost saving
and profit improvement initiatives at CSI; results from transfers of production
to new facilities; developments in technology; the threat of displacement from
competing technologies including wireless and fiber optic technologies;
acceptance of Belden's products; changes in raw material costs and availability;
foreign currency rates; pricing of Belden's products; changes in the global
economy; the success of cost-saving initiatives and programs and other specific
factors discussed elsewhere in this Annual Report on Form 10-K and other
Securities and Exchange filings will have an impact on Belden's actual results.
The information contained herein represents management's best judgement as of
the date hereof based on information currently available; however, the Company
does not intend to update this information to reflect developments of
information obtained after the date hereof and disclaims any legal obligation to
do so.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risks relating to the Company's operations result primarily from interest
rates, foreign exchange rates and certain commodity prices, as well as
concentrations of credit risk. Each of these is discussed below.
Interest Rate Risk
The following table provides information about the Company's financial
instruments that are sensitive to changes in interest rates. For the Company's
short-term and long-term debt obligations, the table presents principal cash
flows and average interest rates by expected maturity dates. The table also
presents fair values as of December 31, 1999.
<TABLE>
<CAPTION>
Expected Maturity Dates
-----------------------------------------------------------------
2000 2001 2002 2003 2004 Thereafter Fair Value
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(in millions, except rates)
Fixed-rate
debt obligations $75.0 $69.0
Average interest rate 6.92%
Fixed-rate
debt obligations $64.0 $63.0
Average interest rate 7.60%
</TABLE>
22
<PAGE> 23
<TABLE>
<CAPTION>
Expected Maturity Dates
-----------------------------------------------------------------
2000 2001 2002 2003 2004 Thereafter Fair Value
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed-rate
debt obligations $44.0 $43.1
Average interest rate 7.75%
Fixed-rate
debt obligations $17.0 $16.7
Average interest rate 8.06%
Variable-rate debt
to be refinanced $83.8 $83.8
Average interest rate 5.80%
</TABLE>
Foreign Exchange Rate Risk
The following table provides information about the Company's financial
instruments that are sensitive to changes in foreign currency rates. The Company
maintains debt denominated in multiple foreign currencies in order to align a
portion of the Company's borrowing in the same currency as that of the
anticipated cash flow of its foreign operations.
<TABLE>
<CAPTION>
Expected Maturity Dates
--------------------------------------------------------------
2000 2001 2002 2003 2004 Thereafter Fair Value
- -----------------------------------------------------------------------------------------------------------------------
Average exchange rates are stated in foreign currency/US dollars
(in millions, except rates)
<S> <C> <C> <C> <C> <C> <C> <C>
Variable-rate Euro
Debt to be refinanced $32.2 $32.2
Average exchange rate 1.0665
Variable-rate Australian Dollar
Debt to be refinanced $10.4 $10.4
Average exchange rate 0.6458
Variable-rate Netherlands
Guilder debt to be refinanced $0.4 $0.4
Average exchange rate 0.4840
</TABLE>
Commodity Price Risk
The Company is a purchaser of certain commodities, primarily copper. The company
uses a combination of futures contracts and fixed price purchase commitments for
hedging purposes to reduce the effect of changing commodity prices over the time
frame required to reflect cost changes in sales price for the Company's
products. The Company does not speculate on commodity prices. The following
table presents both the open futures contracts and purchase commitments by the
notional amount in pounds, the weighted average contract price, and total dollar
amounts by expected maturity date. In addition, the table presents the physical
inventory of copper at December 31, 1999, by the amount of pounds held at
average cost. The fair value of copper futures contracts, commitments, and
physical inventory as of December 31, 1999, is also presented.
23
<PAGE> 24
<TABLE>
<CAPTION>
Expected Maturity Dates
-----------------------
2000 2001 Fair Value
- -----------------------------------------------------------------------------------------------------------------------
(in millions, except average price)
<S> <C> <C> <C>
Over-the-counter forward sell contracts
Contract volume (pounds) 5.0
Weighted average price (per pound) $0.8198 -
Contract amounts $4.1 - $4.3
Purchase commitments
Commitment volume (pounds) 13.5
Weighted average price (per pound) $0.8085 -
Commitment amounts $10.9 - $11.5
On-hand copper rod at December 31, 1999
Pounds on hand 6.3
Weighted average price (per pound) $0.8135 -
Total value on hand $5.1 - $5.3
</TABLE>
Credit Risk
Sales to a major customer were $134.4 million or 16% of total sales in 1999 and
$121.2 million or 18% of total sales in 1998. At December 31, 1999, outstanding
receivables to this customer totaled $13.9 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Auditors on Consolidated Financial Statements.
The Board of Directors and Shareholders
Belden Inc.
We have audited the accompanying consolidated balance sheets of Belden Inc. as
of December 31, 1999 and 1998, and related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards required that we plan and perform the
audit to obtain reasonable assurances about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects the consolidated financial position of Belden Inc. at December
31, 1999 and 1998, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
St. Louis, Missouri
January 25, 2000
24
<PAGE> 25
BELDEN INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1999 1998
- -------------------------------------------------------------------------------------------------------------------
(in thousands, except par value and number of shares)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,874 $ 3,291
Receivables, less allowance for doubtful accounts
of $1,267 at 1999 and $663 at 1998 135,576 95,643
Inventories 125,370 89,633
Deferred income taxes 10,911 6,422
Net assets of discontinued operations - 30,200
Other 3,559 3,211
- -------------------------------------------------------------------------------------------------------------------
Total current assets 279,290 228,400
Property, plant and equipment, less accumulated
depreciation 336,817 183,745
Goodwill, less accumulated amortization
of $9,107 at 1999 and $7,029 at 1998 77,931 77,115
Other intangibles, less accumulated amortization
of $13,752 at 1999 and $10,774 at 1998 11,534 10,583
Other assets 6,892 629
- -------------------------------------------------------------------------------------------------------------------
$712,464 $500,472
===================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $115,322 $ 70,623
Income taxes payable 4,464 3,177
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 119,786 73,800
Long-term debt 283,817 162,850
Post-retirement benefits other than pensions 13,432 14,747
Deferred income taxes 32,880 14,159
Other long-term liabilities 15,022 15,249
Stockholders' equity:
Preferred stock, par value $.01 per share, 25,000,000 shares
authorized, no shares outstanding - -
Common stock, par value $.01 per share, 100,000,000 shares
authorized, 26,203,603 issued, and
24,377,881 and 24,328,742 shares outstanding
at 1999 and 1998, respectively 262 262
Additional paid-in capital 47,958 48,482
Retained earnings 249,653 218,605
Accumulated other comprehensive income/(loss) (13,050) (8,859)
Treasury stock, at cost, 1,825,722 and 1,874,861 shares
at 1999 and 1998 (37,296) (38,823)
- -------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 247,527 219,667
- -------------------------------------------------------------------------------------------------------------------
$712,464 $500,472
===================================================================================================================
</TABLE>
See accompanying notes.
25
<PAGE> 26
BELDEN INC.
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
Years Ended December 31, 1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
Revenues $ 818,614 $ 664,148 $ 676,898
Cost of sales 638,982 501,348 488,886
- -------------------------------------------------------------------------------------------------------------------------
Gross profit 179,632 162,800 188,012
Selling, general and administrative expenses 97,701 86,127 80,339
Amortization of goodwill 2,041 1,787 1,764
Nonrecurring charges - 9,084 1,600
- -------------------------------------------------------------------------------------------------------------------------
Operating earnings 79,890 65,802 104,309
Interest expense 14,042 7,145 6,319
- -------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before taxes 65,848 58,657 97,990
Income taxes 24,857 22,730 37,966
- -------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 40,991 35,927 60,024
Income/(loss) from discontinued business, net of
tax of $54 in 1999, tax benefit of $901 in 1998
and tax of $406 in 1997 89 (1,423) 629
Loss on disposal of discontinued business,
net of tax benefit of $3,123 (5,150) - -
- -------------------------------------------------------------------------------------------------------------------------
Net income $ 35,930 $ 34,504 $ 60,653
=========================================================================================================================
Basic average shares outstanding 24,355 25,507 26,126
Basic earnings per share from continuing operations $ 1.68 $ 1.41 $ 2.30
Basic earnings per share $ 1.48 $ 1.35 $ 2.32
=========================================================================================================================
Diluted average shares outstanding 24,468 25,620 26,340
Diluted earnings per share from continuing operations $ 1.68 $ 1.40 $ 2.28
Diluted earnings per share $ 1.47 $ 1.35 $ 2.30
=========================================================================================================================
</TABLE>
See accompanying notes.
26
<PAGE> 27
BELDEN INC.
CONSOLIDATED CASH FLOW STATEMENTS
<TABLE>
<CAPTION>
Years Ended December 31, 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Cash flow from operating activities:
Income from continuing operations $ 40,991 $35,927 $60,024
Adjustments to reconcile income from continuing operations to net cash
provided by operating activities:
Depreciation 25,060 17,092 15,686
Amortization 5,298 4,594 1,764
Deferred income taxes 5,577 151 3,650
Changes in operating assets and liabilities(*):
Receivables (13,793) 24,761 (13,570)
Inventories (2,274) 18,150 (20,315)
Accounts payable and accrued liabilities 7,847 (5,535) (5,656)
Income taxes payable 1,524 (7,881) 6,056
Other assets and liabilities, net 3,407 (697) 5,477
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 73,637 86,562 53,116
Cash flows from investing activities:
Capital expenditures (24,863) (39,872) (26,207)
Cash used to acquire businesses (197,557) (40,703) (76,082)
Proceeds from sale of business 27,433 - -
Proceeds from disposal of property 1,884 317 198
- ------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (193,103) (80,258) (102,091)
Cash flows from financing activities:
Net borrowings (payments) under long-term
credit facility and credit agreements 5,501 39,375 (17,906)
Proceeds from private placement of debt 125,000 - 75,000
Purchase of treasury stock - (39,250) (6,846)
Exercise of stock options 1,003 780 1,165
Cash dividends paid (4,882) (5,062) (5,229)
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) financing activities 126,622 (4,157) 46,184
Cash flows from discontinued operations:
Income (loss) from discontinued operations (5,061) (1,423) 629
Adjustments to reconcile income (loss) from discontinued
operations to net cash provided by (used for) discontinued
operations:
Depreciation and amortization 986 2,661 2,366
Loss on disposal and other noncash charges 8,273 - -
Changes in operating assets and liabilities of discontinued
operations (10,157) (177) 1,483
Capital expenditures (416) (972) (2,518)
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) discontinued operations (6,375) 89 1,960
Effect of exchange rate changes on cash and cash equivalents (198) 139 (48)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 583 2,375 (879)
Cash and cash equivalents, beginning of year 3,291 916 1,795
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 3,874 $ 3,291 $ 916
========================================================================================================================
</TABLE>
(*) Net of the effects of exchange rate changes and acquired businesses.
See accompanying notes.
27
<PAGE> 28
BELDEN INC.
CONSOLIDATED STOCKHOLDERS' EQUITY STATEMENTS
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Treasury Stock Other
---------------------- Paid-In Retained --------------------- Comprehensive
Shares Amount Capital Earnings Shares Amount Income (Loss) Total
- ----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 26,138 $261 $51,443 $133,739 (53) ($1,276) ($4,460) $179,707
Net Income 60,653 60,653
Foreign currency translation (4,140) (4,140)
adjustments ----------
Comprehensive income 56,513
Issuance of common stock for:
Stock Options 42 1 115 53 1,276 1,392
Employee Stock Purchase Plan (2,188) 163 5,605 3,417
Purchase of treasury stock (201) (6,846) (6,846)
Cash dividends ($.20 per share) (5,229) (5,229)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 26,180 262 49,370 189,163 (38) (1,241) (8,600) 228,954
Net Income 34,504 34,504
Foreign currency translation (259) (259)
adjustments
----------
Comprehensive income 34,245
Issuance of common stock for:
Stock Options 24 (888) 69 1,668 780
Purchase of treasury stock (1,906) (39,250) (39,250)
Cash dividends ($.20 per share) (5,062) (5,062)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 26,204 262 48,482 218,605 (1,875) (38,823) (8,859) 219,667
NET INCOME 35,930 35,930
FOREIGN CURRENCY TRANSLATION (4,191) (4,191)
ADJUSTMENTS
----------
COMPREHENSIVE INCOME 31,739
ISSUANCE OF COMMON STOCK FOR:
STOCK OPTIONS (331) 31 959 628
EMPLOYEE STOCK PURCHASE PLAN (193) 18 568 375
CASH DIVIDENDS ($.20 PER SHARE) (4,882) (4,882)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999 26,204 $262 $47,958 $249,653 (1,826) ($37,296) ($13,050) $247,527
==================================================================================================================================
</TABLE>
See accompanying notes.
28
<PAGE> 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: DESCRIPTION OF BUSINESS
Belden Inc. (the Company) is a leader in the design and manufacture of wire,
cable, and fiber optic products for the computer, audio/video, industrial and
telecommunications markets. The Company was previously an unincorporated
operating division of Cooper Industries, Inc. (Cooper), until October 1993, when
23.5 million shares of Belden Inc. common stock were sold to the public in an
initial public offering. The 2.5 million shares of common stock originally
retained by Cooper were subsequently sold to the public in 1995 and 1996.
NOTE 2: 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.
Cash and Cash Equivalents
Cash equivalents consist of short-term, highly liquid investments with a
maturity of three months or less.
Inventories
Inventories, including raw materials, work-in-progress, and finished goods, are
carried at cost or, if lower, market value. On the basis of current costs, 70%
and 63% of inventories in 1999 and 1998, respectively, were carried on the
last-in, first-out (LIFO) method. The remaining inventories were carried on the
first-in, first-out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciation is provided
over the estimated useful lives of the related assets using primarily the
straight-line method, generally using asset lives of 10 to 40 years for
buildings and 5 to 12 years for machinery and equipment.
Intangibles
Goodwill is related to businesses acquired and is being amortized over 40 years
using the straight-line method. On a periodic basis, the Company estimates the
future undiscounted cash flows of businesses to which goodwill relates in order
to ensure that the carrying value of goodwill has not been impaired, consistent
with Statement of Financial Accounting Standard (SFAS) 121. Other intangibles,
which consist primarily of business information systems, are recorded at cost,
and are being amortized over their estimated useful lives, generally 5 years,
using the straight-line method.
Revenue Recognition
Revenue is recognized in the period product is shipped to customers. Provisions
are recorded for anticipated returns and bad debts.
Income Taxes
Income taxes are provided based on earnings reported for financial statement
purposes. The provision for income taxes differs from the amounts currently
payable due to the recognition of revenues and expenses in different periods for
income tax and financial statement purposes. Income taxes are provided as if
operations in all countries, including the United States, were standalone
businesses filing separate tax returns.
Research and Development
Research and development expenditures are charged to expense as incurred.
Expenditures for research and development sponsored by the Company were $8.7
million, $8.0 million and $7.3 million for 1999, 1998, and 1997, respectively.
29
<PAGE> 30
Environmental Remediation and Compliance
Environmental remediation costs are accrued, except to the extent costs can be
capitalized, based on estimates of known environmental remediation exposures.
Environmental compliance costs include maintenance and operating costs with
respect to ongoing monitoring programs. Such costs are expensed as incurred.
Capitalized environmental costs are depreciated generally utilizing a 15-year
life.
Futures Contracts
As part of its risk management strategy, the Company purchases exchange traded
forward contracts to manage its exposure to changes in copper costs. The copper
forward contracts obligate the Company to make or receive a payment equal to the
net change in the value of the contract at its maturity. Such contracts are
designated as hedges of the Company's anticipated sales for which selling prices
are firm, are short-term in nature, and are effective in hedging the Company's
exposure to changes in copper costs during that cycle.
Unrealized gains and losses are deferred and recognized in earnings when
realized as an adjustment to cost of sales when the future sales occur (the
deferral accounting method). Amounts securing open forward contracts are
included in inventory. Realized and unrealized gains or losses on options that
are no longer effective as hedges or that relate to sales that are no longer
probable of occurring are recognized in income from the date the contracts
become ineffective until their expiration.
Foreign Currency Exposure Management
The Company enters into various transactions designed to manage foreign currency
exposure. The Company is subject to transaction exposures that arise from
foreign exchange rate movements between the date foreign currency transactions
are recorded (e.g., export purchases and sales) and the date they are
consummated (e.g., cash disbursements and receipts in foreign currencies). The
Company sometimes hedges specific transaction exposures by entering into forward
contracts, which typically do not exceed one year. Gains and losses on those
forward contracts from exchange rate movements offset losses and gains on the
transactions being hedged.
The Company sometimes enters into forward contracts to hedge a portion of
anticipated export sales, primarily intercompany, within the next 12 months. The
dates of the forward contracts are designated to match the dates of the
anticipated cash receipts of the hedged export sales. Gains and losses on the
forward contracts from exchange rate movements offset the losses and gains on
the portion of the export sales hedged.
As a result of having various foreign operations, the Company is exposed to the
effect of exchange rate movements on the U.S. dollar value of anticipated cash
flows of its foreign operations, which will be remitted to the U.S. The Company
sometimes utilizes a natural hedge to mitigate this exposure by denominating a
portion of the Company's borrowing in the same currency as the currency of the
anticipated cash flow of its foreign operations. The foreign currency
denominated cash flow from the foreign operation, when remitted, can be used to
reduce the foreign currency borrowing.
Impact of Pending Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS 133,
Accounting for Derivative Instruments and Hedging Activities, which is required
to be adopted by the Company in 2001. The Statement permits early adoption as of
the beginning of any fiscal quarter after its issuance. The Company expects to
adopt the new Statement effective with the first quarter of 2001. The Statement
will require the Company to recognize all derivatives on the balance sheet at
fair value. Derivatives that are not hedges must be adjusted to fair value
through income. If a derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of the derivative will either be offset against
the change in fair value of the hedged assets, liabilities, or firm commitments
through earnings, or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings.
30
<PAGE> 31
Hedging activities have been confined to copper futures and purchase commitments
during 1999. The Company does not expect the adoption of SFAS 133 to have a
material effect on the earnings or financial portion of the Company.
Use of Estimates in the Preparation of the Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassifications
Certain reclassifications have been made to prior year amounts to make them
comparable to current year classifications.
NOTE 3: EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Years Ended December 31, 1999 1998 1997
------------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
Numerator:
Income from continuing operations $ 40,991 $ 35,927 $ 60,024
Net Income $ 35,930 $ 34,504 $ 60,653
------------------------------------------------------------------------------------------------------------------
Denominator:
Denominator for basic earnings per
share - weighted-average shares 24,355 25,507 26,126
Effect of dilutive employee stock options 113 113 214
------------------------------------------------------------------------------------------------------------------
Denominator for diluted earnings per share -
adjusted weighted-average shares 24,468 25,620 26,340
Basic earnings per share from continuing operations $ 1.68 $ 1.41 $ 2.30
Basic earnings per share $ 1.48 $ 1.35 $ 2.32
------------------------------------------------------------------------------------------------------------------
Diluted earnings per share from continuing operations $ 1.68 $ 1.40 $ 2.28
Diluted earnings per share $ 1.47 $ 1.35 $ 2.30
------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 4: ACQUISITIONS
During 1999, 1998, and 1997 the Company acquired the entities described below,
which were 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. Operating results of each acquisition are included
in the Company's consolidated results since its respective acquisition date.
- - On October 25, 1999, the Company purchased for cash of approximately $17
million, Dorfler Kabelwerk Ges.m.b.H. (Dorfler), Klosterneuburg, Austria
and Duna Kabel Kft. (Duna), Budapest, Hungary from Siemens
Aktiengesellschaft, Muchen/Berlin. The Company has preliminarily recorded
$7 million of goodwill with respect to the transaction. Dorfler and Duna
manufacture and market copper communication and specialty cables serving
primarily telecommunications and industrial industries.
- - On June 28, 1999, the Company acquired all of the outstanding shares of
Cable Systems Holding Company (Holdings) and its subsidiary Cable Systems
International Inc. (CSI). CSI manufactures copper cable products primarily
for telecommunications applications in the United States. The consideration
paid in connection with the transaction totaled $183,456,000 including
$2,500,000 yet to be paid into an escrow account. This amount includes
payment of the outstanding amounts owed by Holdings and CSI under a credit
agreement and amounts owed to holders of preferred stock of Holdings. No
goodwill was recorded with respect to this transaction.
31
<PAGE> 32
The CSI acquisition was funded with a $125 million short-term bridge loan, as
well as funds available under existing credit arrangements. On September 9,
1999, the Company completed a private placement of $125 million in unsecured
debt. The Private Placement was issued in tranches of $64 million, $44 million,
and $17 million which will mature in five, seven, and ten years from closing
with stated interest rates of 7.60%, 7.74%, and 7.95%, respectively. The
proceeds of the Private Placement were used to pay off the borrowings under the
short-term bridge loan. The Note Purchase Agreement effecting the Private
Placement contains affirmative and negative covenants including a minimum net
worth and a maximum ratio of debt to total capitalization.
The purchase price allocation, when final, may differ from that included in the
Company's December 31, 1999 consolidated balance sheet. The Company's pro forma
unaudited information assuming the acquisition had been made at the beginning of
each of the years presented is as follows:
<TABLE>
<CAPTION>
Twelve months ended
December 31,
------------------------
(in thousands, except per share amounts) 1999 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues $948,919 $1,006,546
Cost of sales 760,573 789,750
- -----------------------------------------------------------------------------------------------------------
Gross margin 188,346 216,796
Selling, general and administrative 114,376 128,436
- -----------------------------------------------------------------------------------------------------------
Operating earnings 73,970 88,360
Interest expense 21,750 20,330
- -----------------------------------------------------------------------------------------------------------
Income from continuing operations
before income taxes 52,220 68,030
Income taxes 19,756 26,478
- -----------------------------------------------------------------------------------------------------------
Income from continuing operations 32,464 41,552
===========================================================================================================
Basic earnings per share $ 1.33 $ 1.63
===========================================================================================================
Diluted earnings per share $ 1.33 $ 1.62
===========================================================================================================
</TABLE>
Pro forma adjustments include primarily the impact of increased debt, adjusted
values of assets, differing depreciation lives, redundant costs and certain
reclassifications. In addition, certain portions of CSI's business were not
acquired, including investments in affiliates, accounted for under the equity
method, and two consolidated subsidiaries. Consolidated revenues attributable to
the excluded consolidated entities were approximately $58.3 million for the year
ended December 31, 1998 and $24.8 million for the six month period ended June
30, 1999.
The unaudited pro forma results are provided for informational purposes only,
should not be construed to be indicative of the Company's results of operations
had the events described above been consummated on the date assumed, and are not
intended to project the Company's results of operations for any future periods.
- - On November 30, 1998, the Company purchased for cash ABB
Elektro-Isolierwerke GmbH (EIW) from Asea Brown Boveri AG, Mannheim, the
holding company of the German ABB group to which EIW belonged. EIW designs,
manufacturers and markets cables serving primarily the industrial and
computer networking industries. The business is located in Villingen,
Germany. The Company has recorded goodwill of $9.4 million with respect to
the acquisition.
- - 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 $16 million. Olex designs, manufactures, and
markets metallic and fiber optic cables serving primarily the computer
networking and telephony industries. The Company has not recorded any
goodwill with respect to the acquisition. The acquired business is located
near Melbourne, Australia.
- - On December 23, 1997, the Company purchased for cash the fixed assets and
inventory of Cowen Cable Corporation (Cowen). Cowen designs, manufactures
and markets a variety of multiconductor cables and is located in
Leominster, Massachusetts.
32
<PAGE> 33
- - On January 8, 1997, the Company purchased substantially all of the assets
of the Alpha Wire Division (Alpha) of Alpha Wire Corporation for cash of
approximately $68 million. Alpha designs and markets specialty wire and
cable for a variety of markets, including the computer interconnect,
industrial and electrical markets, and is located in Elizabeth, New Jersey.
The Company recorded approximately $45 million of goodwill in connection
with the acquisition.
NOTE 5: DISCONTINUED OPERATIONS
On May 7, 1999, the Company completed the sale of its Cord Products Division,
which had comprised the Cord Products segment. The operating results of the Cord
Products segment, including a first quarter provision for losses on the sale of
$5.2 million net of tax, have been segregated from continuing operations and
reported separately in the consolidated income statement and the remaining net
assets have been classified within the current assets section of the December
31, 1998 balance sheet as "Net assets of discontinued operations".
Summarized financial information for the discontinued operation is as follows:
<TABLE>
<CAPTION>
Twelve Months Ended
December 31,
---------------------------------------------
1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Revenues $ 22,525 $ 59,477 $ 70,309
Income/(loss) before tax $ 143 $ (2,324) $ 1,674
Income/(loss), net of income taxes $ 89 $ (1,423) $ 619
Loss on disposal of discontinued operations, net of
income taxes $ (5,150) $ -- $ --
</TABLE>
Included in income before tax is an allocation of interest expense based on the
level of identifiable assets of the segment to total identifiable assets. These
allocated costs were $181,000 in the year ended December 31, 1999, $593,000 for
1998, and $639,000 for 1997.
NOTE 6: NONRECURRING CHARGES
In 1998, the Company recorded a charge of $2.9 million ($1.8 million after tax)
for salary continuation, extended medical coverage and other miscellaneous
employee benefits related to a reduction of 35 salaried employees in the
Electronics segment. Prior to December 31, 1998, 35 salaried employees had been
terminated. As of December 31, 1999, none of this amount remained to be paid
related to this charge.
Additionally in 1998, the Company discontinued certain product lines. Inventory
writedowns related to discontinued product lines within the Electronics business
segment were $3 million ($1.8 million after tax) and were recorded net of
expected recovery upon disposal. Other nonrecurring charges of $3.2 million ($2
million after tax) were primarily for the write-off of receivables due from a
failed Asia/Pacific distributor.
In 1997, the Company recorded a restructuring charge of $1.6 million ($980,000
after tax) primarily related to employee severance and costs of plant closure.
At December 31, 1999, no such costs remain to be paid.
33
<PAGE> 34
NOTE 7: INVENTORIES
<TABLE>
<CAPTION>
December 31, 1999 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands)
Raw materials $ 32,984 $ 20,062
Work-in-process 20,495 12,714
Finished goods 77,966 63,353
Perishable tooling and supplies 6,577 4,226
- ----------------------------------------------------------------------------------------------
138,022 100,355
Excess of current standard
costs over LIFO costs (8,203) (7,400)
Obsolescence and other reserves (4,449) (3,322)
- ----------------------------------------------------------------------------------------------
$125,370 $ 89,633
==============================================================================================
</TABLE>
NOTE 8: PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
December 31, 1999 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands)
Land and land improvements $ 24,603 $ 11,170
Buildings 118,934 66,729
Machinery and equipment 341,956 242,480
Construction in process 32,776 14,480
- ----------------------------------------------------------------------------------------------
518,269 334,859
Accumulated depreciation (181,452) (151,114)
- ----------------------------------------------------------------------------------------------
$336,817 $183,745
==============================================================================================
</TABLE>
NOTE 9: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>
December 31, 1999 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands)
Trade accounts $ 68,578 $ 42,870
Payroll and related taxes 11,757 5,569
Employee stock purchase plan and
employee benefit accruals 8,348 5,716
Restructuring costs 790 2,405
Accrued Interest 5,560 2,316
Other (individual items less than
5% of total current liabilities) 20,289 11,747
- ----------------------------------------------------------------------------------------------
$115,322 $ 70,623
==============================================================================================
</TABLE>
34
<PAGE> 35
NOTE 10: LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS
<TABLE>
<CAPTION>
December 31, 1999 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands)
Variable-rate bank revolving
credit agreement, due 2001,
effective interest rate 6.75% at
December 31,1999 $ 35,000 $ 69,810
Short-term borrowings to be
refinanced, effective interest rate
5.62% at December 31,1999 48,817 18,040
Medium-term notes, face amount
of $75,000 due from 2005
through 2009, effective interest
rate 6.92% 75,000 75,000
Medium-term notes, face amount
of $64,000 due 2004,
effective interest rate 7.60% 64,000 --
Medium-term notes, face amount
of $44,000 due 2006,
effective interest rate 7.75% 44,000 --
Medium-term notes, face amount
of $17,000 due 2009,
effective interest rate 8.06% 17,000 --
- -----------------------------------------------------------------------------------------
$283,817 $162,850
=========================================================================================
</TABLE>
The variable-rate bank revolving credit agreement (Credit Agreement) provides
for an aggregate $200 million unsecured, multicurrency revolving credit facility
expiring in November 2001. Loans under the Credit Agreement can be advanced by
the banks either based on their commitments (committed loans) or their offers
which have been accepted by the Company under a special bidding procedure (bid
loans). Committed loans accrue interest at the option of the Company at LIBOR
plus 0.235% to 0.500%, or the higher of the prime rate or the federal funds rate
plus 0.500%. Bid loans accrue interest at prevailing interest rates. A facility
fee of 0.090% to 0.250% per annum is charged on the aggregate $200 million
credit. The facility includes certain covenants, including a maximum leverage
ratio and maintaining a minimum net worth. The short-term borrowings relate to
unsecured, uncommitted arrangements with five banks under which the Company may
borrow up to $82 million at prevailing interest rates. At December 31, 1999 and
1998, these borrowings were reclassified to long-term debt, reflecting the
Company's intention and ability to refinance the amounts during the next year
through either continued short-term borrowings or utilizing the Credit
Agreement.
In 1999, the Company completed a private placement of $64, $44, and $17 million
of unsecured medium-term notes. The notes bear interest at 7.60%, 7.74%, and
7.95%, respectively, and mature 5, 7, and 10 years from closing, respectively.
The Note Purchase Agreement for the notes contains various customary affirmative
and negative covenants and other provisions, including restrictions on the
incurrence of debt, a maximum leverage ratio, and maintaining a minimum net
worth.
In 1997, the Company completed a private placement of $75 million of unsecured
medium-term notes. The notes bear interest at 6.92% and mature 12 years from
closing with an average life of 10 years. The Note Purchase Agreement for the
notes contains various customary affirmative and negative covenants and other
provisions, including restrictions on the incurrence of debt, a maximum leverage
ratio, and maintaining a minimum net worth.
35
<PAGE> 36
Total interest paid during 1999, 1998, and 1997 was $11.5 million, $7.6 million,
and $4.8 million, respectively.
NOTE 11: RETIREMENT PLANS
Substantially all employees are covered by defined benefit or defined
contribution pension plans maintained by the Company. The Company's defined
benefit plans include a noncontributory cash balance plan for its domestic
employees, a final pay pension plan and an early retirement plan for its Dutch
employees and a defined benefit plan for its German employees, obtained with the
acquisition of EIW. Annual contributions to retirement plans equal or exceed the
minimum funding requirements of the Employee Retirement Income Security Act or
applicable local regulations.
Benefits provided to employees under defined contribution plans include cash
contributions by the Company based on either hours worked by the employee or a
percentage of the employee's compensation and under a 401(k) feature, a partial
matching of employees' salary deferrals with Company common stock. Defined
contribution expense for the years ended December 31, 1999, 1998 and 1997 was
$5.0 million, $5.8 million, and $5.5 million, respectively.
The Company sponsors an unfunded post-retirement benefit plan (medical and life
insurance benefits) for employees who retired prior to 1989 (as well as certain
other employees who were near retirement and elected to receive certain
benefits). The net actuarial gain/loss in excess of a 10% corridor, the prior
service cost and the transition asset or obligation are being amortized over the
average remaining service period of active participants on a straight-line
basis.
The assets of the pension plans are maintained in various trusts and invested
primarily in equity and fixed income securities and money market funds.
The following tables provide a reconciliation of the changes in the plans'
benefit obligations and fair value of assets over years ended December 31, 1999
and 1998, and a statement of the funded status as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------------------- ------------------------------
Years Ended December 31, 1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year $ (99,458) $ (88,243) $ (14,986) $ (14,629)
Service cost (6,135) (3,928) (42) (50)
Interest cost (7,496) (5,671) (933) (939)
Plan participants' contributions (198) (87) (118) (91)
Actuarial gain/(loss) and other 1,617 (1,435) 185 (1,158)
Special termination benefits -- (442) -- --
Plan merger (23,465) -- -- --
Acquisition -- (2,526) -- --
Benefits paid 6,007 2,874 1,866 1,881
- -------------------------------------------------------------------------------------------------------------
Benefit obligation, end of year $(129,128) $ (99,458) $ (14,028) $ (14,986)
=============================================================================================================
</TABLE>
36
<PAGE> 37
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------------------- --------------------------
Years Ended December 31, 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Change in plan assets:
Fair value of plan assets, beginning of $ 98,836 $ 85,104 $ -- $ --
year
Actual return on plan assets 18,863 16,227 -- --
Plan merger 25,079 -- -- --
Employer contributions 675 529 1,748 1,790
Plan participant contributions 198 87 118 91
Expenses paid (440) (237) -- --
Benefits paid (6,007) (2,874) (1,866) (1,881)
- -----------------------------------------------------------------------------------------------------
Fair value of plan assets, end of year $ 137,204 $ 98,836 $ -- $ --
=====================================================================================================
</TABLE>
During 1999, the Company allowed for the voluntary transfer of assets in a
Company sponsored non-contributory defined contribution plan covering domestic
hourly employees of the Electronics segment into the Company's defined benefit
pension plan. The amount of the transfer was $25,079.
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
------------------------- ----------------------
December 31, 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Funded status:
Funded status $ 8,076 $ (622) $(14,028) $(14,986)
Unrecognized net actuarial (gain)/loss (26,085) (14,050) 2,585 2,639
Unrecognized prior service cost (302) (20) (1,989) (2,400)
Unrecognized net transition obligation/(asset) -- (223) -- --
- -----------------------------------------------------------------------------------------------------------
Accrued benefit cost $(18,311) $(14,915) $(13,432) $(14,747)
===========================================================================================================
</TABLE>
Certain of the pension plans had projected benefit obligations in excess of plan
assets. The net unfunded status of these plans was $16,747 and $15,784 at
December 31, 1999 and 1998 respectively. The table below shows the components of
the net unfunded status of these plans:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------------------- -------------------------
December 31, 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Funded Status of Plans with Projected
Benefit Obligations in Excess of Plan
Assets:
Benefit obligation, end of year $ (55,169) $ (48,517) N/A N/A
Fair value of plan assets, end of year 38,422 32,733 N/A N/A
- -----------------------------------------------------------------------------------------------------------
Net unfunded status $ (16,747) $ (15,784) N/A N/A
===========================================================================================================
</TABLE>
Plans with assets in excess of projected benefit obligations had assets in
excess of projected benefit obligations of $24,823 and $15,162 at December 31,
1999 and 1998 respectively.
Plans with accumulated benefit obligations in excess of plan assets had no plan
assets at December 31, 1999 and 1998. The accumulated benefit obligation related
to these plans was $2,685 and $6,702 at December 31, 1999 and 1998 respectively.
37
<PAGE> 38
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
-------------------------- -------------------
December 31, 1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Weighted-average assumptions:
Discount rate 6.9% 6.3% 6.8% 6.5%
Expected return of plan assets 9.0% 8.7% N/A N/A
Rate of compensation increase 4.2% 4.2% N/A N/A
</TABLE>
For measurement purposes, a 7.0% gross health care trend rate was used for
benefits for 2000. Trend rates were to decrease gradually to 5% in 2004 and
remain at this level beyond.
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plan. A one percentage point change in the assumed
health care cost trend rates would have the following effects on 1999 expense
and year-end liabilities:
<TABLE>
<CAPTION>
1% Increase 1% Decrease
----------------------------------
(in thousands)
<S> <C> <C>
Effect on total of service and interest cost components $ 53 $ (47)
Effect on postretirement benefit obligation $ 876 $ (764)
</TABLE>
The following table provides the components of net periodic benefit costs for
the plans for the years ended December 31, 1999, 1998, and 1997:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------------------------- --------------------------------
Years Ended December 31, 1999 1998 1997 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(in thousands)
Components of net periodic benefit cost:
Service cost $ 6,135 $ 3,928 $ 3,465 $ 42 $ 50 $ 30
Interest cost 7,496 5,671 5,274 933 939 827
Expected return on plan assets (9,445) (6,556) (7,180) -- -- --
Amortization of prior service cost (30) (1) (1) (619) (600) (600)
Net(gain)/loss recognition 16 18 1,690 77 52 --
Transition (asset)/obligation recognition (223) (294) (212) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost $ 3,949 $ 2,766 $ 3,036 $ 433 $ 441 $ 257
========================================================================================================================
</TABLE>
NOTE 12: INCOME TAXES
Effective October 6, 1993, the Company and Cooper entered into a Tax Sharing and
Separation Agreement ("Tax Agreement"). Pursuant to the Tax Agreement, the
Company and Cooper made an election in connection with the initial public
offering of the Company's stock under Section 338(h)(10) of the Internal Revenue
Code. The effect of this election was to increase the tax basis of the Company's
assets. This additional basis is expected to result in increased income tax
deductions and accordingly may reduce income taxes otherwise payable by the
Company. Pursuant to the Tax Agreement, the Company agreed to pay to Cooper the
amount of the tax benefit associated with this additional basis (retaining 10%
of the tax benefit associated with the amortization of the allocated cost of
certain intangibles, such as goodwill) as realized on a quarterly basis,
calculated by comparing the Company's actual taxes to the taxes that would have
been owed had the increase in basis not occurred. The amount required to be paid
to Cooper is subject to certain adjustments if certain business combinations or
other acquisitions involving the Company occur. Except for the retained 10%
benefit, the effect of the Tax Agreement is to put the Company in the same
financial position it would have been in had there been no increase in the tax
basis of the Company's assets.
The effect of the retained 10% benefit upon the income tax provisions reflected
in the accompanying income statements is to reduce these provisions for the
years ended December 31, 1999, 1998 and 1997 by $1,161,000, $922,000 and
$789,000, respectively.
38
<PAGE> 39
<TABLE>
<CAPTION>
Years Ended December 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in thousands)
Income from continuing operations before taxes:
U.S. operations $ 57,564 $ 50,351 $ 89,627
Foreign operations 8,284 8,306 8,363
- ----------------------------------------------------------------------------------------------------------
$ 65,848 $ 58,657 $ 97,990
==========================================================================================================
Income Tax expense/(benefit):
Currently payable:
U.S. federal $ 14,826 $ 14,675 $ 26,218
U.S. state and local 3,643 3,049 5,818
Foreign 2,899 5,223 2,282
- ----------------------------------------------------------------------------------------------------------
21,368 22,947 34,316
Deferred:
U.S. federal $ 2,809 $ 1,577 $ 2,486
U.S. state and local 421 398 614
Foreign 259 (2,192) 550
- ----------------------------------------------------------------------------------------------------------
3,489 (217) 3,650
- ----------------------------------------------------------------------------------------------------------
$ 24,857 $ 22,730 $ 37,966
- ----------------------------------------------------------------------------------------------------------
Total income taxes paid (*) $ 16,806 $ 27,764 $ 30,470
==========================================================================================================
</TABLE>
(*) Included in 1999, 1998, and 1997 taxes paid are $12,400, $12,000 and
$11,600, respectively, paid to Cooper in accordance with the Tax Agreement.
<TABLE>
<S> <C> <C> <C>
Effective tax rate reconciliation:
U.S. federal statutory rate 35.0% 35.0% 35.0%
State and local income taxes 3.9 3.8 4.3
Other (1.0) -- (0.5)
- ----------------------------------------------------------------------------------------------------------
Effective tax rate 37.8% 38.8% 38.8%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands)
Components of deferred tax balances:
Deferred tax liabilities:
Plant, equipment and intangibles $(44,494) $(25,288)
Deferred tax assets:
Postretirement benefits 10,752 10,856
Reserves and accruals 11,773 6,695
- ----------------------------------------------------------------------------------------------------------
22,525 17,551
- ----------------------------------------------------------------------------------------------------------
Net deferred tax liability $(21,969) $( 7,737)
==========================================================================================================
</TABLE>
Deferred income taxes have been established for differences in the basis of
assets and liabilities for financial statement and tax reporting purposes as
adjusted for the Tax Agreement with Cooper.
39
<PAGE> 40
NOTE 13: STOCK COMPENSATION PLANS
The Company has two forms of stock compensation plans, the Long-term Incentive
Plan ("Incentive Plan") and the Employee Stock Purchase Plan ("Stock Purchase
Plan"). Under the Incentive Plan, certain employees of the Company are eligible
to receive awards in the form of stock options, stock appreciation rights,
restricted stock grants and performance shares. An aggregate of 2.6 million
shares is reserved for issuance under the Incentive Plan. As of December 31,
1999, 1.7 million stock options have been granted with terms ranging from five
to ten years, vesting in equal amounts on each of the first three anniversaries
of the grant date. Under the Stock Purchase Plan, all full-time U.S., Canadian,
Dutch (effective with the 1997 offering), and German (effective with the 1999
offering) employees receive an option to purchase common stock at the lesser of
85% of the fair market value on the offering date or 100% of the fair market
value on the exercise date.
With respect to the 1995 offering of the Stock Purchase Plan, on December 8,
1997, the Company sold 163,170 shares to 1,054 employees at $20.94 per share
using existing treasury shares With respect to the 1997 offering of the Stock
Purchase Plan, on December 3, 1999, the Company sold 18,479 shares to 188
employees at $20.31 per share using existing treasury shares. With respect to
the 1999 offering at December 31, 1999, 1,712 participating employees had
options to acquire up to 330,765 shares of common stock at the lesser of $17.32
per share or the market price on the exercise date of December 7, 2001. An
aggregate of 1.3 million shares of common stock is currently reserved for
issuance under the Stock Purchase Plan.
The Company accounts for stock options under Accounting Principles Board No. 25,
"Accounting for Stock Issued to Employees" and has adopted the disclosure-only
provisions of SFAS 123, "Accounting for Stock-Based Compensation". Accordingly,
no compensation cost has been recognized for the stock compensation plans. The
effect of applying SFAS 123's fair value method to the Company's stock
compensation is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------------------------------------------------------------
As Pro As Pro As Pro
For the years ended December 31, Reported forma Reported forma Reported forma
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations $40,991 $38,889 $35,927 $34,263 $60,024 $59,338
Basic earnings per share from continuing
operations $ 1.68 $ 1.60 $ 1.41 $ 1.34 $ 2.30 $ 2.27
Diluted earnings per share from continuing
operations $ 1.68 $ 1.59 $ 1.40 $ 1.34 $ 2.28 $ 2.25
</TABLE>
The fair value of common stock options was estimated at the date of grant using
the Black-Scholes option-pricing model. Assumptions used in the determination of
the options fair value include: dividend yield of 1%; expected volatility of
20%; expected life of 7 years; and a risk free interest rate of 5%. For the
years ended December 31, 1999, 1998, and 1997, the weighted average per share
fair value of options granted was $4.67, $6.17, and $7.71, respectively. The
Black-Scholes option-pricing model was developed to estimate the fair value of
market traded options. Incentive stock options have certain characteristics
including vesting periods, and non-transferability, which market-traded options
are not subject to. Due to the significant effect changes in assumptions and
differences in option characteristics have on option fair values, the models may
not accurately reflect the fair value of the options.
The following table summarizes the Company's stock option activity and related
information for the years ended December 31, 1999, 1998, and 1997:
<TABLE>
<CAPTION>
Years Ended December 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------
WEIGHTED Weighted Weighted
AVERAGE Average Average
EXERCISE Exercise Exercise
OPTIONS PRICE Options Price Options Price
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 1,743,694 $ 28.08 706,536 $ 25.73 738,247 $ 23.51
Granted 309,500 20.83 1,288,500 28.64 88,000 34.94
Exercised (30,917) 18.29 (116,789) 18.49 (100,551) 17.85
Canceled (266,256) 24.23 (134,553) 29.24 (19,160) 23.87
- ----------------------------------------------------------------------------------------------------------------------
Outstanding at end of year 1,756,021 $ 27.59 1,743,694 $ 28.08 706,536 $ 25.73
======================================================================================================================
Exercisable at end of year 694,553 $ 29.65 369,365 $ 26.00 375,702 $ 20.66
======================================================================================================================
</TABLE>
40
<PAGE> 41
The following table summarizes information about fixed stock options outstanding
at December 31, 1999:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------------------------------------------------------------------------
Weighted
Range of Weighted Average Average
Exercise Remaining Weighted Average Exercise
Prices Options Contractual Life Exercise Price Options Price
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 16 to $21 790,800 8.9 years $ 17.90 181,819 $ 16.94
21 to 27 79,810 7.7 23.24 16,310 21.85
27 to 32 260,045 5.9 30.75 260,045 30.75
32 to 37 70,200 6.7 35.19 46,699 35.19
37 to 42 555,166 8.0 39.59 189,680 39.63
- ------------------------------------------------------------------------------------------------------------------
$ 16 to 42 1,756,021 8.0 years $ 27.59 694,553 $ 29.65
==================================================================================================================
</TABLE>
NOTE 14: STOCKHOLDER RIGHTS PLAN
Under the Company's Stockholder Rights Plan, each share of common stock
generally has "attached" to it one preferred share purchase right. Each right,
when exercisable, entitles the holder to purchase 1/100th of a share of the
Company's Series A Junior Participating Preferred Stock at a purchase price of
$100. Each 1/100th of a share of Series A Junior Participating Preferred Stock
will be substantially equivalent to one share of common stock and will be
entitled to one vote, voting together with the shares of common stock. The
rights will become exercisable only if, without the prior approval of the Board
of Directors, a person or group of persons acquires or announces the intention
to acquire 15% or more of the common stock. If the Company is acquired through a
merger or other business combination transaction, each right will entitle the
holder to purchase $200 worth of the surviving company's common stock for $100
(subject to adjustment). In addition, if a person or group of persons acquires
15% or more of the common stock, each right not owned by the 15% or greater
shareholder would permit the holder to purchase $200 worth of common stock for
$100 (subject to adjustment). The rights are redeemable, at the option of the
Company, at $.01 per right at any time until ten business days after a person or
group of persons acquires 15% or more of the common stock. The rights expire on
July 18, 2005.
NOTE 15: COMMITMENTS
At December 31, 1999, the Company was not a party to any foreign currency
exchange contracts. At December 31, 1999, the Company was committed to purchase
approximately 18.5 million pounds of copper, a one to two months supply of the
Company's anticipated U.S. requirements, at an aggregate cost of $15.0 million.
At December 31, 1999, there were unrealized gains of $800,000 on these
contracts, which will be realized as an adjustment to cost of sales when the
future sales that are being hedged occur. The contracts mature as follows:
<TABLE>
<CAPTION>
2000 (by quarter)
----------------------------------------------
1 2 3 4 Thereafter
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(in thousands)
Commitments as of December 31, 1999 $ 13.0 $2.0 - - -
</TABLE>
41
<PAGE> 42
NOTE 16: LEASES
Rental expense for operating leases primarily for office space and machinery and
equipment was $4.1 million, $3.8 million, and $4.1 million in 1999, 1998, and
1997, respectively.
Minimum annual lease payments for noncancellable operating leases in effect at
December 31, 1999 are as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
2000 $ 3,647
2001 2,191
2002 1,550
2003 934
2004 525
Thereafter 132
-------
$ 8,979
-------
</TABLE>
NOTE 17: CONCENTRATIONS OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Concentrations of Credit Risk
Concentrations of credit risk with respect to trade receivables are limited due
to the wide variety of customers and markets into which the Company's products
are sold, as well as their dispersion across many different geographic areas. As
a result, at December 31, 1999 and 1998, the Company did not consider itself to
have any significant concentrations of credit risk except for receivables from
several operating units of its largest customer of $ 13.9 million and $13.7
million, respectively.
Fair Value of Financial Instruments
The Company's financial instruments consist primarily of cash and cash
equivalents, trade receivables, trade payables, and debt instruments. At
December 31, 1999 and 1998, the book values of cash and cash equivalents, trade
receivables, trade payables and debt instruments, excluding the medium-term
notes, are considered representative of their respective fair values. The book
value of the medium-term notes at December 31, 1999, was $200 million. The fair
value of the medium-term notes at December 31, 1999 was approximately $192
million estimated on a discounted cash flow basis using current obtainable rates
for similar financing.
NOTE 18: INDUSTRY SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION
The Company's operations are conducted within two business segments, the
Electronics segment and the Communications segment. The Electronics segment
designs, manufactures and markets wire, cable and fiber optic products primarily
for the electronics and electrical markets, including products used for the
transmission of data, audio, video and electrical signals. These products are
sold primarily through distributors. The Communications segment designs,
manufactures, and markets wire and cable primarily for the telecommunications
market. The segment includes products used for the transmission of voice, video
and data. These products are sold primarily to the Regional Bell Operating
Companies (RBOC's) directly and through distributors, and to other major
communications companies.
The Company evaluates performance and allocates resources based on operating
earnings before interest and income taxes.
Operating earnings of the two principal businesses include all the ongoing costs
of operations. Allocations to or from these businesses are immaterial. With the
exception of certain unallocated tax assets, substantially all the business
assets are the owned assets of each of the business segments. Segment
information below the quantitative threshold is attributable to Corporate
headquarters. Sales to a major customer were $134.4 million or 16% of total
revenues in 1999, $121.2 million or 18% in 1998, and $118.0 million or 17% in
1997. At
42
<PAGE> 43
December 31, 1999, outstanding receivables to this customer totaled
$13.9 million. Product is sold to this customer by both segments of the
business.
Business Segment Information
<TABLE>
<CAPTION>
CORPORATE &
1999 ELECTRONICS COMMUNICATIONS ELIMINATIONS CONSOLIDATED
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
REVENUES $695,316 $132,103 $ (8,805) $818,614
DEPRECIATION &
AMORTIZATION 25,425 4,835 98 30,358
OPERATING EARNINGS/(LOSS) 79,651 4,673 (4,434) 79,890
INTEREST EXPENSE -- -- 14,042 14,042
INCOME/(LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 79,651 4,673 (18,476) 65,848
IDENTIFIABLE ASSETS 471,224 235,469 5,771 712,464
ACQUISITION OF PROPERTY,
PLANT & EQUIPMENT 26,122* 160,203** -- 186,325
</TABLE>
* Includes $7,081 for acquired property, plant & equipment related to the Duna
and Dorfler acquisitions.
** Includes $155,778 for acquired property, plant & equipment related to the CSI
acquisition.
<TABLE>
<CAPTION>
Corporate &
1998 Electronics Communications Eliminations Consolidated
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Revenues $664,148 $ -- $ -- $664,148
Depreciation & amortization 21,628 -- 58 21,686
Nonrecurring items 9,084 -- -- 9,084
Operating earnings/(loss) 69,594 -- (3,792) 65,802
Interest expense -- -- 7,145 7,145
Income/(loss) from continuing
operations before taxes 69,594 -- (10,937) 58,657
Identifiable assets 461,359 -- 8,913 470,272**
Acquisition of property,
plant & equipment 64,403* -- -- 64,403
</TABLE>
* Includes $24,531 for acquired property, plant & equipment related to the
acquisitions of Olex and EIW.
** Excludes $24,029 net assets of discontinued operations
<TABLE>
<CAPTION>
Corporate &
1997 Electronics Communications Eliminations Consolidated
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Revenues $676,898 $ -- $ -- $676,898
Depreciation & amortization 17,400 -- 50 17,450
Nonrecurring items 1,600 -- -- 1,600
Operating earnings/(loss) 107,582 -- (3,273) 104,309
Interest expense -- -- 6,319 6,319
Income/(loss) from continuing
operations before taxes 107,582 -- (9,592) 97,990
Identifiable assets 425,636 -- 5,830 431,466
Acquisition of property,
plant & equipment 37,262* -- -- 37,262
</TABLE>
* Includes $11,055 for acquired property, plant & equipment related to the
acquisitions of Alpha and Cowen Cable.
43
<PAGE> 44
Geographic Information
The following table identifies revenues by country based on the location of the
customer and property, plant and equipment by country based on physical
location.
<TABLE>
<CAPTION>
1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
PERCENT PROPERTY, Percent Property, Percent Property,
OF PLANT & of Plant & of Plant &
COUNTRY & REGION REVENUES REVENUE EQUIPMENT Revenues Revenue Equipment Revenues Revenue Equipment
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(in thousands)
UNITED STATES $559,247 68% $ 256,710 $ 433,466 65% $105,282 $ 433,728 64% $ 84,518
CANADA 38,789 5% 13,535 40,020 6% 13,372 47,145 7% 13,325
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL US & 598,036 73% 270,245 473,486 71% 118,654 480,873 71% 97,843
CANADA
THE NETHERLANDS 13,574 2% 35,422 17,602 3% 28,660 20,219 3% 39,512
REST OF EUROPE 123,219 15% 17,334 98,032 15% 23,294 103,875 15% 35
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL EUROPE 136,793 17% 52,756 115,634 18% 51,954 124,094 18% 39,547
ASIA/PACIFIC 53,843 7% 13,811 47,702 7% 13,130 46,825 7% 79
LATIN AMERICA 21,710 2% 5 21,426 3% 7 20,274 3% 12
OTHER 8,232 1% - 5,900 1% - 4,832 1% -
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL $818,614 100% $ 336,817 $ 664,148 100% $183,745 $ 676,898 100% $137,481
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 19: QUARTERLY OPERATING RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
1999 (BY QUARTER)
-----------------------------------------------------------------------
1 2 3 4
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands, except per share amounts)
REVENUES $159,629 $166,220 $234,419 $258,346
GROSS PROFIT 34,804 39,802 49,206 55,820
OPERATING EARNINGS 11,928 16,746 23,758 27,458
INCOME FROM CONTINUING OPERATIONS 10,009 9,234 11,531 13,995
NET INCOME 1,170 9,234 11,531 13,995
BASIC EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $ 0.26 $ 0.38 $ 0.47 $ 0.57
BASIC EARNINGS PER SHARE $ 0.05 $ 0.38 $ 0.47 $ 0.57
DILUTED EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $ 0.26 $ 0.38 $ 0.47 $ 0.57
DILUTED EARNINGS PER SHARE $ 0.05 $ 0.38 $ 0.47 $ 0.57
</TABLE>
<TABLE>
<CAPTION>
1998 (by quarter)
---------------------------------------------------------------------
1 2 3 4
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands, except per share amounts)
Revenues $173,615 $180,797 $151,562 $158,174
Gross profit 47,115 49,499 32,968 33,218
Operating earnings 26,283 26,694 7,208 5,617
Income from continuing operations 15,103 15,213 3,272 2,340
Net income 15,468 15,155 2,525 1,356
Basic earnings per share
from continuing operations $ 0.58 $ 0.58 $ 0.13 $ 0.10
Basic earnings per share $ 0.59 $ 0.58 $ 0.10 $ 0.06
Diluted earnings per share
from continuing operations $ 0.57 $ 0.58 $ 0.13 $ 0.10
Diluted earnings per share $ 0.59 $ 0.58 $ 0.10 $ 0.06
</TABLE>
44
<PAGE> 45
In 1998, the Company recorded certain nonrecurring charges in both the third
quarter and the fourth quarter. Operating earnings and income from continuing
operations before nonrecurring items for the third quarter of 1998 would be
$10,973 and $5,578 respectively. Operating earnings and income from continuing
operations before nonrecurring items for the fourth quarter of 1998 would be
$10,936 and $5,598 respectively.
NOTE 20: CONTINGENT LIABILITIES
Various claims are asserted against the Company in the ordinary course of
business including those pertaining to income tax examinations, product
liability and patent matters. Based on facts currently available, management
believes that the disposition of the claims that are pending or asserted will
not have a materially adverse effect on the financial position of the Company.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
45
<PAGE> 46
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors is incorporated herein by reference to "Proposal
No. 1, Election of Directors", as described in the Proxy Statement. Information
regarding executive officers is set forth in Part I herein under the heading
"Executive Officers."
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to "Board Structure and Compensation",
"Director Compensation", "Executive Compensation", and "Stock Performance
Graph", as described in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to "Stock Ownership of Certain Beneficial
Owners and Management", "Beneficial Ownership Table of Directors, Nominees and
Executive Officers" and "Beneficial Ownership Table of Shareholders Owning more
than Five Percent", as described in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to "Relationship with Independent Auditors" and
"Other Matters", as described in the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report:
1. FINANCIAL STATEMENTS
Report of Independent Auditors
Consolidated Balance Sheets as of December 31, 1999
and December 31, 1998
Consolidated Income Statements for Each of the Three Years
in the Period Ended December 31, 1999
Consolidated Cash Flow Statements for Each of the Three Years
in the Period Ended December 31, 1999
Consolidated Stockholders' Equity Statements for Each of the
Three Years in the Period Ended December 31, 1999
Notes to Consolidated Financial Statements
2. Financial statement schedules not included in this Annual Report on
Form 10-K have been omitted because they are not applicable.
3. EXHIBITS The following exhibits are filed herewith or incorporated
herein by reference. DOCUMENTS INDICATED BY AN ASTERISK (*) ARE FILED HEREWITH;
DOCUMENTS INDICATED BY A DOUBLE ASTERISK IDENTIFY EACH MANAGEMENT CONTRACT OR
COMPENSATORY PLAN. Documents not indicated by an asterisk are incorporated
herein by reference to the document indicated. References to (i) the
"Registration Statement" are to the Belden Inc. Registration Statement on Form
S-1, File Number 33-66830, (ii) the "Form 10-Q" are to the Belden Inc. Quarterly
Report on Form 10-Q for the Quarter ended September 30, 1993, File Number
1-12280, (iii) the
46
<PAGE> 47
"Form 10-Q, Second Quarter, 1994" are to the Belden Inc. Quarterly Report on
Form 10-Q for the Quarter ended June 30, 1994, File Number 1-12280, (iv) the
"Form 8-K" are to the Belden Inc. Report on Form 8-K, filed with the Commission
on April 17, 1995, File Number 1-12280, (v) the "Form 8-A" are to the Belden
Inc. Registration Statement on Form 8-A filed with the Commission and effective
on July 25, 1995, (vi) the "Amendment to Form S-8" are to the Belden Inc.
Post-Effective Amendment No. 1 of Form S-8 Registration Statement, filed with
the Commission on October 23, 1995, File Number 33-66830, (vii) the "Form 10-K
1995" are to the Belden Inc. Report on Form 10-K for 1995, File Number 1-12280,
(viii) the "Form 10-Q, Third Quarter, 1996" are to the Belden Inc. Quarterly
Report on Form 10-Q for the Quarter ended September 30, 1996, File Number
1-12280, (ix) the "Form S-8" are to the Belden Inc. Registration Statement on
Form S-8, filed in connection with the Belden Inc. Non-Employee Director Stock
Plan, File Number 333-11071, (x) the "Form 8-K, January 1997" are to the Belden
Inc. Report on Form 8-K, filed with the Commission on January 23, 1997, File
Number 1-12280, (xi) the "Form 10-K 1996" are to the Belden Inc. Report on Form
10-K for 1996, File Number 1-12280, (xii) the "Form 10-K 1997" are to the Belden
Inc. Report on Form 10-K for 1997, File Number 1-12280, (xiii) the "Form 10-Q,
First Quarter, 1998" are to the Belden Inc. Quarterly Report on Form 10-Q for
the Quarter ended March 31, 1998, File Number 1-12280, (xiv) the "1999 Form S-8"
are to the Belden Inc. Registration Statement on Form S-8, filed in connection
with the Belden Inc. Long-Term Incentive Plan, File Number 333-74923, and the
"Form 8-K, July 1999" are to the Belden Inc. Report on Form 8-K, filed with the
Commission on July 12, 1999.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
2.1 Stock Purchase Agreement, dated April 3, 1995, among PCW
Beheermaatschappij B.V., Philips Electronics N.V., Belden Inc. and
Belden Europe B.V. for the purchase of Pope Cable and Wire B.V.
(Exhibit 2 to Form 8-K)
2.2 Asset Purchase Agreement, dated October 21, 1996, between Belden
Wire & Cable Company and Intech Cable, Inc. (Exhibit 10.1 to Form
10-Q, Third Quarter, 1996)
2.3 Asset Purchase Agreement, dated November 21, 1996, between Belden
Wire & Cable Company and Alpha Wire Corporation, and Asset
Purchase Agreement/U.K. Assets dated January 7, 1997 between
Belden U.K. Limited and Alpha Wire Limited (Exhibits 2.1 and 2.2
to Form 8-K, January 1997)
2.4 Agreement and Plan of Merger, dated May 21, 1999, among Belden
Inc., Ashes Merger Corp., Cable Systems Holding Company, Cable
Systems Holding, LLC, Citicorp Venture Capital, Ltd. and the other
Ultimate Owners (Exhibit 2 to Form 8-K, July 1999)
3.1 Certificate of Incorporation of the Company (Exhibit 3.1 to
Registration Statement)
3.2 Bylaws of the Company (Exhibit 3.2 to Registration Statement)
4.1 Specimen Common Stock Certificate (Exhibit 4.1 to Form 10-K 1995)
4.2 Amendment to Specimen Common Stock Certificate (Exhibit 4.2 to
Form 10-K 1997)
4.3 Rights Agreement, dated as of July 6, 1995, between Belden Inc.
and First Chicago Trust Company of New York, as Rights Agent;
ChaseMellon Shareholder Services, L.L.C. has superseded First
Chicago Trust Company of New York as Rights Agent (Exhibit 1 to
Form 8-A)
4.4 Note Purchase Agreement, dated as of August 1, 1997, providing for
up to $200,000,000 aggregate principal amount of Senior Notes
issuable in series, with an initial series of Senior Notes in the
aggregate principal amount of $75,000,000, between Belden Inc. as
issuer and, as purchasers, Aid Association for Lutherans; Mutual
of Omaha Insurance Company; United of Omaha Life Insurance
Company; Nationwide Mutual Insurance Company; State Farm Life
Insurance Company; Principal Mutual Life Insurance Company; Nippon
Life Insurance Company of America; and Berkshire Life Insurance
Company (Exhibit 4.4 to Form 10-K 1997)
*4.5 First Amendment to Note Purchase Agreement listed above as Exhibit
4.4, dated as of September 1, 1999
*4.6 Amended and Restated Series 1997-A Guaranty of Belden Wire &
Cable, Cable Systems Holding Company and Cable Systems
International Inc. (now Belden Communications Company), the form
of which is included as Annex II to the First Amendment to Note
Purchase Agreement listed above as Exhibit 4.5
*4.7 Note Purchase Agreement, dated as of September 1, 1999, providing
for $125,000,000 aggregate principal amount of Senior Notes
issuable in series, with three series of Senior Notes in the
</TABLE>
47
<PAGE> 48
<TABLE>
<S> <C>
principal amounts of $64,000,000, $44,000,000, and $17,000,000,
respectively, between Belden Inc. as issuer and, as purchasers,
Principal Life Insurance Company, Commercial Union Life Insurance
Company of America, State Farm Life Insurance Company, State Farm
Life and Accident Assurance Company, Connecticut General Life
Insurance Company, Allstate Life Insurance Company, The Travelers
Insurance Company, Primerica Life Insurance Company, First Trenton
Indemnity Company, United of Omaha Life Insurance Company,
American United Life Insurance Company, The State Life Insurance
Company, Acacia National Life Insurance Company, Acacia Life
Insurance Company, Ameritas Variable Life Insurance Company,
Ameritas Life Insurance Corporation, The Canada Life Assurance
Company, Canada Life Insurance Company of America, Canada Life
Insurance Company of New York, Lutheran Brotherhood, Modern
Woodmen of America, Woodmen Accident and Life Company,
Indianapolis Life Insurance Company and TMG Life Insurance Company
*4.8 Guaranty of Belden Wire & Cable Company, Cable Systems Holding
Company, and Cable Systems International Inc (now Belden
Communications Company), the form of which is included as Exhibit
1.2 to the Note Purchase Agreement listed above as Exhibit 4.7
10.1 Asset Transfer Agreement by and between Cooper Industries, Inc.
and Belden Wire & Cable Company, with schedules and exhibits
thereto (Exhibit 10.1 to Form 10-Q)
10.2 Canadian Asset Transfer Agreement by and between Cooper Industries
(Canada) Inc. and Belden (Canada) Inc. (Exhibit 10.11 to Form
10-Q)
10.3 Trademark License Agreement by and between Belden Wire & Cable
Company and Cooper Industries, Inc. (Exhibit 10.2 to Form 10-Q)
10.4 Stock Agreement by and between Cooper Industries, Inc. and Belden
Inc. (Exhibit 10.4 to Form 10-Q)
10.5 Tax Sharing and Separation Agreement by and among Belden Inc.,
Cooper Industries, Inc., and Belden Wire & Cable Company (Exhibit
10.6 to Form 10-Q)
**10.6 Non-Employee Director Stock Plan (Exhibit 4.5 to Form S-8)
***10.7 Amendment to Non-Employee Director Stock Plan
**10.8 Change of Control Employment Agreements, dated as of August 16,
1996, between Belden Inc. and each of C. Baker Cunningham, Richard
K. Reece, Peter J. Wickman and Kevin L. Bloomfield (Exhibit 10.3
to Form 10-Q, Third Quarter, 1996)
**10.9 Trust Agreement ("Rabbi Trust"), dated January 1, 1998, between
Belden Wire & Cable Company and Bankers Trust Company (Exhibit
10.8 to Form 10-K 1997)
**10.10 Belden Inc. Long-Term Incentive Plan (Exhibit 4.6 to 1999 Form
S-8)
***10.11 Amendment to Belden Inc. Long-Term Incentive Plan
**10.12 Belden Inc. Employee Stock Purchase Plan, as restated as of August
4, 1995 (Exhibit 99.1 to Amendment to Form S-8)
**10.13 Belden Wire & Cable Company Supplemental Excess Defined Benefit
Plan (Exhibit 10.11 to Registration Statement)
***10.14 Amendment to Belden Wire & Cable Company Supplemental Excess
Defined Benefit Plan
**10.15 Belden Wire & Cable Company Supplemental Excess Defined
Contribution Plan (Exhibit 10.15 to Registration Statement)
***10.16 Amendment to Belden Wire & Cable Company Supplemental Excess
Defined Contribution Plan
**10.17 Indemnification Agreements entered into between Belden Inc. and
each of its directors and executive officers as of October 6, 1993
(Exhibit 10.10 to Form 10-Q)
**10.18 Indemnification Agreements entered into between Belden Inc. and
each of Christopher I. Byrnes, Bernard G. Rethore and John R.
DallePezze dated November 14, 1995, February 27, 1997 and May 1,
1997, respectively (Exhibit 10.15 to Form 10-K 1997)
**10.19 Change of Control Employment Agreement, dated as of August 16,
1997, between Belden Inc. and Cathy O. Staples (Exhibit 10.1 to
Form 10-Q, First Quarter, 1998)
**10.20 Indemnification Agreement dated as of August 16, 1997, entered
into between Belden Inc. and Cathy O. Staples (Exhibit 10.2 to
Form 10-Q, First Quarter, 1998)
***10.21 Change of Control Employment Agreement, dated as of August 16,
1999, between Belden Inc. and Paul Schlessman
***10.22 Indemnification Agreement dated as of July 23, 1999, entered into
between Belden Inc. and Paul Schlessman
10.23 Credit Agreement, dated as of November 18, 1996, among Belden Wire
& Cable Company,
</TABLE>
48
<PAGE> 49
<TABLE>
<S> <C>
Bank of America N.A., Wachovia Bank of Georgia, N.A., Royal Bank
of Canada, ING Bank Nederland, The Northern Trust Company,
SunTrust Bank, Atlanta, and Commerzbank Aktiengesellschaft, Grand
Cayman Branch (Exhibit 10.14 to 10-K 1996)
10.24 Guaranty of Belden Inc., the form of which is included as Exhibit
D to the Credit Agreement listed above as Exhibit 10.23 (Exhibit
10.15 to 10-K 1996)
*21.1 List of Subsidiaries of Belden Inc.
*23.1 Consent of Ernst & Young LLP
*24.1 Powers of Attorney from Members of the Board of Directors of
Belden Inc.
*27.1 Financial Data Schedule
*99.1 Proxy Statement for the Annual Meeting of Stockholders to be held
on May 4, 2000
</TABLE>
Copies of the above Exhibits are available to shareholders at a charge of $.25
per page, minimum order of $10.00. Direct requests to:
Belden Inc., Attention: Secretary
7701 Forsyth Boulevard, Suite 800
St. Louis, Missouri 63105
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed
during the last quarter of 1999.
49
<PAGE> 50
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BELDEN INC.
By: /s/ C. Baker Cunningham
---------------------------------------
C. Baker Cunningham
Chairman of the Board, President,
Date: March 24, 2000 Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the date indicated.
<TABLE>
<S> <C> <C>
/s/ C. Baker Cunningham President, Chairman of the Board March 24, 2000
- ----------------------------- Chief Executive Officer and Director
C. Baker Cunningham
/s/ Paul Schlessman Vice President, Finance, Treasurer March 24, 2000
- ----------------------------- and Chief Financial Officer
Paul Schlessman (Mr. Schlessman also is the Company's
Chief Accounting Officer)
/s/ LORNE D. BAIN* Director March 24, 2000
- -----------------------------
Lorne D. Bain
/s/ JOSEPH R. COPPOLA* Director March 24, 2000
- -----------------------------
Joseph R. Coppola
/s/ ALAN E. RIEDEL* Director March 24, 2000
- -----------------------------
Alan E. Riedel
/s/ BERNARD G. RETHORE* Director March 24, 2000
- -----------------------------
Bernard G. Rethore
/s/ JOHN R. DALLEPEZZE* Director March 24, 2000
- -----------------------------
John R. DallePezze
/s/ CHRISTOPHER I. BYRNES* Director March 24, 2000
- -----------------------------
Christopher I. Byrnes
- -----------------------------------------
*By C. Baker Cunningham, Attorney-in-fact
</TABLE>
50
<PAGE> 51
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Numbered
Pages
<S> <C>
2.1 Stock Purchase Agreement, dated April 3, 1995, among PCW
Beheermaatschappij B.V., Philips Electronics N.V., Belden Inc. and
Belden Europe B.V. for the purchase of Pope Cable and Wire B.V.
(Exhibit 2 to Form 8-K)
2.2 Asset Purchase Agreement, dated October 21, 1996, between Belden
Wire & Cable Company and Intech Cable, Inc. (Exhibit 10.1 to Form
10-Q, Third Quarter, 1996)
2.3 Asset Purchase Agreement, dated November 21, 1996, between Belden
Wire & Cable Company and Alpha Wire Corporation, and Asset
Purchase Agreement/U.K. Assets dated January 7, 1997 between
Belden U.K. Limited and Alpha Wire Limited (Exhibits 2.1 and 2.2
to Form 8-K, January 1997)
2.4 Agreement and Plan of Merger, dated May 21, 1999, among Belden
Inc., Ashes Merger Corp., Cable Systems Holding Company, Cable
Systems Holding, LLC, Citicorp Venture Capital, Ltd. and the other
Ultimate Owners (Exhibit 2 to Form 8-K, July 1999)
3.1 Certificate of Incorporation of the Company (Exhibit 3.1 to
Registration Statement)
3.2 Bylaws of the Company (Exhibit 3.2 to Registration Statement)
4.1 Specimen Common Stock Certificate (Exhibit 4.1 to Form 10-K 1995)
4.2 Amendment to Specimen Common Stock Certificate (Exhibit 4.2 to
Form 10-K 1997)
4.3 Rights Agreement, dated as of July 6, 1995, between Belden Inc.
and First Chicago Trust Company of New York, as Rights Agent;
ChaseMellon Shareholder Services, L.L.C. has superseded First
Chicago Trust Company of New York as Rights Agent (Exhibit 1 to
Form 8-A)
4.4 Note Purchase Agreement, dated as of August 1, 1997, providing for
up to $200,000,000 aggregate principal amount of Senior Notes
issuable in series, with an initial series of Senior Notes in the
aggregate principal amount of $75,000,000, between Belden Inc. as
issuer and, as purchasers, Aid Association for Lutherans; Mutual
of Omaha Insurance Company; United of Omaha Life Insurance
Company; Nationwide Mutual Insurance Company; State Farm Life
Insurance Company; Principal Mutual Life Insurance Company; Nippon
Life Insurance Company of America; and Berkshire Life Insurance
Company (Exhibit 4.4 to Form 10-K 1997)
*4.5 First Amendment to Note Purchase Agreement listed above as Exhibit
4.4, dated as of September 1, 1999
*4.6 Amended and Restated Series 1997-A Guaranty of Belden Wire &
Cable, Cable Systems Holding Company and Cable Systems
International Inc. (now Belden Communications Company), the form
of which is included as Annex II to the First Amendment to Note
Purchase Agreement listed above as Exhibit 4.5
*4.7 Note Purchase Agreement, dated as of September 1, 1999, providing
for $125,000,000 aggregate principal amount of Senior Notes
issuable in series, with three series of Senior Notes in the
principal amounts of $64,000,000, $44,000,000, and $17,000,000,
respectively, between Belden Inc. as issuer and, as purchasers,
Principal Life Insurance Company, Commercial Union Life Insurance
Company of America, State Farm Life Insurance Company, State Farm
Life and Accident Assurance Company, Connecticut General Life
Insurance Company, Allstate Life Insurance Company, The Travelers
Insurance Company, Primerica Life Insurance Company, First Trenton
Indemnity Company, United of Omaha Life Insurance Company,
American United Life Insurance Company, The State Life Insurance
Company, Acacia National Life Insurance Company, Acacia Life
Insurance Company, Ameritas Variable Life Insurance Company,
Ameritas Life Insurance Corporation, The Canada Life Assurance
Company, Canada Life Insurance Company of America, Canada Life
Insurance Company of New York, Lutheran Brotherhood, Modern
Woodmen of America, Woodmen Accident and Life Company,
Indianapolis Life Insurance Company and TMG Life Insurance Company
</TABLE>
51
<PAGE> 52
<TABLE>
<S> <C>
*4.8 Guaranty of Belden Wire & Cable Company, Cable Systems Holding
Company, and Cable Systems International Inc (now Belden
Communications Company), the form of which is included as Exhibit
1.2 to the Note Purchase Agreement listed above as Exhibit 4.7
10.1 Asset Transfer Agreement by and between Cooper Industries, Inc.
and Belden Wire & Cable Company, with schedules and exhibits
thereto (Exhibit 10.1 to Form 10-Q)
10.2 Canadian Asset Transfer Agreement by and between Cooper Industries
(Canada) Inc. and Belden (Canada) Inc. (Exhibit 10.11 to Form
10-Q)
10.3 Trademark License Agreement by and between Belden Wire & Cable
Company and Cooper Industries, Inc. (Exhibit 10.2 to Form 10-Q)
10.4 Stock Agreement by and between Cooper Industries, Inc. and Belden
Inc. (Exhibit 10.4 to Form 10-Q)
10.5 Tax Sharing and Separation Agreement by and among Belden Inc.,
Cooper Industries, Inc., and Belden Wire & Cable Company (Exhibit
10.6 to Form 10-Q)
**10.6 Non-Employee Director Stock Plan (Exhibit 4.5 to Form S-8)
***10.7 Amendment to Non-Employee Director Stock Plan
**10.8 Change of Control Employment Agreements, dated as of August 16,
1996, between Belden Inc. and each of C. Baker Cunningham, Richard
K. Reece, Peter J. Wickman and Kevin L. Bloomfield (Exhibit 10.3
to Form 10-Q, Third Quarter, 1996)
**10.9 Trust Agreement ("Rabbi Trust"), dated January 1, 1998, between
Belden Wire & Cable Company and Bankers Trust Company (Exhibit
10.8 to Form 10-K 1997)
**10.10 Belden Inc. Long-Term Incentive Plan (Exhibit 4.6 to 1999 Form S-8)
***10.11 Amendment to Belden Inc. Long-Term Incentive Plan
**10.12 Belden Inc. Employee Stock Purchase Plan, as restated as of August
4, 1995 (Exhibit 99.1 to Amendment to Form S-8)
***10.13 Belden Wire & Cable Company Supplemental Excess Defined Benefit
Plan (Exhibit 10.11 to Registration Statement)
***10.14 Amendment to Belden Wire & Cable Company Supplemental Excess
Defined Benefit Plan
**10.15 Belden Wire & Cable Company Supplemental Excess Defined
Contribution Plan (Exhibit 10.15 to Registration Statement)
***10.16 Amendment to Belden Wire & Cable Company Supplemental Excess
Defined Contribution Plan
**10.17 Indemnification Agreements entered into between Belden Inc. and
each of its directors and executive officers as of October 6, 1993
(Exhibit 10.10 to Form 10-Q)
**10.18 Indemnification Agreements entered into between Belden Inc. and
each of Christopher I. Byrnes, Bernard G. Rethore and John R.
DallePezze dated November 14, 1995, February 27, 1997 and May 1,
1997, respectively (Exhibit 10.15 to Form 10-K 1997)
**10.19 Change of Control Employment Agreement, dated as of August 16,
1997, between Belden Inc. and Cathy O. Staples (Exhibit 10.1 to
Form 10-Q, First Quarter, 1998)
**10.20 Indemnification Agreement dated as of August 16, 1997, entered
into between Belden Inc. and Cathy O. Staples (Exhibit 10.2 to
Form 10-Q, First Quarter, 1998)
***10.21 Change of Control Employment Agreement, dated as of August 16,
1999, between Belden Inc. and Paul Schlessman
***10.22 Indemnification Agreement dated as of July 23, 1999, entered into
between Belden Inc. and Paul Schlessman
10.23 Credit Agreement, dated as of November 18, 1996, among Belden Wire
& Cable Company, Bank of America N.A., Wachovia Bank of Georgia,
N.A., Royal Bank of Canada, ING Bank Nederland, The Northern Trust
Company, SunTrust Bank, Atlanta, and Commerzbank
Aktiengesellschaft, Grand Cayman Branch (Exhibit 10.14 to 10-K
1996)
10.24 Guaranty of Belden Inc., the form of which is included as Exhibit
D to the Credit Agreement listed above as Exhibit 10.23 (Exhibit
10.15 to 10-K 1996)
*21.1 List of Subsidiaries of Belden Inc.
*23.1 Consent of Ernst & Young LLP
*24.1 Powers of Attorney from Members of the Board of Directors of
Belden Inc.
</TABLE>
52
<PAGE> 53
<TABLE>
<S> <C>
*27.1 Financial Data Schedule
*99.1 Proxy Statement for the Annual Meeting of Stockholders to be held
on May 4, 2000
</TABLE>
*Filed herewith. Documents not indicated by an asterisk (*) are incorporated
herein by reference.
53
<PAGE> 1
EXHIBIT 4.5
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT,
DATED AS OF SEPTEMBER 1, 1999
EXECUTION COPY
BELDEN INC.
FIRST AMENDMENT TO
NOTE PURCHASE AGREEMENT
$200,000,000
Senior Notes Issuable in Series
$75,000,000 Principal Amount
6.92% Senior Notes, Series 1997-A
Due August 11, 2009
Dated as of September 1, 1999
To the Holders of the Senior Notes,
Series 1997-A, of Belden Inc. Named in the
Attached Schedule I
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement dated as of August 1,
1997 among Belden Inc. (the "Company") and each of the Purchasers named in
Schedule A thereto (the "1997 Note Agreement"), pursuant to which the Company
issued $75,000,000 principal amount of its 6.92% Senior Notes, Series 1997-A,
due August 11, 2009 (the "1997 Notes"). Reference is also made to the Series
1997-A Guaranty dated August 11, 1997 (as it may be amended, modified or
restated, the "Series 1997-A Guaranty") made by Belden Wire & Cable Company, a
Wholly Owned Subsidiary of the Company ("Belden Wire"), in favor of the holders
of the 1997 Notes. You are referred to herein individually as a "Holder" and
collectively as the "Holders." Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the 1997 Note Agreement.
The Company has authorized the issuance and sale of $64,000,000
aggregate principal amount of 7.60% Senior Notes, Series A, due September 1,
2004, $44,000,000 aggregate principal amount of 7.74% Senior Notes, Series B,
due September 1, 2006, and $17,000,000 aggregate principal amount of 7.95%
Senior Notes, Series C, due September 1, 2009 (collectively, the "1999 Notes"),
pursuant to a Note Purchase Agreement dated as of September 1, 1999 (the "1999
Note Agreement"). The 1999 Notes will be guaranteed by certain Wholly Owned
Subsidiaries of the Company, including Belden Wire, Cable Systems Holding
Company ("CSH") and Cable Systems International Inc. ("CSI"). In order to
maintain parity between the 1999 Notes and the 1997 Notes, CSH and CSI will
guaranty the 1997 Notes.
<PAGE> 2
The Holders are willing to grant an amendment on the terms and
conditions hereinafter set forth. In consideration of the premises and for good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the Company and the Holders agree as follows:
AMENDMENTS
Amendment of Section 1.1. Section 1.1 of the 1997 Note Agreement
is amended to read in its entirety as follows:
"The Company is contemplating the issue and sale of up to
$200,000,000 aggregate principal amount of its Senior Notes issuable in
series (the "Notes", such term to include any such Notes issued in
substitution therefor pursuant to Section 13 of this Agreement). The
Notes shall be substantially in the form set out in Exhibit 1.1-A, with
such changes therefrom, if any, as may be approved by the purchasers of
such Notes, or series thereof, and the Company. Certain capitalized
terms used in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement. The Notes may be
issued in one or more series. Each series of Notes will be guaranteed
by Belden Wire & Cable Company, a Delaware corporation ("Belden Wire"),
Cable Systems Holding Company, a Delaware corporation ("CSH"), and
Cable Systems International Inc., a Delaware corporation ("CSI" and,
together with Belden Wire, CSH and any future party to the Belden Wire
Guaranty, the "Subsidiary Guarantors"), each a Wholly Owned Subsidiary
of the Company, pursuant to a guaranty in substantially the form of
Exhibit 1.1-B (such guaranty with respect to the Series 1997-A Notes is
herein referred to as the "Belden Wire Guaranty"). Each series of
Notes, other than the initial series, shall be issued pursuant to a
supplement to this Agreement (a "Supplement") in substantially the form
of Exhibit 1.1-C, and shall be subject to the following terms and
conditions:
(a) the designation of each series of Notes shall distinguish
the Notes of one series from the Notes of all other series;
(b) the Notes of each series shall be senior in the sense that
they rank pari passu with the Notes of all other series and the
Company's other outstanding unsecured Indebtedness that has not been
expressly subordinated to any other Indebtedness of the Company;
(c) each series of Notes shall be dated the date of issue,
bear interest at such rate or rates, mature on such date or dates, be
subject to such mandatory prepayments on the dates and with the
Make-Whole Amounts, if any, as are provided in the Supplement under
which such Notes are issued, and shall have such additional or
different conditions precedent to closing and such additional or
different representations and warranties or other terms and provisions
as shall be specified in such Supplement; and
<PAGE> 3
(d) except to the extent provided in foregoing clauses (a)
through (c), all of the provisions of this Agreement shall apply to the
Notes of each series.
The Purchasers of the Series 1997-A Notes need not purchase subsequent
series of Notes."
Amendment of Section 10.4. Clause (b) of Section 10.4 of the
1997 Note Agreement is amended to read in its entirety as follows:
"(b) Any Restricted Subsidiary may (x) merge into the Company
(provided that the Company is the surviving corporation) or another
Restricted Subsidiary or (y) sell, transfer or lease all or any part of
its assets to the Company or another Restricted Subsidiary, or (z)
merge or consolidate with, or sell, transfer or lease all or
substantially all of its assets to, any Person in a transaction that is
permitted by Section 10.3 or, as a result of which, such Person becomes
a Restricted Subsidiary; provided in each instance set forth in clauses
(x) through (z) that, immediately before and after giving effect
thereto, there shall exist no Default or Event of Default and provided
further, that, in the case of a transaction contemplated by clause (z),
if the Restricted Subsidiary is a Subsidiary Guarantor and it is not
the surviving corporation, the survivor of such merger shall be a
solvent corporation organized and existing under the laws of the United
States, any State thereof (including the District of Columbia), Canada
or any province thereof, or a country within Western Europe, and such
corporation (A) shall have executed and delivered to each holder of any
Notes its assumption of the due and punctual performance and observance
of each covenant and condition of the Belden Wire Guaranty applicable
to the Subsidiary Guarantor that does not survive, and (B) shall have
caused to be delivered to each holder of any Notes an opinion of
independent counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with the
terms hereof;"
Amendment of Section 10.6. Section 10.6 of the 1997 Note
Agreement is amended to read in its entirety as follows:
"10.6 DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
The Company will not designate a Subsidiary Guarantor
as an Unrestricted Subsidiary. The Company may designate any other
Restricted Subsidiary as an Unrestricted Subsidiary unless such
Subsidiary has been designated an Unrestricted Subsidiary more than
once previously and unless immediately before or after such designation
there exists a Default or Event of Default."
Addition of Section 10.9. A new Section 10.9 is added to the
1997 Note Agreement to read as follows:
<PAGE> 4
"10.9 GUARANTIES BY SUBSIDIARIES.
The Company will not permit any Subsidiary to
directly or indirectly guarantee any of the Company's Indebtedness or
other obligations under the Credit Agreement unless such Subsidiary is,
or concurrently therewith becomes, a party to the Belden Wire
Guaranty."
Amendment of Section 11.
Clause (c) of Section 11 of the 1997 Note Agreement
is amended to read in its entirety as follows:
"(c) the Company defaults in the performance of or
compliance with any term contained in Section 7.1(e) or
Sections 10.1 through 10.9; or"
Clause (e) of Section 11 of the 1997 Note Agreement
is amended to read in its entirety as follows:
"(e) any representation or warranty made in writing
by or on behalf of the Company or any Subsidiary Guarantor or
by any officer of the Company or any Subsidiary Guarantor in
this Agreement or the Belden Wire Guaranty or in any writing
furnished in connection with the transactions contemplated
hereby proves to have been false or incorrect in any material
respect on the date as of which made; or"
Clause (k) of Section 11 of the 1997 Note Agreement
is amended to read in its entirety as follows:
"(k) the Belden Wire Guaranty ceases to be in full
force and effect as a result of acts taken by the Company or
any Subsidiary Guarantor or is declared to be null and void in
whole or in material part by a court or other governmental or
regulatory authority having jurisdiction or the validity or
enforceability thereof shall be contested by any of the
Company or any Subsidiary Guarantor or any of them renounces
any of the same or denies that it has any or further liability
thereunder."
Amendment of Section 12.1. Clause (a) of Section 12.1 of the
1997 Note Agreement is amended to read in its entirety as follows:
"(a) If an Event of Default with respect to the Company or a
Subsidiary Guarantor described in paragraph (g) or (h) of Section 11
(other than an Event of Default described in clause (i) or paragraph
(g) or described in clause (vi) of paragraph (g) by virtue of the fact
that such clause encompasses clause (i) of paragraph (g)) has occurred,
all the Notes then outstanding shall automatically become immediately
due and payable."
Addition of Section 23. A new Section 23 is added to the 1997
Note Agreement to read in its entirety as follows:
<PAGE> 5
"You and each other holder of the Notes agree to
fully release any Subsidiary Guarantor other than Belden Wire, CSH and
CSI from the Belden Wire Guaranty at such time as such Subsidiary
Guarantor no longer guarantees, directly or indirectly, the Company's
Indebtedness or other obligations under the Credit Agreement; provided,
however, that you and each other holder will not be required to release
such Subsidiary Guarantor from the Belden Wire Guaranty if (i) such
Subsidiary Guarantor is contemplated to become a borrower under the
Credit Agreement or (ii) there is a plan of financing that contemplates
such Subsidiary Guarantor guaranteeing any other Indebtedness of the
Company, and such requirement to release such Subsidiary Guarantor is
conditioned upon the prior receipt by each holder of the Notes of a
certificate from a Senior Financial Officer of the Company stating that
neither of the circumstances described in clauses (i) and (ii) above
are true."
Amendment of Schedule B.
The following terms included in Schedule B of the
1997 Note Agreement are amended to read in their entirety as follows:
"MATERIAL ADVERSE EFFECT" means a material adverse
effect on (a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Restricted Subsidiaries
taken as a whole, or (b) the ability of the Company to perform its
obligations under this Agreement and the Notes, or (c) the ability of
any Subsidiary Guarantor to perform its obligations under the Belden
Wire Guaranty, or (d) the validity or enforceability of this Agreement,
the Notes or the Belden Wire Guaranty.
"MATERIAL RESTRICTED SUBSIDIARY" means, as of the
date of determination, each Subsidiary Guarantor and any other
Restricted Subsidiary the assets or revenues of which account for more
than 5% of the Consolidated Total Assets of the Company and its
Restricted Subsidiaries at the end of the most recently ended fiscal
period or more than 5% of the consolidated revenues of the Company and
its Restricted Subsidiaries for the most recently completed four fiscal
quarters.
"RESTRICTED SUBSIDIARY" means each Subsidiary
Guarantor and any other Subsidiary (a) of which at least a majority of
the voting securities are owned by the Company and/or one or more
Wholly Owned Restricted Subsidiaries and of which the Company has
management control and (b) which the Company has designated a
Restricted Subsidiary by notice in writing (including designation in
Section 5.4) given to the holders of the Notes and (c) which has not
been designated as a Restricted Subsidiary more than once previously."
Schedule B of the 1997 Note Agreement is amended to
add the following terms:
<PAGE> 6
"CREDIT AGREEMENT" means the Credit Agreement dated as of
November 18, 1996 among the Company and the banks from time to time
party thereto, as such agreement may be hereafter amended, restated,
supplemented, refinanced, increased or reduced from time to time, and
any successor credit agreement or similar facility."
"CSH" is defined in Section 1.1.
"CSI" is defined in Section 1.1.
"SUBSIDIARY GUARANTOR" is defined in Section 1.1.
Replacement of Exhibit 1.1-B. Exhibit 1.1-B to the 1997 Note
Agreement is replaced with the form attached to this Amendment as Annex I.
REAFFIRMATION; ETC.
Reaffirmation of 1997 Note Agreement. The Company reaffirms
its agreement to comply with each of the covenants, agreements and other
provisions of the 1997 Note Agreement and the 1997 Notes, as amended by this
Amendment.
No Default or Event of Default. The Company represents and
warrants that, to the actual knowledge of its Responsible Officers after due
inquiry, no Default or Event of Default has occurred and is continuing or will
occur as a result of the execution of this Amendment.
Authorization. The execution, delivery and performance by the
Company of this Amendment have been duly authorized by all necessary corporate
action and, except as provided herein, do not require any registration with,
consent or approval of, notice to or action by, any Person (including any
Governmental Authority) in order to be effective and enforceable. Each of the
1997 Note Agreement and this Amendment constitutes the legal, valid and binding
obligations of the Company, enforceable against it in accordance with its
respective terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
EFFECTIVE DATE
This Amendment shall become effective as of the date set forth above
upon satisfaction of each of the following conditions:
Consent of Requisite Holders. The Holders of at least a
majority of the aggregate principal amount of the 1997 Notes outstanding shall
have executed counterparts of this Amendment.
Amendment and Restatement of Series 1997-A Guaranty. The
Holders of the 1997 Notes shall have received a counterpart signature page to an
amended and restated Guaranty in the form attached hereto as Annex II signed by
each Subsidiary Guarantor.
<PAGE> 7
Acknowledgement of Belden Wire. Belden Wire shall have
acknowledged this Amendment by executing the signature page hereto.
Expenses. The Company shall have paid all fees and expenses of
special counsel to the Holders in connection with this Amendment.
MISCELLANEOUS
Ratification. Except as expressly amended, modified, deleted
or added to hereby, all of the terms and conditions of the 1997 Note Agreement,
the 1997 Notes and all other documents relating to the 1997 Note Agreement
remain in full force and effect, and the parties hereto expressly reaffirm and
ratify their respective obligations thereunder.
Reference to and Effect on the 1997 Note Agreement. Upon the
effectiveness of this Amendment, (i) each reference in the 1997 Note Agreement
and in other documents describing or referencing the 1997 Note Agreement to the
"Agreement," "Note Agreement," "hereunder," "hereof," "herein," or words of like
import referring to the 1997 Note Agreement, shall mean and be a reference to
the 1997 Note Agreement, as amended hereby, and (ii) each reference in the
Series 1997-A Guaranty and in other documents describing or referencing the
Series 1997-A Guaranty to the "Guaranty," "Series 1997-A Guaranty," "hereunder,"
"hereof," "herein," or words of like import referring to the Series 1997-A
Guaranty, shall mean and be a reference to the Series 1997-A Guaranty as amended
and restated pursuant to this Amendment.
Restricted Subsidiaries. The Company hereby notifies the
Holders that each Subsidiary listed in Annex III hereto (which are all of the
Subsidiaries of the Company) is a Restricted Subsidiary under the 1997 Note
Agreement, as amended, whether or not such Subsidiaries were Restricted
Subsidiaries prior to the effective date hereof.
Binding Effect. This Amendment shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties hereto.
Governing Law. This Amendment shall be governed by and
construed in accordance with Illinois law.
Counterparts. This Amendment be executed in any number of
counterparts, each executed counterpart constituting an original, but altogether
only one instrument.
<PAGE> 8
If you are in agreement with the foregoing, please sign the
accompanying counterpart of this Amendment and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company upon satisfaction of the conditions set forth in Section 3 of this
Amendment.
BELDEN INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
The foregoing is hereby agreed
to as of the date thereof.
AID ASSOCIATION FOR LUTHERANS
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
MUTUAL OF OMAHA INSURANCE
COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
NATIONWIDE MUTUAL INSURANCE
COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
<PAGE> 9
STATE FARM LIFE INSURANCE COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By:
----------------------------------------
Its:
---------------------------------------
By:
----------------------------------------
Its:
---------------------------------------
NIPPON LIFE INSURANCE COMPANY OF
AMERICA, an Iowa corporation
By: Principal Life Company, an Iowa corporation,
its attorney in fact
By:
----------------------------------------
Its:
---------------------------------------
By:
----------------------------------------
Its:
---------------------------------------
BERKSHIRE LIFE INSURANCE COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
<PAGE> 10
The undersigned Subsidiary Guarantor acknowledges the foregoing
Amendment.
BELDEN WIRE & CABLE COMPANY
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
<PAGE> 11
SCHEDULE I
<TABLE>
<CAPTION>
Original Principal
Name of Holder Amount of 1997 Notes
- -------------- --------------------
<S> <C>
Aid Association for Lutherans $24,000,000
Mutual of Omaha Insurance Company 11,000,000
United of Omaha Life Insurance Company 4,000,000
Nationwide Mutual Insurance Company 15,000,000
State Farm Life Insurance Company 10,000,000
Principal Life Insurance Company 7,000,000
Nippon Life Insurance Company of America 1,000,000
Berkshire Life Insurance Company 3,000,000
</TABLE>
<PAGE> 12
ANNEX I
EXHIBIT 1.1-B
[FORM OF SUBSIDIARY GUARANTY]
SERIES [ ] GUARANTY
THIS GUARANTY (this "GUARANTY") dated [ ] is made by the undersigned
(each, a "GUARANTOR"), in favor of the holders from time to time of the Series
[ ] Notes hereinafter referred to, including each purchaser named in the Note
Purchase Agreement [or supplement thereto] hereinafter referred to, and their
respective successors and assigns (collectively, the "HOLDERS" and each
individually, a "HOLDER").
W I T N E S S E T H:
WHEREAS, Belden Inc., a Delaware corporation (the "COMPANY"), and the
initial Holders have entered into a [Supplement dated , to] [Note Purchase
Agreement dated as of August 1, 1997] (the Note Purchase Agreement [as so
supplemented and] as [further] amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms and in effect, the "NOTE
PURCHASE AGREEMENT");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of $200,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement) in series [of which $ have heretofore been issued]
and the Company has authorized the issuance and sale of $[ ] aggregate
principal amount of Series [ ] Notes to the Purchasers;
WHEREAS, the Company directly or indirectly owns all of the issued and
outstanding capital stock of each Guarantor and, by virtue of such ownership and
otherwise, each Guarantor will derive substantial benefits from the purchase by
the initial Holders of the Company's Series [ ] Notes;
WHEREAS, it is a condition precedent to the obligation of the initial
Holders to purchase the Series [ ] Notes that each Guarantor shall have
executed and delivered this Guaranty to the Holders and it will be a condition
to the sale of subsequent series of Notes that a substantially identical
Guaranty run in favor of the holders of such subsequent series of Notes; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Series [ ] Notes by the
initial Holders, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, each Guarantor makes this Guaranty as
follows:
<PAGE> 13
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. The Guarantors, jointly and severally,
unconditionally and irrevocably guarantee to the Holders the due, prompt and
complete payment by the Company of the principal of, Make-Whole Amount, if any,
and interest on, and each other amount due under, the Series [ ] Notes or the
Note Purchase Agreement, when and as the same shall become due and payable
(whether at stated maturity or by prepayment or by declaration or otherwise) in
accordance with the terms of the Series [ ] Notes and the Note Purchase
Agreement (the Series [ ] Notes and the Note Purchase Agreement being sometimes
hereinafter collectively referred to as the "NOTE DOCUMENTS" and the amounts
payable by the Company under the Note Documents, and all other monetary
obligations of the Company thereunder, being sometimes collectively hereinafter
referred to as the "OBLIGATIONS"). This Guaranty is a guaranty of payment and
not just of collectibility and is in no way conditioned or contingent upon any
attempt to collect from the Company or upon any other event, contingency or
circumstance whatsoever. If for any reason whatsoever the Company shall fail or
be unable duly, punctually and fully to pay such amounts as and when the same
shall become due and payable and any Holder shall notify each Guarantor that all
Series [ ] Notes held by such Holder or all outstanding Series [ ] Notes are
subject to acceleration under Section 12.1 of the Note Purchase Agreement, the
Guarantors (jointly and severally), without demand, presentment, protest or
notice of any kind, will forthwith pay or cause to be paid such amounts to the
Holders under the terms of such Note Documents, in lawful money of the United
States, at the place specified in the Note Purchase Agreement, or perform or
comply with the same or cause the same to be performed or complied with,
together with interest (to the extent provided for under such Note Documents) on
any amount due and owing from the Company. The Guarantors (jointly and
severally), promptly after demand, will pay to the Holders the reasonable costs
and expenses of collecting such amounts or otherwise enforcing this Guaranty,
including, without limitation, the reasonable fees and expenses of counsel. The
right of recovery against each Guarantor under this Guaranty is, however,
limited to the Fair Net Worth of such Guarantor, as of the date of any
determination thereof, less $20,000. For purposes of this Guaranty, the "Fair
Net Worth" of a Guarantor shall mean an amount equal to the fair saleable value
of such Guarantor's assets and all rights of contribution, indemnification and
exoneration, net of all obligations of such Guarantor owed to third parties
(other than such Guarantor's liabilities under this Guaranty), including all
liabilities, whether fixed or contingent, direct or indirect, disputed or
undisputed, secured or unsecured, and whether or not required to be reflected on
a balance sheet prepared in accordance with generally accepted accounting
principles.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of such Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim such Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not such Guarantor or the Company shall have
any knowledge or notice thereof), including:
<PAGE> 14
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give notice to such Guarantor
of the occurrence of a "Default" or an "Event of Default" under any
Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, a Guarantor or to any
other person or any of their respective properties or creditors, or any
action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or a Guarantor
into or with any other corporation, or any sale, lease or transfer of
any of the assets of the Company or a Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and a Guarantor, or any termination of such relationship;
<PAGE> 15
(j) any release or discharge, by operation of law, of a
Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance that might otherwise
constitute a legal or equitable defense or discharge of the liabilities
of a guarantor or surety or that might otherwise limit recourse against
a Guarantor.
Notwithstanding any other provision contained in this Guaranty, the Guarantors'
joint and several liability with respect to the principal amount of the Series
[ ] Notes shall be no greater than the liability of the Company with respect
thereto.
SECTION 4. Full Recourse Obligations. The obligations of each
Guarantor set forth herein constitute the full recourse obligations of such
Guarantor enforceable against it to the full extent of all its assets and
properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the
extent permitted by applicable law, (a) notice of any of the matters referred to
in Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or such Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or that might otherwise
limit recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity.
Until one year and one day after all Obligations have been indefeasibly paid in
full, each Guarantor agrees not to take any action pursuant to any rights that
may have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including Section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company that
<PAGE> 16
may have arisen in connection with this Guaranty. So long as the Obligations
remain, if any amount shall be paid by or on behalf of the Company to a
Guarantor on account of any of the rights waived in this paragraph, such amount
shall be held by such Guarantor in trust, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Holders (duly endorsed by such Guarantor to the Holders, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as the Holders may determine. The provisions of this paragraph shall survive the
term of this Guaranty and the payment in full of the Obligations.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Series [ ]
Notes shall at any time have occurred and be continuing, and such acceleration
shall at such time be prevented by reason of the pendency against the Company or
any other person of a case or proceeding under a bankruptcy or insolvency law,
each Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Series [ ] Notes and all
other Obligations shall be deemed to have been accelerated with the same effect
as if any Holder had accelerated the same in accordance with the terms of the
Note Purchase Agreement or other applicable Note Document, and the Guarantors
(jointly and severally) shall forthwith pay such principal amount, Make-Whole
Amount, if any, and interest thereon and any other amounts guaranteed hereunder
without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of
each Guarantor hereunder shall be duly paid and performed in full.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged;
(b) such Guarantor has the corporate power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Guaranty;
<PAGE> 17
(c) this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or material
contractual obligation of such Guarantor and will not result in or
require the creation or imposition of any Lien on any of the
properties, revenues or assets of such Guarantor pursuant to the
provisions of any material contractual obligation of such Guarantor or
any requirement of law;
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or governmental authority is
required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor or
any of its properties or revenues (i) with respect to this Guaranty or
any of the transactions contemplated hereby or (ii) that could
reasonably be expected to have a material adverse effect upon the
business, operations or financial condition of such Guarantor and its
subsidiaries taken as a whole;
(g) the execution, delivery and performance of this Guaranty
will not violate any provision of any order, judgment, writ, award or
decree of any court, arbitrator or Governmental Authority, domestic or
foreign, or of the charter or by-laws of such Guarantor or of any
securities issued by such Guarantor; and
(h) after giving effect to the transactions contemplated
herein, (i) the present fair salable value of the assets of such
Guarantor is in excess of the amount that will be required to pay its
probable liability on its existing debts as said debts become absolute
and matured, (ii) such Guarantor has received reasonably equivalent
value for executing and delivering this Guaranty, (iii) the property
remaining in the hands of such Guarantor is not an unreasonably small
capital, and (iv) such Guarantor is able to pay its debts as they
mature.
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed (a) if to the Company or
any Holder at the address set forth in the Note Purchase Agreement or (b) if to
a Guarantor, at:
<PAGE> 18
[Name of Guarantor]
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
or at such other address as a Guarantor shall from time to time designate in
writing to the Holders or on a counterpart signature page hereto. Any notice so
addressed shall be deemed to be given when actually received.
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the Holders. All
statements in any such certificate or other instrument shall constitute
warranties and representations by such Guarantor hereunder.
SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any suit, action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Notes. Each Guarantor consents to process being served in any such suit,
action or proceeding by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the address of such Guarantor
specified herein or designated pursuant hereto or on a counterpart signature
page hereto. Each Guarantor agrees that such service upon receipt (i) shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service upon and personal delivery to such
Guarantor.
SECTION 13. Miscellaneous. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Holders. The section and paragraph headings in this Guaranty and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof, and all references herein
to numbered sections, unless otherwise indicated, are to sections in this
Guaranty. This Guaranty shall in all respects be governed by, and construed in
accordance with, the laws of the State of Illinois, including all matters of
construction, validity and performance.
<PAGE> 19
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.
BELDEN WIRE & CABLE COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
---------------------------
CABLE SYSTEMS HOLDING COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
---------------------------
CABLE SYSTEMS INTERNATIONAL INC.
By:
-------------------------------
Name:
-----------------------------
Title:
---------------------------
<PAGE> 20
ANNEX II
[FORM OF AMENDED AND RESTATED
SERIES 1997-A GUARANTY]
THIS AMENDED AND RESTATED SERIES 1997-A GUARANTY (this "GUARANTY")
dated as of September 1, 1999 is made by the undersigned (each, a "GUARANTOR"),
in favor of the holders from time to time of the Series 1997-A Notes hereinafter
referred to, including each purchaser named in the Note Purchase Agreement
hereinafter referred to, and their respective successors and assigns
(collectively, the "HOLDERS" and each individually, a "HOLDER").
W I T N E S S E T H:
WHEREAS, Belden Inc., a Delaware corporation (the "COMPANY"), and the
initial Holders have entered into a Note Purchase Agreement dated as of August
1, 1997 (the Note Purchase Agreement as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms and in effect,
the "NOTE PURCHASE AGREEMENT");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of $200,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement) in series and the Company has authorized the issuance
and sale of $75,000,000 aggregate principal amount of Series 1997-A Notes to the
Purchasers;
WHEREAS, the Company has authorized the issuance and sale of senior
notes pursuant to a Note Purchase Agreement dated as of September 1, 1999, which
senior notes will be guaranteed by certain subsidiaries of the Company that do
not currently guaranty the Series 1997-A Notes, and, in order to maintain parity
between the Series 1997-A Notes and such senior notes by providing a guaranty of
the Series 1997-A Notes by such subsidiaries, this Guaranty amends and restates
in its entirety the Series 1997-A Guaranty originally entered into on August 11,
1997 by Belden Wire (the "Original Guaranty");
WHEREAS, the Company directly or indirectly owns all of the issued and
outstanding capital stock of each Guarantor and, by virtue of such ownership and
otherwise, each Guarantor has derived or will derive substantial benefits from
the purchase by the initial Holders of the Company's Series 1997-A Notes; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the provisions of the preceding paragraphs;
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Series 1997-A Notes by the
initial Holders, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, each Guarantor makes this Guaranty, which
amends and restates in its entirety the Original Guaranty, as follows:
<PAGE> 21
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. The Guarantors, jointly and severally,
unconditionally and irrevocably guarantee to the Holders the due, prompt and
complete payment by the Company of the principal of, Make-Whole Amount, if any,
and interest on, and each other amount due under, the Series 1997-A Notes or the
Note Purchase Agreement, when and as the same shall become due and payable
(whether at stated maturity or by prepayment or by declaration or otherwise) in
accordance with the terms of the Series 1997-A Notes and the Note Purchase
Agreement (the Series 1997-A Notes and the Note Purchase Agreement being
sometimes hereinafter collectively referred to as the "NOTE DOCUMENTS" and the
amounts payable by the Company under the Note Documents, and all other monetary
obligations of the Company thereunder, being sometimes collectively hereinafter
referred to as the "OBLIGATIONS"). This Guaranty is a guaranty of payment and
not just of collectibility and is in no way conditioned or contingent upon any
attempt to collect from the Company or upon any other event, contingency or
circumstance whatsoever. If for any reason whatsoever the Company shall fail or
be unable duly, punctually and fully to pay such amounts as and when the same
shall become due and payable and any Holder shall notify each Guarantor that all
Series 1997-A Notes held by such Holder or all outstanding Series 1997-A Notes
are subject to acceleration under Section 12.1 of the Note Purchase Agreement,
the Guarantors (jointly and severally), without demand, presentment, protest or
notice of any kind, will forthwith pay or cause to be paid such amounts to the
Holders under the terms of such Note Documents, in lawful money of the United
States, at the place specified in the Note Purchase Agreement, or perform or
comply with the same or cause the same to be performed or complied with,
together with interest (to the extent provided for under such Note Documents) on
any amount due and owing from the Company. The Guarantors (jointly and
severally), promptly after demand, will pay to the Holders the reasonable costs
and expenses of collecting such amounts or otherwise enforcing this Guaranty,
including, without limitation, the reasonable fees and expenses of counsel. The
right of recovery against each Guarantor under this Guaranty is, however,
limited to the Fair Net Worth of such Guarantor, as of the date of any
determination thereof, less $20,000. For purposes of this Guaranty, the "Fair
Net Worth" of a Guarantor shall mean an amount equal to the fair saleable value
of such Guarantor's assets and all rights of contribution, indemnification and
exoneration, net of all obligations of such Guarantor owed to third parties
(other than such Guarantor's liabilities under this Guaranty), including all
liabilities, whether fixed or contingent, direct or indirect, disputed or
undisputed, secured or unsecured, and whether or not required to be reflected on
a balance sheet prepared in accordance with generally accepted accounting
principles.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of such Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim such Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not such Guarantor or the Company shall have
any knowledge or notice thereof), including:
<PAGE> 22
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give notice to such Guarantor
of the occurrence of a "Default" or an "Event of Default" under any
Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, a Guarantor or to any
other person or any of their respective properties or creditors, or any
action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or a Guarantor
into or with any other corporation, or any sale, lease or transfer of
any of the assets of the Company or a Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and a Guarantor, or any termination of such relationship;
<PAGE> 23
(j) any release or discharge, by operation of law, of a
Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance that might otherwise
constitute a legal or equitable defense or discharge of the liabilities
of a guarantor or surety or that might otherwise limit recourse against
a Guarantor.
Notwithstanding any other provision contained in this Guaranty, the Guarantors'
joint and several liability with respect to the principal amount of the Series
1997-A Notes shall be no greater than the liability of the Company with respect
thereto.
SECTION 4. Full Recourse Obligations. The obligations of each
Guarantor set forth herein constitute the full recourse obligations of such
Guarantor enforceable against it to the full extent of all its assets and
properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the
extent permitted by applicable law, (a) notice of any of the matters referred to
in Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or such Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or that might otherwise
limit recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity.
Until one year and one day after all Obligations have been indefeasibly paid in
full, each Guarantor agrees not to take any action pursuant to any rights that
may have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including Section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company that
<PAGE> 24
may have arisen in connection with this Guaranty. So long as the Obligations
remain, if any amount shall be paid by or on behalf of the Company to a
Guarantor on account of any of the rights waived in this paragraph, such amount
shall be held by such Guarantor in trust, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Holders (duly endorsed by such Guarantor to the Holders, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as the Holders may determine. The provisions of this paragraph shall survive the
term of this Guaranty and the payment in full of the Obligations.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Series 1997-A
Notes shall at any time have occurred and be continuing, and such acceleration
shall at such time be prevented by reason of the pendency against the Company or
any other person of a case or proceeding under a bankruptcy or insolvency law,
each Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Series 1997-A Notes and
all other Obligations shall be deemed to have been accelerated with the same
effect as if any Holder had accelerated the same in accordance with the terms of
the Note Purchase Agreement or other applicable Note Document, and the
Guarantors (jointly and severally) shall forthwith pay such principal amount,
Make-Whole Amount, if any, and interest thereon and any other amounts guaranteed
hereunder without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of
each Guarantor hereunder shall be duly paid and performed in full.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged;
(b) such Guarantor has the corporate power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Guaranty;
<PAGE> 25
(c) this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or material
contractual obligation of such Guarantor and will not result in or
require the creation or imposition of any Lien on any of the
properties, revenues or assets of such Guarantor pursuant to the
provisions of any material contractual obligation of such Guarantor or
any requirement of law;
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or governmental authority is
required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor or
any of its properties or revenues (i) with respect to this Guaranty or
any of the transactions contemplated hereby or (ii) that could
reasonably be expected to have a material adverse effect upon the
business, operations or financial condition of such Guarantor and its
subsidiaries taken as a whole;
(g) the execution, delivery and performance of this Guaranty
will not violate any provision of any order, judgment, writ, award or
decree of any court, arbitrator or Governmental Authority, domestic or
foreign, or of the charter or by-laws of such Guarantor or of any
securities issued by such Guarantor; and
(h) after giving effect to the transactions contemplated
herein, (i) the present fair salable value of the assets of such
Guarantor is in excess of the amount that will be required to pay its
probable liability on its existing debts as said debts become absolute
and matured, (ii) such Guarantor has received reasonably equivalent
value for executing and delivering this Guaranty, (iii) the property
remaining in the hands of such Guarantor is not an unreasonably small
capital, and (iv) such Guarantor is able to pay its debts as they
mature.
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed (a) if to the Company or
any Holder at the address set forth in the Note Purchase Agreement or (b) if to
a Guarantor, at:
<PAGE> 26
[Name of Guarantor]
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
or at such other address as a Guarantor shall from time to time designate in
writing to the Holders or on a counterpart signature page hereto. Any notice so
addressed shall be deemed to be given when actually received.
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the Holders. All
statements in any such certificate or other instrument shall constitute
warranties and representations by such Guarantor hereunder.
SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any suit, action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Series 1997-A Notes. Each Guarantor consents to process being served in
any such suit, action or proceeding by mailing a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the address of
such Guarantor specified herein or designated pursuant hereto or on a
counterpart signature page hereto. Each Guarantor agrees that such service upon
receipt (i) shall be deemed in every respect effective service of process upon
it in any such suit, action or proceeding and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon and
personal delivery to such Guarantor.
SECTION 13. Miscellaneous. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Holders. The section and paragraph headings in this Guaranty and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof, and all references herein
to numbered sections, unless otherwise indicated, are to sections in this
Guaranty. This Guaranty shall in all respects be governed by, and construed in
accordance with, the laws of the State of Illinois, including all matters of
construction, validity and performance.
<PAGE> 27
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed as of the day and year first above written.
BELDEN WIRE & CABLE COMPANY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CABLE SYSTEMS HOLDING COMPANY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CABLE SYSTEMS INTERNATIONAL INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE> 1
EXHIBIT 4.6
AMENDED AND RESTED SERIES 1997-A GUARANTY
EXECUTION COPY
AMENDED AND RESTATED
SERIES 1997-A GUARANTY
THIS AMENDED AND RESTATED SERIES 1997-A GUARANTY (this "GUARANTY")
dated as of September 1, 1999 is made by the undersigned (each, a "GUARANTOR"),
in favor of the holders from time to time of the Series 1997-A Notes hereinafter
referred to, including each purchaser named in the Note Purchase Agreement
hereinafter referred to, and their respective successors and assigns
(collectively, the "HOLDERS" and each individually, a "HOLDER").
W I T N E S S E T H:
WHEREAS, Belden Inc., a Delaware corporation (the "COMPANY"), and the
initial Holders have entered into a Note Purchase Agreement dated as of August
1, 1997 (the Note Purchase Agreement as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms and in effect,
the "NOTE PURCHASE AGREEMENT");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of $200,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement) in series and the Company has authorized the issuance
and sale of $75,000,000 aggregate principal amount of Series 1997-A Notes to the
Purchasers;
WHEREAS, the Company has authorized the issuance and sale of senior
notes pursuant to a Note Purchase Agreement dated as of September 1, 1999, which
senior notes will be guaranteed by certain subsidiaries of the Company that do
not currently guaranty the Series 1997-A Notes, and, in order to maintain parity
between the Series 1997-A Notes and such senior notes by providing a guaranty of
the Series 1997-A Notes by such subsidiaries, this Guaranty amends and restates
in its entirety the Series 1997-A Guaranty originally entered into on August 11,
1997 by Belden Wire (the "Original Guaranty");
WHEREAS, the Company directly or indirectly owns all of the issued and
outstanding capital stock of each Guarantor and, by virtue of such ownership and
otherwise, each Guarantor has derived or will derive substantial benefits from
the purchase by the initial Holders of the Company's Series 1997-A Notes; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the provisions of the preceding paragraphs;
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Series 1997-A Notes by the
initial Holders, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, each Guarantor makes this Guaranty, which
amends and restates in its entirety the Original Guaranty, as follows:
SECTION 1. Definitions. Any capitalized terms not otherwise
herein defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. The Guarantors, jointly and severally,
unconditionally and irrevocably guarantee to the Holders the due, prompt and
complete payment by the Company of the principal of, Make-Whole Amount, if any,
and interest on, and each other amount due under, the Series 1997-A Notes or the
Note Purchase Agreement, when and as the same shall become due and payable
(whether at stated maturity or by prepayment or by declaration or otherwise) in
accordance with the terms of the Series 1997-A Notes and the Note Purchase
Agreement (the Series 1997-A Notes and the Note Purchase Agreement being
sometimes hereinafter collectively referred to as the "NOTE DOCUMENTS" and the
amounts payable by the Company under the Note Documents, and all other monetary
obligations of the Company thereunder, being sometimes collectively hereinafter
referred to as the "OBLIGATIONS"). This Guaranty is a guaranty of payment and
not just of collectibility and is in no way conditioned or contingent upon any
attempt to collect from the Company or upon any other event, contingency or
circumstance whatsoever. If for any reason whatsoever the Company shall fail or
be unable duly, punctually and fully to pay such amounts as and when the same
shall become due and payable and any Holder shall notify each Guarantor that all
Series 1997-A Notes held by such Holder or all outstanding Series 1997-A Notes
are subject to acceleration under Section 12.1 of the Note Purchase Agreement,
the Guarantors (jointly and severally), without demand, presentment, protest or
notice of any kind, will forthwith pay or cause to be paid such amounts to the
Holders under the terms of such Note Documents, in lawful money of the United
States, at the place specified in the Note Purchase Agreement, or perform or
comply with the same or cause the same to be performed or complied with,
together with interest (to the extent provided for under such Note Documents) on
any amount due and owing from the Company. The Guarantors (jointly and
severally), promptly after demand, will pay to the Holders the reasonable costs
and expenses of collecting such amounts or otherwise enforcing this Guaranty,
including, without limitation, the reasonable fees and expenses of counsel. The
right of recovery against each Guarantor under this Guaranty is, however,
limited to the Fair Net Worth of such Guarantor, as of the date of any
determination thereof, less $20,000. For purposes of this Guaranty, the "Fair
Net Worth" of a Guarantor shall mean an amount equal to the fair saleable value
of such Guarantor's assets and all rights of contribution, indemnification and
exoneration, net of all obligations of such Guarantor owed to third parties
(other than such Guarantor's liabilities under this Guaranty), including all
liabilities, whether fixed or contingent, direct or indirect, disputed or
undisputed, secured or unsecured, and whether or not required to be reflected on
a balance sheet prepared in accordance with generally accepted accounting
principles.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of such Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment,
<PAGE> 3
suspension, deferment, reduction or defense based upon any claim such Guarantor
or any other person may have against the Company or any other person, and to the
full extent permitted by applicable law shall remain in full force and effect
without regard to, and shall not be released, discharged or in any way affected
by, any circumstance or condition whatsoever (whether or not such Guarantor or
the Company shall have any knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give notice to such Guarantor
of the occurrence of a "Default" or an "Event of Default" under any
Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, a Guarantor or to any
other person or any of their respective properties or creditors, or any
action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
<PAGE> 4
(h) any merger or consolidation of the Company or a Guarantor
into or with any other corporation, or any sale, lease or transfer of
any of the assets of the Company or a Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and a Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of a
Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance that might otherwise
constitute a legal or equitable defense or discharge of the liabilities
of a guarantor or surety or that might otherwise limit recourse against
a Guarantor.
Notwithstanding any other provision contained in this Guaranty, the Guarantors'
joint and several liability with respect to the principal amount of the Series
1997-A Notes shall be no greater than the liability of the Company with respect
thereto.
SECTION 4. Full Recourse Obligations. The obligations of each Guarantor
set forth herein constitute the full recourse obligations of such Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or such Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or that might otherwise
limit recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any rights that may
have arisen in connection with this Guaranty to
<PAGE> 5
be subrogated to any of the rights (whether contractual, under the United States
Bankruptcy Code, as amended, including Section 509 thereof, under common law or
otherwise) of any of the Holders against the Company or against any collateral
security or guaranty or right of offset held by the Holders for the payment of
the Obligations. Until one year and one day after all Obligations have been
indefeasibly paid in full, each Guarantor agrees not to take any action pursuant
to any contractual, common law, statutory or other rights of reimbursement,
contribution, exoneration or indemnity (or any similar right) from or against
the Company that may have arisen in connection with this Guaranty. So long as
the Obligations remain, if any amount shall be paid by or on behalf of the
Company to a Guarantor on account of any of the rights waived in this paragraph,
such amount shall be held by such Guarantor in trust, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Holders (duly endorsed by such Guarantor to the Holders, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Holders may determine. The provisions of this paragraph
shall survive the term of this Guaranty and the payment in full of the
Obligations.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Series 1997-A
Notes shall at any time have occurred and be continuing, and such acceleration
shall at such time be prevented by reason of the pendency against the Company or
any other person of a case or proceeding under a bankruptcy or insolvency law,
each Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Series 1999-A Notes and
all other Obligations shall be deemed to have been accelerated with the same
effect as if any Holder had accelerated the same in accordance with the terms of
the Note Purchase Agreement or other applicable Note Document, and the
Guarantors (jointly and severally) shall forthwith pay such principal amount,
Make-Whole Amount, if any, and interest thereon and any other amounts guaranteed
hereunder without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of
each Guarantor hereunder shall be duly paid and performed in full.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and
<PAGE> 6
authority to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged;
(b) such Guarantor has the corporate power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or material
contractual obligation of such Guarantor and will not result in or
require the creation or imposition of any Lien on any of the
properties, revenues or assets of such Guarantor pursuant to the
provisions of any material contractual obligation of such Guarantor or
any requirement of law;
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or governmental authority is
required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor or
any of its properties or revenues (i) with respect to this Guaranty or
any of the transactions contemplated hereby or (ii) that could
reasonably be expected to have a material adverse effect upon the
business, operations or financial condition of such Guarantor and its
subsidiaries taken as a whole;
(g) the execution, delivery and performance of this Guaranty
will not violate any provision of any order, judgment, writ, award or
decree of any court, arbitrator or Governmental Authority, domestic or
foreign, or of the charter or by-laws of such Guarantor or of any
securities issued by such Guarantor; and
(h) after giving effect to the transactions contemplated
herein, (i) the present fair salable value of the assets of such
Guarantor is in excess of the amount that will be required to pay its
probable liability on its existing debts as said debts become absolute
and matured, (ii) such Guarantor has received reasonably equivalent
value for executing and delivering this Guaranty, (iii) the property
remaining in the hands of such Guarantor is not an unreasonably small
capital, and (iv) such Guarantor is able to pay its debts as they
mature.
<PAGE> 7
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed (a) if to the Company or
any Holder at the address set forth in the Note Purchase Agreement or (b) if to
a Guarantor, at:
[Name of Guarantor]
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
or at such other address as a Guarantor shall from time to time designate in
writing to the Holders or on a counterpart signature page hereto. Any notice so
addressed shall be deemed to be given when actually received.
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the Holders. All
statements in any such certificate or other instrument shall constitute
warranties and representations by such Guarantor hereunder.
SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any suit, action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Series 1997-A Notes. Each Guarantor consents to process being served in
any such suit, action or proceeding by mailing a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the address of
such Guarantor specified herein or designated pursuant hereto or on a
counterpart signature page hereto. Each Guarantor agrees that such service upon
receipt (i) shall be deemed in every respect effective service of process upon
it in any such suit, action or proceeding and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon and
personal delivery to such Guarantor.
SECTION 13. Miscellaneous. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Holders. The section and paragraph headings in this Guaranty and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or
<PAGE> 8
provisions hereof, and all references herein to numbered sections, unless
otherwise indicated, are to sections in this Guaranty. This Guaranty shall in
all respects be governed by, and construed in accordance with, the laws of the
State of Illinois, including all matters of construction, validity and
performance.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed as of the day and year first above written.
BELDEN WIRE & CABLE COMPANY
By:
-------------------------
Name:
-----------------------
Title:
----------------------
CABLE SYSTEMS HOLDING COMPANY
By:
-------------------------
Name:
-----------------------
Title:
----------------------
CABLE SYSTEMS INTERNATIONAL INC.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
<PAGE> 1
EXHIBIT 4.7
NOTE PURCHASE AGREEMENT.
DATED AS OF SEPTEMBER 1, 1999
CONFORMED COPY
- --------------------------------------------------------------------------------
BELDEN INC.
$125,000,000
Aggregate Principal Amount
of Senior Notes
$64,000,000
7.60% Senior Notes, Series A
Due September 1, 2004
$44,000,000
7.74% Senior Notes, Series B
Due September 1, 2006
$17,000,000
7.95% Senior Notes, Series C
Due September 1, 2009
---------
NOTE PURCHASE AGREEMENT
---------
Dated as of September 1, 1999
================================================================================
Series A PPN: 077459 A@ 4
Series B PPN: 077459 A# 2
Series C PPN: 077459 B* 5
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
Section Page
- ------- ----
<S> <C> <C> <C>
1. AUTHORIZATION OF NOTES..................................................................................1
2. SALE AND PURCHASE OF NOTES..............................................................................2
3. CLOSING.................................................................................................2
4. CONDITIONS TO CLOSING...................................................................................2
4.1. Representations and Warranties.................................................................2
4.2. Performance; No Default........................................................................3
4.3. Compliance Certificates........................................................................3
4.4. Opinions of Counsel............................................................................3
4.5. Purchase Permitted By Applicable Law, etc......................................................3
4.6. Sale of Other Notes............................................................................4
4.7. Payment of Special Counsel Fees................................................................4
4.8. Private Placement Number.......................................................................4
4.9. Changes in Corporate Structure.................................................................4
4.10. Subsidiary Guaranty............................................................................4
4.11. Amendment of 1997 Note Purchase Agreement......................................................4
4.12. Proceedings and Documents......................................................................4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................5
5.1. Organization; Power and Authority..............................................................5
5.2. Authorization, etc.............................................................................5
5.3. Disclosure.....................................................................................5
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates...............................6
5.5. Financial Statements...........................................................................7
5.6. Compliance with Laws, Other Instruments, etc...................................................7
5.7. Governmental Authorizations, etc...............................................................8
5.8. Litigation; Observance of Agreements, Statutes and Orders......................................8
5.9. Taxes..........................................................................................8
5.10. Title to Property; Leases......................................................................8
5.11. Licenses, Permits, etc.........................................................................9
5.12. Compliance with ERISA..........................................................................9
5.13. Private Offering by the Company...............................................................10
5.14. Use of Proceeds; Margin Regulations...........................................................10
5.15. Existing Indebtedness; Future Liens...........................................................11
5.16. Foreign Assets Control Regulations, etc.......................................................11
5.17. Status under Certain Statutes.................................................................11
5.18. Environmental Matters.........................................................................11
5.19. Solvency of Subsidiary Guarantors.............................................................12
5.20. Year 2000 Compliance..........................................................................12
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
6. REPRESENTATIONS OF THE PURCHASERS......................................................................12
6.1. Purchase for Investment.......................................................................12
6.2. Source of Funds...............................................................................13
7. INFORMATION AS TO COMPANY..............................................................................14
7.1. Financial and Business Information............................................................14
7.2. Officer's Certificate.........................................................................17
7.3. Inspection....................................................................................17
8. PREPAYMENT OF THE NOTES................................................................................18
8.1. Required Prepayments..........................................................................18
8.2. Optional Prepayments with Make-Whole Amount...................................................18
8.3. Allocation of Partial Prepayments.............................................................19
8.4. Maturity; Surrender, etc......................................................................19
8.5. Purchase of Notes.............................................................................19
8.6. Make-Whole Amount.............................................................................19
9. AFFIRMATIVE COVENANTS..................................................................................21
9.1. Compliance with Law...........................................................................21
9.2. Insurance.....................................................................................21
9.3. Maintenance of Properties.....................................................................21
9.4. Payment of Taxes and Claims...................................................................21
9.5. Corporate Existence, etc......................................................................22
10. NEGATIVE COVENANTS.....................................................................................22
10.1. Adjusted Consolidated Net Worth...............................................................22
10.2. Consolidated Indebtedness; Indebtedness of Restricted Subsidiaries............................22
10.3. Liens.........................................................................................22
10.4. Sale of Assets................................................................................24
10.5. Mergers, Consolidations, etc..................................................................24
10.6. Disposition of Stock of Restricted Subsidiaries...............................................26
10.7. Designation of Unrestricted Subsidiaries......................................................26
10.8. Nature of Business............................................................................26
10.9. Guaranties by Subsidiaries....................................................................26
10.10. Transactions with Affiliates..................................................................27
11. EVENTS OF DEFAULT......................................................................................27
12. REMEDIES ON DEFAULT, ETC...............................................................................29
12.1. Acceleration..................................................................................29
12.2. Other Remedies................................................................................30
12.3. Rescission....................................................................................30
12.4. No Waivers or Election of Remedies, Expenses, etc.............................................30
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................................................31
13.1. Registration of Notes.........................................................................31
13.2. Transfer and Exchange of Notes................................................................31
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
13.3. Replacement of Notes..........................................................................32
14. PAYMENTS ON NOTES......................................................................................32
14.1. Place of Payment..............................................................................32
14.2. Home Office Payment...........................................................................32
15. EXPENSES, ETC..........................................................................................33
15.1. Transaction Expenses..........................................................................33
15.2. Survival......................................................................................33
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........................................33
17. AMENDMENT AND WAIVER...................................................................................34
17.1. Requirements..................................................................................34
17.2. Solicitation of Holders of Notes..............................................................34
17.3. Binding Effect, etc...........................................................................34
17.4. Notes held by Company, etc....................................................................35
18. NOTICES................................................................................................35
19. REPRODUCTION OF DOCUMENTS..............................................................................35
20. CONFIDENTIAL INFORMATION...............................................................................36
21. SUBSTITUTION OF PURCHASER..............................................................................37
22. RELEASE OF SUBSIDIARY GUARANTORS.......................................................................37
23. MISCELLANEOUS..........................................................................................37
23.1. Successors and Assigns........................................................................37
23.2. Payments Due on Non-Business Days.............................................................37
23.3. Severability..................................................................................38
23.4. Construction..................................................................................38
23.5. Counterparts..................................................................................38
23.6. Governing Law.................................................................................38
</TABLE>
<TABLE>
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE B-1 -- Existing Investments
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Licenses, Permits, etc.
SCHEDULE 5.12(b) -- Benefit Liabilities
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 5.20 -- Year 2000 Compliance
SCHEDULE 10.3 -- Existing Liens
EXHIBIT 1.1-A -- Form of Senior Note, Series A
EXHIBIT 1.1-B -- Form of Senior Note, Series B
EXHIBIT 1.1-C -- Form of Senior Note, Series C
EXHIBIT 1.2 -- Form of Subsidiary Guaranty
EXHIBIT 4.4(a) -- Form of Opinion of Counsel to the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel to the Purchasers
</TABLE>
<PAGE> 6
BELDEN INC.
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
(314) 854-8000
Fax: (314) 854-8001
$125,000,000
Aggregate Principal Amount
of Senior Notes
$64,000,000 7.60% Senior Notes, Series A, due September 1, 2004
$44,000,000 7.74% Senior Notes, Series B, due September 1, 2006
$17,000,000 7.95% Senior Notes, Series C, due September 1, 2009
Dated as of September 1, 1999
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
BELDEN INC., a Delaware corporation (the "COMPANY"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES.
The Company has authorized the issue and sale of $64,000,000
aggregate principal amount of its 7.60% Senior Notes, Series A due September 1,
2004 (the "Series A Notes"), $44,000,000 aggregate principal amount of its 7.74%
Senior Notes, Series B due September 1, 2006 (the "Series B Notes"), and
$17,000,000 aggregate principal amount of its 7.95% Senior Notes, Series C due
September 1, 2009 (the "Series C Notes" and, collectively with the Series A
Notes and Series B Notes, the "Notes", such term to include any such Notes
issued in substitution therefor pursuant to Section 13 of this Agreement). The
Notes shall be substantially in the form set out in Exhibits 1.1-A, 1.1-B and
1.1-C with such changes therefrom, if any, as may be approved by you, the Other
Purchasers and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement. The
Notes will be guaranteed by Belden Wire & Cable Company, a Delaware corporation
("Belden Wire"), Cable Systems Holding Company, a Delaware corporation ("CSH"),
and Cable Systems International Inc., a Delaware corporation ("CSI" and,
together with Belden Wire, CSH and any future party to the Subsidiary Guaranty,
the "Subsidiary Guarantors"), each a Wholly Owned Subsidiary of the Company,
pursuant to a guaranty in substantially the form of Exhibit 1.2 (the "Subsidiary
Guaranty"). The Notes shall be senior in the sense that they rank pari passu
<PAGE> 7
with the Company's other outstanding unsecured Indebtedness that has not been
expressly subordinated to any other Indebtedness of the Company.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and each of the other purchasers named in
Schedule A (the "OTHER PURCHASERS"), and you and the Other Purchasers will
purchase from the Company, at the Closing provided for in Section 3, Notes in
the series and principal amount specified opposite your names in Schedule A at
the purchase price of 100% of the principal amount thereof. Your obligation
hereunder and the obligations of the Other Purchasers are several and not joint
obligations and you shall have no liability to any Person for the performance or
non-performance by any Other Purchaser hereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and
the Other Purchasers shall occur at the offices of Gardner, Carton & Douglas,
Quaker Tower, Suite 3400, 321 North Clark Street, Chicago, Illinois 60610 at
9:00 a.m., Chicago time, at a closing (the "CLOSING") on September 9, 1999 or on
such other Business Day thereafter on or prior to September 15, 1999 as may be
agreed upon by the Company and you and the Other Purchasers. At the Closing the
Company will deliver to you the Notes to be purchased by you in the form of a
single Note for each series purchased (or such greater number of Notes in
denominations of at least $500,000 as you may request) dated the date of the
Closing and registered in your name (or in the name of your nominee), against
delivery by you to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of immediately
available funds for the account of the Company to account number 12769761 at
Wachovia Bank of Georgia, 191 Peachtree Street Northeast, Atlanta, Georgia
30303, ABA No. 061000010. If at the Closing the Company shall fail to tender
such Notes to you as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by reason of such
failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your satisfaction, prior
to or at the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the Closing.
<PAGE> 8
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Closing and after giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14) no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since the date of the Memorandum that would have
been prohibited by Sections 10.1 through 10.10 had such Sections applied since
such date.
4.3. COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Company shall have
delivered to you an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2,
4.9 and 4.10 have been fulfilled.
(b) Secretary's Certificate. The Company shall have
delivered to you a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, the Agreement and
the Subsidiary Guaranty.
4.4. OPINIONS OF COUNSEL.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from Kevin L. Bloomfield,
Vice President, Secretary and General Counsel of the Company, covering the
matters set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as you or your counsel may reasonably
request (and the Company instructs its counsel to deliver such opinion to you)
and (b) from Gardner, Carton & Douglas, your special counsel in connection with
such transactions, substantially in the form set forth in Exhibit 4.4(b) and
covering such other matters incident to such transactions as you may reasonably
request.
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
<PAGE> 9
4.6. SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to
the Other Purchasers and the Other Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the fees, charges and disbursements of
your special counsel referred to in Section 4.4, to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.8. PRIVATE PLACEMENT NUMBER.
A Private Placement number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
the Notes.
4.9. CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not
have changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.
4.10. SUBSIDIARY GUARANTY.
The Subsidiary Guarantors shall have executed and delivered
the Subsidiary Guaranty to you and the Other Purchasers.
4.11. AMENDMENT OF 1997 NOTE PURCHASE AGREEMENT.
The Company and the holders of the 6.92% Senior Notes, Series
1997-A, issued pursuant to the Note Purchase Agreement dated as of August 1,
1997 between the Company and the purchasers listed on Schedule A thereto shall
have entered into a First Amendment to Note Purchase Agreement that provides,
among other things, for the execution and delivery by Belden Wire, CSH and CSI
of a Guaranty in favor of such holders comparable to the Subsidiary Guaranty.
4.12. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
<PAGE> 10
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes and to perform the provisions hereof and
thereof.
5.2. AUTHORIZATION, ETC.
This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
The Subsidiary Guaranty has been duly authorized by all
necessary corporate action on the part of each Subsidiary Guarantor and upon
execution and delivery thereof will constitute the legal, valid and binding
obligation of each Subsidiary Guarantor, enforceable against each Subsidiary
Guarantor in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5.3. DISCLOSURE.
The Company, through its agent, Banc of America Securities
LLC, has delivered to you and each Other Purchaser a copy of a Private Placement
Memorandum, dated July 1999 (the "MEMORANDUM"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. Except as disclosed in Schedule 5.3 and for projections, as to
which no representation or warranty is made, this Agreement, the Memorandum, the
documents, certificates or other writings delivered to you by or on behalf of
the Company in connection with the transactions contemplated hereby and the
financial statements listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a
<PAGE> 11
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. The projections provided to you are based upon good faith estimates
and assumptions believed by the Company to be reasonable. Except as disclosed in
the Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1998, there has
been no change in the financial condition, operations, business or properties of
the Company or any Restricted Subsidiary except changes that individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein)
complete and correct lists (i) of the Company's Subsidiaries, showing,
as to each Subsidiary, the correct name thereof, the jurisdiction of
its organization, and the percentage of shares of each class of its
capital stock or similar equity interests outstanding owned by the
Company and each other Subsidiary, (ii) to the Company's knowledge, of
the Company's Affiliates, other than Subsidiaries, and (iii) of the
Company's directors and senior officers. Each Subsidiary listed in
Schedule 5.4 is designated a Restricted Subsidiary by the Company.
(b) All of the outstanding shares of capital stock or
similar equity interests of each Restricted Subsidiary shown in
Schedule 5.4 as being owned by the Company and its Restricted
Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Restricted Subsidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Restricted Subsidiary identified in Schedule 5.4
is a corporation or other legal entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other
legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Restricted Subsidiary has the
corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise
subject to any legal restriction or any agreement (other than this
Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability
of such Restricted Subsidiary to pay dividends out of profits or make
any other similar distributions of profits to the Company or any of its
<PAGE> 12
Restricted Subsidiaries that owns outstanding shares of capital stock
or similar equity interests of such Restricted Subsidiary.
5.5. FINANCIAL STATEMENTS.
The Company has delivered to you and each Other Purchaser
copies of the financial statements of the Company and its Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the
consolidated financial condition of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Restricted Subsidiary under, any Material
agreement, or corporate charter or By-Laws, to which the Company or any
Restricted Subsidiary is bound or by which the Company or any Restricted
Subsidiary or any of their respective properties may be bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Restricted Subsidiary or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Restricted Subsidiary.
The execution, delivery and performance by each Subsidiary
Guarantor of the Subsidiary Guaranty will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of such Subsidiary Guarantor under, any Material
agreement, or corporate charter or By-Laws, to which such Subsidiary Guarantor
is bound or by which such Subsidiary Guarantor or any of its properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to such Subsidiary Guarantor or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to such Subsidiary Guarantor.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by the Company of this Agreement or
the Notes or the execution, delivery or performance by each Subsidiary Guarantor
of the Subsidiary Guaranty.
<PAGE> 13
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no
actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Restricted
Subsidiary or any property of the Company or any Restricted Subsidiary
in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is
in default under any term of any agreement or instrument to which it is
a party or by which it is bound, or any order, judgment, decree or
ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation
(including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
5.9. TAXES.
The Company and its Restricted Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Restricted
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Restricted
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate under GAAP.
5.10. TITLE TO PROPERTY; LEASES.
The Company and its Restricted Subsidiaries have good and
sufficient title to the properties that they own or purport to own and that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this Agreement.
All leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects.
5.11. LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11,
<PAGE> 14
(a) the Company and its Restricted Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others that is Material;
(b) to the best knowledge of the Company, no product of
the Company infringes any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name or other right
owned by any other Person in any respect that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect; and
(c) to the best knowledge of the Company, there is no
violation that is Material by any Person of any right of the Company or
any of its Restricted Subsidiaries with respect to any patent,
copyright, service mark, trademark, trade name or other right owned or
used by the Company or any of its Restricted Subsidiaries.
5.12. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated
and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and
could not reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Company or any ERISA
Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise
tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be individually or in the
aggregate Material.
(b) Except for the Plans set forth in Schedule 5.12(b)
(the "Top Hat Plans"), the present value of the aggregate benefit
liabilities under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan year
on the basis of the actuarial assumptions specified for funding
purposes in such Plan's most recent actuarial valuation report, did not
exceed the aggregate current value of the assets of such Plan allocable
to such benefit liabilities. The term "BENEFIT LIABILITIES" has the
meaning specified in section 4001 of ERISA and the terms "CURRENT
VALUE" and "PRESENT VALUE" have the meaning specified in section 3 of
ERISA.
(c) The Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in respect
of Multiemployer Plans that individually or in the aggregate are
Material.
<PAGE> 15
(d) The expected postretirement benefit obligation
(determined as of the last day of the Company's most recently ended
fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) of the
Company and its Subsidiaries is not Material or has been disclosed in
the most recent audited consolidated financial statements of the
Company and its Subsidiaries.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA
or in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be
purchased by you.
5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has
offered the Notes or the Subsidiary Guaranty or any similar securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with, any person other than you, the Other
Purchasers and not more than 45 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes or the execution and delivery of the
Subsidiary Guaranty to the registration requirements of Section 5 of the
Securities Act.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will use the proceeds of the sale of the Notes for
general corporate purposes of the Company and its Subsidiaries, including to
repay existing Indebtedness of the Company and its Subsidiaries incurred in
connection with the Company's acquisition of CSH, as described in Schedule 5.14.
No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading
in any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute more than 5% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 5% of the value of such assets. As
used in this Section, the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR
CARRYING" shall have the meanings assigned to them in said Regulation U. For
purposes of the foregoing, margin stock shall not include common stock of the
Company held in its treasury.
<PAGE> 16
5.15. EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth
a complete and correct list of all outstanding Indebtedness of the
Company and its Restricted Subsidiaries as of June 30, 1999, since
which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the
Indebtedness of the Company or its Subsidiaries. Neither the Company
nor any Restricted Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Restricted Subsidiary that is
outstanding in an aggregate principal amount in excess of $5,000,000
and no event or condition exists with respect to any Indebtedness of
the Company or any Restricted Subsidiary that is outstanding in an
aggregate principal amount in excess of $5,000,000 and that would
permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly
scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the
Company nor any Restricted Subsidiary has agreed or consented to cause
or permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.3.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its
use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Restricted Subsidiary is subject
to regulation under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended by the ICC Termination Act, as amended, or the Federal Power Act, as
amended.
5.18. ENVIRONMENTAL MATTERS.
Neither the Company nor any Restricted Subsidiary has
knowledge of any liability or has received any notice of any liability, and no
proceeding has been instituted asserting any liability against the Company or
any of its Restricted Subsidiaries or any of their respective real properties
now owned, leased or operated by any of them or other assets nor, to the
knowledge of the Company or any Restricted Subsidiary, has any such proceeding
been instituted against any of their respective real properties formerly owned,
for damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing,
<PAGE> 17
(a) neither the Company nor any Restricted Subsidiary has
knowledge of any facts that would give rise to any liability for
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real properties now
or formerly owned, leased or operated by any of them and has not
disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be
expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Restricted Subsidiaries
are in compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
5.19. SOLVENCY OF SUBSIDIARY GUARANTORS.
After giving effect to the transactions contemplated herein,
(i) the present fair salable value of the assets of each Subsidiary Guarantor is
in excess of the amount that will be required to pay its probable liability on
its existing debts as said debts become absolute and matured, (ii) each
Subsidiary Guarantor has received reasonably equivalent value for executing and
delivering the Subsidiary Guaranty, (iii) the property remaining in the hands of
each Subsidiary Guarantor is not an unreasonably small capital, and (iv) each
Subsidiary Guarantor is able to pay its debts as they mature.
5.20. YEAR 2000 COMPLIANCE.
The Company's year 2000 disclosure statement appearing in
Schedule 5.20 is true and correct.
6. REPRESENTATIONS OF THE PURCHASERS.
6.1. PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
<PAGE> 18
6.2. SOURCE OF FUNDS.
You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the Company in
writing pursuant to this paragraph (b), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or
a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA; or
<PAGE> 19
(g) the Source is an "insurance company general account"
as such term is defined in the Department of Labor Prohibited
Transaction Class Exemption 95-60 (issued July 12, 1995) ("PTE 95-60")
and there is no "employee benefit plan" with respect to which the
aggregate amount of such general account's reserves and liabilities for
the contracts held by or on behalf of such employee benefit plan and
all other employee benefit plans maintained by the same employer (and
affiliates thereof as defined in Section V(a)(1) of PTE 95-60) or by
the same employee organization (in each case determined in accordance
with the provisions of PTE 95-60) exceeds 10% of the total reserves and
liabilities of such general account (as determined under PTE 95-60)
(exclusive of separate account liabilities) plus surplus as set forth
in the National Association of Insurance Commissioners Annual Statement
filed with the state of domicile of such Purchaser.
As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. FINANCIAL AND BUSINESS INFORMATION
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end
of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes
in stockholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
condition of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
<PAGE> 20
(b) Annual Statements -- within 120 days after the end of
each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes
in stockholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in
all material respects, the financial condition of the companies being
reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time period
specified above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to shareholders,
if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with
the Securities and Exchange Commission, together with such accountant's
opinion, shall be deemed to satisfy the requirements of this Section
7.1(b);
(c) Unrestricted Subsidiaries -- if, at the time of
delivery of any financial statements pursuant to Section 7.1(a) or (b),
Unrestricted Subsidiaries account for more than 10% of (i) the
consolidated total assets of the Company and its Subsidiaries reflected
in the balance sheet included in such financial statements or (ii) the
consolidated revenues of the Company and its Subsidiaries reflected in
the consolidated statement of income included in such financial
statements, an unaudited balance sheet for all Unrestricted
Subsidiaries taken as whole as at the end of the fiscal period included
in such financial statements and the related unaudited statements of
income, stockholders' equity and cash flows for such Unrestricted
Subsidiaries for such period, together with consolidating statements
reflecting all eliminations or adjustments necessary to reconcile such
group financial statements to the consolidated financial statements of
the Company and its Subsidiaries;
(d) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Restricted Subsidiary to
public securities holders generally, and (ii) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Restricted Subsidiary
with the Securities and Exchange Commission and of all press releases
and other statements made
<PAGE> 21
available generally by the Company or any Restricted Subsidiary to the
public concerning developments that are Material;
(e) Notice of Default or Event of Default -- promptly,
and in any event within five days after a Responsible Officer obtains
actual knowledge of the existence of any Default or Event of Default or
that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto; provided that any such notice
with respect to a Default under Section 11(f) or claimed default of the
type referred to in Section 11(f) shall be within 10 days after a
Responsible Officer obtains actual knowledge thereof;
(f) ERISA Matters -- promptly, and in any event within
five days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
hereof; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the institution
of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the Company or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(g) Notices from Governmental Authority -- promptly, and
in any event within 30 days of receipt thereof, copies of any notice to
the Company or any Restricted Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other
law or regulation that could reasonably be expected to have a Material
Adverse Effect; and
<PAGE> 22
(h) Requested Information -- with reasonable promptness,
such other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
7.2. OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or (b) shall be accompanied by a certificate of
a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.1 through
Section 10.6, inclusive, during the quarterly or annual period covered
by the statements then being furnished (including with respect to each
such Section, where applicable, the calculations of the maximum or
minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Restricted Subsidiaries from the
beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default
or, if any such condition or event existed or exists (including any
such event or condition resulting from the failure of the Company or
any Restricted Subsidiary to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action
the Company shall have taken or proposes to take with respect thereto.
7.3. INSPECTION.
The Company will permit the representatives of each holder of
Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of
the Company, which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company and each Restricted
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
<PAGE> 23
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of
the Company, which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company and each Restricted
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing.
8. PREPAYMENT OF THE NOTES.
8.1. REQUIRED PREPAYMENTS.
No regularly scheduled prepayments are due on the Notes prior
to their stated maturity.
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes in an amount
not less than $2,000,000 in the aggregate in the case of a partial prepayment,
at 100% of the principal amount so prepaid, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount. The
Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
<PAGE> 24
8.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section
8, the principal amount of each Note to be prepaid shall mature and become due
and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued to such date and the applicable Make-Whole Amount,
if any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5. PURCHASE OF NOTES.
The Company will not, and will not permit any Affiliate to,
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.6. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, .50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as the "PX Screen" on the
Bloomberg Financial Market Service (or such other display as may
replace the PX Screen on Bloomberg Financial Market Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the
yields
<PAGE> 25
reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding
the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1. COMPLIANCE WITH LAW.
The Company will, and will cause each Restricted Subsidiary to,
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including, without limitation, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership of
their respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such laws,
ordinances or
<PAGE> 26
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.2. INSURANCE.
The Company will, and will cause each Restricted Subsidiary to,
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
9.3. MAINTENANCE OF PROPERTIES.
The Company will and will cause each Restricted Subsidiary to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent
the Company or any Restricted Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each Restricted Subsidiary to,
file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Restricted
Subsidiary, provided that neither the Company nor any Restricted Subsidiary need
pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Restricted Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Company or a
Restricted Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Company or such Restricted Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
9.5. CORPORATE EXISTENCE, ETC.
Subject to Section 10.5, the Company will at all times preserve
and keep in full force and effect its corporate existence. Subject to Sections
10.4 and 10.5, the Company will at all times preserve and keep in full force and
effect the corporate existence of each Restricted Subsidiary (unless merged into
the Company or a Restricted Subsidiary) and all rights and
<PAGE> 27
franchises of the Company and its Restricted Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. ADJUSTED CONSOLIDATED NET WORTH.
The Company will not permit Adjusted Consolidated Net Worth at
any time to be less than $175,000,000 plus the cumulative sum of 50% of
Consolidated Net Income (without reduction for a net deficit) for each fiscal
quarter ending after December 31, 1998.
10.2. CONSOLIDATED INDEBTEDNESS; INDEBTEDNESS OF RESTRICTED SUBSIDIARIES.
The Company will not permit:
(a) Consolidated Indebtedness to exceed 65% of Consolidated Total
Capitalization at any time; and
(b) Any Restricted Subsidiary other than Belden Wire to incur any
Indebtedness if, after giving effect thereto and to the application of
the proceeds therefrom, Priority Debt outstanding would exceed 20% of
Consolidated Total Capitalization.
10.3. LIENS.
The Company will not, and will not permit any Restricted
Subsidiary to, permit to exist, create, assume or incur, directly or indirectly,
any Lien on its properties or assets, whether now owned or hereafter acquired
(unless, concurrently with the incurrence, assumption or creation of such Lien,
the Company makes, or causes to be made, effective provision whereby the Notes
are equally and ratably secured by a Lien on the same property or assets),
except:
(a) Liens existing on property or assets of the Company or any
Restricted Subsidiary as of the date of this Agreement that are
described in Schedule 10.3;
(b) Liens for taxes, assessments or governmental charges not then
due and delinquent or the nonpayment of which is permitted by Section
9.4;
(c) encumbrances in the nature of leases, subleases, zoning
restrictions, easements, rights of way and other rights and
restrictions of record on the use of real property and defects in
title arising or incurred in the ordinary course of business, which,
individually and in the aggregate, do not materially impair the use or
value of the property or assets subject thereto;
<PAGE> 28
(d) Liens incidental to the conduct of business or the ownership
of properties and assets (including landlords', lessors', carriers',
warehousemen's, mechanics', materialmen's and other similar liens) and
Liens to secure the performance of bids, tenders, leases or trade
contracts, or to secure statutory obligations (including obligations
under workers compensation, unemployment insurance and other social
security legislation), surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money;
(e) any attachment or judgment Lien, unless the judgment it
secures has not, within 60 days after the entry thereof, been
discharged or execution thereof stayed pending appeal, or has not been
discharged within 60 days after the expiration of any such stay;
(f) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to another Restricted Subsidiary and Liens securing
Indebtedness of the Company to a Restricted Subsidiary;
(g) Liens (i) existing on property at the time of its acquisition
by the Company or a Restricted Subsidiary and not created in
contemplation thereof, whether or not the Indebtedness secured by such
Lien is assumed by the Company or a Restricted Subsidiary; or (ii) on
property created contemporaneously with its acquisition or within 180
days of the acquisition or completion of construction thereof to
secure or provide for all or a portion of the purchase price or cost
of construction of such property after the date of Closing; or (iii)
existing on property of a Person at the time such Person is merged or
consolidated with, or becomes a Restricted Subsidiary of, or
substantially all of its assets are acquired by, the Company or a
Restricted Subsidiary and not created in contemplation thereof;
provided that in the case of clauses (i), (ii) and (iii) such
Liens do not extend to additional property of the Company or any
Restricted Subsidiary (other than property that is an improvement to
or is acquired for specific use in connection with the subject
property) and, in the case of clause (ii) only, that the aggregate
principal amount of Indebtedness secured by each such Lien does not
exceed the lesser of the fair market value (determined in good faith
by the board of directors of the Company) or cost of acquisition or
construction of the property subject thereto;
(h) Liens resulting from extensions, renewals or replacements of
Liens permitted by paragraphs (a), (f) and (g), provided that (i)
there is no increase in the principal amount or decrease in maturity
of the Indebtedness secured thereby at the time of such extension,
renewal or replacement, (ii) any new Lien attaches only to the same
property theretofore subject to such earlier Lien and (iii)
immediately after such extension, renewal or replacement no Default or
Event of Default would exist; and
(i) Additional Liens securing Indebtedness not otherwise
permitted by paragraphs (a) through (h) above, provided that, at the
time of creation, assumption or incurrence thereof and immediately
after giving effect thereto and
<PAGE> 29
to the application of the proceeds therefrom, Priority Debt
outstanding does not exceed 20% of Consolidated Total Capitalization.
10.4. SALE OF ASSETS.
Except as permitted by Section 10.5, the Company will not, and
will not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise
dispose of, including by way of merger (collectively a "DISPOSITION"), any
assets, including capital stock of Restricted Subsidiaries, in one or a series
of transactions, to any Person, other than (a) Dispositions in the ordinary
course of business, (b) Dispositions by the Company to a Restricted Subsidiary
or by a Restricted Subsidiary to the Company or another Restricted Subsidiary or
(c) other Dispositions not otherwise permitted by this Section 10.4, provided
that the aggregate net book value of all assets so disposed of in any fiscal
year pursuant to this Section 10.4(c) does not exceed 10% of Consolidated Total
Assets as of the end of the immediately preceding fiscal year. Notwithstanding
the foregoing, the Company may, or may permit any Restricted Subsidiary to, make
a Disposition and the assets subject to such Disposition shall not be subject to
or included in the foregoing limitation and computation contained in clause (c)
of the preceding sentence to the extent that (x) such assets are leased back by
the Company or any Restricted Subsidiary, as lessee, within 180 days of the
Disposition thereof, or (y) the net proceeds from such Disposition are within
one year of such Disposition (A) reinvested in productive assets by the Company
or a Restricted Subsidiary or (B) applied to the payment or prepayment of any
outstanding Indebtedness of the Company or any Restricted Subsidiary that is not
subordinated to the Notes. Any prepayment of Notes pursuant to this Section 10.4
shall be in accordance with Sections 8.2 and 8.3, without regard to the minimum
prepayment requirements of Section 8.2.
10.5. MERGERS, CONSOLIDATIONS, ETC.
The Company will not, and will not permit any Restricted
Subsidiary to, consolidate with or merge with any other Person or convey,
transfer, sell or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person except that:
(a) the Company may consolidate or merge with any other Person or
convey, transfer, sell or lease all or substantially all of its assets
in a single transaction or series of transactions to any Person,
provided that:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance, transfer, sale or lease all or substantially all of
the assets of the Company as an entirety, as the case may be,
shall be a solvent corporation organized and existing under the
laws of the United States, any State thereof (including the
District of Columbia), Canada or any province thereof, or a
country within Western Europe, and, if the Company is not such
corporation, such corporation (x) shall have executed and
delivered to each holder of any Notes its assumption of the due
and punctual performance and observance of each covenant and
condition of this Agreement and the Notes and (y) shall have
caused to be delivered to each holder of any Notes an opinion of
independent counsel reasonably satisfactory to the
<PAGE> 30
Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof;
(ii) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance, transfer, sale or lease all or substantially all of
the assets of the Company as an entirety, as the case may be,
could incur immediately thereafter $1.00 of additional
Indebtedness without violating Section 10.2;
(iii) immediately before and after giving effect to such
transaction, no Default or Event of Default shall exist; and
(b) Any Restricted Subsidiary may (x) merge into the Company
(provided that the Company is the surviving corporation) or another
Restricted Subsidiary or (y) sell, transfer or lease all or any part
of its assets to the Company or another Restricted Subsidiary, or (z)
merge or consolidate with, or sell, transfer or lease all or
substantially all of its assets to, any Person in a transaction that
is permitted by Section 10.4 or, as a result of which, such Person
becomes a Restricted Subsidiary; provided in each instance set forth
in clauses (x) through (z) that, immediately before and after giving
effect thereto, there shall exist no Default or Event of Default and
provided further, that, in the case of a transaction contemplated by
clause (z), if the Restricted Subsidiary is a Subsidiary Guarantor and
it is not the surviving corporation, the survivor of such merger shall
be a solvent corporation organized and existing under the laws of the
United States, any State thereof (including the District of Columbia),
Canada or any province thereof, or a country within Western Europe,
and such corporation (A) shall have executed and delivered to each
holder of any Notes its assumption of the due and punctual performance
and observance of each covenant and condition of the Subsidiary
Guaranty applicable to the Subsidiary Guarantor that does not survive,
and (B) shall have caused to be delivered to each holder of any Notes
an opinion of independent counsel reasonably satisfactory to the
Required Holders, to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof;
No such conveyance, transfer, sale or lease of all or substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.5 from its liability under this Agreement or the
Notes.
10.6. DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES.
The Company (i) will not permit any Restricted Subsidiary to
issue its capital stock, or any warrants, rights or options to purchase, or
securities convertible into or exchangeable for, such capital stock, to any
Person other than the Company or another Restricted Subsidiary, and (ii) will
not, and will not permit any Restricted Subsidiary to, sell, transfer or
otherwise dispose of any shares of capital stock of a Restricted Subsidiary if
such sale would be prohibited by Section 10.4. If a Restricted Subsidiary at any
time ceases to be such as a result of a sale or
<PAGE> 31
issuance of its capital stock, any Liens on property of the Company or any other
Restricted Subsidiary securing Indebtedness owed to such Restricted Subsidiary,
which is not contemporaneously repaid, together with such Indebtedness, shall be
deemed to have been incurred by the Company or such other Restricted Subsidiary,
as the case may be, at the time such Restricted Subsidiary ceases to be a
Restricted Subsidiary.
10.7. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
The Company will not designate a Subsidiary Guarantor as an
Unrestricted Subsidiary. The Company may designate any other Restricted
Subsidiary as an Unrestricted Subsidiary unless such Subsidiary has been
designated an Unrestricted Subsidiary more than once previously and unless
immediately before or after such designation there exists a Default or Event of
Default.
10.8. NATURE OF BUSINESS.
The Company will not, and will not permit any Restricted
Subsidiary to, engage in any business if, as a result, the general nature of the
business in which the Company and its Restricted Subsidiaries, taken as a whole,
would then be engaged would be substantially changed from the general nature of
the business in which the Company and its Restricted Subsidiaries, taken as a
whole, are engaged on the date of this Agreement as described in the Memorandum.
10.9. GUARANTIES BY SUBSIDIARIES.
The Company will not permit any Subsidiary to directly or
indirectly guarantee any of the Company's Indebtedness or other obligations
under the Credit Agreement unless such Subsidiary is, or concurrently therewith
becomes, a party to the Subsidiary Guaranty.
10.10. TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Restricted
Subsidiary to enter into directly or indirectly any Material transaction or
Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
<PAGE> 32
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance with
any term contained in Section 7.1(e) or Sections 10.1 through 10.10;
or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note
(any such written notice to be identified as a "notice of default");
or
(e) any representation or warranty made in writing by or on
behalf of the Company or any Subsidiary Guarantor or by any officer of
the Company or any Subsidiary Guarantor in this Agreement or the
Subsidiary Guaranty or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or
incorrect in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount in
excess of 5% of Adjusted Consolidated Net Worth (as of the end of the
most recently completed fiscal period of the Company) beyond any
period of grace provided with respect thereto, or (ii) the Company or
any Restricted Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness that is
outstanding in an aggregate principal amount in excess of 5% of
Adjusted Consolidated Net Worth (as of the end of the most recently
completed fiscal period of the Company) or of any mortgage, indenture
or other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such Indebtedness has
become, or has been declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii)
as a consequence of the occurrence or continuation of any event or
condition (other than the giving of notice of optional redemption, the
passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), the Company or any
Restricted Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal
amount in excess of 5% of Adjusted Consolidated Net Worth (as of the
end of the most recently completed fiscal period of the Company); or
(g) the Company or any Material Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to pay, its
debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the
<PAGE> 33
benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any
Material Restricted Subsidiary, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any
Material Restricted Subsidiary, or any such petition shall be filed
against the Company or any Material Restricted Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of 5% of Adjusted Consolidated Net Worth (as of
the end of the most recently completed fiscal period of the Company)
are rendered against one or more of the Company and its Material
Restricted Subsidiaries, which judgments are not, within 60 days after
entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA)
under all Plans, other than the Top Hat Plans, determined in
accordance with Title IV of ERISA, shall exceed 5% of Adjusted
Consolidated Net Worth (as of the end of the most recently completed
fiscal period of the Company), (iv) the Company or any ERISA Affiliate
shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the
Company or any ERISA Affiliate withdraws from any Multiemployer Plan,
or (vi) the Company or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events described
in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to
have a Material Adverse Effect; or
(k) the Subsidiary Guaranty ceases to be in full force and effect
as a result of acts taken by the Company or any Subsidiary Guarantor
or is
<PAGE> 34
declared to be null and void in whole or in material part by a court
or other governmental or regulatory authority having jurisdiction or
the validity or enforceability thereof shall be contested by any of
the Company or any Subsidiary Guarantor or any of them renounces any
of the same or denies that it has any or further liability thereunder.
As used in Section 11(j), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default with respect to the Company or a
Subsidiary Guarantor described in paragraph (g) or (h) of Section 11
(other than an Event of Default described in clause (i) of paragraph
(g) or described in clause (vi) of paragraph (g) by virtue of the fact
that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become
immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
any holder or holders of more than 50% of the principal amount of the
Notes at the time outstanding may at any time at its or their option,
by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
<PAGE> 35
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
12.3. RESCISSION.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of more than 50% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
<PAGE> 36
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of
the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1.1-A,
1.1-B or 1.1-C, as appropriate. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Note or dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less than $500,000,
provided that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than
$500,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representation set
forth in Section 6.2.
13.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such
Note is, or is a nominee for, an original Purchaser or another
Institutional Investor holder of a Note with a minimum net worth of at
least $50,000,000, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
<PAGE> 37
14. PAYMENTS ON NOTES.
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
in Chicago, Illinois at the principal office of Bank of America in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.
14.2. HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note,
and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable
attorneys' fees of one special counsel for you and the Other Purchasers
collectively and, if reasonably required, local or other counsel) incurred by
you and each Other Purchaser or holder of a Note in connection with such
transactions and in connection with any amendments, waivers or consents under or
in respect of this Agreement or the Notes (whether or not such amendment, waiver
or consent becomes effective), including, without limitation: (a) the reasonable
costs and expenses incurred in enforcing or defending (or determining whether or
how to enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or by reason of
being a holder of any Note, and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or
<PAGE> 38
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save you
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders (other than those
retained by you).
15.2. SURVIVAL.
The obligations of the Company under this Section 15 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive
the execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such
<PAGE> 39
holder to make an informed and considered decision with respect to any
proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes. The Company will deliver executed
or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder
of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section
17 applies equally to all holders of Notes and is binding upon them and upon
each future holder of any Note and upon the Company without regard to whether
such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "THIS AGREEMENT" or "THE AGREEMENT" and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.
17.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
<PAGE> 40
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in
writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the
Company in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Paul M.
Schlessman, Chief Financial Officer, or at such other address as
the Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION"
means information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or (d) constitutes financial statements delivered to
you under Section 7.1 that are otherwise publicly available. You will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers,
<PAGE> 41
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by your
Notes), (ii) your financial advisors and other professional advisors who agree
to hold confidential the Confidential Information substantially in accordance
with the terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates
as the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. RELEASE OF SUBSIDIARY GUARANTORS.
You and each other holder of the Notes agree to fully release any
Subsidiary Guarantor other than Belden Wire, CSH and CSI from the Subsidiary
Guaranty at such time as such Subsidiary Guarantor no longer guarantees,
directly or indirectly, the Company's Indebtedness or other obligations under
the Credit Agreement; provided, however, that you and
<PAGE> 42
each other holder will not be required to release such Subsidiary Guarantor from
the Subsidiary Guaranty if (i) such Subsidiary Guarantor is contemplated to
become a borrower under the Credit Agreement or (ii) there is a plan of
financing that contemplates such Subsidiary Guarantor guaranteeing any other
Indebtedness of the Company, and such requirement to release such Subsidiary
Guarantor is conditioned upon the prior receipt by each holder of the Notes of a
certificate from a Senior Financial Officer of the Company stating that neither
of the circumstances described in clauses (i) and (ii) above are true.
23. MISCELLANEOUS.
23.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by
or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
23.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
23.3. SEVERABILITY.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
23.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
23.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart
<PAGE> 43
may consist of a number of copies hereof, each signed by less than all, but
together signed by all, of the parties hereto.
23.6. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of Illinois excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
* * * * *
<PAGE> 44
If you are in agreement with the foregoing, please sign the form
of agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.
Very truly yours,
BELDEN INC.
By: /s/ Paul Schlessman
-------------------------------------
Name: Paul Schlessman
Title: Vice President, Finance, Treasurer
and Chief Financial Officer
<PAGE> 45
The foregoing is agreed to as of the date thereof.
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By: /s/ James C. Fifield
------------------------
Its: Counsel
By: /s/ Clint Woods
------------------------
Its: Counsel
COMMERCIAL UNION LIFE INSURANCE COMPANY OF AMERICA, a Delaware corporation
By: Principal Capital Management, LLC
a Delaware limited liability company,
its attorney in fact
By: /s/ James C. Fifield
------------------------
Its: Counsel
By: /s/ Clint Woods
------------------------
Its: Counsel
STATE FARM LIFE INSURANCE COMPANY
By: /s/ Lyle Triebwasser
-------------------------------
Name: Lyle Triebwasser
Title: Senior Investment Officer
By: /s/ Larry Rottunda
-------------------------------
Name: Larry Rottunda
Title: Assistant Secretary
<PAGE> 46
STATE FARM LIFE AND ACCIDENT ASSURANCE COMPANY
By: /s/ Lyle Triebwasser
---------------------------------
Name: Lyle Triebwasser
Title: Senior Investment Officer
By: /s/ Larry Rottunda
---------------------------------
Name: Larry Rottunda
Title: Assistant Secretary
CONNECTUCIT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc. (authorized agent)
By: /s/ Edward Lewis
--------------------------------
Name: Edward Lewis
Title: Managing Director
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Ron Mendel
-------------------------------
Name: Ron Mendel
By: /s/ Patricia W. Wilson
-------------------------------
Name: Patricia W. Wilson
Authorized Signatories
THE TRAVELERS INSURANCE COMPANY
By: /s/ John W. Petchler
----------------------------
Name: John W. Petchler
Title: Second Vice President
<PAGE> 47
PRIMERICA LIFE INSURANCE COMPANY
By: /s/ Jordan M. Stitzer
----------------------------------
Name: Jordan M. Stitzer
Title: Vice President
FIRST TRENTON INDEMNITY COMPANY
By: Travelers Asset Management International Corporation
By: /s/ John W. Petchler
----------------------------------
Name: John W. Petchler
Title: Second Vice President
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ Edwin H. Garrison Jr.
----------------------------------
Name: Edwin H. Garrison Jr.
Title: First Vice President
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Kent R. Adams
----------------------------------
Name: Kent R. Adams
Title: Vice President
THE STATE LIFE INSURANCE COMPANY
By: /s/ Kent R. Adams
----------------------------------
Name: Kent R. Adams
Title: Vice President of American United Life Insurance Company as
Agent for The State Life Insurance Company
ACACIA NATIONAL LIFE INSURANCE COMPANY
by Ameritas Investment Advisors, Inc. as Agent
By: /s/ Patrick J. Henry
--------------------------------------
Name: Patrick J. Henry, CLU, CFA
Title: Vice President, Fixed Income Securities
<PAGE> 48
ACACIA LIFE INSURANCE COMPANY
by Ameritas Investment Advisors, Inc. as Agent
By: /s/ Patrick J. Henry
-------------------------------------
Name: Patrick J. Henry, CLU, CFA
Title: Vice President - Fixed Income Securities
AMERITAS VARIABLE LIFE INSURANCE COMPANY
by Ameritas Investment Advisors, Inc. as Agent
By: /s/ Patrick J. Henry
-------------------------------------
Name: Patrick J. Henry
Title: Vice President - Fixed Income Securities
AMERITAS LIFE INSURANCE CORP.
by Ameritas Investment Advisors, Inc. as Agent
By: /s/ Patrick J. Henry
-------------------------------------
Name: Patrick J. Henry
Title: Vice President - Fixed Income Securities
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ C. Paul English
-------------------------------
Name: C. Paul English
Title: Associate Treasurer
CANADA LIFE INSURANCE COMPANY OF AMERICA
By: /s/ C. Paul English
-------------------------------
Name: C. Paul English
Title: Assistant Treasurer
<PAGE> 49
CANADA LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ C. Paul English
-------------------------------
Name: C. Paul English
Title: Assistant Treasurer
LUTHERAN BROTHERHOOD
By: /s/ Scott A. Lalim
-------------------------------
Name: Scott A. Lalim
Title: Assistant Vice President
MODERN WOODMEN OF AMERICA
By: /s/ Clyde C. Schoeck
-------------------------------
Name: Clyde C. Schoeck
Title: President
WOODMEN ACCIDENT AND LIFE COMPANY
By: /s/ Alan M. McCray
-------------------------------
Name: A.M. McCray
Title: Senior Director, Securities Investments
and Assistant Treasurer
INDIANAPOLIS LIFE INSURANCE COMPANY
By: /s/ Kent Deeter
-------------------------------
Name: Kent A. Deeter
Title: Portfolio Manager
<PAGE> 50
TMG LIFE INSURANCE COMPANY
By: /s/ James R. Smith
-------------------------------
Name: James R. Smith
Title: Senior Vice President
By: /s/ Michael J. Steppe
-------------------------------
Name: Michael J. Steppe
Title: Senior Vice President
<PAGE> 51
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
PRINCIPAL LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
---------------------------------------------
Series A Series B Series C
---------- -------- -----------
<S> <C> <C> <C>
$18,500,000
</TABLE>
Register Notes in the name of: Principal Life Insurance Company
(1) All payments on account of the Notes to be made by 12:00 noon (New York
City time) by wire transfer of immediately available funds to:
ABA No.: 073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 0000014752
OBI PFGSE (S) B0062355()Belden
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
(2) All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Fax (515) 248-2643
Confirmation (515) 247-0689
(3) All other communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attn: Investment - Securities
Fax (515) 248-2490
Confirmation (515) 248-3495
(4) Upon closing, deliver Note to:
Principal Capital Management, LLC
<PAGE> 52
801 Grand Avenue
Des Moines, Iowa 50392-0301
Attn: Clint Woods
Tax ID #42-0127290
<PAGE> 53
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
COMMERCIAL UNION LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY OF AMERICA ---------------------------------------------
Series A Series B Series C
---------- -------- -----------
<S> <C> <C> <C>
$1,500,000
</TABLE>
Register Notes in the name of: Commercial Union Life Insurance Company of
America
(1) All payments on account of the Notes to be made by 12:00 noon (New York
City time) by wire transfer of immediately available funds to:
First Union (Philadelphia)
ABA No.: 031201467
1500 Market Street
Philadelphia, PA 19102-2509
Attn: Joe Aman
DDA 5000012398064
For further credit to Account No. 060073-02-4 (Commercial
Union Life Insurance Company of America/Principal)
OBI PFGSE (S) B0062355()Belden
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
(2) All notices with respect to payments to:
Commercial Union Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Fax (515) 248-2643
Confirmation (515) 247-0689
<PAGE> 54
(3) All other communications to:
Commercial Union Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attn: Investment - Securities
Fax (515) 248-2490
Confirmation (515) 248-3495
(4) Upon closing, deliver Note to:
Commercial Union Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0301
Attn: Clint Woods
Tax ID #04-2235236
<PAGE> 55
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
STATE FARM LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
--------------------------------------------
Series A Series B Series C
---------- ----------- -------------
<S> <C> <C> <C>
$9,000,000 $9,000,000
</TABLE>
Register Notes in the name of: State Farm Life Insurance Company
(1) All payments of principal, interest and premium on the account of the
Notes shall be made by wire transfer of immediately available funds to:
The Chase Manhattan Bank
ABA No. 021000021
SSG Private Income Processing
A/C #900-9-000200
For Credit to Account Number G 06893
Ref. PPN#
Rate:
Maturity Date:
(2) All notices (as well as a photocopy of the original security) to:
State Farm Life Insurance Company
Investment Dept. E-10
One State Farm Plaza
Bloomington, IL 61710
(3) Send confirms to:
State Farm Life Insurance Company
Investment Accounting Dept. D-3
One State Farm Plaza
Bloomington, IL 61710
<PAGE> 56
(4) Upon closing, deliver Note to:
Chase Manhattan Bank
Attn: Barbara Walsh
(North America Insurance)
3 Chase Metrotech Center - 6th Floor
Brooklyn, New York 11245
With a copy to:
State Farm Insurance Companies
One State Farm Plaza E-8
Bloomington, IL 61710
Attn: Investment Legal E-8
Larry Rottunda, Investment Counsel
Tax ID #37-0533090
<PAGE> 57
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
STATE FARM LIFE AND ACCIDENT Principal Amount of Notes to be Purchased
ASSURANCE COMPANY ----------------------------------------------
- ----------------- Series A Series B Series C
---------- ---------- ---------------
<S> <C> <C> <C>
$1,000,000 $1,000,000
</TABLE>
Register Notes in the name of: State Farm Life and Accident Assurance Company
(1) All payments of principal, interest and premium on the account of the
Notes shall be made by wire transfer of immediately available funds to:
The Chase Manhattan Bank
ABA No. 021000021
SSG Private Income Processing
A/C #900-9-000200
For Credit to Account Number G 06895
Ref. PPN#
Rate:
Maturity Date:
(2) All notices (as well as a photocopy of the original security) to:
State Farm Life and Accident Assurance Company
Investment Dept. E-10
One State Farm Plaza
Bloomington, IL 61710
(3) Send confirms to:
State Farm Life and Accident Assurance Company
Investment Accounting Dept. D-3
One State Farm Plaza
Bloomington, IL 61710
<PAGE> 58
(4) Upon closing, deliver Note to:
Chase Manhattan Bank
Attn: Barbara Walsh
(North America Insurance)
3 Chase Metrotech Center - 6th Floor
Brooklyn, New York 11245
With a copy to:
State Farm Insurance Companies
One State Farm Plaza E-8
Bloomington, IL 61710
Attn: Investment Legal E-8
Larry Rottunda, Investment Counsel
Tax ID #37-0805091
<PAGE> 59
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
CONNECTICUT GENERAL LIFE Principal Amount of Notes to be Purchased
INSURANCE COMPANY ----------------------------------------------
- ----------------- Series A Series B Series C
----------- ---------- --------
<S> <C> <C> <C>
$11,800,000
7,200,000
</TABLE>
Register Notes in the name of: CIG & CO.
(1) All payments of principal, interest and premium on the account of the
Notes shall be made by Federal funds wire transfer of immediately
available funds to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=Belden Inc., 7.74% Senior Notes, Series B, due September 1, 2006;
PPN 077459 A# 2; due date and application (as among principal, premium
and interest of the payment being made); contact name and phone]
(2) Address for notices related to payments:
CIG & CO.
c/o CIGNA Investments, Inc.
Attention: Securities Processing - S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & CO.
c/o CIGNA Investments, Inc.
Attention: Private Securities - S-307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
<PAGE> 60
with a copy to:
Chase Manhattan Bank
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, NY 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
(3) Address for all other notices:
CIG & CO.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division- S-307
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
(4) Deliver original Notes to (with form supplied by in-house counsel):
The Chase Manhattan Bank
4 New York Plaza
11th Floor
New York, NY 10004
Attn: Larry Zimmer
With a copy to:
William M. Duncan
CIGNA Investments
900 Cottage Grove Road
CIGNA Private Securities, S-307
Hartford, CT 06152
Tax ID #13-3574027
<PAGE> 61
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
ALLSTATE LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
---------- -------- ------------
<S> <C> <C> <C>
$15,000,000
</TABLE>
Register Notes in the name of: Allstate Life Insurance Company
(1) All payments by Fedwire transfer of immediately available funds,
identifying the name of the Issuer, the Private Placement Number
preceded by "DPP" and the payment as principal, interest or premium, in
the format as follows:
BBK=Harris Trust and Savings Bank
ABA #071000288
BNF=Allstate Life Insurance Company
Collection Account #168-117-0
ORG=Belden Inc.
OBI=DPP - 077459 A@ 4
Payment Due Date (MM/DD/YY) - P_____ (Enter "P" and amount of
principal being remitted, for example P5000000.00) - I_____
(Enter "I" and amount of interest being remitted, for example,
I225000.00)
(2) All notices of scheduled payments and written confirmations of such
wire transfer to be sent to:
Allstate Insurance Company
Investment Operations - Private Placements
3075 Sanders Road, STE G4A
Northbrook, IL 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
(3) Securities to be delivered to:
Citibank, Federal Savings Bank
U.S. Custody & Employee Benefit Trust
500 W. Madison Street, Floor 6, Zone 4
Chicago, Illinois 60661-2591
Attention: Ellen Lorden
For Allstate Life Insurance Company/Safekeeping Account No. 846627
<PAGE> 62
(4) All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-4394
Telecopy: (847) 402-3092
Tax ID #36-2554642
<PAGE> 63
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
THE TRAVELERS INSURANCE COMPANY Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
---------- -------- ------------
<S> <C> <C> <C>
$5,000,000
</TABLE>
Register Notes in the name of: TRAL & CO.
(1) All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as Belden Inc., 7.60% Senior Notes, Series A, due September 1,
2004, PPN 077459 A@ 4, principal, premium or interest) to:
The Chase Manhattan Bank, N.A. (ABA #021000021)
One Chase Manhattan Plaza
New York, NY 10004
for credit to: The Travelers Insurance Company
Consolidated Private Placement Account Number 910-2-587434
(2) All notices and communications to be addressed to:
The Travelers Insurance Company
One Tower Square
Hartford, CT 06183-2030
Attention: Investment Group - 9PB
Telecopier Number: 860-954-5243
Except notices with respect to payment and written confirmation of each
such payment to be addressed to:
The Travelers Insurance Company
One Tower Square
Hartford, CT 06183-2030
Attention: Investment Group - Cashier 10PB
Telecopier Number: 860-954-5243
Tax ID #06-0566090
<PAGE> 64
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
PRIMERICA LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
---------------------------------------------
Series A Series B Series C
--------- -------- ------------
<S> <C> <C> <C>
$3,000,000
</TABLE>
Register Notes in the name of: Primerica Life Insurance Company
(1) All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as Belden Inc., 7.60% Senior Notes, Series A, due September 1,
2004, PPN 077459 A@ 4, principal, premium or interest) to:
The Chase Manhattan Bank, N.A. (ABA #021000021)
One Chase Manhattan Plaza
New York, NY 10004
for credit to: The Travelers Insurance Company
Consolidated Private Placement Account Number 910-2-587434
(2) All notices and communications to be addressed to:
Primerica Life Insurance Company
One Tower Square
Hartford, CT 06183-2030
Attention: Investment Group - 9PB
Telecopier Number: 860-954-5243
Except notices with respect to payment and written confirmation of each
such payment to be addressed to:
Primerica Life Insurance Company
One Tower Square
Hartford, CT 06183-2030
Attention: Investment Group - Cashier 10PB
Telecopier Number: 860-954-5243
Tax ID #04-1590590
<PAGE> 65
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
FIRST TRENTON INDEMNITY COMPANY Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
---------- -------- ------------
<S> <C> <C> <C>
$2,000,000
</TABLE>
Register Notes in the name of: HARE & CO.
(1) All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as Belden Inc., 7.60% Senior Notes, Series A, due September 1,
2004, PPN 077459 A@ 4, principal, premium or interest) to:
First Union Char/Phil (ABA #031201467)
Credit account number 5014179770579
for further credit to First Trenton Indemnity Company
Attn: Mary Pitt
(2) All notices and communications to be addressed to:
First Trenton Indemnity Company
One Tower Square
Hartford, CT 06183-2030
Attention: Investment Group - 9PB
Telecopier Number: 860-954-5243
Except notices with respect to payment and written confirmation of each
such payment to be addressed to:
First Trenton Indemnity Company
One Tower Square
Hartford, CT 06183-2030
Attention: Investment Group - Cashier 10PB
Telecopier Number: 860-954-5243
Tax ID #13-6062916
<PAGE> 66
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
UNITED OF OMAHA LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY -------------------------------------------
Series A Series B Series C
---------- ---------- --------
<S> <C> <C> <C>
$5,000,000 $3,000,000
</TABLE>
Register Notes in the name of: United of Omaha Life Insurance Company
(1) All principal and interest payments on the Notes shall be made by wire
transfer of immediately available funds to:
Chase Manhattan Bank
ABA #021000021
Private Income Processing
For credit to:
United of Omaha Life Insurance Company
Account #900-900200
a/c: G07097
Cusip/PPN:
Interest Amount:
Principal Amount:
(2) Address for all notices in respect of payment of Principal and
Interest, Corporate Actions and Reorganization Notifications:
The Chase Manhattan Bank
4 New York Plaza - 13th Floor
New York, NY 10004
Attn: Income Processing - J. Pipperato
a/c: G07097
(3) Address for all other communications (i.e., Quarterly/Annual reports,
Tax filings, Modifications, Waivers):
4 - Investment Loan Administration
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE 68175-1011
(4) Address for delivery of Notes:
The Chase Manhattan Bank
<PAGE> 67
North America Insurance - 6th Floor
Attn: Christine Alonzo
3 Chase Metrotech Center
Brooklyn, NY 11245
Tax ID #47-0322111
<PAGE> 68
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
AMERICAN UNITED LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY -------------------------------------------
- ------- Series A Series B Series C
---------- -------- -----------
<S> <C> <C> <C>
$3,000,000
2,000,000
</TABLE>
Register Notes in the name of: American United Life Insurance Company
(1) All payment of principal and interest on the Note in immediately
available funds by wire transfer to the following bank account:
Bank of New York
Attn: P & I Department
One Wall Street, 3rd Floor
Window A
New York, NY 10286
ABA #021000018, BNF: IOC566
Account #186683/AUL
Payments should contain sufficient information to identify the
breakdown of principal and interest and should identify the full
description of the Note and the payment date.
(2) All notices and communications to be addressed to:
American United Life Insurance Company
Attn: Christopher D. Pahlke, Securities Department
One American Square
Post Office Box 368
Indianapolis, IN 46206
(3) Deliver original Note to:
Bank of New York
Attn: Vinny Nardone, free receive
One Wall Street, 3rd Floor
Window A
Acct. #186683/American United Life
New York, NY 10286
Tax ID #35-0145825
<PAGE> 69
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
THE STATE LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
-------------------------------------------
Series A Series B Series C
---------- -------- ---------
<S> <C> <C> <C>
$1,000,000
</TABLE>
Register Notes in the name of: The State Life Insurance Company
(1) All payment of principal and interest on the Note in immediately
available funds by wire transfer to the following bank account:
Bank of New York
Attn: P & I Department
One Wall Street, 3rd Floor
Window A
New York, NY 10286
ABA #021000018, BNF: IOC566
Account #343761
State Life, c/o American United Life
Payments should contain sufficient information to identify the
breakdown of principal and interest and should identify the full
description of the Note and the payment date.
(2) All notices and communications to be addressed to:
American United Life Insurance Company
Attn: Christopher D. Pahlke, Securities Department
One American Square
Post Office Box 368
Indianapolis, IN 46206
(3) Deliver original Note to:
Bank of New York
Attn: Vinny Nardone, free receive
One Wall Street, 3rd Floor
Window A
Acct. #186683/American United Life
New York, NY 10286
Tax ID #35-0684263
<PAGE> 70
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
ACACIA NATIONAL LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY ----------------------------------------------
Series A Series B Series C
---------- ---------- --------
<S> <C> <C> <C>
$1,000,000
</TABLE>
Register Notes in the name of: HARE & CO.
(1) All payments by wire transfer of immediately available funds to:
BK of NYC/BBK
IOC 565 - INST CUSTODY
ACACIA NATIONAL LIFE #000326
BK OF NY ABA #021000018
with sufficient information to identify the source and application of
such funds.
(2) All notices of payments and written confirmation of such wire transfer
and all other communications to:
Acacia National Life Insurance Company
Ameritas Investment Advisors, Inc.
5900 "O" Street
Lincoln, NE 68510
Fax Number: (402) 467-6970
(3) Delivery of Notes by registered mail to:
The Bank of New York
Attn: Free Receive Department
One Wall Street, 3rd Floor
New York, NY 10286
ACACIA NATIONAL LIFE 3000326
Tax I.D. #52-1009067
<PAGE> 71
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
ACACIA LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
--------------------------------------------
Series A Series B Series C
---------- -------- -------------
<S> <C> <C> <C>
$2,000,000
</TABLE>
Register Notes in the name of: HARE & CO.
(1) All payments by wire transfer of immediately available funds to:
BK of NYC/BBK
IOC 565 - Inst Custody
Acacia Life Insurance Company #000327
BK of NY ABA #021000018
with sufficient information to identify the source and application of
such funds.
(2) All notices of payments and written confirmation of such wire transfer
and all other communications to:
Acacia Life Insurance Company
Ameritas Investment Advisors, Inc.
5900 "O" Street
Lincoln, NE 68510
Fax Number: (402) 467-6970
(3) Delivery of Notes by registered mail to:
The Bank of New York
Attn: Free Receive Department
One Wall Street, 3rd Floor
New York, NY 10286
ACACIA LIFE INSURANCE COMPANY 3000327
Tax I.D. #53-0022880
<PAGE> 72
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
AMERITAS VARIABLE LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY -------------------------------------------
Series A Series B Series C
---------- ---------- ---------
<S> <C> <C> <C>
$1,000,000
</TABLE>
Register Notes in the name of: Ameritas Variable Life Insurance Company
(1) All payments on or in respect of the Notes to be by wire transfer of
Federal or other immediately available funds to:
Bankers Trust Company
ABA# 021-001-033
Attn: Private Placement Processing
Acct# 99-911-145
FFC: Ameritas Variable Life Insurance Company
Acct.: 097223
Re: Description of Note; Principal & Interest Breakdown, with
sufficient information to identify the source and application
of such funds.
(2) All notices of payments, written confirmation of such wire transfer
and all other communications to:
Ameritas Variable Life Insurance Company
c/o Ameritas Life Insurance Corp.
5900 "O" Street
Lincoln, NE 68510-2234
Fax Number: (402) 467-6970
Attn: James Mikus
Tax I.D. #47-0657746
<PAGE> 73
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
AMERITAS LIFE INSURANCE CORP. Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$2,000,000
</TABLE>
Register Notes in the name of: Ameritas Life Insurance Corp.
(1) All payments by wire transfer of immediately available funds to:
U.S. Bank
ABA# 104-000-029
Ameritas Life Insurance Corp.
Acct# 1-494-0070-0188
Re: Description of Note; Principal & Interest Breakdown, with
sufficient information to identify the source and application
of such funds.
(2) All notices of payments, written confirmation of such wire transfer
and all other communications to:
Ameritas Life Insurance Corp.
5900 "O" Street
Lincoln, NE 68510-2234
Fax Number: (402) 467-6970
Attn: James Mikus
Tax I.D. #47-0098400
<PAGE> 74
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
THE CANADA LIFE ASSURANCE COMPANY Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$1,750,000
</TABLE>
Register Notes in the name of: J. ROMEO & CO.
(1) All payments regarding the Note(s) by bank wire transfer of Federal or
other immediately available funds:
For regular Principal and Interest
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000168 Attn: Doll Balbadar
Trust Account No. G52750, The Canada Life Assurance Company
Attn: Bond Interest
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date, type
of security, whether principal and/or interest and due date.
For our Sale to a Broker (Federal Wire Transfers - Cash):
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000168
Trust Account No. G52750, The Canada Life Assurance Company
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date,
settlement date
For Call or Maturity:
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000192
Trust Account No. G52750, The Canada Life Assurance Company
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date,
whether principal and/or interest and effective date of call or
maturity.
(2) Send notices of payments and written confirmation of wire transfers to:
Chase Manhattan Bank
North America Insurance
<PAGE> 75
3 Chase MetroTech Centre - 6th Floor
Brooklyn, NY 11245
Attn: Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attn: Supervisor, Securities Accounting
(3) Send financial statements and all other communications to:
The Canada Life Assurance Company
SP-11
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attn: Paul English, Associate Treasurer, U.S. Private Placements
(4) Delivery of Notes:
For Notes delivered FREE by Lawyer (Primary Market)
Chase Manhattan Bank
4 New York Plaza - 11th Floor
Receive Window
New York, NY 10004-2477
Attention: Larry Zimmer (212) 623-0987
For: The Canada Life Assurance Company
Trust Account No. G52750
For Broker Delivery AGAINST PAYMENT (Secondary Market)
Chase Manhattan Bank
4 New York Plaza
Receive Window, Ground Floor
New York, NY 10004-2477
For delivery problem, call: Doll Balbadar (718) 242-1774
For: The Canada Life Assurance Company
Trust Account No. G52750
Tax I.D. #38-0397420
<PAGE> 76
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
CANADA LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY OF AMERICA ----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$3,000,000
</TABLE>
Register Notes in the name of: J. ROMEO & CO.
(1) All payments regarding the Note(s) by bank wire transfer of Federal or
other immediately available funds:
For regular Principal and Interest
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000200
Trust Account No. G52709, Canada Life Insurance Company of America
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date, type
of security, whether principal and/or interest and due date.
For our Sale to a Broker (Federal Wire Transfers - Cash):
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000168
Trust Account No. G52709, Canada Life Insurance Company of America
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date,
settlement date
For Call or Maturity:
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000192
Trust Account No. G52709, Canada Life Insurance Company of America
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date,
whether principal and/or interest and effective date of call or
maturity.
(2) Send notices of payments and written confirmation of wire transfers to:
Chase Manhattan Bank
North America Insurance
<PAGE> 77
3 Chase MetroTech Centre - 6th Floor
Brooklyn, NY 11245
Attn: Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attn: Supervisor, Securities Accounting
(3) Send financial statements and all other communications to:
The Canada Life Assurance Company
Corporate Treasury, SP-11
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attn: Paul English, Associate Treasurer, U.S. Private Placements
(4) Delivery of Notes:
For Notes delivered FREE by Lawyer (Primary Market); Courier
Chase Manhattan Bank
4 New York Plaza - 11th Floor
Receive Window
New York, NY 10004-2477
Attention: Larry Zimmer (212) 623-0987
For: Canada Life Insurance Company of America
Trust Account No. G52709
For Broker Delivery AGAINST PAYMENT (Secondary Market)
Chase Manhattan Bank
4 New York Plaza
Receive Window - Ground Floor
New York, NY 10004-2477
For delivery problem, call: Doll Balbadar (718) 242-1774
For: Canada Life Insurance Company of America
Trust Account No. G52709
Tax I.D. #38-2816473
<PAGE> 78
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
CANADA LIFE INSURANCE Principal Amount of Notes to be Purchased
COMPANY OF NEW YORK ----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$250,000
</TABLE>
Register Notes in the name of: J. ROMEO & CO.
(1) All payments regarding the Note(s) by bank wire transfer of Federal or
other immediately available funds:
For regular Principal and Interest
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000200
Trust Account No. G52685, Canada Life Insurance Company of New York
Attn: Bond Interest
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date, type
of security, whether principal and/or interest and due date.
For our Sale to a Broker (Federal Wire Transfers - Cash):
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000168
Trust Account No. G52685, Canada Life Insurance Company of New York
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date,
settlement date
For Call or Maturity:
Chase Manhattan Bank
ABA 021-000-021
A/C #900-9-000192
Trust Account No. G52685, Canada Life Insurance Company of New York
Attn: Doll Balbadar
Refer to: PPN# 077459 A@ 4, name of issuer, rate, maturity date,
whether principal and/or interest and effective date of call or
maturity.
(2) Send notices of payments and written confirmation of wire transfers to:
Chase Manhattan Bank
North America Insurance
<PAGE> 79
3 Chase MetroTech Centre - 6th Floor
Brooklyn, NY 11245
Attn: Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attn: Supervisor, Securities Accounting
(3) Send financial statements and all other communications to:
The Canada Life Assurance Company
Corporate Treasury, SP-11
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attn: Paul English, Associate Treasurer, U.S. Private Placements
(4) Delivery of Notes:
For Notes delivered FREE by Lawyer (Primary Market)
Chase Manhattan Bank
4 New York Plaza - 11th Floor
Receive Window
New York, NY 10004-2477
Attention: Larry Zimmer (212) 623-0987
For: Canada Life Insurance Company of New York
Trust Account No. G52685
For Broker Delivery AGAINST PAYMENT (Secondary Market)
Chase Manhattan Bank
4 New York Plaza
Receive Window, Ground Floor
New York, NY 10004-2477
For delivery problem, call: Doll Balbadar (718) 242-1774
For: Canada Life Insurance Company of New York
Trust Account No. G52685
Tax I.D. #13-2690792
<PAGE> 80
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
LUTHERAN BROTHERHOOD Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$5,000,000
</TABLE>
Register Notes in the name of: Lutheran Brotherhood
(1) Payments to:
By wire:
Norwest Bank Minnesota, N.A.
ABA #091000019
For Credit to Trust Clearing Account #0000840245
Attn: Sarah Corcoran
For Credit to: Lutheran Brotherhood
Acct. No.: 12651300
By mail:
Lutheran Brotherhood
Norwest Bank Minnesota, N.A.
P.O. Box 1450
NW9919
Minneapolis, MN 55485
All payments must include the following information:
A/C Lutheran Brotherhood
Account No.: 12651300
Belden Inc., 7.60% Senior Notes, Series A, due September 1, 2004
Private Placement Number: 077459 A@ 4
Reference Purpose of Payment
Interest and/or Principal Breakdown
(2) Notices of payments and written confirmation of such wire transfers to:
Lutheran Brotherhood
Attn: Investment Accounting/Trading Administrator
625 Fourth Avenue South, 10th Floor
Minneapolis, MN 55415
(3) All other communications to:
Lutheran Brotherhood
<PAGE> 81
Attn: Investment Division
625 Fourth Avenue South
Minneapolis, MN 55415
Telecopier: (612) 340-5776
(4) Deliver original note to:
Norwest Bank Minnesota, N.A.
733 Marquette Avenue
Attn: Client Services - Sarah Corcoran
5th Floor, Window 1
Investors Building
Minneapolis, MN 55479-0051
Telecopier: (612) 667-0550
With a copy to the Lutheran Brotherhood in-house attorney.
Tax I.D. #41-0385700
<PAGE> 82
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
MODERN WOODMEN OF AMERICA Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$4,000,000
</TABLE>
Register Notes in the name of: Modern Woodmen of America
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
ABA No. 071-000-152
Account Name: Modern Woodmen of America
Account No. 84352
Each wire transfer shall set forth the name of the Company, the full
title (including the applicable coupon rate and final maturity date) of
the Notes, a reference to PPN No. 077459 A# 2 and the due date and
application (as among principal, premium and interest) of the payment
being made.
(2) Address for all notices relating to payments:
Modern Woodmen of America
Attn: Investment Accounting Department
1701 First Avenue
Rock Island, IL 61201
(3) Address for all other communications and notices:
Modern Woodmen of America
Attn: Investment Department
1701 First Avenue
Rock Island, IL 61201
Tax ID #36-1493430
<PAGE> 83
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
WOODMEN ACCIDENT AND Principal Amount of Notes to be Purchased
LIFE COMPANY ----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$3,000,000
</TABLE>
Register Notes in the name of: Woodmen Accident and Life Company
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
U.S. Bank National Association
13th and "M" Streets
Lincoln, NE 68508
ABA Number 1040-0002-9
for credit to Woodmen Accident and Life Company
General Fund Account #1-494-0092-9092
With sufficient notation to identify the source of the funds.
(2) Address for notices and communications:
Woodmen Accident and Life Company
1526 "K" Street
Lincoln, Nebraska 68508
Attention: Investment Division
Tax ID #47-0339220
<PAGE> 84
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
INDIANAPOLIS LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
--------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$2,000,000
</TABLE>
Register Notes in the name of: Indianapolis Life Insurance Company
(1) All principal and interest payments on the Notes shall be made by wire
transfer of immediately available funds to:
The Bank of New York
New York, New York 10286
BNF: IOC 566
ABA #021000018
For credit to: Indianapolis Life Insurance Company
Account #177862
With sufficient information to identify payment as to principal and
interest, issue identification and PPN# 077459 A@ 4.
(2) Address for all notices in respect of payment:
Indianapolis Life Insurance Company/#177862
c/o The Bank of New York
Attn: P&I Department
P.O. Box 19266
Newark, New Jersey 07195
(3) Address for all other communications:
Indianapolis Life Insurance Company
2960 N. Meridian Street
Indianapolis, Indiana 46208
Attention: Securities Department
Fax: (317) 927-3363
<PAGE> 85
(4) Address for delivery of the Note:
Indianapolis Life Insurance Company/#177862
c/o The Bank of New York
Attn: Window A
One Wall Street, 3rd Floor
New York, New York 10286
Tax ID #35-0413330
<PAGE> 86
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
<TABLE>
<CAPTION>
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
TMG LIFE INSURANCE COMPANY Principal Amount of Notes to be Purchased
----------------------------------------------
Series A Series B Series C
-------- -------- --------
<S> <C> <C> <C>
$2,000,000
</TABLE>
Register Notes in the name of: TMG Life Insurance Company
(1) All payments on account of the Notes shall be made by wire or intrabank
transfer of immediately available funds to:
<TABLE>
<S> <C>
ABA Routing Transit Number: Norwest Bank Minnesota, N.A.
*(field 3400) 091000019
Beneficiary Account Number: 0000840245 (must be 10 digits in length)
Beneficiary Account Name: Trust Wire Clearing (must be on line 2)
*(field 4200)
OBI FFC: I.C. 13326600 Belden Inc. PPN: 077459 A@ 4
*(field 6000) P= I=
End Balance=
*Federal Reserve Field Tag Numbers
</TABLE>
(2) All notices in respect of payment shall be delivered to:
TMG Life Insurance Company
c/o The Mutual Group (U.S.), Inc.
Attn: Tamie Greenwood
401 North Executive Drive, Suite 300
Brookfield, WI 53008-0503
Telephone: (414) 641-4027
Facsimile: (414) 641-4055
(3) All other communications shall be delivered to:
TMG Life Insurance Company
c/o The Mutual Group (U.S.), Inc.
401 North Executive Drive, Suite 300
Brookfield, WI 53008-0503
Telephone: (414) 641-4027
Facsimile: (414) 641-4055
Tax ID #45-0208990
<PAGE> 87
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such term:
"ADJUSTED CONSOLIDATED NET WORTH" means, as of any date,
consolidated stockholders' equity of the Company and its Restricted Subsidiaries
on such date, determined in accordance with GAAP, less (a) minority interests
and (b) the amount by which outstanding Restricted Investments on such date
exceed 20% of consolidated stockholders' equity.
"AFFILIATE" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or indirectly through
one or more intermediaries Controls, or is Controlled by, or is under common
Control with, such first Person, and (b) any Person beneficially owning or
holding, directly or indirectly, 10% or more of any class of voting or equity
interests of the Company or any Subsidiary or any corporation of which the
Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests.
As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"BELDEN WIRE" is defined in Section 1.
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (b) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in Chicago, Illinois or New York City
are required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the acquisition of an
asset and the incurrence of a liability in accordance with GAAP.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time.
"COMPANY" means Belden Inc., a Delaware corporation.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
<PAGE> 88
"CONSOLIDATED INDEBTEDNESS" means, as of any date,
Indebtedness of the Company and its Restricted Subsidiaries as of such date
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or net deficit) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, as of any date, the assets
and properties of the Company and its Restricted Subsidiaries as of such date
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, as of any date, the
sum of Consolidated Indebtedness and Adjusted Consolidated Net Worth as of such
date.
"CREDIT AGREEMENT" means the Credit Agreement dated as of
November 18, 1996 among the Company and the banks from time to time party
thereto, as such agreement may be hereafter amended, restated, supplemented,
refinanced, increased or reduced from time to time, and any successor credit
agreement or similar facility.
"CSH" is defined in Section 1.
"CSI" is defined in Section 1.
"DEFAULT" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater
of (i) 2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Bank of America in Chicago, Illinois as its "base" or "prime" rate.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
<PAGE> 89
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State
or other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
any such government.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 13.1.
"INDEBTEDNESS" with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable and other
accrued liabilities arising in the ordinary course of business but
including all liabilities created or arising under any conditional sale
or other title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
<PAGE> 90
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities).
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (d) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP. Indebtedness of any Person shall not
include any Guaranty by such Person of Indebtedness. Indebtedness of the Company
or a Restricted Subsidiary shall not include Indebtedness of the Company to a
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary to the Company
or to another Restricted Subsidiary. For purposes of this definition of
Indebtedness, "Guaranty" means, with respect to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or
other obligation of any other Person in any manner, whether directly or
indirectly, including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person: (a) to purchase such
indebtedness or obligation or any property constituting security therefor; (b)
to advance or supply funds (i) for the purchase or payment of such indebtedness
or obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such indebtedness
or obligation; (c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or (d) otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a
Note, (b) any holder of a Note holding more than $2,000,000 in aggregate
principal amount of the Notes, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INVESTMENTS" means all investments made, in cash or by
delivery of property, directly or indirectly, by any Person, in any other
Person, whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or
otherwise.
"LIEN" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
<PAGE> 91
"MATERIAL" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the Company
and its Restricted Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or properties
of the Company and its Restricted Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the ability of any Subsidiary Guarantor to perform its obligations
under the Subsidiary Guaranty, or (d) the validity or enforceability of this
Agreement, the Notes or the Subsidiary Guaranty.
"MATERIAL RESTRICTED SUBSIDIARY" means, as of the date of
determination, each Subsidiary Guarantor and any other Restricted Subsidiary the
assets or revenues of which account for more than 5% of the Consolidated Total
Assets of the Company and its Restricted Subsidiaries at the end of the most
recently ended fiscal period or more than 5% of the consolidated revenues of the
Company and its Restricted Subsidiaries for the most recently completed four
fiscal quarters.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose responsibilities
extend to the subject matter of such certificate.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may have
any liability.
"PRIORITY DEBT" means, as of any date, the sum (without
duplication) of (a) Indebtedness of Restricted Subsidiaries other than Belden
Wire on such date and
<PAGE> 92
(b) Indebtedness of the Company and its Restricted Subsidiaries (including
Belden Wire) secured by Liens permitted by Section 10.3(i) on such date.
"PROPERTY" or "PROPERTIES" means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.
"PURCHASER" means each purchaser listed in Schedule A.
"QPAM EXEMPTION" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of at least
a majority in principal amount of the Notes at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and
any other officer of the Company with responsibility for the administration of
the relevant portion of this agreement.
"RESTRICTED INVESTMENTS" means all Investments of the
Company and its Restricted Subsidiaries, other than:
(a) property or assets to be used or consumed in the
ordinary course of business;
(b) current assets arising from the sale of goods or
services in the ordinary course of business;
(c) Investments in Restricted Subsidiaries or in any
Person which, as a result thereof, becomes a Restricted Subsidiary;
(d) Investments existing as of the date of this Agreement
which are listed in the attached Schedule B-1;
(e) Investments in treasury stock;
(f) Investments in:
(i) obligations, maturing within one year from the
date of acquisition, of or fully guaranteed by (A) the United
States of America or an agency thereof or (B) Canada or a
province thereof;
(ii) state or municipal securities (including
auction rate floaters and variable rate demand Notes), having
an effective maturity within one year from the date of
acquisition, which are rated in one of the top two rating
classifications by at least one nationally recognized rating
agency;
<PAGE> 93
(iii) certificates of deposit or banker's acceptances
maturing within one year from the date of acquisition of or
issued by Bank of America or other commercial banks whose
long-term unsecured debt obligations (or the long-term
unsecured debt obligations of the bank holding company owning
all of the capital stock of such bank) are rated in one of the
top two rating classifications by at least one nationally
recognized rating agency;
(iv) commercial paper maturing within 270 days from
the date of issuance which, at the time of acquisition, is
rated in one of the top two rating classifications by at least
one credit rating agency of recognized national standing;
(v) repurchase agreements, having a term of not
more than 90 days and fully collateralized with obligations
of the type described in clause (i), with a bank satisfying
the requirements of clause (iii); and
(vi) money market instrument programs that are
properly classified as current assets in accordance with GAAP.
For purposes of this Agreement, an Investment shall be valued at the lesser of
(i) cost and (ii) the value at which such Investment is shown on the books of
the Company and its Restricted Subsidiaries in accordance with GAAP.
"RESTRICTED SUBSIDIARY" means each Subsidiary Guarantor and
any other Subsidiary (a) of which at least a majority of the voting securities
are owned by the Company and/or one or more Wholly Owned Restricted Subsidiaries
and of which the Company has management control and (b) which the Company has
designated a Restricted Subsidiary by notice in writing (including designation
in Section 5.4) given to the holders of the Notes and (c) which has not been
designated as a Restricted Subsidiary more than once previously.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"SOURCE" is defined in Section 6.2.
"SUBSIDIARY" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint
venture if more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries or such Person and one or more
of its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or
<PAGE> 94
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY GUARANTOR" is defined in Section 1.
"SUBSIDIARY GUARANTY" is defined in Section 1.
"THIS AGREEMENT" or "THE AGREEMENT" is defined in Section
17.3.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that has not been designated a Restricted Subsidiary.
"WESTERN EUROPE" means any of the following countries:
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the
United Kingdom and any other country that hereafter joins the European Union.
Any country that terminates membership in the European Union will still be
considered a country of Western Europe.
"WHOLLY OWNED SUBSIDIARY" means, at any time, any Subsidiary
100% of all of the equity interests (except directors' qualifying shares) and
voting interests of which are owned by any one or more of the Company and the
Company's other Wholly Owned Subsidiaries at such time.
<PAGE> 95
EXHIBIT 1.1-A
[FORM OF SENIOR NOTE, SERIES A]
BELDEN INC.
7.60% SENIOR NOTE, SERIES A
DUE SEPTEMBER 1, 2004
No. AR-[__] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, BELDEN INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, promises to pay to [ ], or registered assigns, the principal sum of
$[ ] on September 1, 2004, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the
rate of 7.60% per annum from the date hereof, payable semiannually, on September
1 and March 1 in each year, commencing with the March 1 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.60% or (ii) 2% over the rate of interest publicly
announced by Bank of America from time to time in Chicago, Illinois as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of September 1,
1999 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's
<PAGE> 96
attorney duly authorized in writing, a new Note for a like principal amount will
be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
BELDEN INC.
By:
Name:
Title:
GUARANTY ENDORSEMENT
Payment of the principal of, and interest and Make-Whole Amount, if
any, on this Note, and all other amounts due under the Note Purchase Agreement,
is guaranteed pursuant to the terms of a Guaranty dated as of September 1, 1999
of certain Subsidiaries of the Company.
<PAGE> 97
EXHIBIT 1.1-B
[FORM OF SENIOR NOTE, SERIES B]
BELDEN INC.
7.74% SENIOR NOTE, SERIES B
DUE SEPTEMBER 1, 2006
No. BR-[__] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, BELDEN INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, promises to pay to [ ], or registered assigns, the principal sum
of $[ ] on September 1, 2006, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the
rate of 7.74% per annum from the date hereof, payable semiannually, on September
1 and March 1 in each year, commencing with the March 1 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.74% or (ii) 2% over the rate of interest publicly
announced by Bank of America from time to time in Chicago, Illinois as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of September 1,
1999 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's
<PAGE> 98
attorney duly authorized in writing, a new Note for a like principal amount will
be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
BELDEN INC.
By:
Name:
Title:
GUARANTY ENDORSEMENT
Payment of the principal of, and interest and Make-Whole Amount, if
any, on this Note, and all other amounts due under the Note Purchase Agreement,
is guaranteed pursuant to the terms of a Guaranty dated as of September 1, 1999
herewith of certain Subsidiaries of the Company.
<PAGE> 99
EXHIBIT 1.1-C
[FORM OF SENIOR NOTE, SERIES C]
BELDEN INC.
7.95% SENIOR NOTE, SERIES C
DUE SEPTEMBER 1, 2009
No. CR-[__] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, BELDEN INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, promises to pay to [ ], or registered assigns, the principal sum
of $[ ] on September 1, 2009, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the
rate of 7.95% per annum from the date hereof, payable semiannually, on September
1 and March 1 in each year, commencing with the March 1 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.95% or (ii) 2% over the rate of interest publicly
announced by Bank of America from time to time in Chicago, Illinois as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of September 1,
1999 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's
<PAGE> 100
attorney duly authorized in writing, a new Note for a like principal amount will
be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
BELDEN INC.
By:
Name:
Title:
GUARANTY ENDORSEMENT
Payment of the principal of, and interest and Make-Whole Amount, if
any, on this Note, and all other amounts due under the Note Purchase Agreement,
is guaranteed pursuant to the terms of a Guaranty dated as of September 1, 1999
of certain Subsidiaries of the Company.
<PAGE> 101
EXHIBIT 1.2
[FORM OF SUBSIDIARY GUARANTY]
THIS GUARANTY (this "GUARANTY") dated as of September 1, 1999 is made
by the undersigned (each, a "GUARANTOR"), in favor of the holders from time to
time of the Notes hereinafter referred to, including each purchaser named in the
Note Purchase Agreement hereinafter referred to, and their respective successors
and assigns (collectively, the "HOLDERS" and each individually, a "HOLDER").
W I T N E S S E T H:
WHEREAS, Belden Inc., a Delaware corporation (the "COMPANY"), and the
initial Holders have entered into a Note Purchase Agreement dated as of
September 1, 1999 (the Note Purchase Agreement as amended, supplemented,
restated or otherwise modified from time to time in accordance with its terms
and in effect, the "NOTE PURCHASE AGREEMENT");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of $125,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement) to the Purchasers;
WHEREAS, the Company directly or indirectly owns all of the issued and
outstanding capital stock of each Guarantor and, by virtue of such ownership and
otherwise, each Guarantor will derive substantial benefits from the purchase by
the initial Holders of the Company's Notes;
WHEREAS, it is a condition precedent to the obligation of the initial
Holders to purchase the Notes that each Guarantor shall have executed and
delivered this Guaranty to the Holders; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Notes by the initial
Holders, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, each Guarantor makes this Guaranty as
follows:
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. The Guarantors, jointly and severally,
unconditionally and irrevocably guarantee to the Holders the due, prompt and
complete payment by the Company of the principal of, Make-Whole Amount, if any,
and interest on, and each other amount due under, the Notes or the Note Purchase
Agreement, when and as the same shall become due and payable (whether at stated
maturity or by prepayment or by declaration or otherwise) in accordance with
<PAGE> 102
the terms of the Notes and the Note Purchase Agreement (the Notes and the Note
Purchase Agreement being sometimes hereinafter collectively referred to as the
"NOTE DOCUMENTS" and the amounts payable by the Company under the Note
Documents, and all other monetary obligations of the Company thereunder, being
sometimes collectively hereinafter referred to as the "OBLIGATIONS"). This
Guaranty is a guaranty of payment and not just of collectibility and is in no
way conditioned or contingent upon any attempt to collect from the Company or
upon any other event, contingency or circumstance whatsoever. If for any reason
whatsoever the Company shall fail or be unable duly, punctually and fully to pay
such amounts as and when the same shall become due and payable and any Holder
shall notify each Guarantor that all Notes held by such Holder or all
outstanding Notes are subject to acceleration under Section 12.1 of the Note
Purchase Agreement, the Guarantors (jointly and severally), without demand,
presentment, protest or notice of any kind, will forthwith pay or cause to be
paid such amounts to the Holders under the terms of such Note Documents, in
lawful money of the United States, at the place specified in the Note Purchase
Agreement, or perform or comply with the same or cause the same to be performed
or complied with, together with interest (to the extent provided for under such
Note Documents) on any amount due and owing from the Company. The Guarantors
(jointly and severally), promptly after demand, will pay to the Holders the
reasonable costs and expenses of collecting such amounts or otherwise enforcing
this Guaranty, including, without limitation, the reasonable fees and expenses
of counsel. The right of recovery against each Guarantor under this Guaranty is,
however, limited to the Fair Net Worth of such Guarantor, as of the date of any
determination thereof, less $20,000. For purposes of this Guaranty, the "Fair
Net Worth" of a Guarantor shall mean an amount equal to the fair saleable value
of such Guarantor's assets and all rights of contribution, indemnification and
exoneration, net of all obligations of such Guarantor owed to third parties
(other than such Guarantor's liabilities under this Guaranty), including all
liabilities, whether fixed or contingent, direct or indirect, disputed or
undisputed, secured or unsecured, and whether or not required to be reflected on
a balance sheet prepared in accordance with generally accepted accounting
principles.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of such Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim such Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not such Guarantor or the Company shall have
any knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
<PAGE> 103
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give notice to such Guarantor
of the occurrence of a "Default" or an "Event of Default" under any
Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, a Guarantor or to any
other person or any of their respective properties or creditors, or any
action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or a Guarantor
into or with any other corporation, or any sale, lease or transfer of
any of the assets of the Company or a Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and a Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of a
Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance that might otherwise
constitute a legal or equitable defense or
<PAGE> 104
discharge of the liabilities of a guarantor or surety or that might
otherwise limit recourse against a Guarantor.
Notwithstanding any other provision contained in this Guaranty, the Guarantors'
joint and several liability with respect to the principal amount of the Notes
shall be no greater than the liability of the Company with respect thereto.
SECTION 4. Full Recourse Obligations. The obligations of each Guarantor
set forth herein constitute the full recourse obligations of such Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or such Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or that might otherwise
limit recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any rights that may
have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including Section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company that may have
arisen in connection with this Guaranty. So long as the Obligations remain, if
any amount shall be paid by or on behalf of the Company to a Guarantor on
account of any of the rights waived in this paragraph, such amount shall be held
by such Guarantor in trust, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Holders
(duly endorsed by such Guarantor to the Holders, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as the
Holders may determine. The provisions of this paragraph shall survive the term
of this Guaranty and the payment in full of the Obligations.
<PAGE> 105
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, each
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and the Guarantors
(jointly and severally) shall forthwith pay such principal amount, Make-Whole
Amount, if any, and interest thereon and any other amounts guaranteed hereunder
without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of
each Guarantor hereunder shall be duly paid and performed in full.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged;
(b) such Guarantor has the corporate power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
<PAGE> 106
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or material
contractual obligation of such Guarantor and will not result in or
require the creation or imposition of any Lien on any of the
properties, revenues or assets of such Guarantor pursuant to the
provisions of any material contractual obligation of such Guarantor or
any requirement of law;
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or governmental authority is
required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor or
any of its properties or revenues (i) with respect to this Guaranty or
any of the transactions contemplated hereby or (ii) that could
reasonably be expected to have a material adverse effect upon the
business, operations or financial condition of such Guarantor and its
subsidiaries taken as a whole;
(g) the execution, delivery and performance of this Guaranty
will not violate any provision of any order, judgment, writ, award or
decree of any court, arbitrator or Governmental Authority, domestic or
foreign, or of the charter or by-laws of such Guarantor or of any
securities issued by such Guarantor; and
(h) after giving effect to the transactions contemplated
herein, (i) the present fair salable value of the assets of such
Guarantor is in excess of the amount that will be required to pay its
probable liability on its existing debts as said debts become absolute
and matured, (ii) such Guarantor has received reasonably equivalent
value for executing and delivering this Guaranty, (iii) the property
remaining in the hands of such Guarantor is not an unreasonably small
capital, and (iv) such Guarantor is able to pay its debts as they
mature.
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed (a) if to the Company or
any Holder at the address set forth in the Note Purchase Agreement or (b) if to
a Guarantor, at:
[Name of Guarantor]
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
or at such other address as a Guarantor shall from time to time designate in
writing to the Holders or on a counterpart signature page hereto. Any notice so
addressed shall be deemed to be given when actually received.
<PAGE> 107
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the Holders. All
statements in any such certificate or other instrument shall constitute
warranties and representations by such Guarantor hereunder.
SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any suit, action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Notes. Each Guarantor consents to process being served in any such suit,
action or proceeding by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the address of such Guarantor
specified herein or designated pursuant hereto or on a counterpart signature
page hereto. Each Guarantor agrees that such service upon receipt (i) shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service upon and personal delivery to such
Guarantor.
SECTION 13. Miscellaneous. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Holders. The section and paragraph headings in this Guaranty and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof, and all references herein
to numbered sections, unless otherwise indicated, are to sections in this
Guaranty. This Guaranty shall in all respects be governed by, and construed in
accordance with, the laws of the State of Illinois, including all matters of
construction, validity and performance.
<PAGE> 108
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.
BELDEN WIRE & CABLE COMPANY
By:
Name:
Title:
CABLE SYSTEMS HOLDING COMPANY
By:
Name:
Title:
CABLE SYSTEMS INTERNATIONAL INC.
By:
Name:
Title:
<PAGE> 109
EXHIBIT 4.4(a)
FORM OF OPINION OF COUNSEL
TO THE COMPANY
The opinion of Kevin L. Bloomfield, Vice President, Secretary and
General Counsel of the Company, shall be to the effect that:
1. Each of the Company, each Subsidiary Guarantor, and each
Subsidiary incorporated under the laws of the United States or any state
thereof, including the District of Columbia, is a corporation duly incorporated,
validly existing in good standing under the laws of Delaware, and each has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted, and, in the case of the Company, to
enter into and perform the Note Purchase Agreement and to issue and sell the
Notes, and, in the case of the Subsidiary Guarantors, to execute, deliver and
perform the Subsidiary Guaranty.
2. The Note Purchase Agreement and the Notes have been duly
authorized by proper corporate action on the part of the Company, have been duly
executed and delivered by an authorized officer of the Company, and constitute
the legal, valid and binding agreements of the Company, enforceable in
accordance with their terms, except to the extent that enforcement thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the enforcement of
the rights of creditors or by equitable principles, regardless of whether
enforcement is sought in a proceeding in equity or at law.
3. The Subsidiary Guaranty has been duly authorized by proper
corporate action on the part of each Subsidiary Guarantor, has been duly
executed and delivered by an authorized officer of such Subsidiary Guarantor,
and constitutes the legal, valid and binding obligation of such Subsidiary
Guarantor, enforceable in accordance with its terms, except to the extent the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of creditors
or by equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
4. The offering, sale and delivery of the Notes and delivery of the
Subsidiary Guaranty do not require the registration of the Notes or the
Subsidiary Guaranty under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
5. Except for filing a copy of the Note Purchase Agreement as an
exhibit to the Company's periodic reports under the Securities Act of 1934, as
amended, no authorization, approval or consent of, and no designation, filing,
declaration, registration and/or qualification with, any Governmental Authority
is necessary or required in connection with the execution, delivery and
performance by the Company of the Note Purchase Agreement or the offering,
<PAGE> 110
issuance and sale by the Company of the Notes, and no authorization, approval or
consent of, and no designation, filing, declaration, registration and/or
qualification with, any Governmental Authority is necessary or required in
connection with the execution, delivery and performance by any Subsidiary
Guarantor of the Subsidiary Guaranty.
6. The issuance and sale of the Notes by the Company, the
performance of the terms and conditions of the Notes and the Note Purchase
Agreement and the execution and delivery of the Note Purchase Agreement do not
conflict with, or result in any breach or violation of any of the provisions of,
or constitute a default under, or result in the creation or imposition of any
Lien on, the property of the Company or any Subsidiary pursuant to the
provisions of (i) the Certificate of Incorporation or By-laws of the Company or
any Subsidiary, (ii) any loan agreement known to such counsel to which the
Company or any Subsidiary is a party or by which any of them or their property
is bound, (iii) any other Material agreement or instrument known to such counsel
to which the Company or any Subsidiary is a party or by which any of them or
their property is bound, (iv) any law (including usury laws) or regulation
applicable to the Company, or (v) to the knowledge of such counsel, any order,
writ, injunction or decree of any court or Governmental Authority applicable to
the Company.
7. The execution, delivery and performance of the Subsidiary
Guaranty will not conflict with, or result in any breach or violation of any of
the provisions of, or constitute a default under, or result in the creation or
imposition of any Lien on, the property of any Subsidiary Guarantor pursuant to
the provisions of (i) the Certificate of Incorporation or By-laws of such
Subsidiary Guarantor, (ii) any loan agreement known to such counsel to which any
Subsidiary Guarantor is a party or by which it or its property is bound, (iii)
any other Material agreement or instrument known to such counsel to which any
Subsidiary Guarantor is a party or by which it or its property is bound, (iv)
any law or regulation applicable to any Subsidiary Guarantor, or (v) to the
knowledge of such counsel, any order, writ, injunction or decree of any court or
Governmental Authority applicable to any Subsidiary Guarantor.
8. All of the issued and outstanding shares of capital stock of each
Subsidiary incorporated in the United States or any state thereof, including the
District of Columbia, have been duly and validly issued, are fully paid and
nonassessable and, except as disclosed in Schedule 5.4 to the Note Purchase
Agreement, are owned directly or indirectly by the Company free and clear of any
perfected pledge or, to the knowledge of such counsel, any other perfected Lien.
9. Except as disclosed in Schedule 5.8 to the Note Purchase
Agreement, there are no actions, suits or proceedings pending, or, to such
counsel's knowledge, threatened against, or affecting the Company or any
Subsidiary, at law or in equity or before or by any Governmental Authority,
which are likely to result, individually or in the aggregate, in a Material
Adverse Effect.
10. Neither the Company nor any Subsidiary is (i) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended
(the "1935 Act"), (ii) a "public utility" as defined in
<PAGE> 111
the Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof, as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
11. The issuance of the Notes and the intended use of the proceeds of
the sale of the Notes do not violate or conflict with Regulation U, T or X of
the Board of Governors of the Federal Reserve System.
The opinion of Mr. Bloomfield shall cover such other matters relating to the
sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company and with respect to matters governed by the laws of any jurisdiction
other than the United States of America and the laws of the State of Missouri,
such counsel may rely upon the opinions of counsel deemed (and stated in their
opinion to be deemed) by them to be competent and reliable.
<PAGE> 112
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The opinion of Gardner, Carton & Douglas, special counsel to the
Purchasers, shall be to the effect that:
1. The Company and each Subsidiary Guarantor are each a corporation
organized and validly existing in good standing under the laws of the State of
Delaware, with all requisite corporate power and authority, in the case of the
Company, to enter into the Agreement and to issue and sell the Notes, and, in
the case of each Subsidiary Guarantor, to execute and deliver the Subsidiary
Guaranty.
2. The Agreement and the Notes have been duly authorized by proper
corporate action on the part of the Company, have been duly executed and
delivered by an authorized officer of the Company, and constitute the legal,
valid and binding agreements of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.
3. The Subsidiary Guaranty has been duly authorized by proper
corporate action on the part of each Subsidiary Guarantor, has been duly
executed and delivered by an authorized officer of such Subsidiary Guarantor,
and constitutes the legal, valid and binding obligation of such Subsidiary
Guarantor, enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in a proceeding in equity or at law.
4. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes and the issuance and delivery of the
Subsidiary Guaranty do not require the registration of the Notes or the
Subsidiary Guaranty under the Securities Act of 1933, as amended, nor the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
5. The issuance and sale of the Notes and compliance with the terms
and provisions of the Notes and the Agreement will not conflict with or result
in any breach of any of the provisions of the Certificate of Incorporation or
By-Laws of the Company.
<PAGE> 113
6. The execution, delivery and performance of the Subsidiary
Guaranty will not violate any provisions of the Certificates of Incorporation or
By-Laws of any Subsidiary Guarantor.
7. No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any governmental body, Federal or
state, is necessary in connection with the execution and delivery of the Note
Purchase Agreement or the Notes or the execution and delivery of the Subsidiary
Guaranty.
The opinion of Gardner, Carton & Douglas also shall state that the opinion of
Kevin L. Bloomfield, Vice President, Secretary and General Counsel of the
Company, delivered to you pursuant to the Agreement, is satisfactory in form and
scope to Gardner, Carton & Douglas, and, in its opinion, the Purchasers and it
are justified in relying thereon and shall cover such other matters relating to
the sale of the Notes as the Purchasers may reasonably request.
<PAGE> 1
EXHIBIT 4.8
GUARANTY OF BELDEN WIRE & CABLE COMPANY,
CABLE SYSTEMS HOLDING COMPANY AND CABLE SYSTEMS
INTERNATIONAL INC.
CONFORMED COPY
SUBSIDIARY GUARANTY
THIS GUARANTY (this "GUARANTY") dated as of September 1, 1999 is made
by the undersigned (each, a "GUARANTOR"), in favor of the holders from time to
time of the Notes hereinafter referred to, including each purchaser named in the
Note Purchase Agreement hereinafter referred to, and their respective successors
and assigns (collectively, the "HOLDERS" and each individually, a "HOLDER").
W I T N E S S E T H:
WHEREAS, Belden Inc., a Delaware corporation (the "COMPANY"), and the
initial Holders have entered into a Note Purchase Agreement dated as of
September 1, 1999 (the Note Purchase Agreement as amended, supplemented,
restated or otherwise modified from time to time in accordance with its terms
and in effect, the "NOTE PURCHASE AGREEMENT");
THIS GUARANTY (this "GUARANTY") dated as of September 1, 1999 is made by the
undersigned (each, a "GUARANTOR"), in favor of the holders from time to time of
the Notes hereinafter referred to, including each purchaser named in the Note
Purchase Agreement hereinafter referred to, and their respective successors and
assigns (collectively, the "HOLDERS" and each individually, a "HOLDER").
W I T N E S S E T H:
WHEREAS, Belden Inc., a Delaware corporation (the "COMPANY"), and the
initial Holders have entered into a Note Purchase Agreement dated as of
September 1, 1999 (the Note Purchase Agreement as amended, supplemented,
restated or otherwise modified from time to time in accordance with its terms
and in effect, the "NOTE PURCHASE AGREEMENT");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of $125,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement) to the Purchasers;
WHEREAS, the Company directly or indirectly owns all of the issued and
outstanding capital stock of each Guarantor and, by virtue of such ownership and
otherwise, each Guarantor will derive substantial benefits from the purchase by
the initial Holders of the Company's Notes;
<PAGE> 2
WHEREAS, it is a condition precedent to the obligation of the initial
Holders to purchase the Notes that each Guarantor shall have executed and
delivered this Guaranty to the Holders; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Notes by the initial
Holders, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, each Guarantor makes this Guaranty as
follows:
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. The Guarantors, jointly and severally,
unconditionally and irrevocably guarantee to the Holders the due, prompt and
complete payment by the Company of the principal of, Make-Whole Amount, if any,
and interest on, and each other amount due under, the Notes or the Note Purchase
Agreement, when and as the same shall become due and payable (whether at stated
maturity or by prepayment or by declaration or otherwise) in accordance with the
terms of the Notes and the Note Purchase Agreement (the Notes and the Note
Purchase Agreement being sometimes hereinafter collectively referred to as the
"NOTE DOCUMENTS" and the amounts payable by the Company under the Note
Documents, and all other monetary obligations of the Company thereunder, being
sometimes collectively hereinafter referred to as the "OBLIGATIONS"). This
Guaranty is a guaranty of payment and not just of collectibility and is in no
way conditioned or contingent upon any attempt to collect from the Company or
upon any other event, contingency or circumstance whatsoever. If for any reason
whatsoever the Company shall fail or be unable duly, punctually and fully to pay
such amounts as and when the same shall become due and payable and any Holder
shall notify each Guarantor that all Notes held by such Holder or all
outstanding Notes are subject to acceleration under Section 12.1 of the Note
Purchase Agreement, the Guarantors (jointly and severally), without demand,
presentment, protest or notice of any kind, will forthwith pay or cause to be
paid such amounts to the Holders under the terms of such Note Documents, in
lawful money of the United States, at the place specified in the Note Purchase
Agreement, or perform or comply with the same or cause the same to be performed
or complied with, together with interest (to the extent provided for under such
Note Documents) on any amount due and owing from the Company. The Guarantors
(jointly and severally), promptly after demand, will pay to the Holders the
reasonable costs and expenses of collecting such amounts or otherwise enforcing
this Guaranty, including, without limitation, the reasonable fees and expenses
of counsel. The right of recovery against each Guarantor under this Guaranty is,
however, limited to the Fair Net Worth of such Guarantor, as of the date of any
determination thereof, less $20,000. For purposes of this Guaranty, the "Fair
Net Worth" of a Guarantor shall mean an amount equal to the fair saleable value
of such Guarantor's assets and all rights of contribution, indemnification and
exoneration, net of all obligations of such Guarantor owed to third parties
(other than such Guarantor's liabilities under
<PAGE> 3
this Guaranty), including all liabilities, whether fixed or contingent, direct
or indirect, disputed or undisputed, secured or unsecured, and whether or not
required to be reflected on a balance sheet prepared in accordance with
generally accepted accounting principles.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of such Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim such Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not such Guarantor or the Company shall have
any knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give notice to such Guarantor
of the occurrence of a "Default" or an "Event of Default" under any
Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, a Guarantor or to any
<PAGE> 4
other person or any of their respective properties or creditors, or any
action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or a Guarantor
into or with any other corporation, or any sale, lease or transfer of
any of the assets of the Company or a Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and a Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of a
Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance that might otherwise
constitute a legal or equitable defense or discharge of the liabilities
of a guarantor or surety or that might otherwise limit recourse against
a Guarantor.
Notwithstanding any other provision contained in this Guaranty, the Guarantors'
joint and several liability with respect to the principal amount of the Notes
shall be no greater than the liability of the Company with respect thereto.
SECTION 4. Full Recourse Obligations. The obligations of each
Guarantor set forth herein constitute the full recourse obligations of such
Guarantor enforceable against it to the full extent of all its assets and
properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the
extent permitted by applicable law, (a) notice of any of the matters referred to
in Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or such Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by
<PAGE> 5
any of the Holders of any right, title to or interest in the Note Purchase
Agreement or in any other Note Document and (h) any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge,
release or defense of a guarantor or surety or that might otherwise limit
recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any rights that may
have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including Section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company that may have
arisen in connection with this Guaranty. So long as the Obligations remain, if
any amount shall be paid by or on behalf of the Company to a Guarantor on
account of any of the rights waived in this paragraph, such amount shall be held
by such Guarantor in trust, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Holders
(duly endorsed by such Guarantor to the Holders, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as the
Holders may determine. The provisions of this paragraph shall survive the term
of this Guaranty and the payment in full of the Obligations.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, each
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and the Guarantors
(jointly and severally) shall forthwith pay such principal amount, Make-Whole
Amount, if any, and interest thereon and any other amounts guaranteed hereunder
without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall
<PAGE> 6
not be discharged until such time as all of the Obligations shall be paid and
performed in full and all of the agreements of each Guarantor hereunder shall be
duly paid and performed in full.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged;
(b) such Guarantor has the corporate power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or material
contractual obligation of such Guarantor and will not result in or
require the creation or imposition of any Lien on any of the
properties, revenues or assets of such Guarantor pursuant to the
provisions of any material contractual obligation of such Guarantor or
any requirement of law;
(e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or governmental authority is
required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor or
any of its properties or revenues (i) with respect to this Guaranty or
any of the transactions contemplated hereby or (ii) that could
reasonably be expected to have a material adverse effect upon the
business, operations or financial condition of such Guarantor and its
subsidiaries taken as a whole;
(g) the execution, delivery and performance of this Guaranty
will not violate any provision of any order, judgment, writ, award or
decree of any court, arbitrator or Governmental Authority, domestic or
foreign, or of the charter or by-laws of such Guarantor or of any
securities issued by such Guarantor; and
<PAGE> 7
(h) after giving effect to the transactions contemplated
herein, (i) the present fair salable value of the assets of such
Guarantor is in excess of the amount that will be required to pay its
probable liability on its existing debts as said debts become absolute
and matured, (ii) such Guarantor has received reasonably equivalent
value for executing and delivering this Guaranty, (iii) the property
remaining in the hands of such Guarantor is not an unreasonably small
capital, and (iv) such Guarantor is able to pay its debts as they
mature.
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed (a) if to the Company or
any Holder at the address set forth in the Note Purchase Agreement or (b) if to
a Guarantor, at:
[Name of Guarantor]
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
or at such other address as a Guarantor shall from time to time designate in
writing to the Holders or on a counterpart signature page hereto. Any notice so
addressed shall be deemed to be given when actually received.
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the Holders. All
statements in any such certificate or other instrument shall constitute
warranties and representations by such Guarantor hereunder.
SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any suit, action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Notes. Each Guarantor consents to process being served in any such suit,
action or proceeding by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the address of such Guarantor
specified herein or designated pursuant hereto or on a counterpart signature
page hereto. Each Guarantor agrees that such service upon receipt (i) shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service upon and personal delivery to such
Guarantor.
SECTION 13. Miscellaneous. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
<PAGE> 8
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, each Guarantor hereby waives any provision of law
that renders any provisions hereof prohibited or unenforceable in any respect.
The terms of this Guaranty shall be binding upon, and inure to the benefit of,
each Guarantor and the Holders and their respective successors and assigns. No
term or provision of this Guaranty may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by each Guarantor
and the Holders. The section and paragraph headings in this Guaranty and the
table of contents are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof, and all
references herein to numbered sections, unless otherwise indicated, are to
sections in this Guaranty. This Guaranty shall in all respects be governed by,
and construed in accordance with, the laws of the State of Illinois, including
all matters of construction, validity and performance.
<PAGE> 9
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.
BELDEN WIRE & CABLE COMPANY
By: /s/ Jeffrey M. Naeger
--------------------------------------
Name: Jeffrey M. Naeger
Title: Assistant Treasurer
CABLE SYSTEMS HOLDING COMPANY
By: /s/ Jeffrey M. Naeger
--------------------------------------
Name: Jeffrey M. Naeger
Title: Assistant Treasurer
CABLE SYSTEMS INTERNATIONAL INC.
By: /s/ Jeffrey M. Naeger
--------------------------------------
Name: Jeffrey M. Naeger
Title: Assistant Treasurer
<PAGE> 1
EXHIBIT 10.7
AMENDMENT TO NON-EMPLOYEE
DIRECTOR STOCK PLAN
The Belden Inc. Non-Employee Director Stock Plan is amended by replacing "200"
in the first and second sentences of Paragraph 6 (Grant Formula) of the Stock
Plan with "500."
<PAGE> 1
EXHIBIT 10.11
AMENDMENT TO BELDEN INC.
LONG-TERM INCENTIVE PLAN
The Belden Inc. Long-Term Incentive Plan is amended by replacing "1000" in the
next-to-last sentence of Paragraph 11.1 (Grants) of Article 11 (Directors' Stock
Options) of the Incentive Plan with "2000."
<PAGE> 1
EXHIBIT 10.14
AMENDMENT TO BELDEN WIRE & CABLE COMPANY
SUPPLEMENTAL EXCESS DEFINED BENEFIT PLAN
The Belden Wire & Cable Company Supplemental Excess Defined Benefit Plan is
amended by revising Article IV (Payment of Plan Benefits) to read as follows:
"The supplemental benefits determined under Article III shall be paid to a
Participant or his Beneficiary, if applicable, as soon as practical following
the (voluntary or involuntary) termination of the Participant's employment with
the Company; provided, however, that the supplemental benefit payable to a
Participant who is receiving a benefit under the Plan equal to the benefit he
had been receiving under the Prior Plan on the day before the Effective Date,
shall be paid to such Participant."
<PAGE> 1
EXHIBIT 10.16
AMENDMENT TO BELDEN WIRE & CABLE COMPANY
SUPPLEMENTAL EXCESS DEFINED CONTRIBUTION PLAN
The Belden Wire & Cable Company Supplemental Excess Defined Contribution Plan is
amended by revising Article V (Distribution) Section 2 (Method of Distribution)
to read as follows:
"The benefits payable under the Plan from a Participant's Supplemental Matching
and Supplemental Basic Accounts shall be paid to the same person as soon as
practical following the (voluntary or involuntary) termination of that person's
employment with the Company.
<PAGE> 1
EXHIBIT 10.21
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
DATED AS OF AUGUST 16, 1999 ENTERED INTO BETWEEN
BELDEN INC. AND PAUL SCHLESSMAN
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 16th day of August, 1999, by Belden Inc., a
Delaware corporation (the "Company"), and Paul Schlessman ("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.
<PAGE> 2
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 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
<PAGE> 3
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:
(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.
<PAGE> 4
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 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
<PAGE> 5
(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 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.
<PAGE> 6
(B) If the Company shall give a Notice of
Termination for Cause 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.
<PAGE> 7
(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 Section 401(k) of the Code or
otherwise), subject to adjustment as provided below.
<PAGE> 8
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 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
<PAGE> 9
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,
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
<PAGE> 10
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 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
<PAGE> 11
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 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.
<PAGE> 12
(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.
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
<PAGE> 13
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 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
<PAGE> 14
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.
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
<PAGE> 15
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 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.
<PAGE> 16
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.
<PAGE> 17
25. HEADINGS. The headings are for reference only and shall not affect
the meaning 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: /s/
--------------------------------------
Attest: /s/
-----------------------------
EXECUTIVE
/s/ Paul Schlessman
- ------------------------------------
Paul Schlessman
<PAGE> 1
EXHIBIT 10.22
INDEMNIFICATION AGREEMENT
DATED JULY 23, 1999 ENTERED INTO BETWEEN
BELDEN INC. AND PAUL SCHLESSMAN
INDEMNIFICATION AGREEMENT
AGREEMENT between Belden Inc., a Delaware corporation (the "Company"), and (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, 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
<PAGE> 2
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 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
<PAGE> 3
3) who is 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
<PAGE> 4
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 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 connectiontherewith
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.
<PAGE> 5
(d) Burden of Proof. In connection with any determination by the
Reviewing Party 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;
<PAGE> 6
(c) The fullest benefits allowable under the law of the
jurisdiction under which 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. 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.
9. 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
<PAGE> 7
provisions thereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
<PAGE> 8
Executed and effective as of this 23 day of July, 1999.
BELDEN INC.
By /s/ Kevin L. Bloomfield
-----------------------------------
Name: Kevin L. Bloomfield
Title: Vice President, Secretary
and General Counsel
Date: August 6, 1999
INDEMNITEE:
By: /s/ Paul Schlessman
-------------------------
Name: Paul Schlessman
Title: Vice President, Finance, Treasurer,
and Chief Financial Officer
Date: August 6, 1999
<PAGE> 1
EXHIBIT 21.1
LIST OF SUBSIDIARIES OF BELDEN INC.
List of Subsidiaries of Belden Inc.
<TABLE>
<S> <C>
Belden Inc. (Incorporated in Delaware)
Belden Wire & Cable Company (Incorporated in Delaware)
Belden Technologies, Inc. (Incorporated in Delaware)
Belden International, Inc. (Incorporated in Delaware)
Belden Holdings, Inc. (Incorporated in Delaware)
Cable Systems Holding Company (Incorporated in Delaware)
Belden Communications Company (Incorporated in Delaware)
Belden Communications Holding, Inc. (Incorporated in Delaware)
Belden Europe B.V. (Incorporated in The Netherlands)
Belden Wire & Cable B.V. (Incorporated in The Netherlands)
Belden International Holdings B.V. (Incorporated in The Netherlands)
MCTEC B.V. (Incorporated in The Netherlands)
Belden Europe B.V. & Belden Wire & (German Civil Code Partnership)
Cable B.V. Finance GbR
Belden Deutschland GmbH (Incorporated in Germany)
Belden Electronics GmbH (Incorporated in Germany)
Belden-EIW GmbH & Co. KG (German Limited Partnership)
Belden Pacific Finance Pty Ltd. (Incorporated in Australia)
Belden Pacific Finance Unit Trust (Organized in Australia)
Belden Australia Pty Ltd. (Incorporated in Australia)
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Belden Superannuation Pty. Ltd. (Incorporated in Australia)
CSH Limited (Incorporated in Barbados)
Belden Foreign Sales Corporation (Incorporated in Barbados)
Belden-Duna Kabel Kft. (Incorporated in Hungary)
Belden-Dorfler GmbH (Incorporated in Austria)
Belden Electronics Argentina S.A. (Incorporated in Argentina)
Belden (Canada) Inc. (Incorporated in Canada)
Belden Electronics S.a.r.l. (Incorporated in France)
Belden UK Limited (Incorporated in the United
Kingdom)
Belden Electronics, S.A. de C.V. (Incorporated in Mexico)
Belden Brasil Comercial Ltda. (Incorporated in Brazil)
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8) pertaining to the Belden Inc. Employee Stock Purchase Plan (No.
33-66830), the Belden Inc. Long-Term Incentive Plan (No. 33-83154), the Belden
Inc. Non-Employee Director Stock Plan (No. 333-11071), and the Belden Inc.
Long-Term Incentive Plan (No. 333-74923) of our report dated January 25, 2000,
with respect to the consolidated financial statements of Belden Inc. included in
this Annual Report (Form 10-K) for the year ended December 31, 1999.
/s/ Ernst & Young LLP
March 21, 2000
<PAGE> 1
EXHIBIT 24.1
POWERS OF ATTORNEY FROM
MEMBERS OF THE BOARD OF DIRECTORS OF
BELDEN INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
BELDEN INC. (the "Company"), does constitute and appoint C. BAKER CUNNINGHAM,
with full power and substitution, his true and lawful attorney and agent, to do
any and all acts and things and to execute any and all instruments which such
attorney and agent may deem necessary or advisable to enable the company to
comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations in connection with the execution and filing of the Annual Report
(Form 10-K) of Belden Inc. for the fiscal year ended December 31, 1999 (the
"Annual Report"), including specifically the power and authority to sign for and
on behalf of the undersigned the name of the undersigned as director of the
Company to the Annual Report or to any amendments thereto filed as part of, as
an exhibit to, or in connection with such Annual Report or amendments; and the
undersigned does hereby ratify and confirm as his own act and deed all that such
attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
24th day of March, 2000.
/s/ Lorne D. Baine
-------------------------------------
Lorne D. Bain
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
BELDEN INC. (the "Company"), does constitute and appoint C. BAKER CUNNINGHAM,
with full power and substitution, his true and lawful attorney and agent, to do
any and all acts and things and to execute any and all instruments which such
attorney and agent may deem necessary or advisable to enable the company to
comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations in connection with the execution and filing of the Annual Report
(Form 10-K) of Belden Inc. for the fiscal year ended December 31, 1999 (the
"Annual Report"), including specifically the power and authority to sign for and
on behalf of the undersigned the name of the undersigned as director of the
Company to the Annual Report or to any amendments thereto filed as part of, as
an exhibit to, or in connection with such Annual Report or amendments; and the
undersigned does hereby ratify and confirm as his own act and deed all that such
attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
15th day of March, 2000.
/s/ John R. DallePezze
---------------------------------
John R. DallePezze
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
BELDEN INC. (the "Company"), does constitute and appoint C. BAKER CUNNINGHAM,
with full power and substitution, his true and lawful attorney and agent, to do
any and all acts and things and to execute any and all instruments which such
attorney and agent may deem necessary or advisable to enable the company to
comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations in connection with the execution and filing of the Annual Report
(Form 10-K) of Belden Inc. for the fiscal year ended December 31, 1999 (the
"Annual Report"), including specifically the power and authority to sign for and
on behalf of the undersigned the name of the undersigned as director of the
Company to the Annual Report or to any amendments thereto filed as part of, as
an exhibit to, or in connection with such Annual Report or amendments; and the
undersigned does hereby ratify and confirm as his own act and deed all that such
attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
16th day of March, 2000.
/s/ Alan E. Reidel
-------------------------------------
Alan E. Reidel
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
BELDEN INC. (the "Company"), does constitute and appoint C. BAKER CUNNINGHAM,
with full power and substitution, his true and lawful attorney and agent, to do
any and all acts and things and to execute any and all instruments which such
attorney and agent may deem necessary or advisable to enable the company to
comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations in connection with the execution and filing of the Annual Report
(Form 10-K) of Belden Inc. for the fiscal year ended December 31, 1999 (the
"Annual Report"), including specifically the power and authority to sign for and
on behalf of the undersigned the name of the undersigned as director of the
Company to the Annual Report or to any amendments thereto filed as part of, as
an exhibit to, or in connection with such Annual Report or amendments; and the
undersigned does hereby ratify and confirm as his own act and deed all that such
attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
15th day of March, 2000.
/s/ Bernard G. Rethore
-------------------------------------
Bernard G. Rethore
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
BELDEN INC. (the "Company"), does constitute and appoint C. BAKER CUNNINGHAM,
with full power and substitution, his true and lawful attorney and agent, to do
any and all acts and things and to execute any and all instruments which such
attorney and agent may deem necessary or advisable to enable the company to
comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations in connection with the execution and filing of the Annual Report
(Form 10-K) of Belden Inc. for the fiscal year ended December 31, 1999 (the
"Annual Report"), including specifically the power and authority to sign for and
on behalf of the undersigned the name of the undersigned as director of the
Company to the Annual Report or to any amendments thereto filed as part of, as
an exhibit to, or in connection with such Annual Report or amendments; and the
undersigned does hereby ratify and confirm as his own act and deed all that such
attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
16th day of March, 2000.
/s/ Joseph R. Coppola
-------------------------------------
Joseph R. Coppola
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
BELDEN INC. (the "Company"), does constitute and appoint C. BAKER CUNNINGHAM,
with full power and substitution, his true and lawful attorney and agent, to do
any and all acts and things and to execute any and all instruments which such
attorney and agent may deem necessary or advisable to enable the company to
comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations in connection with the execution and filing of the Annual Report
(Form 10-K) of Belden Inc. for the fiscal year ended December 31, 1999 (the
"Annual Report"), including specifically the power and authority to sign for and
on behalf of the undersigned the name of the undersigned as director of the
Company to the Annual Report or to any amendments thereto filed as part of, as
an exhibit to, or in connection with such Annual Report or amendments; and the
undersigned does hereby ratify and confirm as his own act and deed all that such
attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
day of , 2000.
- ------ -------------
-------------------------------------
Christopher I. Byrnes
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