<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File Number 1-12280
BELDEN INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 76-0412617
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7701 FORSYTH BOULEVARD, SUITE 800
ST. LOUIS, MISSOURI 63105
(Address of Principal Executive Offices and Zip Code)
(314) 854-8000
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days.
Yes X No
------- -------
Number of shares outstanding of the issuer's Common Stock, par value $.01
per share, as of April 23, 2000: 24,294,940 shares
================================================================================
Exhibit Index on Page 15 Page 1 of 16
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, December 31,
2000 1999
- ---------------------------------------------------------------------------------------------------------------------
(unaudited)
(in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,324 $ 3,874
Receivables 119,392 135,576
Inventories 136,715 125,370
Deferred income taxes 10,878 10,911
Other 3,531 3,559
- ---------------------------------------------------------------------------------------------------------------------
Total current assets 271,840 279,290
Property, plant and equipment, less
accumulated depreciation 333,982 336,817
Intangibles, less accumulated amortization 88,782 89,465
Other assets 2,524 6,892
- ---------------------------------------------------------------------------------------------------------------------
$ 697,128 $ 712,464
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 93,281 $ 115,322
Income taxes payable 6,937 4,464
- ---------------------------------------------------------------------------------------------------------------------
Total current liabilities 100,218 119,786
Long-term debt 280,096 283,817
Postretirement benefits other than pensions 13,144 13,432
Deferred income taxes 35,870 32,880
Other long-term liabilities 16,677 15,022
Stockholders' equity:
Preferred stock - -
Common stock 262 262
Additional paid-in capital 47,756 47,958
Retained earnings 257,802 249,653
Treasury stock, at cost (36,806) (37,296)
Accumulated other comprehensive income (loss) (17,891) (13,050)
- ---------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 251,123 247,527
- ---------------------------------------------------------------------------------------------------------------------
$ 697,128 $ 712,464
=====================================================================================================================
</TABLE>
See accompanying notes.
-2-
<PAGE> 3
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
2000 1999
-----------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C>
Revenues $ 228,009 $159,629
Cost of sales 181,139 124,825
-----------------------------------------------------------------------------------------------------------
Gross profit 46,870 34,804
Selling, general and administrative expenses 27,001 22,382
Amortization of goodwill 495 494
-----------------------------------------------------------------------------------------------------------
Operating earnings 19,374 11,928
Interest expense 4,518 1,919
-----------------------------------------------------------------------------------------------------------
Income from continuing operations before tax 14,856 10,009
Income taxes 5,497 3,778
-----------------------------------------------------------------------------------------------------------
Income from continuing operations 9,359 6,231
Income from discontinued business net of
tax of $54 in 1999 - 89
Loss on disposal of discontinued business
net of tax benefit of $3,123 in 1999 - (5,150)
-----------------------------------------------------------------------------------------------------------
Net income $ 9,359 $ 1,170
===========================================================================================================
Basic earnings per share from continuing operations $ .38 $ .26
Basic earnings per share $ .38 $ .05
===========================================================================================================
Diluted earnings per share from continuing operations $ .38 $ .26
Diluted earnings per share $ .38 $ .05
===========================================================================================================
See accompanying notes.
</TABLE>
-3-
<PAGE> 4
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
2000 1999
- -----------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Income from continuing operations $9,359 $6,231
Adjustments to reconcile income from continuing operations
to net cash provided by operating activities:
Depreciation 7,207 4,934
Amortization 1,579 1,267
Deferred income taxes 3,023 (988)
Changes in operating assets and liabilities(*):
Receivables 13,633 (6,994)
Inventories (13,299) 4,141
Accounts payable and accrued liabilities (20,273) (5,304)
Income taxes payable 2,702 5,254
Other assets and liabilities, net 3,412 (1,768)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 7,343 6,773
Cash flows from investing activities:
Capital expenditures (7,022) (5,122)
- -----------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (7,022) (5,122)
Cash flows from financing activities:
Net borrowings/(paydown) under long-term credit facility and
credit agreements (1,842) (855)
Exercise of stock options 202 471
Cash dividends paid (1,210) (1,217)
- -----------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (2,850) (1,601)
Cash flows from discontinued operations:
Loss from discontinued operations - (5,061)
Adjustments to reconcile loss from discontinued
operations to net cash provided by/(used for)
discontinued operations:
Depreciation and amortization - 695
Loss on disposal and other non cash charges - 8,273
Changes in operating assets and liabilities of discontinued
operations - (6,115)
Capital expenditures - (416)
- -----------------------------------------------------------------------------------------------------------------
Net cash used for discontinued operations - (2,624)
Effect of exchange rate changes on cash and cash equivalents (21) 69
- -----------------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents (2,550) (2,505)
Cash and cash equivalents, beginning of period 3,874 3,291
- -----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $1,324 $ 786
=================================================================================================================
</TABLE>
See accompanying notes.
(*)Net of the effects of exchange rate changes, acquired businesses, and
discontinued operations.
-4-
<PAGE> 5
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Common Stock Treasury Stock Other
------------------ Paid-In Retained ------------------ Comprehensive
(in thousands) Shares Amount Capital Earnings Shares Amount Income (Loss) Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 26,204 $262 $48,482 $218,605 (1,875) ($38,823) ($8,859) $219,667
Net Income 1,170 1,170
Foreign currency translation adjustments (1,817) (1,817)
---------
Comprehensive income (loss) (647)
Issuance of common stock for:
Stock Options (342) 26 813 471
Cash dividends ($.05 per share) (1,217) (1,217)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1999 26,204 $262 $48,140 $218,558 (1,849) ($38,010) ($10,676) $218,274
===================================================================================================================================
Balance at December 31, 1999 26,204 $262 $47,958 $249,653 (1,826) ($37,296) ($13,050) $247,527
Net Income 9,359 9,359
Foreign currency translation adjustments (4,841) (4,841)
---------
Comprehensive income (loss) 4,518
Issuance of common stock for:
Stock Options (202) 26 490 288
Cash dividends ($.05 per share) (1,210) (1,210)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2000 26,204 $262 $47,756 $257,802 (1,810) ($36,806) ($17,891) $251,123
===================================================================================================================================
</TABLE>
-5-
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Consolidated Financial Statements include Belden and all of its
subsidiaries. All significant intercompany accounts and transactions are
eliminated in consolidation. The financial information presented as of any date
other than December 31, 1999 has been prepared from the books and records
without audit. The accompanying Consolidated Financial Statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the information and the footnotes required by generally accepted accounting
principles for complete statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of such financial statements have been included. These
Consolidated Financial Statements should be read in conjunction with the
Consolidated Financial Statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
NOTE 2: SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for income taxes during the first three months of 2000 and 1999
amounted to $561,000 and $446,000, respectively.
Total interest paid, net of amounts capitalized, during the first three months
of 2000 and 1999 amounted to $8,345,000 and $3,450,000, respectively.
NOTE 3: INVENTORIES
<TABLE>
<CAPTION>
MARCH 31, December 31,
2000 1999
- --------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Raw materials $ 27,912 $ 32,984
Work-in-process 21,849 20,495
Finished goods 92,926 77,966
Perishable tooling and supplies 6,569 6,577
- ------------------------------------------------------------------------- -------------------- ---------------------
Total 149,256 138,022
Excess of current standard costs over LIFO costs (7,909) (8,203)
Obsolescence and other reserves (4,632) (4,449)
- ------------------------------------------------------------------------- -------------------- ---------------------
Net inventories $136,715 $125,370
====================================================================================================================
</TABLE>
-6-
<PAGE> 7
NOTE 4: PER SHARE INFORMATION
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------------------
2000 1999
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Numerator: (in thousands, except per share data)
Income from continuing operations $ 9,359 $ 6,231
Net Income $ 9,359 $ 1,170
- --------------------------------------------------------------------------------------------------------------------
Denominator:
Denominator for basic earnings per share - weighted
average shares 24,384 24,342
Effect of dilutive employee stock options 172 48
- --------------------------------------------------------------------------------------------------------------------
Denominator for dilutive earnings per share - adjusted
weighted average shares 24,556 24,390
- --------------------------------------------------------------------------------------------------------------------
Basic earnings per share from continuing operations $ .38 $ .26
Basic earnings per share $ .38 $ .05
- --------------------------------------------------------------------------------------------------------------------
Diluted earnings per share from continuing operations $ .38 $ .26
Diluted earnings per share $ .38 $ .05
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
On May 4, 2000 the Company declared a quarterly cash dividend of $.05 per share
payable on July 5, 2000 to shareholders of record on June 1, 2000.
NOTE 5: INDUSTRY SEGMENTS 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
major communications companies directly and, secondarily, through distributors.
The Communications segment was created in connection with the acquisition of CSI
in June 1999. Therefore, no comparative information is presented below.
THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Corporate &
Electronics Communications Elimination's Consolidated
- -------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUES $175,860 $52,149 - $228,009
INTERSEGMENT REVENUES 800 7,172 (7,972) -
OPERATING EARNINGS 18,030 1,695 (351) 19,374
INTEREST EXPENSE - - 4,518 4,518
INCOME FROM CONTINUING
OPERATIONS, BEFORE TAX 18,030 1,695 (4,869) 14,856
</TABLE>
-7-
<PAGE> 8
Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Corporate &
Electronics Communications Elimination's Consolidated
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Revenues $159,629 - $ - $159,629
Operating earnings 13,145 - (1,217) 11,928
Interest expense - - 1,919 1,919
Income from continuing operations, before
tax 13,145 - (3,136) 10,009
Geographic information
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------------------------------------
2000 1999
- -------------------------------------------------------------------------------------------------------------------------
Percent of Percent of
Country & Region Revenues Revenue Revenues Revenue
- -------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
US & Canada $169,517 74% $107,515 67%
Europe 38,420 17% 34,514 22%
Asia/Pacific 11,581 5% 11,691 7%
Latin America 6,818 3% 4,494 3%
Other 1,673 1% 1,415 1%
- -------------------------------------------------------------------------------------------------------------------------
Total $228,009 100% $159,629 100%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 6: SUBSEQUENT EVENTS
On April 3, 2000, the Company purchased Corning's UK metallic communications
business, located in Blackley, near Manchester, England, by purchasing certain
assets and assuming certain liabilities of Corning. The business primarily
serves the British communications market, and is the sole supplier of metallic
communications cables to British Telecom. In connection with the purchase, the
company expects to record goodwill of between $3 million and $5 million. The
business will be included within the Communications segment.
-8-
<PAGE> 9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF CONTINUING OPERATIONS
AND FINANCIAL CONDITION
THREE MONTHS ENDED MARCH 31, 2000 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1999
Revenues
Revenues from continuing operations for the three months ended March 31, 2000
were up 43% to $228.0 million compared with $159.6 million in the same period
last year. Included in the first quarter of 2000 is approximately $58.1 million
of additional revenues compared to the first quarter of 1999 relating to the
acquisitions of Dorfler Kabelwerk GmbH. (Dorfler), Klosterneuburg, Austria and
Duna Kabel Kft. (Duna), Budapest, Hungary, completed October 25, 1999, and CSI
completed June 28, 1999. The following table shows the components of the 43%
increase in the Company's revenues for the three months ended March 31, 2000
compared with 1999 in each of the Company's four served markets.
<TABLE>
<CAPTION>
% Increase
% of Total In 2000 Revenues
Revenues Compared with 1999
-------- ------------------
<S> <C> <C>
Communications 30% 179%
Networking 22 44
Industrial 30 8
Entertainment & OEM 18 12
</TABLE>
Communications market revenues were up 179% due primarily to the acquisition of
CSI. Contributing further to the gains in this served market has been the
success of new communications business contracts won since the acquisition.
Revenues from internal growth in the communications market were 20% in the first
quarter of 2000 compared to the same period in 1999. A significant component of
this internal growth was the strong demand for the Company's broadband products
across all geographic regions. This growth has been driven by strong demand for
the Company's fiber optic products, wireless satellite products as well as
increased sales of CATV products due to the Company having lower lead times than
certain competitors.
Networking market revenues for the three months ended March 31, 2000 were up 44%
compared to the same period of 1999. Included in this growth are revenues from
CSI as well as the incremental business obtained due to implemented cross
selling and supply strategies for high demand products between the Divisions.
Growth before the impact of acquisitions was 2% from the first quarter of 1999.
This increase is due primarily to high growth rates for the Company's networking
products, offset by unfavorable foreign exchange rate changes from Europe. In
addition, offsetting some of the volume increases from the first quarter of 1999
are lower prices for the Company's networking products in Europe. This lower
pricing environment is being driven by a shift in demand toward braided products
in that region.
Industrial market revenues were up 8% in the first quarter of 2000 over 1999.
This increase is due to the recent strength of the Canadian instrumentation
control cable market as well as an increase in project activity in the
Asia/Pacific region.
-9-
<PAGE> 10
Entertainment & OEM market revenues increased 12% in the first quarter of 2000
compared with 1999. Professional broadcast products are up across all
geographical regions. This increase is being fueled by the digital conversion of
broadcasters, increased large project volume, and the shipping of Sydney Olympic
orders during the quarter. Revenues in Europe are up due to the acquisition of
Duna/Dorfler, offset, in part, by lower sales of OEM products.
U.S. revenues, which represented approximately 70% of total revenues in the
first quarter of 2000, increased 65% from 1999 due to internal growth of 13% and
the remainder due to the acquisition of CSI. Strong demand across all of the
Company's served markets contributed to this increase. European revenues
increased 11% in the first quarter of 2000 compared with 1999 due to the
addition of Duna/Dorfler. Without this acquisition, sales in Europe would be
down 6%. This decrease is due primarily to the unfavorable impact of changes in
exchange rates. Without the unfavorable exchange rate impact from Europe,
internal revenues before acquisition would be up 6%. European and Canadian
revenues represented 17% and 4% of total revenues, respectively, for the first
quarter of 2000. Sales to the Asia/Pacific region, which represented 5% of total
revenues for the first quarter of 2000, were flat compared with 1999. Market
stabilization in the region has driven increased demand for the Company's
products, especially industrial and broadcast products, offset, in part, by
increased competition for communications market business. Sales into export
markets, including the Middle East and Latin America, were up 13% primarily due
to strong demand for networking products and increased broadband projects in the
Latin American markets.
Costs, Expenses and Earnings
The following table sets forth information regarding the components of earnings
from continuing operations for the three months ended March 31, 2000 compared
with the same period in 1999.
<TABLE>
<CAPTION>
Three Months Ended
March 31, % Increase
-------------------------------------- 2000 Compared
2000 1999 With 1999
- -------------------------------------------------------------------------------------------------------------------------
(in thousands, except % data)
<S> <C> <C> <C>
Gross profit $ 46,870 $ 34,804 34.7%
As a % of revenue 20.6% 21.8%
Operating earnings $ 19,374 $11,928 62.4%
As a % of revenue 8.5% 7.5%
Income from continuing operations, before
income taxes $ 14,856 $ 10,009 48.4%
As a % of revenue 6.5% 6.3%
Income from continuing operations $ 9,359 $6,231 50.2%
As a % of revenue 4.1% 3.9%
</TABLE>
Gross profit for the first quarter of 2000 was up 35% from the first quarter of
1999. Of this increase, 44% was the result of additional revenues from the
acquisition of CSI in June 1999. The remaining increase, while including a small
portion related to the acquisition of Duna/Dorfler in October 1999, was
primarily due to the impact of internal growth, higher average Industrial prices
in the US, partially offset by lower average pricing in the networking markets
in the European region. In addition, the Electronics segment manufacturing cost
structure has been mildly improved due to the consolidation of higher cost
-10-
<PAGE> 11
facilities into a new facility in Lancaster County, South Carolina. The decrease
in gross profit as a percent of revenues in 2000 was primarily attributable to
lower average pricing in the networking markets as well as the inclusion of the
Communications segment, which have the effect of lowering the average gross
profit percentage realized. These decreases were partially offset by cost saving
programs put into effect in the fourth quarter of 1998 and fully realized by
late 1999, including certain headcount reductions, material cost reduction
programs and the consolidation of manufacturing into the new lower-cost
facility.
Operating earnings increased during the first quarter of 2000 compared to the
first quarter of 1999 due to higher gross profit. In addition, the impact of
higher leveraged selling, general and administrative expenses on revenues by
both business segments contributed to the increase in operating earnings and
operating earnings as a percent of revenues.
Income before income taxes increased due to higher operating earnings, partially
offset by higher interest costs associated with higher average debt levels and
effective interest rates. Average debt levels are higher primarily due to the
acquisition of CSI on June 28, 1999, and Duna/Dorfler on October 25, 1999.
Average debt during the first quarters of 2000 and 1999 was $290 million and
$170 million, respectively. The Company's average daily interest rate for the
first quarter of 2000 was 6.5% compared to 5.5% for the same period in 1999.
The Company's effective tax rate was 37.0% and 37.8%, for the three months ended
March 31, 2000 and 1999, respectively. This decrease is due to a permanent
reduction in the Company's effective state income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $200 million Credit Agreement with a group of seven banks. The
Credit Agreement is unsecured and expires in November 2001. At March 31, 2000,
the Company had $120 million available under the Credit Agreement. In addition,
as of March 31, 2000, the Company had unsecured, uncommitted arrangements with
five banks under which it may borrow up to $82 million at prevailing interest
rates. At March 31, 2000, the Company had $36 million available under these
arrangements.
The Company had privately placed, unsecured debt of $200 million outstanding as
of March 31, 2000. These private placements were issued in tranches of $75
million, $64 million, $44 million, and $17 million, which will mature in 2009,
2004, 2006 and 2009, with interest rates of 6.92%, 7.60%, 7.74%, and 7.95%,
respectively. The Note Purchase Agreements effecting these private placements
contain 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 the Credit Agreement will provide it with sufficient liquidity to meet its
operating needs and fund its normal dividends and anticipated capital
expenditures.
Working Capital
During the first three months of 2000, operating working capital (defined as
receivables and inventories less payables and accrued liabilities, excluding the
effect of exchange rate changes and business combinations and dispositions) used
cash of $20 million. The change in operating working capital was
-11-
<PAGE> 12
primarily due to investments made for additional inventory to service new
business and the net impact of lower accounts payable and accounts receivable
balances due to timing of payments and collections.
Capital Expenditures
For the first three months in 2000, the Company had capital expenditures of $7.0
million, primarily for modernization and enhancement of machinery and equipment.
The Company plans on spending approximately $40 million during 2000 on these and
similar projects.
FORWARD-LOOKING STATEMENTS
The statements set forth in this Form 10-Q, 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 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 within the Communications
segment; 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 in the Company's
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.
-12-
<PAGE> 13
PART II OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 10.1 Indemnification Agreements entered into between Belden Inc.
and John M. Monter and Whiston Sadler, respectively, dated
May 4, 2000.
Exhibit 27.1: Financial Data Schedule
-13-
<PAGE> 14
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BELDEN INC.
Date: May 8, 2000 By: /s/ C. Baker Cunningham
---------------------------------
C. Baker Cunningham
Chairman of the Board, President
and Chief Executive Officer
Date: May 8, 2000 By: /s/ Paul Schlessman
----------------------------------
Paul Schlessman
Vice President, Finance,
Treasurer and Chief Financial Officer
-14-
<PAGE> 1
EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
AGREEMENT between Belden Inc., a Delaware corporation (the "Company"),
and John M. Monter (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors, officers and representatives the most capable persons available; and
WHEREAS, Indemnitee is a director, officer or representative of the
Company; and
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors, officers and
representatives of public companies in today's environment; and
WHEREAS, the Articles of Incorporation of the Company and the Delaware
General Corporation Law each provide that the indemnification provided therein
shall not be exclusive; and
WHEREAS, in recognition of the Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued
service to the Company in an effective manner, the Company wishes to provide in
this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
(a) Change in Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding
Voting Securities without the prior approval of the Board of Directors,
or (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of 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
<PAGE> 2
merger or consolidation which would result in the Voting Securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
(b) Claim shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted
by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative, investigative or
other.
(c) Expenses shall mean include all costs, expenses (including
attorneys' fees) and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal) or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event (including
all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing).
(d) Judgments shall mean judgments, fines, penalties and amounts
paid in settlement that are paid or payable in connection with any
Claim relating to any Indemnifiable Event (including all interest,
assessments and other charges paid or payable in connection with or in
respect of any of the foregoing).
(e) Indemnifiable Event shall mean any event or occurrence
related to the fact that Indemnitee is or was a director, director
nominee, officer or representative of the Company, or is or was serving
at the request of the Company as a director, trustee, officer,
employee, agent or representative of another corporation, domestic or
foreign, nonprofit or for profit, partnership, joint venture, employee
benefit plan, trust or other enterprise, or by reason of anything done
or not done by Indemnitee in any such capacity.
(f) Reviewing Party shall mean any appropriate person or body
consisting of a member or members of the Company's Board of Directors
or any other person or body appointed by the Board (including the
special, independent counsel referred to in Section 3) who is 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
2
<PAGE> 3
witness or other participant in, or is threatened to be made a party to
or witness or other participant in, a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law against any and all
Expenses and Judgments arising from or relating to such Claim. Except
as otherwise provided in Section 2(b), such indemnification shall be
made as soon as practicable, but in any event not later than thirty
(30) days, after written demand therefor is presented to the Company by
or on behalf of the Indemnitee.
(b) Indemnification and Advance Payment of Expenses. Any and all
Expenses and any and all expenses referred to in Section 2(c) shall be
paid by the Company promptly as they are incurred by Indemnitee (any
such payment of expenses by the Company is hereinafter referred to as
an "Expense Advance"). Indemnitee shall be obligated, and hereby
agrees, to repay the amount of Expenses so paid only to the extent that
it is proved by clear and convincing evidence in a court of competent
jurisdiction that his action or failure to act involved an act or
omission undertaken with deliberate intent to cause injury to the
Company or violate the law or undertaken with reckless disregard for
the best interests of the Company. Indemnitee hereby further agrees to
cooperate reasonably with the Company concerning any Claim.
(c) Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) that are incurred by Indemnitee in connection with any claim
asserted against or action brought by Indemnitee for (i)
indemnification of Expenses or Judgments or advance payment of Expenses
by the Company under this Agreement or under any other agreement, the
Company's articles, statute or rule of law now or hereafter in effect
relating to Claims for Indemnifiable Events and (ii) recovery under any
directors' and officers' liability insurance policy or policies
maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
(d) Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some
or a portion of the Judgments and Expenses arising from or relating to
a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled.
(e) Indemnification of Successful Defense Expenses.
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
3. Reviewing Party Determinations.
(a) General Rules. Notwithstanding the provisions of Section 2,
the obligations of the Company under Section 2(a) shall be subject to
the condition that the Reviewing Party shall not
3
<PAGE> 4
have determined (in a written opinion, in any case in which the
special, independent counsel referred to in Section 4 hereof is
involved) that Indemnitee would not be permitted to be indemnified
under applicable law; provided, however, that if Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable
law shall not be binding until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed) and any such determination by the Reviewing
Party shall be modified, to the extent necessary, to conform to such
final judicial determination.
(b) Selection of Reviewing Party. If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board of
Directors. If there has been such a Change in Control, the Reviewing
Party shall be the special, independent counsel referred to in Section
4 hereof.
(c) Judicial Review. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantially would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents
to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
(d) Burden of Proof. In connection with any determination by the
Reviewing Party 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
4
<PAGE> 5
proceeding, by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular belief
or that a court has determined that indemnification is not permitted by
applicable law.
6. Nonexclusivity. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may now or hereafter have to
indemnification by the Company. More specifically, the Parties intend
that Indemnitee shall be entitled to indemnification to the maximum
extent permitted by any or all of the following:
(a) The fullest benefits provided by the Company's Certificate of
Incorporation and By-Laws or their equivalent of the Company in effect
at the time the Indemnifiable Event occurs or at the time Expenses are
incurred by Indemnitee;
(b) The fullest benefits allowable under Delaware law in effect
at the date hereof or as the same may be amended to the extent that
such benefits are increased thereby;
(c) The fullest benefits allowable under the law of the
jurisdiction under which 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
5
<PAGE> 6
coverage (whether voluntary or involuntary), the Company shall, and
hereby agrees to, stand as a self-insurer with respect to the coverage,
or portion thereof, not retained, and shall indemnify the Indemnitee
against any loss arising out of the reduction in or cancellation of
such insurance coverage.
8. Escrow Fund. As collateral security for its obligations hereunder
(including specifically its indemnity obligations [other than
Judgments] and other obligations pursuant to Sections 2,6 and 7) and
under similar agreements with other directors, officers and
representatives, in the event of a Change in Control, the Company shall
dedicate and maintain, for a period of five years following the Change
of Control, an escrow account in the aggregate of ten million dollars
($10,000,000) by depositing assets or bank letters of credit in escrow
or reserving lines of credit that may be drawn down by an escrow agent
in said amount (the "Escrow Reserve"). The Company shall promptly
following establishment of the Escrow Reserve provide Indemnitee with a
true and complete copy of the agreement relating to the establishment
and operation of the Escrow Reserve, together with such additional
documentation or information with respect to the Escrow Reserve as
Indemnitee may from time to time reasonably request. The Company shall
promptly following establishment of the Escrow Reserve deliver an
executed copy of this Agreement to the escrow agent for the Escrow
Reserve to evidence to that agent that Indemnitee is a beneficiary of
that Escrow Reserve and shall deliver to Indemnitee the escrow agent's
signed receipt evidencing that delivery.
9. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse,
heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of
action, and any claim or cause of action of the Company or its
affiliate shall be extinguished and deemed released unless asserted by
the timely filing of legal action within such two-year period;
provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period
shall govern.
10. Amendments. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions thereof
(whether or not similar) nor shall such waiver constitute a continuing
waiver.
11. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, article or otherwise) of the
6
<PAGE> 7
amounts otherwise indemnifiable hereunder.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company,
spouses, heirs, and personal and legal representatives. This Agreement
shall continue in effect regardless of whether Indemnitee continues to
serve as a director, officer or representative of the Company of or any
other enterprise at the Company's request.
14. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable,
and the remaining provisions shall remain enforceable to the fullest
extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
7
<PAGE> 8
Executed and effective as of this 4th day of May, 2000.
BELDEN INC.
By /s/ C. Baker Cunningham
------------------------------------
Title: Chairman, President and
Chief Executive Officer
Date:
INDEMNITEE:
By: /s/ John M. Monter
------------------------------------
Name: John M. Monter
Date: May 4, 2000
8
<PAGE> 9
INDEMNIFICATION AGREEMENT
AGREEMENT between Belden Inc., a Delaware corporation (the "Company"),
and M. Whitson Sadler (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors, officers and representatives the most capable persons available; and
WHEREAS, Indemnitee is a director, officer or representative of the
Company; and
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors, officers and
representatives of public companies in today's environment; and
WHEREAS, the Articles of Incorporation of the Company and the Delaware
General Corporation Law each provide that the indemnification provided therein
shall not be exclusive; and
WHEREAS, in recognition of the Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued
service to the Company in an effective manner, the Company wishes to provide in
this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
(a) Change in Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding
Voting Securities without the prior approval of the Board of Directors,
or (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of 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
<PAGE> 10
merger or consolidation which would result in the Voting Securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
(b) Claim shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted
by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative, investigative or
other.
(c) Expenses shall mean include all costs, expenses (including
attorneys' fees) and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal) or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event (including
all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing).
(d) Judgments shall mean judgments, fines, penalties and amounts
paid in settlement that are paid or payable in connection with any
Claim relating to any Indemnifiable Event (including all interest,
assessments and other charges paid or payable in connection with or in
respect of any of the foregoing).
(e) Indemnifiable Event shall mean any event or occurrence
related to the fact that Indemnitee is or was a director, director
nominee, officer or representative of the Company, or is or was serving
at the request of the Company as a director, trustee, officer,
employee, agent or representative of another corporation, domestic or
foreign, nonprofit or for profit, partnership, joint venture, employee
benefit plan, trust or other enterprise, or by reason of anything done
or not done by Indemnitee in any such capacity.
(f) Reviewing Party shall mean any appropriate person or body
consisting of a member or members of the Company's Board of Directors
or any other person or body appointed by the Board (including the
special, independent counsel referred to in Section 3) who is 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
2
<PAGE> 11
witness or other participant in, a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law against any and all
Expenses and Judgments arising from or relating to such Claim. Except
as otherwise provided in Section 2(b), such indemnification shall be
made as soon as practicable, but in any event not later than thirty
(30) days, after written demand therefor is presented to the Company by
or on behalf of the Indemnitee.
(b) Indemnification and Advance Payment of Expenses. Any and all
Expenses and any and all expenses referred to in Section 2(c) shall be
paid by the Company promptly as they are incurred by Indemnitee (any
such payment of expenses by the Company is hereinafter referred to as
an "Expense Advance"). Indemnitee shall be obligated, and hereby
agrees, to repay the amount of Expenses so paid only to the extent that
it is proved by clear and convincing evidence in a court of competent
jurisdiction that his action or failure to act involved an act or
omission undertaken with deliberate intent to cause injury to the
Company or violate the law or undertaken with reckless disregard for
the best interests of the Company. Indemnitee hereby further agrees to
cooperate reasonably with the Company concerning any Claim.
(c) Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) that are incurred by Indemnitee in connection with any claim
asserted against or action brought by Indemnitee for (i)
indemnification of Expenses or Judgments or advance payment of Expenses
by the Company under this Agreement or under any other agreement, the
Company's articles, statute or rule of law now or hereafter in effect
relating to Claims for Indemnifiable Events and (ii) recovery under any
directors' and officers' liability insurance policy or policies
maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
(d) Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some
or a portion of the Judgments and Expenses arising from or relating to
a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled.
(e) Indemnification of Successful Defense Expenses.
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
3. Reviewing Party Determinations.
(a) General Rules. Notwithstanding the provisions of Section 2,
the obligations of the Company under Section 2(a) shall be subject to
the condition that the Reviewing Party shall not
3
<PAGE> 12
have determined (in a written opinion, in any case in which the
special, independent counsel referred to in Section 4 hereof is
involved) that Indemnitee would not be permitted to be indemnified
under applicable law; provided, however, that if Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable
law shall not be binding until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed) and any such determination by the Reviewing
Party shall be modified, to the extent necessary, to conform to such
final judicial determination.
(b) Selection of Reviewing Party. If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board of
Directors. If there has been such a Change in Control, the Reviewing
Party shall be the special, independent counsel referred to in Section
4 hereof.
(c) Judicial Review. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantially would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents
to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
(d) Burden of Proof. In connection with any determination by the
Reviewing Party 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
4
<PAGE> 13
proceeding, by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular belief
or that a court has determined that indemnification is not permitted by
applicable law.
6. Nonexclusivity. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may now or hereafter have to
indemnification by the Company. More specifically, the Parties intend
that Indemnitee shall be entitled to indemnification to the maximum
extent permitted by any or all of the following:
(a) The fullest benefits provided by the Company's Certificate of
Incorporation and By-Laws or their equivalent of the Company in effect
at the time the Indemnifiable Event occurs or at the time Expenses are
incurred by Indemnitee;
(b) The fullest benefits allowable under Delaware law in effect
at the date hereof or as the same may be amended to the extent that
such benefits are increased thereby;
(c) The fullest benefits allowable under the law of the
jurisdiction under which 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
5
<PAGE> 14
coverage. However, in the event of any reduction in (or cancellation
of) such insurance coverage (whether voluntary or involuntary), the
Company shall, and hereby agrees to, stand as a self-insurer with
respect to the coverage, or portion thereof, not retained, and shall
indemnify the Indemnitee against any loss arising out of the reduction
in or cancellation of such insurance coverage.
8. Escrow Fund. As collateral security for its obligations hereunder
(including specifically its indemnity obligations [other than
Judgments] and other obligations pursuant to Sections 2,6 and 7) and
under similar agreements with other directors, officers and
representatives, in the event of a Change in Control, the Company
shall dedicate and maintain, for a period of five years following the
Change of Control, an escrow account in the aggregate of ten million
dollars ($10,000,000) by depositing assets or bank letters of credit
in escrow or reserving lines of credit that may be drawn down by an
escrow agent in said amount (the "Escrow Reserve"). The Company shall
promptly following establishment of the Escrow Reserve provide
Indemnitee with a true and complete copy of the agreement relating to
the establishment and operation of the Escrow Reserve, together with
such additional documentation or information with respect to the
Escrow Reserve as Indemnitee may from time to time reasonably request.
The Company shall promptly following establishment of the Escrow
Reserve deliver an executed copy of this Agreement to the escrow agent
for the Escrow Reserve to evidence to that agent that Indemnitee is a
beneficiary of that Escrow Reserve and shall deliver to Indemnitee the
escrow agent's signed receipt evidencing that delivery.
9. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse,
heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of
action, and any claim or cause of action of the Company or its
affiliate shall be extinguished and deemed released unless asserted by
the timely filing of legal action within such two-year period;
provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period
shall govern.
10. Amendments. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions thereof
(whether or not similar) nor shall such waiver constitute a continuing
waiver.
11. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, article or otherwise) of the
6
<PAGE> 15
amounts otherwise indemnifiable hereunder.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company,
spouses, heirs, and personal and legal representatives. This Agreement
shall continue in effect regardless of whether Indemnitee continues to
serve as a director, officer or representative of the Company of or any
other enterprise at the Company's request.
14. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable,
and the remaining provisions shall remain enforceable to the fullest
extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
7
<PAGE> 16
Executed and effective as of this 4th day of May, 2000.
BELDEN INC.
By /s/ C. Baker Cunningham
-------------------------------------------
Title: Chairman, President and
Chief Executive Officer
Date:
INDEMNITEE:
By: /s/ M. Whitson Sadler
------------------------------------------
Name: M. Whitson Sadler
Date: May 4, 2000
8
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<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
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<ALLOWANCES> 1,596
<INVENTORY> 136,715
<CURRENT-ASSETS> 14,409
<PP&E> 520,727
<DEPRECIATION> 186,745
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0
0
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<TOTAL-LIABILITY-AND-EQUITY> 697,128
<SALES> 228,009
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