<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 6, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
CABLE DESIGN TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3601505
(State of or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
FOSTER PLAZA 7
661 ANDERSEN DRIVE
PITTSBURGH, PENNSYLVANIA 15220
(Address of Principal Executive Offices) (zip code)
-----------------------
CONSULTING AGREEMENT WITH MICHAEL F.O. HARRIS
CONSULTING AGREEMENT WITH GLENN KALNASY
(Full title of plans)
-----------------------
PAUL M. OLSON
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
FOSTER PLAZA 7
661 ANDERSEN DRIVE
PITTSBURGH, PENNSYLVANIA 15220
(Name and address of agent for service)
(412) 937-2300
(Telephone number, including area code, of agent for service)
Copy to:
LANCE C. BALK
KIRKLAND & ELLIS
CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
Calculation of Registration Fee
<TABLE>
<CAPTION>
======================================================================================================
Title of securities to Amount to Proposed Proposed maximum Amount of
be registered be maximum aggregate offering price Registration Fee
registered price per share
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 181,848 $0.67 $121,838.16 $38.14
value $.01 per share
======================================================================================================
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from this Registration Statement in accordance with Rule 428 under
the Securities Act of 1933 (the "Securities Act") and the Note to Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of certain documents by reference.
The following documents filed with the Securities and Exchange Commission are
incorporated herein by reference:
(a)(1) Cable Design Technologies Corporation's (the "Registrant") Annual
Report on Form 10-K for the fiscal year ended July 31, 1996;
(a)(2) The Registrant's Registration Statement on Form S-3 ("Form S-3")
originally filed on January 23, 1996 (File No. 333-00554), as amended by
Amendment No. 1 filed on February 6, 1996 and Post-Effective No. 1 filed on
February 28, 1996, containing a prospectus filed on February 29, 1996 pursuant
to Rule 424(b) under the Securities Act.
(b) The description of the Registrant's Common Stock contained in Form S-3
under the caption "Description of Capital Stock."
All reports and other documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Registration Statement, but prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
1
<PAGE>
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware permits
indemnification of, and certain expense advancements to, directors, employees
and agents of corporations under certain conditions and subject to certain
limitations. ARTICLE NINE of the Amended and Restated Certificate of
Incorporation (the "Certificate") of the Registrant provides that the personal
liability of the directors of the Registrant is eliminated to the fullest extent
permitted by Paragraph (7) of Subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware, as the same may be amended or
supplemented.
ARTICLE V of the By-Laws of the Registrant provides as follows:
ARTICLE V
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 1. Nature of Indemnity. Each person who was or is made a party or
--------- -------------------
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent which it is empowered to
do so by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment) against all expense, liability and loss (including attorneys'
fees actually and reasonably incurred by such person in connection with such
proceeding and such indemnification shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that, except as provided
in Section 2 hereof, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only if
such proceeding was authorized by the Board of Directors of the corporation.
The right to indemnification conferred in this Article V shall be a contract
right and, subject to Sections 2 and 5 hereof, shall include the right to be
paid by the corporation the expenses incurred in defending any such proceeding
in advance of its final disposition. The corporation may, by action of its
Board of Directors, provide indemnification to employees and agents of the
corporation with the same scope and effect as the foregoing indemnification of
directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
---------- -------------------------------------------------------
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance or expenses under Section 5 of this Article V shall be
made promptly, and in any event within 30 days, upon the written request of the
director or officer. If a determination by the corporation that the director or
officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within sixty days to a written request for
indemnity, the corporation shall be deemed to have approved the request. If the
corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within 30 days, the right to indemnification or advances as granted by
this Article V shall be enforceable by the director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the corporation. It
shall be a defense to any such action (other than an action
2
<PAGE>
brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any, has
been tendered to the corporation) that the claimant has not met the standards of
conduct which make it permissible under the General Corporation Law of the State
of Delaware for the corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the corporation. Neither
the failure of the corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
--------- ---------------------
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
--------- ---------
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
--------- --------
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the Board of Directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and condition, if any, as the Board of Directors deems
appropriate.
Section 6. Employee and Agents. Persons who are not covered by the
---------- -------------------
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the Board of Directors.
Section 7. Contract Rights. The provisions of this Article V shall be
--------- ---------------
deemed to a contract right between the corporation and each director or officer
who serves in any such capacity at any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, any repeal or modification of this Article V
or any such law shall not affect any rights or obligations then existing with
respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
--------- -----------------------
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including
3
<PAGE>
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
this Article V with respect to the resulting or surviving corporation as he or
she would have with respect to such constituent corporation if its separate
existence had continued.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Reference is made to the Exhibit Index that immediately precedes the
exhibits filed with this Registration Statement.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of any employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as the indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore
4
<PAGE>
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of express expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Pittsburgh, State of Pennsylvania, on this 6th day of December, 1996.
CABLE DESIGN TECHNOLOGIES CORPORATION
By: /s/Paul M. Olson
----------------------------------------
Paul M. Olson
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
hereby constitutes and appoints Paul M. Olson and Kenneth O. Hale his true and
lawful attorney-in-fact and agent, with full power of substitution and
revocation, for him and in his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorney-in-fact and agent, full power and
authority to do and perform such, each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as such person might
or could do in person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act this Registration Statement
and the foregoing Power of Attorney have been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/Bryan C. Cressey Chairman of the Board, Director December 6, 1996
- --------------------------
Bryan C. Cressey
/s/Paul M. Olson Director, President, Chief Executive Officer December 6, 1996
- --------------------------
Paul M. Olson (Principal Executive Officer)
/s/Kenneth O. Hale Vice President, Chief Financial Officer, Secretary December 6, 1996
- --------------------------
Kenneth O. Hale (Principal Financial and Principal Accounting Officer)
/s/Bernard J. Bannan Director December 6, 1996
- --------------------------
Bernard J. Bannan
/s/Myron S. Gelbach, Jr. Director December 6, 1996
- --------------------------
Myron S. Gelbach, Jr.
/s/Michael F.O. Harris Director December 6, 1996
- --------------------------
Michael F.O. Harris
/s/Glenn Kalnasy Director December 6, 1996
- --------------------------
Glenn Kalnasy
/s/Richard C. Tuttle Director December 6, 1996
- --------------------------
Richard C. Tuttle
/s/Paul M. Olson Attorney-in-Fact December 6, 1996
- --------------------------
Paul M. Olson
/s/Kenneth O. Hale Attorney-in-Fact December 6, 1996
- --------------------------
Kenneth O. Hale
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Consulting Agreement dated July 14, 1988, among Intercole Holding
Corporation (subsequently renamed Cable Design Technologies
Corporation), Intercole Inc. and Michael F.O. Harris
4.2 Consulting Agreement dated July 14, 1988, among Intercole Holding
Corporation (subsequently renamed Cable Design Technologies
Corporation), Intercole Inc. and Glenn Kalnasy
5.1 Opinion and consent of Kirkland & Ellis, special counsel to the Registrant.
15 Not Applicable.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).
24.1 Powers of Attorney (included in signature page).
99 Not Applicable.
</TABLE>
I-1
<PAGE>
EXHIBIT 4.1
CONSULTING AGREEMENT
--------------------
This Agreement is made as of July 14, 1988, by and among Intercole
Holding Corporation, a Delaware corporation ("Holding"), Intercole Inc., a
Washington corporation (the "Company"), and Michael F.O. Harris (the
"Consultant").
Holding, the Company and the Consultant desire to enter into an
agreement pursuant to which the Consultant will provide consulting services to
the Company and will purchase certain shares of Holding's Class A Common Stock,
par value $.Ol per share (the "Stock"). In addition, Holding shall grant the
Consultant certain options to acquire shares of Stock as provided herein (the
"Options"). All of the shares of Stock issued hereunder and all shares of Stock
issued upon exercise of the Options are referred to herein as "Consultant
Stock". The execution and delivery of this Agreement by Holding, the Company
and the Consultant are conditions to the purchase of the Company's securities
by Golder, Thoma, Cressey Fund II ("GTC"), The Prudential Insurance Company of
America and Pruco Life Insurance Company (the "Investors"), pursuant to the
Investors Subscription and Stockholders Agreement of even date herewith.
Certain provisions of this Agreement are for the benefit of the Investors and
will be enforceable by the Investors. Capitalized terms not otherwise defined
herein have the meaning set forth in paragraph 20 hereof.
The parties hereto agree as follows:
CONSULTING TERMS
1. Consulting Services. In consideration of the right to purchase the
-------------------
Stock hereunder and the granting of the Options, the Consultant hereby agrees to
serve as an independent contractor, and not as an employee, to render consulting
services to the Company as hereinafter provided for a period commencing on the
date of this Agreement and ending on the date on which this Agreement is
terminated pursuant to paragraph 4 below (the "Consulting Period"). During the
Consulting Period, the Consultant will render such consulting services to the
Company in connection with the Company's business as the Company from time to
time requests. The Consultant shall have no authority to act, incur expenses or
other obligations or make any authority to act, incur expenses or other
obligations or make any commitments on behalf of the Company or otherwise bind
the Company without the prior specific written approval of the Company.
2. Board Membership. During the Consulting Period, the Consultant
----------------
will serve on Holding's board of directors (the "Board") as requested by Holding
and its shareholders.
<PAGE>
3. Confidential Information. The Consultant acknowledges that the
------------------------
information, observations and data obtained by him during the course of his
performance under this Agreement concerning the business or affairs of the
Company and Holding and their respective affiliates are the property of the
Company. Therefore, the Consultant agrees that he will not disclose to any
unauthorized person or use for his own account any of such information,
observations or data without Holding's written consent, unless and to the extent
that the aforementioned matters become generally known to and available for use
by the public other than as a result of the Consultant's acts or omissions to
act.
4. Termination of Consulting Period. Holding or the Consultant may
--------------------------------
terminate the Consulting Period by providing written notice thereof to the other
party with written notice at least 60 days prior to the effective time of the
termination; provided however that the Consulting Period shall not terminate
until the termination of the Northern Consulting Agreement dated the date
hereof.
CONSULTANT STOCK AND OPTIONS
5. Purchase and Sale of Stock and Grant of Options.
-----------------------------------------------
(a) On the date hereof, the Consultant will purchase, and Holding will
sell, 92,749 shares of Stock at a price per share of $.727. The Company will
deliver to the Consultant a certificate or certificates representing such shares
of Consultant Stock, and, upon the receipt of such certificates), Consultant
will deliver to the Company a check (or a promissory note on terms and
conditions satisfactory to Holding) in the amount of the full purchase price
therefore.
(b) The Company hereby grants to the Consultant the Option to purchase
from Holding upon the terms and subject to the conditions hereinafter set forth
up to 107,251 shares of the Stock (the "Option Shares") at a purchase price of
$.727 per share.
(c) The Consultant represents and warrants that the Consultant Stock
and Option to be acquired by him pursuant to this Agreement will be acquired for
his own account and not with a view to, or present intention of, distribution
thereof in violation of the Securities Act of 1933, as amended (the "1933 Act"),
and will not be disposed of in contravention of the 1933 Act.
(d) The Consultant acknowledges that he is able to bear the economic
risk of his investment in the Consultant Stock for an indefinite period of time
because the Consultant Stock,
2
<PAGE>
when issued, will not have been registered under the 1933 Act and, therefore,
cannot be sold unless subsequently registered under the 1933 Act or an exemption
from such registration is available.
(e) The Consultant represents and warrants that he has had an
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of Consultant Stock and Option and has had full
access to such other information concerning Holding as he has requested.
(f) The Consultant agrees that within 30 days after he purchases any
Consultant Stock from Holding, he will make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code and
the regulations promulgated thereunder in the form attached hereto as Appendix
(g) The Consultant acknowledges that the Consultant Stock and Option
to be issued hereunder are being issued in connection with the Consultant's
compensation for the consulting services to be rendered hereunder and but for
Consultant's agreement to provide services hereunder, the Executive would not be
permitted to purchase the Stock hereunder. This Agreement is a written contract
relating to the compensation of the Consultant.
6. Vesting of Option Terms.
-----------------------
(a) The Option shall become exercisable for Option Shares in
installments. The portion of the total number of Option Shares which are
exercisable shall be determined as follows:
<TABLE>
<CAPTION>
Cumulative Percentage
of Total Number of
Shares of Common
Stock For Which Option
Date is Exercisable
---- --------------
<S> <C>
Prior to the first anniversary hereof 0%
On and after the first anniversary 20%
hereof but prior to the second
anniversary hereof
On and after the second anniversary 40%
hereof but prior to the third
anniversary hereof
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Cumulative Percentage
of Total Number of
Shares of Common
Stock For Which Option
Date is Exercisable
---- --------------
<S> <C>
On and after the third anniversary
hereof but prior to the fourth
anniversary hereof 60%
On and after the fourth anniversary 80%
hereof but prior to the fifth
anniversary hereof
On and after the fifth anniversary 100%
hereof
</TABLE>
As of any given date, all Option Shares which the Consultant has become eligible
to purchase are referred to as "Vested Option Shares" and all Option Shares
which the Consultant has not yet become eligible to purchase are referred to as
"Unvested Option Shares." Notwithstanding the foregoing, no Unvested Option
Shares shall become Vested Option Shares after the date on which the Consulting
Period has terminated for whatever reason or no reason (including, without
limitation, death, disability or termination with or without cause) (the
"Termination Date"); provided that after the first anniversary hereof if the
Termination Date occurs on any date other than an anniversary date hereof, the
percentage of Option Shares treated as Vested Option Shares will be the
percentage set forth for the previous anniversary date increased by a pro rata
share of the next percentage change based upon the number of days elapsed
between the Termination Date and the previous anniversary date; and further
provided that all Unvested Option Shares shall become Vested Option Shares
immediately prior to, but contingent upon, the consummation of a Sale of Holding
(as such term is defined in paragraph (c) below).
(b) The Consultant (or such Optionee's estate or legal representative)
may only exercise the Option with respect to the Vested Option Shares until the
first to occur of (i) the tenth anniversary of the date hereof, (ii) the
consummation of a Sale of Holding, or (iii) 10 days after the Termination Date.
Neither the Consultant nor such Consultant's estate or legal representative may
exercise the Options with respect to Unvested Qualified Options and all of
Optionee's rights with respect to the Unvested Options shall terminate as of the
Termination Date.
(c) As used herein, the term "Sale of Holding" means (i) any sale of
all or substantially all of the Holding's consolidated assets in any single
transaction or series of
4
<PAGE>
related transactions, (ii) any merger or consolidation to which Holding is a
party if, after giving effect to such merger or consolidation, persons who were
stockholders of Holding immediately prior to such merger or consolidation cease
to own capital stock of the surviving or resulting corporation with the ordinary
voting power to elect a majority of the board of directors of the surviving or
resulting corporation, (iii) the consummation of a registered public offering of
the Stock pursuant to a registration statement which has become effective under
the Securities Act of 1933, as amended, at a price per share of at least $3.65
(as such number is equitably adjusted for stock splits, stock dividends and
other recapitalizations affecting the Stock) and the net proceeds of which offer
to Holding are at least $15 million, or (iv) any sale of more than 70% of the
shares of Stock originally issued to GTC pursuant to the Stock Purchase
Agreement dated the date hereof between the Company and CTC in any single
transaction or series of related transactions.
7. Other Conditions and Limitations. The Option shall not be
--------------------------------
transferable by the Consultant otherwise than by will or by the laws of descent
and distribution, and the Option shall be exercisable during the lifetime of the
Consultant by the Consultant only.
8. Exercise of Option. Written notice of the exercise of any Option
------------------
or any portion thereof shall be given to Holding at its principal office
accompanied by the Option price payable by check.
9. Stock Dividends; Stock Splits; Stock Combination;
-------------------------------------------------
Recapitalizations. Appropriate adjustment (in number, kind and price) shall be
- -----------------
made in the Option Shares to give effect to any stock dividends, stock splits,
stock combinations, recapitalizations and other similar changes in the capital
structure of Holding after the grant of the Option.
10. Merger; Sale of Assets; Dissolution. In the event of a change in
-----------------------------------
the Stock resulting from a merger or consolidation to which Holding is a party
which does not result in a Sale of Holding, the number and kind of shares then
subject to the Option and the price per share thereof shall be appropriately
adjusted in such manner as the Board or the Compensation Committee thereof may
deem equitable to prevent substantial dilution or enlargement of the rights
available or granted hereunder.
11. Miscellaneous. The Consultant shall have no rights as a
-------------
stockholder with respect to the shares subject to the Option until the exercise
of the Option and the issuance of a stock certificate for the shares with
respect to which the Option shall have been exercised. Nothing herein contained
shall impose
5
<PAGE>
any obligation on Holding or any of its subsidiaries or the Consultant with
respect to the Consultant's continued employment by Holding or any of its
subsidiaries or to seek a Sale of Holding. Nothing herein contained shall
impose any obligation upon the Consultant to exercise the Option. Holding makes
no representation as to the tax treatment to the Consultant upon receipt or
exercise of the Option or sale or other disposition of the shares covered by
such Option.
STOCK TERMS
12. Repurchase Option.
-----------------
(a) Upon termination of the Consulting Period for any reason or no
reason (including, without limitation, death, disability or termination with or
without cause), the Consultant Stock, whether held by the Consultant or one or
more transferees, will be subject to repurchase by Holding pursuant to the terms
and conditions set forth in this paragraph 12 (the "Repurchase Option").
(b) On or after the Termination Date but prior to the 180th day
following the Termination Date, Holding may elect to purchase all or any portion
of the Consultant Stock at a price per share equal to 150% of the sum of (i)
such share's Original Cost and (ii) such share's pro rata portion (on a fully-
diluted basis determined as of the date of purchase, assuming the-exercise and
conversion of all outstanding options, warrants and convertible securities and
ignoring any restrictions on the convertibility or exercise of such options,
warrants and convertible securities) of the difference between (A) Holding's
cumulative, consolidated net earnings from August 1, 1988 to the end of
Holding's fiscal quarter immediately preceding the date of repurchase as
reflected on Holding's normally prepared financial statements (audited, if
available) and (B) any dividends paid or accrued on any preferred stock of any
Subsidiary or any common stock of Holding. Holding's normally prepared
financial statement will be prepared in accordance with generally accepted
accounting principles consistently applied except for differences concurred in
by Holding's auditors.
(c) The Board may elect to exercise, pursuant to paragraph 12(b),
Holding's right to purchase all or any portion of the shares of Consultant Stock
by delivering written notice (the "Repurchase Notice") to the holder or holders
of Consultant Stock. The Repurchase Notice will set forth the number of shares
of Consultant Stock to be acquired from such holder, the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction. The number of shares to be repurchased by Holding shall
first be satisfied to the extent possible from the shares of Consultant Stock
held by the
6
<PAGE>
Consultant at the time of delivery of the Repurchase Notice. if the number of
shares of Consultant Stock then held by Consultant is less than the total number
of shares of Consultant Stock Holding has elected to purchase, then Holding
shall purchase the remaining shares elected to be purchased from the other
holder(s) of Consultant Stock, pro rata according to the number of shares of
Consultant Stock held by such other holder(s) at the time of delivery of such
Repurchase Notice (determined as nearly as practicable to the nearest share).
(d) If for any reason Holding does not elect to purchase all of the
shares of Consultant Stock pursuant to the Repurchase Option, the Investors
shall be entitled to exercise Holding's Repurchase option in the manner set
forth in paragraph 12(c) for the shares of Consultant Stock Holding has not
elected to purchase (the "Available Shares"). As soon as practicable after
Holding has determined that there will be Available Shares, but in any event
within 160 days after the Termination Date, Holding shall deliver written notice
(the "Option Notice") to the Investors setting forth the number of Available
Shares and the price for each Available Share. Each Investor may elect to
purchase its pro rata share of the Available Shares by delivering written notice
to Holding within 25 days after receipt of the Option Notice from Holding. As
soon as practicable, and in any event within 5 days, after the expiration of
such 25-day period, Holding shall notify each holder of Consultant Stock as to
the number of shares being purchased from such holder by the Investors (the
"Supplemental Repurchase Notice"). At the time Holding delivers the
Supplemental Repurchase Notice to the holder(s) of Consultant Stock, each
Investor shall also receive written notice from Holding setting forth the number
of shares it is entitled to purchase, the aggregate purchase price and the time
and place of the closing of the transaction. For the purpose of this paragraph
12(d), each Investor's "pro rata share" will be equal to the percentage
determined by dividing (i) the number of shares of Stock (on a fully-diluted
basis assuming the exercise or conversion of any options, warrants ' or
convertible securities held by such Investor regardless of any restrictions on
such exercise or conversion) held by such Investor by (ii) the total number of
shares of Stock (on a fully diluted basis) held by the Investors electing to
purchase Available Shares.
(e) The Closing of the purchase transactions contemplated by this
paragraph 12 shall take place on the date designated by Holding in the
Repurchase Notice (or the Supplemental Repurchase Notice, as the case may be),
which date shall not be more than 30 days and not less than 10 days after the
delivery of such notice. Holding will pay for the Consultant Stock to be
purchased pursuant to the Repurchase Option by check payable to the holder of
such Consultant Stock. Holding will be entitled to
7
<PAGE>
receive customary representations and warranties from the seller regarding the
sale of the Consultant Stock.
(f) For the purposes Of this paragraph 12, Consultant Stock will
include all shares of Stock issuable upon exercise or conversion of any options,
warrants or convertible securities then held by the Consultant, ignoring any
restrictions on the convertibility or exercise of such options, warrants or
convertible securities; provided that the price at which the Repurchase Option
may be exercised with respect to any such shares of Consultant Stock shall be
less any consideration payable by the Consultant if such options, warrants or
convertible securities were then exercised or converted.
13. Restrictions on Transfer.
------------------------
(a) The Consultant will not sell, pledge or otherwise transfer any
interest in any shares of Consultant Stock except (i) pursuant to the provisions
of (A) paragraph 12 or 15 hereof (an "Exempt Transfer") or (B) paragraph 13(c)
below or (ii) after the 180th day following the Termination Date (with respect
to any shares of Consultant Stock for which the Repurchase Option is not
exercised), subject to the provisions of paragraph 13(b) below.
(b) At least 60 days prior to making any transfer permitted by clause
(ii) of paragraph 13(a) above, the Consultant (or Consultant's transferees) will
deliver a written notice (the "Sale Notice") to Holding and the Investor. The
Sale Notice will disclose in reasonable detail the identity of the prospective
transferees) and the terms and conditions of the proposed transfer. Consultant
(and Consultant's transferees) agrees not to consummate any such transfer until
60 days after the Sale Notice has been delivered to Holding and the Investor,
unless either Holding or the Investor has exercised its right of first refusal
prior to the expiration of such 60-day period. (The date of the first to occur
of such events is referred to herein as the Authorization Date.)
(c) Holding may elect to purchase all (but not less than all) of the
Consultant Stock to be transferred upon the same terms and conditions as those
set forth in the Sale Notice by delivering a written notice of such election to
the Consultant within 30 days after the receipt of the Sale Notice by Holding.
If Holding has not elected to purchase all of the Consultant Stock to be
transferred, the Investors may elect to purchase all (but not less than all) of
the Consultant Stock to be transferred upon the same terms and conditions as
those set forth in the Sale Notice by delivering a written notice of such
election to the Consultant within 60 days after the receipt of the Sale Notice
by the Investors. If more than one Investor elects to purchase the
8
<PAGE>
Consultant Stock pursuant to this paragraph 13(b), each Investor shall have the
right to purchase its pro rata share of Consultant Stock to be transferred. For
the purpose of this paragraph 13(b), each Investor's "pro rata share" will be
equal to the percentage determined by dividing (i) the number of shares of Stock
(on a fully-diluted basis assuming the exercise or conversion of any options,
warrants or convertible securities held by such Investor regardless of any
restrictions on such exercise or conversion) held by such Investor by (ii) the
total number of shares of Stock (on a fully diluted basis) held by the Investors
electing to purchase Consultant Stock to be transferred herein. Any person who
has exercised its right to acquire Consultant Stock pursuant to this paragraph
13(b) shall be given up to 60 days (after it has been determined that such
person has such right) to consummate the purchase and sale of Consultant Stock.
If neither Holding nor the Investors have elected to purchase all of the
Consultant Stock specified in the Sale Notice, Consultant may transfer the
Consultant Stock specified in the Sale Notice at a price and on terms no more
favorable to the transferees) thereof than specified in the Sale Notice during
the 60-day period immediately following the Authorization Date. Any shares of
Consultant Stock not transferred within such 60-day period will be subject to
the provisions of this paragraph 13(b) upon subsequent transfer.
(d) The Consultant may transfer Consultant Stock (i) pursuant to
applicable laws of descent and distribution or (ii) among Consultant's family
group; provided that the restrictions contained in this Agreement will continue
to be applicable to the Consultant Stock after any such transfer and the
transferees of such Consultant Stock have agreed in writing to be bound by the
provisions of this Agreement. Consultant's "family group" means Consultant's
spouse and descendants (whether natural or adopted) and any trust solely for the
benefit of Consultant and/or Consultant's spouse and/or descendants. At least
30 days prior to making any transfer of Consultant Stock pursuant to this
paragraph 13(c), Consultant will deliver a written notice to Holding which will
describe in reasonable detail the identity of the prospective transferees).
14. Additional Restrictions on Transfer.
-----------------------------------
(a) The certificates representing the Consultant Stock will bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON _________ __, HAVE NOT BEEN REGISTERED UNDER SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
9
<PAGE>
ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER
AGREEMENTS SET FORTH IN A CONSULTING AGREEMENT BY AND BETWEEN THE
ISSUER (THE "COMPANY") AND A CERTAIN CONSULTANT OF THE COMPANY DATED
AS OF JULY 14, 1988, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER
HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Consultant Stock may sell, transfer or dispose of any
Consultant Stock (except pursuant to an effective registration statement under
the Securities Act of 1933) without first delivering to Holding an opinion of
counsel reasonably acceptable in form and substance to Holding that registra-
tion under the Securities Act of 1933 is not required in connection with such
transfer.
(c) Each holder of Consultant Stock agrees not to effect any public
sale or distribution of any equity securities of Holding, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the 90 days after the effectiveness of any public
offering of Holding's securities registered under the Securities Act of 1933, as
amended, except pursuant to such underwritten registration if otherwise
permitted.
15. Sale of Holding.
---------------
(a) If the Board and the holders of a majority of the Stock then
outstanding approve the Sale of Holding to an independent third party (the
"Approved Sale"), the holders of Consultant Stock will consent to and raise no
objections against the Approved Sale of Holding, and if the Approved Sale of
Holding is structured as a sale of stock, the holders of Consultant Stock will
agree to sell all of their shares of Consultant Stock and rights to acquire
shares of Holding's capital stock on the terms and conditions approved by the
Board and the holders of a majority of the Stock then outstanding. The holders
of Consultant Stock will take all necessary and desirable actions to effect the
consummation of the Approved Sale. For purposes of this paragraph 15, an
"independent third party" is any person who does not own in excess of 5% of the
Stock on a fully-diluted basis, who is not controlling, controlled by or under
common control with any such 5% owner of the Stock and who is not the spouse,
ancestor or descendant (by birth or adoption) of any such 5% owner of the Stock.
10
<PAGE>
(b) The obligations of the holders of Consultant Stock with respect to
the Approved Sale of Holding are subject to the satisfaction of the condition
that upon the consummation of the Approved Sale, all of the holders of Stock
will receive the same form and amount of consideration per share of Stock, or if
any holders are given an option as to the form and amount of consideration to
be received, all holders will be given the same option.
(c) If Holding or the holders of Holding's securities enter into any
negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation
or other reorganization), the holders of Consultant Stock will, at the request
of Holding, appoint a purchaser representative (as such term is defined in Rule
501) reasonably acceptable to Holding. If any holder of Consultant Stock
appoints the purchaser representative designated by Holding, Holding will pay
the fees of such purchaser representative, but if any holder of Consultant Stock
declines to appoint the purchaser representative designated by Holding, such
holder will appoint another purchaser representative (reasonably acceptable to
Holding), and such holder will be responsible for the fees of the purchaser
representative so appointed.
16. Definition of Consultant Stock. For all purposes of this
------------------------------
Agreement, Consultant Stock will continue to be Consultant Stock in the hands
of any holder other than Consultant (except for Holding, the Investor and
purchasers pursuant to an offering registered with the Securities Exchange
Commission or purchasers pursuant to a Rule 144 transaction), and each such
other holder of Consultant Stock will succeed to all rights and obligations
attributable to the Consultant as a holder of Consultant Stock hereunder.
Consultant Stock will also include shares of Holding'B capital stock issued with
respect to shares of Consultant Stock by way of a stock split, stock dividend or
other recapitalization.
17. Termination of Provisions Relating to Consultant Stock. The
------------------------------------------------------
provisions of paragraphs 12, 13 and 15 hereof will terminate upon the first to
occur of (i) the date on which Holding has consummated a registered public
offering of the Stock pursuant to a registration statement which has become
effective under the Securities Act of 1933, as amended, at a price per share of
at least $3.65 (as such number is equitably adjusted for any stock splits, stock
dividends or other recapitalizations affecting Holding's capital stock) and the
net proceeds of which offer to Holding are at least $15 million, (ii) any merger
or consolidation to which Holding is a party if, after giving effect to such
merger or consolidation, persons who were stockholders of
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<PAGE>
Holding immediately prior to such merger or consolidation cease to own capital
stock of the surviving or resulting corporation with the ordinary voting power
to elect a majority of the board of directors of the surviving or resulting
corporation, (iii) a sale of all, or substantially all, of Holding's assets or
capital stock in any transaction or series of related transactions, or (iv) any
sale of more than 70% of the shares of Stock originally issued to GTC pursuant
to the Stock Purchase Agreement dated the date hereof between the Company and
GTC in any single transaction or series of related transactions.
18. Confidential Information. Consultant acknowledges that the
------------------------
information, observations and data obtained by him during the course of the
Consulting Period concerning the business or affairs of Holding and its
affiliates are the property of Holding. Therefore, Consultant agrees that he
will not disclose to any unauthorized person or use for his own account any of
such information, observations or data without the Board's written consent,
unless and to the extent that the aforementioned matters become generally known
to and available for use by the public other than as a result of the
Consultant's acts or omissions to act.
19. Notices. Any notice provided for in this Agreement must be in
-------
writing and must be personally delivered, mailed by first class mail, or sent by
overnight delivery service, to the recipient at the address indicated below:
To Holding: Intercole Holding Corporation
c/o Golder, Thoma & Cressey
120 S. LaSalle Street - Suite 630
Chicago, IL 60603
Attn. Bryan C. Cressey
With copies to: Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005
Attn. Brian J. Richmand
To Consultant: Michael F.O. Harris
1207 Parkside Drive East
Seattle, WA 98112
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
12
<PAGE>
20. Definitions.
-----------
The "Original Cost" of each share of Consultant Stock will be equal to
$.727 for each share of Stock (as proportionally adjusted for all stock splits,
stock dividends and other recapitalizations affecting the Stock subsequent to
the date hereof).
"Subsidiary" means any corporation of which shares of stock having a
majority of the general voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by Holding either
directly or through its Subsidiaries.
21. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
22. Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understand ings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
23. Counterparts. This Agreement may be executed on separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
24. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by the Consultant and Holding and
their respective successors and assigns, except that the Consultant may not
assign any of his rights or obligations under paragraph 18.
25. Choice of Law. The corporate law of the State of Delaware will
-------------
govern all issues concerning the relative rights of Holding and its
shareholders. All other questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts of the State of
Illinois.
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<PAGE>
26. Remedies. Each of the parties to this Agreement will be entitled
--------
to enforce his or its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in his or its favor. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in his or its
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce or prevent
any violations of the provisions of this Agreement.
27. Amendments and Waivers. Any provision of this Agreement may be
----------------------
amended or waived only with the prior written consent of Holding and the
Consultant; provided that no amendment or waiver of paragraph 12 or 13 hereof
shall be effective without the prior written consent of the Investor.
28. No Employment Terms. No provision of this Agreement shall be
-------------------
construed to obligate Holding to employ or engage the Consultant. Holding may
terminate the Consulting Period for any reason or no reason (including, without
limitation, the Consultant's death, disability or termination with or without
cause).
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
INTERCOLE HOLDING CORPORATION
By /s/Richard C. Tuttle
--------------------------------
Its_______________________________
INTERCOLE INC.
By /s/Michael F.O. Harris
--------------------------------
Its _____________________________
/s/Michael F.O. Harris
----------------------------------
MICHAEL F.O. HARRIS
Accepted as of July 13, 1988:
GOLDER, THOMA, CRESSEY FUND II
By Golder, Thoma & Cressey
Its General Partner
By /s/Bryan C. Cressey
----------------------------
Its General Partner
---------------------------
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
Prucapital Management Inc., agent
By /s/Kelvin Pennington
-----------------------------------
Its Vice President, Corporate Finance
----------------------------------
PRUCO LIFE INSURANCE COMPANY
By /s/Man Walfield
-----------------------------------
Its Assistant Vice President
----------------------------------
<PAGE>
EXHIBIT 4.2
CONSULTING AGREEMENT
--------------------
This Agreement is made as of July 14, 1988, by and among Intercole
Holding Corporation, a Delaware corporation ("Holding"), Intercole Inc., a
Washington corporation (the "Company"), and Glenn Kalnasy (the "Consultant").
Holding, the Company and the Consultant desire to enter into an
agreement pursuant to which the Consultant will provide consulting services to
the Company and will purchase certain shares of Holding's Class A Common Stock,
par value $.Ol per share (the "Stock"). In addition, Holding shall grant the
Consultant certain options to acquire shares of Stock as provided herein (the
"Options"). All of the shares of Stock issued hereunder and all shares of Stock
issued upon exercise of the Options are referred to herein as "Consultant
Stock". The execution and delivery of this Agreement by Holding, the Company
and the Consultant are conditions to the purchase of the Company's securities
by Golder, Thoma, Cressey Fund II ("GTC"), The Prudential Insurance Company of
America and Pruco Life Insurance Company (the "Investors"), pursuant to the
Investors Subscription and Stockholders Agreement of even date herewith.
Certain provisions of this Agreement are for the benefit of the Investors and
will be enforceable by the Investors. Capitalized terms not otherwise defined
herein have the meaning set forth in paragraph 20 hereof.
The parties hereto agree as follows:
CONSULTING TERMS
1. Consulting Services. In consideration of the right to
-------------------
purchase the Stock hereunder and the granting of the Options, the Consultant
hereby agrees to serve as an independent contractor, and not as an employee, to
render consulting services to the Company as hereinafter provided for a period
commencing on the date of this Agreement and ending on the date on which this
Agreement is terminated pursuant to paragraph 4 below (the "Consulting Period").
During the Consulting Period, the Consultant will render such consulting
services to the Company in connection with the Company's business as the Company
from time to time requests. The Consultant shall have no authority to act,
incur expenses or other obligations or make any authority to act, incur expenses
or other obligations or make any commitments on behalf of the Company or
otherwise bind the Company without the prior specific written approval of the
Company.
2. Board Membership. During the Consulting Period, the
----------------
Consultant will serve on Holding's board of directors (the "Board") as requested
by Holding and its shareholders.
<PAGE>
3. Confidential Information. The Consultant acknowledges that the
------------------------
information, observations and data obtained by him during the course of his
performance under this Agreement concerning the business or affairs of the
Company and Holding and their respective affiliates are the property of the
Company. Therefore, the Consultant agrees that he will not disclose to any
unauthorized person or use for his own account any of such information,
observations or data without Holding's written consent, unless and to the extent
that the aforementioned matters become generally known to and available for use
by the public other than as a result of the Consultant's acts or omissions to
act.
4. Termination of Consulting Period. Holding or the Consultant
--------------------------------
may terminate the Consulting Period by providing written notice thereof to the
other party with written notice at least 60 days prior to the effective time of
the termination; provided however that the Consulting Period shall not terminate
until the termination of the Northern Consulting Agreement dated the date
hereof.
CONSULTANT STOCK AND OPTIONS
5. Purchase and Sale of Stock and Grant of Options.
-----------------------------------------------
(a) On the date hereof, the Consultant will purchase,
and Holding will sell, 92,749 shares of Stock at a price per share of $.727. The
Company will deliver to the Consultant a certificate or certificates
representing such shares of Consultant Stock, and, upon the receipt of such
certificates), Consultant will deliver to the Company a check (or a promissory
note on terms and conditions satisfactory to Holding) in the amount of the full
purchase price therefore.
(b) The Company hereby grants to the Consultant the Option to purchase
from Holding upon the terms and subject to the conditions hereinafter set forth
up to 107,251 shares of the Stock (the "Option Shares") at a purchase price of
$.727 per share.
(c) The Consultant represents and warrants that the Consultant Stock
and Option to be acquired by him pursuant to this Agreement will be acquired for
his own account and not with a view to, or present intention of, distribution
thereof in violation of the Securities Act of 1933, as amended (the "1933 Act"),
and will not be disposed of in contravention of the 1933 Act.
(d) The Consultant acknowledges that he is able to bear the economic
risk of his investment in the Consultant Stock for an indefinite period of time
because the Consultant Stock,
2
<PAGE>
when issued, will not have been registered under the 1933 Act and, therefore,
cannot be sold unless subsequently registered under the 1933 Act or an exemption
from such registration is available.
(e) The Consultant represents and warrants that he has had an
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of Consultant Stock and Option and has had full
access to such other information concerning Holding as he has requested.
(f) The Consultant agrees that within 30 days after he purchases any
Consultant Stock from Holding, he will make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code and
the regulations promulgated thereunder in the form attached hereto as Appendix
(g) The Consultant acknowledges that the Consultant Stock and Option
to be issued hereunder are being issued in connection with the Consultant's
compensation for the consulting services to be rendered hereunder and but for
Consultant's agreement to provide services hereunder, the Executive would not be
permitted to purchase the Stock hereunder. This Agreement is a written contract
relating to the compensation of the Consultant.
6. Vesting of Option Terms.
-----------------------
(a) The Option shall become exercisable for Option
Shares in installments. The portion of the total number of Option Shares which
are exercisable shall be determined as follows:
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<PAGE>
Cumulative Percentage of
Total Number of Shares of Common
Date Stock For Which Option is Exercisable
---- -------------------------------------
Prior to the first anniversary hereof 0%
On and after the first anniversary hereof
but prior to the second anniversary hereof 20%
On and after the second anniversary hereof
but prior to the third anniversary hereof 40%
On and after the third anniversary hereof
but prior to the fourth anniversary hereof 60%
On and after the fourth anniversary hereof
but prior to the fifth anniversary hereof 80%
On and after the fifth anniversary hereof 100%
As of any given date, all Option Shares which the Consultant has become eligible
to purchase are referred to as "Vested Option Shares" and all Option Shares
which the Consultant has not yet become eligible to purchase are referred to as
"Unvested Option Shares." Notwithstanding the foregoing, no Unvested Option
Shares shall become Vested Option Shares after the date on which the Consulting
Period has terminated for whatever reason or no reason (including, without
limitation, death, disability or termination with or without cause) (the
"Termination Date"); provided that after the first anniversary hereof if the
Termination Date occurs on any date other than an anniversary date hereof, the
percentage of Option Shares treated as Vested Option Shares will be the
percentage set forth for the previous anniversary date increased by a pro rata
share of the next percentage change based upon the number of days elapsed
between the Termination Date and the previous anniversary date; and further
provided that all Unvested Option Shares shall become Vested Option Shares
immediately prior to, but contingent upon, the consummation of a Sale of Holding
(as such term is defined in paragraph (c) below).
(b) The Consultant (or such Optionee's estate or legal representative) may
only exercise the Option with respect to the Vested Option Shares until the
first to occur of (i) the tenth anniversary of the date hereof, (ii) the
consummation of a Sale of Holding, or (iii) 10 days after the Termination Date.
Neither the Consultant nor such Consultant's estate or legal representative may
exercise the Options with respect to Unvested Qualified Options and all of
Optionee's rights with respect to the Unvested Options shall terminate as of the
Termination Date.
4
<PAGE>
(c) As used herein, the term "Sale of Holding" means
(i) any sale of all or substantially all of the Holding's consolidated assets
in any single transaction or series of related transactions, (ii) any
merger or consolidation to which Holding is a party if, after giving effect
to such merger or consolidation, persons who were stockholders of Holding
immediately prior to such merger or consolidation cease to own capital
stock of the surviving or resulting corporation with the ordinary voting
power to elect a majority of the board of directors of the surviving or
resulting corporation, (iii) the consummation of a registered public
offering of the Stock pursuant to a registration statement which has become
effective under the Securities Act of 1933, as amended at a price per share
of at least $3.65 (as such number is equitably adjusted for stock splits,
stock dividends and other recapitalizations affecting the Stock) and the
net proceeds of which offer to Holding are at least $15 million, or (iv)
any sale of more than 70% of the shares of Stock originally issued to GTC
pursuant to the Stock Purchase Agreement dated the date hereof between the
Company and GTC in any single transaction or series of related
transactions.
7. Other Conditions and Limitations. The Option shall not be
--------------------------------
transferable by the Consultant otherwise than by will or by the laws of descent
and distribution, and the Option shall be exercisable during the lifetime of the
Consultant by the Consultant only.
8. Exercise of Option. Written notice of the exercise of any Option or
------------------
any portion thereof shall be given to Holding at its principal office
accompanied by the Option price payable by check.
9. Stock Dividends; Stock Splits; Stock Combination; Recapitalizations.
-------------------------------------------------------------------
Appropriate adjustment (in number, kind and price) shall be made in the Option
Shares to give effect to any stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of Holding
after the grant of the Option.
10. Merger; Sale of Assets; Dissolution. In the event of a change in the
-----------------------------------
Stock resulting from a merger or consolidation to which Holding is a party which
does not result in a Sale of Holding, the number and kind of shares then subject
to the Option and the price per share thereof shall be appropriately adjusted in
such manner as the Board or the Compensation Committee thereof may deem
equitable to prevent substantial dilution or enlargement of the rights available
or granted hereunder.
11. Miscellaneous. The Consultant shall have no rights as a stockholder
-------------
with respect to the shares subject to the Option until the exercise of the
Option and the issuance of a
5
<PAGE>
stock certificate for the shares with respect to which the Option shall have
been exercised. Nothing herein contained shall impose any obligation on Holding
or any of its subsidiaries or the Consultant with respect to the Consultant's
continued employment by Holding or any of its subsidiaries or to seek a Sale of
Holding. Nothing herein contained shall impose any obligation upon the
Consultant to exercise the Option. Holding makes no representation as to the tax
treatment to the Consultant upon receipt or exercise of the Option or sale or
other disposition of the shares covered by such Option.
STOCK TERMS
12. Repurchase Option.
-----------------
(a) Upon termination of the Consulting Period for any
reason or no reason (including, without limitation, death, disability or
termination with or without cause), the Consultant Stock, whether held by the
Consultant or one or more transferees, will be subject to repurchase by Holding
pursuant to the terms and conditions set forth in this paragraph 12 (the
"Repurchase Option").
(b) On or after the Termination Date but prior to the 180th day following
the Termination Date, Holding may elect to purchase all or any portion of the
Consultant Stock at a price per share equal to 150% of the sum of (i) such
share's Original Cost and (ii) such share's pro rata portion (on a fully-diluted
basis determined as of the date of purchase, assuming the exercise and
conversion of all outstanding options, warrants and convertible securities and
ignoring any restrictions on the convertibility or exercise of such options,
warrants and convertible securities) of the difference between (A) Holding's
cumulative, consolidated net earnings from August 1, 1988 to the end of
Holding's fiscal quarter immediately preceding the date of repurchase as
reflected on Holding's normally prepared financial statements (audited, if
available) and (B) any dividends paid or accrued on any preferred stock of any
Subsidiary or any common stock of Holding. Holding's normally prepared
financial statements will be prepared in accordance with generally accepted
accounting principles consistently applied except for differences concurred in
by Holding's auditors.
(c) The Board may elect to exercise, pursuant to paragraph 12(b), Holding's
right to purchase all or any portion of the shares of Consultant Stock by
delivering written notice (the "Repurchase Notice") to the holder or holders of
Consultant Stock. The Repurchase Notice will set forth the number of shares of
Consultant Stock to be acquired from such holder, the aggregate consideration
to be paid for such shares and the time and place for the closing of the
transaction. The number of shares
6
<PAGE>
to be repurchased by Holding shall first be satisfied to the extent possible
from the shares of Consultant Stock held by the Consultant at the time of
delivery of the Repurchase Notice. If the number of shares of Consultant Stock
then held by Consultant is less than the total number of shares of Consultant
Stock Holding has elected to purchase, then Holding shall purchase the remaining
shares elected to be purchased from the other holder(s) of Consultant Stock, pro
rata according to the number of shares of Consultant Stock held by such other
holder(s) at the time of delivery of such Repurchase Notice (determined as
nearly as practicable to the nearest share).
(d) If for any reason Holding does not elect to purchase all of the shares
of Consultant Stock pursuant to the Repurchase Option, the Investors shall be
entitled to exercise Holding's Repurchase Option in the manner set forth in
paragraph 12(c) for the shares of Consultant Stock Holding has not elected to
purchase (the "Available Shares"). As soon as practicable after Holding has
determined that there will be Available Shares, but in any event within 160 days
after the Termination Date, Holding shall deliver written notice (the "Option
Notice") to the Investors setting forth the number of Available Shares and the
price for each Available Share. Each Investor may elect to purchase its pro
rata share of the Available Shares by delivering written notice to Holding
within 25 days after receipt of the Option Notice from Holding. As soon as
practicable, and in any event within 5 days, after the expiration of such 25.-
day period, Holding shall notify each holder of Consultant Stock as to the
number of shares being purchased from such holder by the Investors (the
"Supplemental Repurchase Notice"). At the time Holding delivers the
Supplemental Repurchase Notice to the holder(s) of Consultant Stock, each
Investor shall also receive written notice from Holding setting forth the number
of shares it is entitled to purchase, the aggregate purchase price and the time
and place of the closing of the transaction. For the purpose of this paragraph
12(d), each Investor's "pro rata share" will be equal to the percentage
determined by dividing (i) the number of shares of Stock (on a fully-diluted
basis assuming the exercise or conversion of any options, warrants or
convertible securities held by such Investor regardless of any restrictions on
such exercise or conversion) held by such Investor by (ii) the total number of
shares of Stock (on a fully diluted basis) held by the Investors electing to
purchase Available Shares.
(e) The closing of the purchase transactions contemplated by this paragraph
12 shall take place on the date designated by Holding in the Repurchase Notice
(or the Supplemental Repurchase Notice, as the case may be), which date shall
not be more than 30 days and not less than 10 days after the delivery of such
notice. Holding will pay for the Consultant Stock'to be purchased pursuant to
the Repurchase Option by check payable to
7
<PAGE>
the holder of such Consultant Stock. Holding will be entitled to receive
customary representation and warranties from the seller regarding the sale of
the Consultant Stock.
(f) For the purposes of this paragraph 12, Consultant Stock will include
all shares of Stock issuable upon exercise or conversion of any options,
warrants or convertible securities then held by the Consultant, ignoring any
restrictions on the convertibility or exercise of such options, warrants or
convertible securities; provided that the price at which the Repurchase Option
may be exercised with respect to any such shares of Consultant Stock shall be
less any consideration payable by the Consultant if such options, warrants or
convertible securities were then exercised or converted.
13. Restrictions on Transfer.
------------------------
(a) The Consultant will not sell, pledge or otherwise transfer any interest
in any shares of Consultant Stock except (i) pursuant to the provisions of (A)
paragraph 12 or 15 hereof (an "Exempt Transfer") or (B) paragraph 13(c) below or
(ii after the 180th day following the Termination Date (with respect to any
shares of Consultant Stock for which the Repurchase Option is not exercised),
subject to the provisions of paragraph 13(b) below.
(b) At least 60 days prior to making any transfer permitted by clause (ii)
of paragraph 13(a) above, the Consultant (or Consultant's transferees) will
deliver a written notice (the "Sale Notice") to Holding and the Investor. The
Sale Notice will disclose in reasonable detail the identity of the prospective
transferees) and the terms and conditions of the proposed transfer. Consultant
(and Consultant's transferees) agrees not to consummate any such transfer until
60 days after the Sale Notice has been delivered to Holding and the Investor,
unless either Holding or the Investor has exercised its right of first refusal
prior to the expiration of such 60-day period. (The date of the first to occur
of such events is referred to herein as the Authorization Date.)
Holding may elect to purchase all (but not less than all) of the Consultant
Stock to be transferred upon the same terms and conditions as those set forth in
the Sale Notice by delivering a written notice of such election to the
Consultant within 30 days after the receipt of the Sale Notice by Holding. If
Holding has not elected to purchase all of the Consultant Stock to be
transferred, the Investors may elect to purchase all (but not less than all) of
the Consultant Stock to be transferred upon the same terms and conditions as
those set forth in the Sale Notice by delivering a written notice of such
election to the Consultant within 60 days after the receipt of the Sale Notice
by the Investors. If more than one Investor elects to purchase the
8
<PAGE>
Consultant Stock pursuant to this paragraph 13(b), each Investor shall have the
right to purchase its pro rata share of Consultant Stock to be transferred. For
the purpose of this paragraph 13(b), each Investor's "pro rata share" will be
equal to the percentage determined by dividing (i) the number of shares of Stock
(on a fully-diluted basis assuming the exercise or conversion of any options,
warrants or convertible securities held by such Investor regardless of any
restrictions on such exercise or conversion) held by such Investor by (ii) the
total number of shares of Stock (on a fully diluted basis) held by the Investors
electing to purchase Consultant Stock to be transferred herein. Any person who
has exercised its right to acquire Consultant Stock pursuant to this paragraph
13(b) shall be given up to 60 days (after it has been determined that such
person has such right) to consummate the purchase and sale of Consultant Stock.
If neither Holding nor the Investors have elected to purchase all of the
Consultant Stock specified in the Sale Notice, Consultant may transfer the
Consultant Stock specified in the Sale Notice at a price and on terms no more
favorable to the transferees) thereof than specified in the Sale Notice during
the 60-day period immediately following the Authorization Date. Any shares of
Consultant Stock not transferred within such 60-day period will be subject to
the provisions of this paragraph 13(b) upon subsequent transfer.
(c) The Consultant may transfer Consultant Stock
(i) pursuant to applicable laws of descent and distribution or
(ii) among Consultant's family group; provided that the restrictions contained
in this Agreement will continue to be applicable to the Consultant Stock
after any such transfer and the transferees of such Consultant Stock have
agreed in writing to be bound by the provisions of this Agreement.
Consultant's "family group" means Consultant's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of
Consultant and/or Consultant's spouse and/or descendants. At least 30 days
prior to making any transfer of Consultant Stock pursuant to this paragraph
13(c), Consultant will deliver a written notice to Holding which will
describe in reasonable detail the identity of the prospective transferees).
14. Additional Restrictions on Transfer.
-----------------------------------
(a) The certificates representing the Consultant Stock
will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
______ __, ____, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION THEREUNDER.
9
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN
OTHER AGREEMENTS SET FORTH IN A CONSULTING AGREEMENT BY AND BETWEEN THE
ISSUER (THE "COMPANY") AND A CERTAIN CONSULTANT OF THE COMPANY DATED AS OF
JULY 14, 1988, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Consultant Stock may sell, transfer or dispose of any
Consultant Stock (except pursuant to an effective registration statement under
the Securities Act of 1933) without first delivering to Holding an opinion of
counsel reasonably acceptable in form and substance to Holding that registra-
tion under the Securities Act of 1933 is not required in connection with such
transfer.
(c) Each holder of Consultant Stock agrees not to effect any public
sale or distribution of any equity securities of Holding, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the 90 days after the effectiveness of any public
offering of Holding's securities registered under the Securities Act of 1933, as
amended, except pursuant to such underwritten registration if otherwise
permitted.
15. Sale of Holding.
---------------
(a) If the Board and the holders of a majority of the Stock then
outstanding approve the Sale of Holding to an independent third party (the
"Approved Sale"), the holders of Consultant Stock will consent to and raise no
objections against the Approved Sale of Holding, and if the Approved Sale of
Holding is structured as a sale of stock, the holders of Consultant Stock will
agree to sell all of their shares of Consultant Stock and rights to acquire
shares of Holding's capital stock on the terms and conditions approved by the
Board and the holders of a majority of the Stock then outstanding. The holders
of Consultant Stock will take all necessary and desirable actions to effect the
consummation of the Approved Sale. For purposes of this paragraph 15, an
"independent third party" is any person who doer, not own in excess of 5% of the
Stock on a fully-diluted basis, who is not controlling, controlled by or under
common control with any such 5% owner of the Stock and who is not the spouse,
ancestor or descendant (by birth or adoption) of any such 5% owner of the Stock.
(b) The obligations of the holders of Consultant Stock with respect to
the Approved Sale of Holding are subject to the satisfaction of the condition
that upon the consummation of the Approved Sale, all of the holders of Stock
will receive the same
10
<PAGE>
form and amount of consideration per share of Stock, or if any holders are given
an option as to the form and amount of consideration to be received, all
holders will be given the same option.
(c) If Holding or the holders of Holding's securities enter into any
negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation
or other reorganization), the holders of Consultant Stock will, at the
request of Holding, appoint a purchaser representative (as such term is defined
in Rule 501) reasonably acceptable to Holding. If any holder of Consultant Stock
appoints the purchaser representative designated by Holding, Holding will pay
the fees of such purchaser representative, but if any holder of Consultant Stock
declines to appoint the purchaser representative designated by Holding, such
holder will appoint another purchaser representative (reasonably acceptable to
Holding), and such holder will be responsible for the fees of the purchaser
representative so appointed.
16. Definition of Consultant Stock. For all purposes of this
------------------------------
Agreement, Consultant Stock will continue to be Consultant Stock in the hands
of any holder other than Consultant (except for Holding, the Investor and
purchasers pursuant to an offering registered with the Securities Exchange
Commission or purchasers pursuant to a Rule 144 transaction), and each such
other holder of Consultant Stock will succeed to all rights and obligations
attributable to the Consultant as a holder of Consultant Stock hereunder.
Consultant Stock will also include shares of Holding's capital stock issued with
respect to shares of Consultant Stock by way of a stock split, stock dividend or
other recapitalization.
17. Termination of Provisions Relating to Consultant Stock. The
------------------------------------------------------
provisions of paragraphs 12, 13 and 15 hereof will terminate upon the first to
occur of (i) the date on which Holding has consummated a registered public
offering of the Stock pursuant to a registration statement which has become
effective under the Securities Act of 1933, as amended, at a price per share of
at least $3.65 (as such number is equitably adjusted for any stock splits, stock
dividends or other recapitalizations affecting Holding's capital stock) and the
net proceeds of which offer to Holding are at least $15 million, (ii) any merger
or consolidation to which Holding is a party if, after giving effect to such
merger or consolidation, persons who were stockholders of Holding immediately
prior to such merger or consolidation cease to own capital stock of the
surviving or resulting corporation with the ordinary voting power to elect a
majority of the board of directors of the surviving or resulting corporation,
(iii) a
11
<PAGE>
Bale of all, or substantially all, of Holding's assets or capital stock in any
transaction or series of related transactions, or (iv) any sale of more than 70%
of the shares of Stock originally issued to GTC pursuant to the Stock Purchase
Agreement dated the date hereof between the Company and GTC in any single
transaction or series of related transactions.
18. Confidential Information. Consultant acknowledges that the
------------------------
information, observations and data obtained by him during the course of the
Consulting Period concerning the business or affairs of Holding and its
affiliates are the property of Holding. Therefore, Consultant agrees that he
will not disclose to any unauthorized person or use for his own account any of
such information, observations or data without the Board's written consent,
unless and to the extent that the aforementioned matters become generally known
to and available for use by the public other than as a result of the
Consultant's acts or omissions to act.
19. Notices. Any notice provided for in this Agreement must be in
-------
writing and must be personally delivered, mailed by first class mail, or sent by
overnight delivery service, to the recipient at the address indicated below:
To Holding: Intercole Holding Corporation
c/o Golder, Thoma & Cressey
120 S. LaSalle Street - Suite 630
Chicago, IL 60603
Attn. Bryan C. Cressey
With copies to: Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005
Attn. Brian J. Richmand
To Consultant: Glenn Kalnasy
6216 East Mercer Way
Mercer Island, WA 98040
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
20. Definitions.
-----------
The "Original Cost" of each share of Consultant Stock will be equal to
$.727 for each share of Stock (as proportionally adjusted for all stock splits,
stock dividends and other recapitalizations affecting the Stock subsequent to
the date hereof).
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<PAGE>
"Subsidiary" means any corporation of which shares of stock having a
majority of the general voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by Holding either
directly or through its Subsidiaries.
21. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
22. Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
23. Counterparts. This Agreement may be executed on separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
24. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by the Consultant and Holding and
their respective successor and assigns, except that the Consultant may not
assign any of his rights or obligations under paragraph 18.
25. Choice of Law. The corporate law of the State of Delaware will
-------------
govern all issues concerning the relative rights of Holding and its
shareholders. All other questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts of the State of
Illinois.
26. Remedies. Each of the parties to this Agreement will be
--------
entitled to enforce his or its rights under this Agreement specifically, to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights existing in his or its favor. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in his or its
sole discretion apply to any court of law or
13
<PAGE>
equity of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce or prevent any violations of the provisions of this
Agreement.
27. Amendments and Waivers. Any provision of this Agreement may be
----------------------
amended or waived only with the prior written consent of Holding and the
Consultant; provided that no amendment or waiver of paragraph 12 or 13 hereof
shall be effective without the prior written consent of the Investor.
28. No Employment Terms. No provision of this Agreement shall be
-------------------
construed to obligate Holding to employ or engage the Consultant. Holding may
terminate the Consulting Period for any reason or no reason (including, without
limitation, the Consultant's death, disability or termination with or without
cause).
* * * *
14
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
INTERCOLE HOLDING CORPORATION
By /s/Richard C. Tuttle
---------------------------
Its
--------------------------
INTERCOLE INC.
By /s/Michael F.O. Harris
---------------------------
Its
--------------------------
/s/Glenn Kalnasy
-----------------------------
Glenn Kalnasy
Accepted as of July 13, 1988:
GOLDER, THOMA, CRESSEY FUND II
By Golder, Thoma & Cressey
Its General Partner
By /s/Bryan C. Cressey
----------------------------
Its General Partner
---------------------------
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
Prucapital Management, Inc., agent
By /s/Kelvin Pennington
-----------------------------------
Its Vice President, Corporate Finance
----------------------------------
PRUCO LIFE INSURANCE COMPANY
By /s/Man Walfield
-----------------------------------
Its Assistant Vice President
----------------------------------
15
<PAGE>
EXHIBIT 5.1
December 6, 1996
Cable Design Technologies Corporation
Foster Plaza 7
661 Andersen Drive
Pittsburgh, Pennsylvania 15220
Re: Shares of Common Stock, $.01 par value
--------------------------------------
Ladies and Gentlemen:
We are acting as counsel to Cable Design Technologies Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"), of a Registration Statement on Form S-8
(the "Registration Statement") pertaining to the registration of a proposed
offering of up to 181,848 shares of the Company's Common Stock, $.01 par value
per share (the "Common Stock") pursuant to the Consulting Agreement dated July
14, 1988, among Intercole Holding Corporation (subsequently renamed Cable Design
Technologies Corporation), Intercole Inc. and Michael F.O. Harris and the
Consulting Agreement dated July 14, 1988, among Intercole Holding Corporation
(subsequently renamed Cable Design Technologies Corporation), Intercole Inc. and
Glenn Kalnasy.
We have examined originals, or copies certified or otherwise
identified to our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary for the purposes of this opinion,
including the following: (i) Amended and Restated Certificate of Incorporation
and the Bylaws of the Company, each as amended to the date hereof; and (ii)
certain resolutions adopted by the Board of Directors of the Company. In
addition, we have made such other and further investigations as we have deemed
necessary to enable us to express the opinions hereinafter set forth.
Based upon the foregoing and having regard to legal considerations
that we deem relevant, and subject to the comments and qualifications set forth
below, it is our opinion that the Common Stock has been duly authorized.
For purposes of this opinion, we have with your permission made the
following assumptions, in each case without independent verification: (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as copies, (iii) the
authenticity of the originals of all documents submitted to us as copies, (iv)
the
<PAGE>
genuineness of the signatures of persons signing all documents in connection
with which this opinion is rendered, (v) the authority of such persons signing
all documents on behalf of the parties thereto and (vi) the due authorization,
execution and delivery of all documents by the parties thereto.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby concede that
we are within the category of persons whose consent is required under Section 7
of the Securities Act or the Rules and Regulations promulgated thereunder.
We do not find it necessary for purposes of this opinion to cover, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the offering and sale of the Common
Stock.
This opinion shall be limited to the laws of the State of Delaware.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
Very truly yours,
KIRKLAND & ELLIS
2
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated September 11,
1996, included in Cable Design Technologies Corporation's Form 10-K for the year
ended July 31, 1996, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
December 6, 1996
