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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________________ TO _________________.
COMMISSION FILE NUMBER 1-4682
THOMAS & BETTS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TENNESSEE 22-1326940
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8155 T&B BOULEVARD, MEMPHIS, TENNESSEE 38125
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (901) 252-8000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- ------------------------------------------
Common Stock, no par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /x/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. / /
As of February 13, 1998, 55,121,199 shares of the Registrant's Common Stock
were outstanding, and the aggregate market value of the voting stock held by
non-affiliates of the Registrant (based on the average bid and asked prices of
such stock on the New York Stock Exchange) was $3,004,411,428.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended
December 28, 1997, are incorporated by reference into Parts I, II and IV.
Portions of the Proxy Statement for the Annual Meeting of Shareholders to
be held May 6, 1998, are incorporated by reference into Part III.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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PART I
ITEM 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . 3
ITEM 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . 9
ITEM 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 11
ITEM 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Executive Officers of the Registrant . . . . . . . . . . . 13
PART II
ITEM 5. Market for Registrant's Common Equity and Related
Shareholder Matters. . . . . . . . . . . . . . . . . . . . 15
ITEM 6. Selected Financial Data. . . . . . . . . . . . . . . . . . 16
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation . . . . . . . . . . . . 16
ITEM 7A. Quantitative and Qualitative Disclosures about
Market Risk . . . . . . . . . . . . . . . . . . . . . . . 16
ITEM 8. Financial Statements and Supplementary Data. . . . . . . . 16
ITEM 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . . . . 17
PART III
ITEM 10. Directors and Executive Officers of the Registrant . . . . 17
ITEM 11. Executive Compensation . . . . . . . . . . . . . . . . . . 18
ITEM 12. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . . . 18
ITEM 13. Certain Relationships and Related Transactions . . . . . . 18
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . 19
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Thomas & Betts Corporation (the Corporation) is a leading manufacturer of
connectors and components for worldwide electrical and electronics markets. The
Corporation operates over 100 manufacturing and distribution facilities in 20
countries. The Corporation was established in 1898 as a sales agency for
electrical wires and raceways, was incorporated in New Jersey in 1917 and
reincorporated in Tennessee in May 1996. Executive offices are located at 8155
T&B Boulevard, Memphis, Tennessee 38125, and the telephone number is
901-252-8000.
The products manufactured and sold by the Corporation are classified into
business segments that are organized around market channels: Electrical
Construction and Maintenance Components (Electrical), Electronic/OEM Components
(Electronics) and Other Products and Components (Other). The Corporation's
products are sold worldwide through those channels to electrical, electronic and
heating, ventilation and air-conditioning (HVAC) distributors; original
equipment manufacturers (OEMs); mass merchandisers; catalog merchandisers; and
home centers. No single customer in any one of these market channels accounted
for more than 5% of 1997 net sales.
In addition to new product development, market penetration, new markets,
and joint venture arrangements, the Corporation pursues acquisitions as a means
of growth. In 1997, the Corporation completed six acquisitions for total
consideration of approximately $62.0 million, consisting of cash and 793,560
shares of common stock. The July 1997 acquisition of Diamond Communications
Products, Inc., a manufacturer of hardware for the worldwide communications
industry, enhanced the Corporation's offering in the "drop-end" portion of the
cable television industry that connects cable service to people's homes. Other
1997 acquisitions increased the breadth of products offered within the
Electrical segment.
In late 1996, the Corporation acquired Augat Inc., a worldwide manufacturer
of electronic connectors and devices for the telecommunications, cable
television, automotive and information processing industries. As a result of
that acquisition, the Corporation gained a position among the world's five
largest electronic connector manufacturers, balanced its electronic and
electrical businesses and achieved critical mass in higher-growth markets. Also
in 1996, the Corporation acquired Amerace Corporation, a manufacturer of
electrical components for utility and industrial markets, and six smaller
companies and product lines.
ELECTRICAL CONSTRUCTION AND MAINTENANCE COMPONENTS
The Corporation's Electrical segment's markets include industrial
construction, renovation, maintenance and repair; commercial and residential
construction and renovation; project construction; and industrial OEM, primarily
in North America. Total sales of the segment were $764.2, $643.4 and $573.6
million, or 36.1%, 32.4% and 33.1% of total sales for 1997, 1996 and 1995,
respectively.
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The Corporation designs, manufactures and markets thousands of different
electrical connectors, components and other products for electrical
applications. Management believes that the Corporation has a leading position
in the market for many of those products. Products include fittings and
accessories for electrical raceways; fastening products, such as plastic and
metallic ties for bundling wire and flexible tubing; connectors, such as
compression and mechanical connectors for high-current power and grounding
applications; indoor and outdoor switch and outlet boxes, covers and
accessories; floor boxes; metal framing used as structural supports for
conduits, cable trays, electrical enclosures and lighting raceways; ground rods
and clamps; outdoor security, roadway and hazardous location lighting; circuit
breakers, safety switches and meter centers; and other products, including
insulation products, wire markers and application tooling products. Products
are sold under a variety of the Corporation's brand names.
Electrical products are sold through electrical distributors and retail
outlets such as home centers and mass merchants. The Corporation has
relationships with over 2,000 national, regional and independent distributors
and buying groups with locations across North America. The Corporation has
strong relationships with its distributors as a result of the breadth and
quality of its product line, innovative service programs, product innovation,
competitive pricing and brand name recognition among its customers. The
Corporation has a network of factory and independent sales representatives who
work with distributors, end users and retail outlets to increase demand for its
products. The Corporation has thousands of customers, and no single end user,
distributor, retailer or group of affiliated distributors accounted for more
than 7% of the Electrical segment's 1997 net sales.
A small portion of Electrical segment sales is currently realized outside
of North America as electrical standards vary by region, and historically the
Corporation has emphasized North American standards. The Corporation sees
potential to further grow participation in markets outside of North America by
developing or acquiring product lines that conform to other regional standards.
ELECTRONIC/OEM COMPONENTS
The Corporation's electronic components are sold primarily to OEM's in the
automotive, information services, office equipment, industrial electronics,
telecommunications and broadband communications - including cable television
(CATV), test equipment, computer-aided-engineering and manufacturing systems,
instrumentation, medical electronics markets, and additional applications in
aerospace, businesses and also through electronics, telecommunications and CATV
distributors. No single end user or distributor of the Corporation's electronic
components accounted for more than 12% of the Electronics segment 1997 net
sales. Total Electronics segment sales were $893.9, $903.9 and $834.1 million,
or 42.3%, 45.5% and 48.1% of the Corporation's total sales for 1997, 1996 and
1995, respectively.
The Corporation's electronic/OEM components include: printed circuit
connectors; IDC connectors for mass termination of flat cables;
custom-engineered connectors for automotive and professional electronics
applications; flexible interconnects, flat cables and assemblies for automotive
and other applications; cable ties; terminals; D-subminiature connectors, a
broad group of industry standard connectors; custom and standard switches,
printed circuit board sockets and terminal blocks;
Page 4 of 21
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modular voice and data connectors and related components; CATV drop hardware; RF
connectors; fiber management systems; and fiber optic connectors and splitters.
These components are sold under a variety of the Corporation's brand names.
The Corporation manufactures and sells its standard components in North
America through electronic distributors and directly to end users, and provides
customer-specific components directly to major OEM's. The Corporation sells
through national, regional and local distributors serving a large customer base.
The Corporation also manufactures and markets its electronic/OEM components
internationally, with design, manufacturing and distribution capabilities in
Europe and the Far East. In Europe and the Far East, as in North America,
electronic/OEM components are sold primarily to automotive, computer, office
equipment, test equipment, instrumentation, industrial automation and
telecommunications markets, and certain electronic components of the Corporation
are developed and manufactured for specific customer applications.
OEM customers have shown a trend of reducing the number of their preferred
suppliers, focusing on companies that can meet quality and delivery standards
and that have a global presence, a broad product package, strong design
capability and competitive prices. The Corporation has achieved a preferred
supplier designation from many of its most important OEM customers for
electronic components, and continues to seek this preferred status from other
accounts.
OTHER PRODUCTS AND COMPONENTS
The Corporation sells its other products and components, comprised of
heating products, steel poles and towers, and utility and telecommunications
components, through distributors and directly to end-users. No single end-user
or distributor accounted for more than 3% of the Corporation's Other Products
and Components segment 1997 net sales. Total Other Products and Components
sales were $456.7, $437.8 and $325.7 million, or 21.6%, 22.1% and 18.8% of the
Corporation's total sales for 1997, 1996 and 1995, respectively.
HEATING PRODUCTS
The Corporation designs, manufactures and markets heating and ventilation
products for commercial and industrial buildings. Products include gas, oil and
electric unit heaters, gas-fired duct furnaces, indirect and direct gas-fired
make-up air heaters, infrared heaters, and evaporative cooling and heat recovery
products for the heating, ventilation and air-conditioning (HVAC) marketplace
under the Reznor and E.K. Campbell brand names. Those products are sold through
HVAC, mechanical and refrigeration distributors in over 2,000 locations
throughout North America and Europe.
Page 5 of 21
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TRANSMISSION POLES AND TOWERS
The Corporation designs, manufactures and markets transmission and
distribution poles and towers for North American power and telecommunications
companies and for export. Those products are primarily sold to five types of
end-users: investor-owned utilities; cooperatives, which purchase power from
utilities and manage its distribution to end-users; municipal utilities; cable
television operating companies; and telephone companies. The Corporation's
products include tubular steel transmission and distribution poles and lattice
steel transmission towers. The Corporation manufactures and sells its
transmission towers and its transmission and distribution poles under the
Lehigh, Meyer and Thomas & Betts brand names.
TELECOMMUNICATIONS COMPONENTS
The Corporation designs, manufactures and markets aerial, pole, pedestal
and buried splice enclosures; connectors; encapsulation and sheath repair
systems; cable ties; and specialty devices for cable television companies and
telephone operating companies. Components are sold under a variety of the
Corporation's brand names both directly to end-users and through distributors.
OTHER COMPONENTS
The Corporation designs, manufactures and markets flood, roadway and
security lighting fixtures and connectors, grounding systems, and fastening and
metal framing components for North American power companies and for HVAC, PVF
(Pipe, Valve and Fittings) and specialty tool distributors. Those products are
primarily sold to four markets: investor-owned utilities, cooperatives,
municipal utilities, and HVAC and plumbing distributors. The Corporation's other
component products include power connectors and grounding systems; roadway,
security and area lighting fixtures; metal framing; cable ties; meter sockets;
evaporative cooling and energy recovery equipment; and power connectors.
Products are sold under a variety of the Corporation's brand names.
MANUFACTURING AND DISTRIBUTION
The Corporation employs advanced processes in order to manufacture quality
products. The Corporation's manufacturing processes include high-speed
stamping, precision molding, machining, plating and automated assembly. The
Corporation makes extensive use of computer-aided design and computer-aided
manufacturing (CAD/CAM) software and equipment to link product engineering with
its factories.
The Corporation also utilizes other advanced equipment and techniques in
the manufacturing and distribution processes, including computer software for
scheduling, material requirements, shop floor control, capacity planning, and
the warehousing and shipment of products.
Page 6 of 21
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The Corporation's products enjoy a reputation for quality in the markets in
which they are sold. The Corporation has implemented quality-control processes
in its design, manufacturing, delivery and other operations in order to further
improve product quality and the service level to customers. These techniques
include just-in-time manufacturing programs for more efficient use of machine
tools in manufacturing different products, statistical process control,
statistical problem solving, and other processes related to the Corporation's
SIGNATURE SERVICE/DMI program.
From its origin as a delivery guarantee, the SIGNATURE SERVICE/DMI program
has evolved into a partnership for profitability that encompasses purchasing
incentives, extensive marketing support, training and service discounts. The
DMI process is now the benchmark in the electrical component industry for how
business, through electronic commerce, should be conducted. In 1997,
participation in the DMI program increased 26% over the previous year. The DMI
advanced partnership includes customer-cost-reduction processes such as
automatic stock replenishment, advanced distributor inventory modeling,
automatic receiving, price synchronization, invoice balancing and summary
billing. The program also provides rights to return merchandise which are
prevalent in the electrical components industry. Combining those
business-process redefinitions with a leading effort in electronic commerce,
such as extensive use of industry-standard Electronic Data Interchange (EDI),
has made the DMI partnership a success for the Corporation as well as for its
participating distributors.
RAW MATERIALS
The Corporation purchases a wide variety of raw materials for the
manufacture of its products, including metals such as brass, copper, aluminum,
steel plate, steel strip and malleable iron castings, and resins and rubber
compounds. The Corporation's sources of raw materials and component parts are
well established and are sufficiently numerous to avoid serious interruption of
production in the event that certain suppliers are unable to provide raw
materials and component parts.
RESEARCH AND DEVELOPMENT
The Corporation has research, development and engineering capabilities in
each of the three regions of the world in which it operates in order to respond
locally to its customers' needs and technological requirements. The Corporation
has a reputation for innovation based upon its ability to develop quality new
and improved products that meet the specific application needs of its customers.
The Corporation allocates significant resources to its research and
development activities. The Corporation's research, development and engineering
expenditures for the creation and application of new and improved products and
processes were $51.9, $47.2 and $44.1 million for 1997, 1996 and 1995,
respectively.
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The research and development activities of the Corporation are focused on
complementary product areas and specific high-growth markets. Most research and
development activity in 1997 took place in the Electronics segment with efforts
focused in part on the Metallized Particle Interconnect (MPI-TM-), a
next-generation microprocessor socket for high-end computers and workstations.
PATENTS AND TRADEMARKS
The Corporation owns approximately 2,043 active patent registrations and
applications worldwide. The Corporation has over 1,283 active trademark
registrations and applications worldwide, including THOMAS & BETTS, T&B,
AGASTAT, ALCOSWITCH, AMERICAN ELECTRIC LIGHTING, ANCHOR, ANSLEY, ARMIGER, ASTER,
AUGAT, BLACKBURN, BOWERS, BUCHANAN, CANSTRUT, CATAMOUNT, CENTER-LOK,
COLOR-KEYED, COMMANDER, DIAMOND, ELASTOMERIC TECHNOLOGIES, EK CAMPBELL,
ELASTIMOLD, ELECTROLINE, EPITOME, ELECTROLAY, EVER-LOK, E-Z-CODE, FLEXSTRIP,
HAZLUX, HOLMBERG, KINDORF, KOLD-N-CLOSE, LIQUID TITE, LRC, MARR, MARRETTE,
MAX-GARD, MEYER, MICROLECTRIC, MPI, NEVADA WESTERN, PHOTON, RDI, REZNOR,
RUSSELLSTOLL, SACHS, SIGNATURE SERVICE, SNAP-N-SEAL, STA-KON, STEEL CITY,
SUPERSTRUT, TAYLOR, TELZON, TY-FAST, TY-RAP, UNION, VALON and ZINSCO. While the
Corporation considers its patents and trademarks (including trade dress) to be
valuable assets, it does not believe that its competitive position is dependent
solely on patent or trademark protection or that its operations are dependent
on any individual patent or trademark. The Corporation does not consider any of
its licenses, franchises or concessions to be material to its business.
COMPETITION
The Corporation encounters competition in all areas of its business, and
the methods of competition vary across the Corporation's segments. The
Corporation competes primarily on the basis of product quality, technology,
price, performance and customer service. Although no single company competes
directly with the Corporation in all of its product lines, various companies
compete in one or more product lines. There are many companies that manufacture
a number of products that compete with those of the Corporation. All of the
Corporation's products are in competition with products of other manufacturers,
some of which have substantially greater sales and assets than the Corporation.
In addition, the Corporation competes with many smaller companies.
EMPLOYEES
As of December 28, 1997, the Corporation and its subsidiaries had
approximately 16,400 full-time employees worldwide. Employees of the
Corporation's international subsidiaries in the aggregate comprise approximately
40% of all employees. The Corporation believes its relationship with its
employees is excellent.
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REGULATION
The Corporation is subject to federal, state and local environmental laws
and regulations which govern the discharge of pollutants into the air, soil and
water, as well as the handling and disposal of solid and hazardous wastes. The
Corporation believes that it is currently in substantial compliance with all
applicable environmental laws and regulations and that the costs of maintaining
or coming into compliance with such environmental laws and regulations will not
be material to the Corporation's financial statements.
FINANCIAL INFORMATION ABOUT FOREIGN AND U.S. DOMESTIC OPERATIONS
For information concerning financial results for industry segments and
foreign and U.S. domestic operations for the three years ended December 28,
1997, December 29, 1996, and December 31, 1995, refer to Notes 12 and 13,
respectively, of Notes to Consolidated Financial Statements contained in the
Corporation's 1997 Annual Report to Shareholders, which are incorporated herein
by reference. Export sales originating in the U.S. were $29.3, $43.5 and $37.2
million for 1997, 1996 and 1995, respectively.
ITEM 2. PROPERTIES
The Corporation has total plant, office and distribution space of
approximately 10,232,000 sq. ft. in 175 locations in 29 states, the Commonwealth
of Puerto Rico and 18 other countries. This space is composed of 6,796,000 sq.
ft. of manufacturing space, 2,627,000 sq. ft. of office and distribution space
and 809,000 sq. ft. of idle space.
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The following table lists the Corporation's manufacturing locations by
segment as of December 28, 1997:
<TABLE>
<CAPTION>
Approximate Area
In Sq. Ft.
No. Of -----------------
Segment Location Facilities Leased Owned
- ------- -------- ---------- ------ -----
<S> <C> <C> <C> <C>
Electrical Construction
and Maintenance Components
Arkansas 1 246,000
California 2 249,000
Georgia 2 220,000 160,000
Massachusetts 1 116,000
Mississippi 1 237,000
Ohio 1 57,000
Oklahoma 1 108,000
Pennsylvania 1 80,000
Puerto Rico 4 112,000 28,000
Tennessee 2 457,000
Texas 1 36,000
Canada 7 109,000 305,000
Mexico 5 361,000
Electronic/OEM Components
Arizona 1 11,000
California 1 120,000
Florida 1 65,000
Maine 1 100,000
Massachusetts 1 53,000
Michigan 4 110,000 230,000
New Jersey 1 65,000
New York 2 389,000
Pennsylvania 2 41,000
South Carolina 3 89,000
Washington 2 120,000
Canada 2 53,000
England 3 37,000 69,000
Hungary 1 62,000
Japan 1 75,000
Luxembourg 2 27,000 43,000
Malaysia 1 24,000
Mexico 2 785,000
Singapore 1 60,000
Switzerland 1 188,000
</TABLE>
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<TABLE>
<CAPTION>
Approximate Area
In Sq. Ft.
No. Of -----------------
Segment Location Facilities Leased Owned
- ------- -------- ---------- ------ -----
<S> <C> <C> <C> <C>
Other Products and Components
Kansas 1 43,000
New Jersey 1 168,000
New Mexico 1 100,000
Pennsylvania 1 227,000
South Carolina 1 105,000
Texas 1 136,000
Wisconsin 1 171,000
Belgium 1 13,000
Mexico 1 136,000
</TABLE>
The Corporation leases approximately 228,000 sq. ft. of space in Memphis,
Tennessee, for its corporate and divisional headquarters. Principal sales
offices and distribution facilities are located in 2,399,000 sq. ft. of
property; approximately one-half of which is leased.
The Corporation has 809,000 sq. ft. of idle manufacturing and office space
primarily in Alabama, Arkansas, Florida, Massachusetts, New Jersey,
Pennsylvania, and Canada, not included in the above table.
ITEM 3. LEGAL PROCEEDINGS
Owners and operators of sites containing hazardous substances, as well as
generators of hazardous substances, are subject to broad liability under various
federal and state environmental laws and regulations, including liability for
cleanup costs and damages arising out of past disposal activity. Such liability
in many cases may be imposed regardless of fault or the legality of the original
disposal activity. The Corporation is the owner or operator or former owner of
various manufacturing facilities currently being evaluated by the Corporation
for the presence of contamination which may require remediation, including
closed facilities in Anniston, Alabama; Elizabeth, New Jersey; Pittsburgh,
Pennsylvania; and St. Louis, Missouri; and currently operated facilities in
Hager City, Wisconsin; and Lancaster, South Carolina. In addition, the
Corporation is evaluating three manufacturing plants which were sold by American
Electric prior to its acquisition by the Corporation, which are located in
Bainbridge, Georgia; Medora, Indiana; and Monroe, Louisiana and which may
require site remediation.
All but two of the above facilities (Elizabeth and Lancaster) were
purchased by American Electric from other parties between the years 1985 and
1988. With respect to all but one of those former American Electric facilities
(Pittsburgh), at the time of those purchases by American Electric, the sellers
committed to indemnify American Electric for environmental liabilities that
occurred prior to the purchase of the facilities by American Electric. The
Corporation believes that the indemnities are reliable; however, there can be no
assurances that such indemnities will be honored. Subsequent
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to the Corporation's acquisition of American Electric, the Corporation entered
into agreements with the sellers to cooperate with each other in resolving
obligations in connection with the above-mentioned environmental issues.
The Corporation has received notifications, from the United States
Environmental Protection Agency (EPA) or similar state environmental regulatory
agencies or private parties, that the Corporation, along with others, may
currently be potentially responsible for the remediation of sites pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(the "Superfund" Act) or similar state environmental statutes. Pursuant to the
Asset Purchase Agreement dated June 28, 1985, between American Electric and ITT
Corporation (ITT), ITT has to date assumed responsibility for costs associated
with contamination prior to June 1985 at four of these sites. The Corporation
has assumed responsibility for its share of costs at the remaining eight sites
covered by this Agreement.
In January 1996, the Corporation acquired Amerace Corporation. Pursuant to
the various environmental laws and regulations described above, Amerace is
evaluating or remediating, or may have liability associated with, contamination
at four facilities formerly owned or operated by Amerace (located in Butler, New
Jersey; Richland, Michigan; Tenafly, New Jersey; and Union, New Jersey) and at
one facility currently owned and operated by Amerace located in Hackettstown,
New Jersey. In addition, Amerace has received notifications from the EPA or
from similar state environmental regulatory agencies or private parties that
Amerace, along with others, may currently be potentially responsible for its
share of the costs relating to the remediation of 10 sites pursuant to the
Superfund Act, or similar state environmental statutes.
In December 1996, the Corporation acquired Augat Inc. Pursuant to the
various environmental laws and regulations described above, Augat is evaluating
or remediating, or may have liability associated with, contamination at five
facilities currently owned or operated by Augat (located in Canton,
Massachusetts; Horseheads, New York; Mashpee, Massachusetts; and at two
facilities in Montgomery, Alabama). In addition, Augat has received
notifications from the EPA or from similar state environmental regulatory
agencies or private parties that Augat, along with others, may currently be
potentially responsible for its share of the costs relating to the remediation
of five sites pursuant to the Superfund Act or similar state environmental
statutes. During 1997, Augat entered into settlements for de minimus amounts
with respect to two of these sites, and Augat's designation as a Potential
Responsible Party was withdrawn with respect to one of those sites.
In July 1997, the Corporation acquired Diamond Communications, Inc.
Pursuant to the various environmental laws and regulations described above,
Diamond is evaluating, and may have liability associated with, contamination at
the Garwood, New Jersey, facility currently owned and operated by Diamond.
The Corporation is not able to predict with certainty the extent of its
ultimate liability with respect to any pending or future environmental matters.
However, the Corporation does not believe that any such liability, with respect
to the aforementioned environmental matters, will be material to its financial
statements.
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The Corporation is subject to other legal proceedings and claims which
arise in the ordinary course of its business. In the opinion of management, the
aggregate liability, if any, with respect to these other actions will not
materially adversely affect the financial position or results of operations of
the Corporation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 28, 1997.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding executive officers of the Corporation is as follows
(included herein pursuant to Instruction 3 to Item 401(b) of Regulation S-K and
General Instruction G(3) of Form 10-K):
<TABLE>
<CAPTION>
Date Assumed
Name Position Age Present Position
---- -------- --- ----------------
<S> <C> <C> <C>
Clyde R. Moore President and 44 May 1997
Chief Executive Officer
Fred R. Jones Vice President-Finance 50 August 1995
and Treasurer
(Chief Financial Officer)
T. Roy Burton President-Electronics/OEM Group 50 May 1997
Jerry Kronenberg Vice President-General Counsel 63 September 1994
Gregory M. Langston Group President-International 42 February 1998
David D. Myler Vice President-Administration 53 January 1994
W. Neil Parker President-Electrical Components 55 May 1997
Group
Gary R. Stevenson Vice President-Operations 45 January 1994
</TABLE>
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Mr. Moore previously was president and chief operating officer of FL
Industries, Inc. (1990 to 1992) and president of its American Electric
Division from 1985 until its acquisition by Thomas & Betts Corporation in
1992. He was president-Electrical Division (1992 to 1994) and chief
operating officer (1994 to 1997) of the Corporation. He has been president
of the Corporation since 1994.
Mr. Jones previously was president of ABB Financial Services, Inc. (1990 to
1992) and senior vice president and chief financial officer (1992 to 1995)
of Joy Technologies, Inc. (manufacturer of industrial, mining and pollution
control equipment).
Mr. Burton previously was vice president and general manager of Bendix
Connector Operations (1989 to 1992), vice president, Information Technology
Operations (1992 to 1993), and vice president, Aerospace Operations (1993
to 1994) of Amphenol Corporation. He was president-Electronics/OEM
Division (1994 to 1997).
Mr. Kronenberg was previously chairman of the Labor and Employee Relations
Committee of the law firm of McBride, Baker & Coles (1990 to 1994).
Mr. Langston was previously managing director of Square D Australia (1989
to 1990), managing director of Square D Asia Pacific (1991 to 1992),
president of Square D de Mexico (1992) and president of Groupe Schneider
Mexico (1992 to 1995). He was president-Utility Division, (1995 to 1997)
and president-Utility Group (1997 to February 1998).
Mr. Myler was previously vice president, Administration (1991 to 1994) of
Thomas & Betts Holdings, Inc. (name changed from FL Industries, Inc. on
June 11, 1992).
Mr. Parker was previously vice president of General Electric Canada (1983
to 1992), president of Thomas & Betts Limited (1992 to 1996),
president-Thomas & Betts Canada (1995 to 1996), president, Electrical
Components Division (1996 to 1997) and chief executive officer of Thomas &
Betts Limited (1996 to 1998).
Mr. Stevenson was previously vice president, Operations of the American
Electric Division of FL Industries, Inc. (1989 to 1992) and vice
president-Operations (1992 to 1994) of Thomas & Betts Holdings, Inc. (name
changed from FL Industries, Inc. on June 11, 1992).
Executive officers are elected by, and serve at the discretion of, the
Board of Directors for a term of one year, which expires May 6, 1998. There is
no arrangement or understanding between any officer and any person, other than a
director or an executive officer of the Corporation acting in his official
capacity, pursuant to which any officer was selected. There are no family
relationships between any executive officer and any other officer or director of
the Corporation. There has been no event involving any executive officer under
any bankruptcy act, criminal proceeding, judgment or injunction during the past
five years.
Page 14 of 21
<PAGE>
PART II
Information for Items 5 through 8 of this Report appears in the
Corporation's 1997 Annual Report to Shareholders as indicated in the following
table and is incorporated herein by reference.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
Information regarding market information, shareholders and dividends is
contained in the Financial Highlights, Quarterly Review and Corporate
Information sections of the Corporation's 1997 Annual Report to Shareholders, on
pages 1, 30, 36 and 39 and is incorporated herein by reference.
Page 15 of 21
<PAGE>
<TABLE>
<CAPTION>
PAGE IN
ANNUAL REPORT TO
SHAREHOLDERS
------------
<S> <C>
ITEM 6. SELECTED FINANCIAL DATA
Selected Consolidated Financial Data . . . . . . . 37
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATION. . . . . . . . . . . . . . . . . . . . 17-20
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK. . . . . . . . . . . . . . . . 25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Statements of Earnings. . . . . . . 21
Consolidated Balance Sheets. . . . . . . . . . . 22
Consolidated Statements of Cash Flows. . . . . . 23
Consolidated Statements of Shareholders'
Equity . . . . . . . . . . . . . . . . . . . . 24
Notes to Consolidated Financial Statements . . . 24-34
</TABLE>
FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-K and in written and oral statements
made by the Corporation may constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The words "believe," "expect" and "anticipate"
and similar expressions identify forward-looking statements. Although these
statements reflect the Corporation's current views with respect to future events
and financial performance, they are subject to many uncertainties and factors
relating to the Corporation's operations and business environment which may
cause the actual results of the Corporation to be materially different from any
future results expressed or implied by such forward-looking statements.
Examples of such uncertainties include, but are not limited to: changes in
customer demand for various products of the Corporation that could affect its
overall product mix, margins, plant utilization levels and asset valuations;
economic slowdown in the U.S. (contrary to the Corporation's expectations of
favorable economic conditions throughout 1998) or economic slowdowns in the
Corporation's major offshore markets, including Canada, Western Europe
(particularly Germany and the U.K.), Japan and Taiwan; effects of significant
changes in monetary and fiscal policies in the U.S.
Page 16 of 21
<PAGE>
and abroad which could result in currency fluctuations, including fluctuations
in the Canadian dollar, German mark and Japanese yen; inflationary pressures
which could raise interest rates and consequently the Corporation's cost of
funds; unforeseen difficulties in completing identified restructuring actions
initiated in 1996 in connection with the Augat merger, including disposal of
idle facilities, geographic shifts of production locations and closure of
redundant administrative facilities; unforeseen problems in the Corporation's
computer systems and from third parties with whom the Corporation deals on
financial transactions, specifically those related to "Year 2000" date-
recognition ability in time-sensitive software; availability and pricing of
commodities and materials needed for production of the Corporation's products,
including steel, copper, zinc, aluminum and plastic resins; increased downward
pressure on selling prices for the Corporation's products; unforeseen
difficulties arising from the integration of acquired businesses with the
Corporation's operations; changes in financial results and consequently in
equity income from the Corporation's equity investments in Taiwan, Japan,
Belgium and the U.S.; changes in environmental regulations and policies that
could impact projections of remediation expenses; significant changes in
governmental policies domestically and abroad that could create trade
restrictions, patent enforcement issues, tax-rate changes and changes in tax
treatment of such items as tax credits, withholding taxes, transfer pricing and
other income and expense recognition for tax purposes, including changes in
taxation on income generated in Puerto Rico.
The Corporation does not, by making any forward-looking statements,
undertake any obligation to update them (whether as a result of new information,
future events or otherwise).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES
Information for Item 9 of this Report appears on page 20 of the Definitive
Proxy Statement for the Corporation's 1998 Annual Meeting of Shareholders to be
held on May 6, 1998, and is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding members of the Corporation's Board of Directors is
presented in sections "Security Ownership of Management," "Election of
Directors," "The Board of Directors," and "Committees of the Board of Directors"
and on pages 2 through 9 of the Definitive Proxy Statement for the Corporation's
1998 Annual Meeting of Shareholders which will be held May 6, 1998, and is
incorporated herein by reference. Information regarding executive officers of
the Corporation is included above in Part I of this Form 10-K under the caption
"Executive Officers of the Registrant" pursuant to Instruction 3 to Item 401(b)
of Regulation S-K and General Instruction G(3) of Form 10-K.
Page 17 of 21
<PAGE>
Information for Items 11 through 13 of this Report appears in the
Definitive Proxy Statement for the Corporation's 1998 Annual Meeting of
Shareholders to be held on May 6, 1998, as indicated in the following table and
is incorporated herein by reference.
<TABLE>
<CAPTION>
PAGE IN PROXY
STATEMENT
---------
<S> <C>
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation . . . . . . . . . . . . . . . . . 10
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Management . . . . . . . . . . . . 2
Security Ownership of Certain Beneficial
Owners. . . . . . . . . . . . . . . . . . . . . . . 3
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Employment Contracts, Termination of Employment and
Change-of-Control Arrangements. . . . . . . . . . . 13
</TABLE>
Page 18 of 21
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The consolidated financial statements of the Corporation,
together with the report thereon of KPMG Peat Marwick LLP, dated
February 5, 1998, are presented on pages 21-35 of the
Corporation's 1997 Annual Report to Shareholders and are
incorporated herein by reference. With the exception of the
aforementioned information and the information incorporated by
reference in Items 5, 6, 7, 7A and 8 hereof, the Corporation's
1997 Annual Report to Shareholders is not to be deemed as filed
as part of this Report.
2. FINANCIAL STATEMENT SCHEDULES
All financial statement schedules have been omitted because they
are not applicable or the required information is included in the
consolidated financial statements, or the notes thereto,
contained in the Corporation's 1997 Annual Report to Shareholders
and incorporated herein by reference.
3. EXHIBITS
Exhibits 3.1, 3.2, 4.1 through 4.6, 10.1 through 10.14, 12, 13,
21, 23.1, 23.2, 24 and 99 are being filed in connection with
this Report and incorporated herein by reference.
The Exhibit Index on pages E-1 through E-3 is incorporated herein
by reference.
(b) REPORTS ON FORM 8-K
During the last quarter of the period covered by this Report on
Form 10-K, the Corporation filed one Current Report on Form 8-K,
dated December 4, 1997, under Items 5 and 7, reporting the
adoption of a shareholder rights plan.
Page 19 of 21
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Corporation has duly caused this Report to
be signed on its behalf by the undersigned, hereunto duly authorized.
THOMAS & BETTS CORPORATION
(Registrant)
BY: /s/ Fred R. Jones
-------------------------------------
Fred R. Jones
Vice President--Finance and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Corporation in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/CLYDE R. MOORE President, Chief Executive Officer March 19, 1998
- -------------------------- (PRINCIPAL EXECUTIVE OFFICER) and Director
Clyde R. Moore
/s/FRED R. JONES Vice President--Finance and Treasurer March 19, 1998
- -------------------------- (PRINCIPAL FINANCIAL OFFICER AND
Fred R. Jones PRINCIPAL ACCOUNTING OFFICER)
/s/T. KEVIN DUNNIGAN* Chairman of the Board and Director
- --------------------------
(T. Kevin Dunnigan)
/s/JEANANNE K. HAUSWALD* Director
- --------------------------
Jeananne K. Hauswald
/s/ROBERT A. KENKEL* Director
- --------------------------
Robert A. Kenkel
/s/JOHN N. LEMASTERS* Director
- --------------------------
John N. Lemasters
/s/JEAN-PAUL RICHARD* Director
- --------------------------
Jean-Paul Richard
Page 20 of 21
<PAGE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/IAN M. ROSS* Director
- --------------------------
Ian M. Ross
/s/WILLIAM H. WALTRIP* Director
- --------------------------
William H. Waltrip
*By: /s/ Fred R. Jones March 19, 1998
---------------------
Fred R. Jones
As attorney-in-fact for the
above-named officers and
directors pursuant to powers
of attorney duly executed by
such persons.
</TABLE>
Page 21 of 21
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------
<S> <C>
3.1 Charter of the Corporation, as amended
3.2 By-laws of the Corporation
4.1 Indenture dated as of January 15, 1992, between the Corporation and
Morgan Guaranty Trust Company of New York, as Trustee, relating to the
Corporation's unsecured debt securities. (Filed as Exhibit 4.5 to the
Corporation's Registration Statement on Form 8-B, filed May 2, 1996,
and incorporated herein by reference.)
4.2 First Supplemental Indenture dated as of May 2, 1996, between the
Corporation and Morgan Guaranty Trust Company of New York. (Filed as
Exhibit 4.3 to the Corporation's Registration Statement on Form 8-B,
filed May 2, 1996, and incorporated herein by reference.)
4.3 Second Supplemental Indenture dated as of February 10, 1998, between
the Corporation and The Chase Manhattan Bank, as Trustee, and form of
note relating to the Corporation's Medium-Term Notes; the last of
which is due February 13, 2003. (Filed as Exhibits 1, 4.1 and 4.2 to
the Corporation's Current Report on Form 8-K dated February 10, 1998,
Commission File No. 1-4682, and incorporated herein by reference.)
4.4 Form of 6 1/2% Senior Note due January 15, 2006. (Filed as Exhibit
4.3 to the Corporation's Registration Statement No. 333-893 on Form
S-4, and incorporated herein by reference.)
4.5 Form of 8 1/4% Senior Note due January 15, 2004. (Filed as an exhibit
to the Corporation's 1991 Annual Report on Form 10-K, Commission File
No. 1-4682, and incorporated herein by reference.)
4.6 Rights Agreement dated as of December 3, 1997, between the Corporation
and First Chicago Trust Company of New York, as Rights Agent, and form
of right certificate. (Filed as Exhibits 1 and 2 to the Corporation's
Registration Statement on Form 8-A, filed December 15, 1997, and
incorporated herein by reference.)
10.1 Credit Agreement dated March 29, 1995, among the Corporation and
Morgan Guaranty Trust Company of New York, individually and as agent,
and certain lenders. (Filed as an exhibit to the Corporation's 1995
Annual Report on Form 10-K, Commission File No. 1-4682, and
incorporated herein by reference.)
10.2 Amendment No. 1 to Credit Agreement dated December 8, 1995, among the
Corporation and Morgan Guaranty Trust Company of New York,
individually and as agent, and certain lenders. (Filed as an exhibit
to the Corporation's 1995 Annual Report on Form 10-K, Commission File
No. 1-4682, and incorporated herein by reference.)
E-1
<PAGE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<S> <C>
10.3 Amendment No. 2 to Credit Agreement dated May 2, 1996, among the
Corporation and Morgan Guaranty Trust Company of New York,
individually and as agent, and certain lenders. (Filed as Exhibit
10.1 to the Corporation's Registration Statement on form 8-B, filed
May 2, 1996, and incorporated herein by reference.)
10.4 Amendment No. 3 to Credit Agreement dated December 5, 1997, among the
Corporation and Morgan Guaranty Trust Company of New York,
individually and as agent, and certain lenders.
10.5 1990 Stock Option Plan and Form of Stock Option Agreement pursuant to
1990 Stock Option Plan. (Filed as an exhibit to the Corporation's
1990 Annual Report on Form 10-K, Commission File No. 1-4682, and
incorporated herein by reference.)
10.6 1993 Management Stock Ownership Plan, as amended, and forms of grant
agreements.
10.7 Executive Incentive Plan. (Description of the executive incentive
plan contained in the Definitive Proxy Statement for the Corporation's
1998 Annual Meeting of Shareholders, under the heading "The Human
Resources Committee Report on Executive Compensation," is incorporated
herein by reference.)
10.8 Pension Restoration Plan.
10.9 Retirement Plan for Nonemployee Directors, as amended.
10.10 Deferred Fee Plan for Nonemployee Directors.
10.11 Form of executive officer employment agreement, as amended.
10.12 Agreement with Kevin Dunnigan dated February 5, 1997. (Filed as an
exhibit to the Corporation's 1996 Annual Report on Form 10-K,
Commission File No. 1-4682, and incorporated herein by reference.)
10.13 1985 Stock Option Plan. (Filed as an exhibit to the Corporation's
1992 Annual Report on Form 10-K, Commission File No. 1-4682, and
incorporated herein by reference.)
10.14 Supplemental Executive Retirement Plan.
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
(Filed as Exhibit 12 to the Corporation's Current Report on Form 8-K,
dated February 5, 1998, Commission File No. 1-4682, and incorporated
herein by reference.)
13 Annual Report to Shareholders for the fiscal year ended December 28,
1997.
21 Subsidiaries of the Corporation.
23.1 Consent of Independent Public Accountants.
E-2
<PAGE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<S> <C>
23.2 Consent of Independent Public Accountants.
24 Power of Attorney.
99 Independent Auditor's Report on Augat, Inc.
</TABLE>
E-3
<PAGE>
CHARTER
OF
THOMAS & BETTS TENNESSEE, INC.
ARTICLE I.
CORPORATE NAME
The name of the corporation is Thomas & Betts Tennessee, Inc.
ARTICLE II.
INITIAL REGISTERED AGENT AND OFFICE
The initial registered agent of the corporation is C T Corporation
System, and the initial registered office of the corporation is at 530 Gay
Street, Knoxville, County of Knox, Tennessee 37902.
ARTICLE III.
INITIAL PRINCIPAL OFFICE
The initial principal office of the corporation is at 1555 Lynnfield
Road Memphis, Tennessee 38119.
ARTICLE IV.
INCORPORATORS
The incorporators are T. Kevin Dunnigan and Clyde R. Moore, 1555
Lynnfield Road, Memphis, Tennessee 38119.
ARTICLE V
NATURE AND PURPOSES OF CORPORATION
The corporation is for profit. The purposes for which this
corporation is organized are to engage in and to do any lawful act concerning
any or all lawful business for which corporations now or at any time hereafter
may be incorporated under the Tennessee Business Corporation Act, as amended
from time to time.
ARTICLE VI.
AUTHORIZED SHARES
The corporation is authorized to issue 80,500,000 shares consisting of
80,000,000 shares of Common Stock, no par value, and 500,000 shares of Preferred
Stock, no par value. The designations, relative rights, preferences and
limitations of the shares of
<PAGE>
each class, or the manner in which such relative rights, preferences and
limitations are determined, are as follows:
COMMON STOCK. The Common Stock shall have full voting rights and
shall entitle the holders thereof to one vote for each share of Common Stock
held.
PREFERRED STOCK. Subject to the provisions hereof, the Board of
Directors is hereby expressly authorized to determine, in whole or in part,
the preferences, limitations and relative rights of the Preferred Stock as a
class, and to issue shares of Preferred Stock in series, and to fix from time
to time before issuance the number of shares to be included in each series
and the designations, relative rights, preferences and limitations of all
shares of each series. The authority of the Board of Directors with respect
to each series shall include, without limitation, the determination of any or
all of the following matters:
A. The number of shares constituting such series and the designation
thereof to distinguish the shares of such series from the shares of all other
series;
B. The dividend rate on the shares of such series and whether such
dividends shall be cumulative and, if cumulative, the date from which dividends
shall accumulate;
C. The redemption price or prices for shares of such series, if
redeemable, and the terms and conditions of such redemption;
D. The preference, if any, of shares of such series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
corporation;
E. The voting rights, if any, of shares of such series in addition to
the voting rights prescribed by law and the terms of exercise of such voting
rights;
F. The right, if any, of shares of such series to be converted into
shares of any other series or class and the terms and conditions of such
conversion;
G. The terms or amount of any sinking fund provided for the purchase or
redemption of such series; and
H. Any other relative rights, preferences and limitations of such series.
The shares of each series may vary from the shares of any other series as
to any of such matters.
<PAGE>
ARTICLE VII.
MANAGEMENT OF THE CORPORATION
The property, affairs, and business of the corporation shall be
managed by a Board of Directors which shall exercise all the powers of the
corporation without action by the shareholders, except as otherwise expressly
provided by statute or by this Charter or by the Bylaws.
The Board of Directors may make Bylaws, and, from time to time may
alter, amend or repeal any Bylaws; but any Bylaw made, altered or amended by the
Board of Directors may be altered, amended or repealed by the shareholders at
any annual meeting or at any special meeting provided notice of such proposed
alteration, amendment or repeal is included in the notice of meeting.
In discharging the duties of a director and in determining what the
director reasonably believes to be in the best interests of the corporation,
a director may, in addition to considering the effects of any action on
shareholders and to the maximum extent permitted by law, consider any
relevant factor. Without limiting the generality of the foregoing, the Board
of Directors of the corporation may consider the effects a proposed merger,
exchange, tender offer or significant disposition of the assets of the
corporation or any of the corporation's subsidiaries would have on the
corporation's employees, customers, suppliers, and the communities in which
the corporation or its subsidiaries operate or are located, and the long-term
as well as the short-term interests of the corporation and its shareholders,
including the possibility that these interests may best be served by the
continued independence of the corporation, in connection with its
deliberations concerning, and actions taken with respect to, such merger,
exchange, tender offer or significant disposition of assets.
ARTICLE III.
LIMITATION OF DIRECTOR LIABILITY
No person who is or was a director of the corporation, or such
person's heirs, executors or administrators, shall be personally liable to
the corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this provision shall
not eliminate or limit the liability of any such party (i) for any breach of
a director's duty of loyalty to the corporation or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, or (iii) for unlawful distributions under the
Tennessee Business Corporation Act. Any repeal or modification of the
provisions of this Article VIII, directly or by the adoption of an
inconsistent provision of this Charter, shall not adversely affect any right
or protection in favor of a particular individual at the time of such repeal
or modification.
<PAGE>
ARTICLE IX.
SPECIAL MEETING OF SHAREHOLDERS
A special meeting of shareholders may be called at any time by the
Chairman of the Board of Directors or by the President or by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
directors which the corporation would have at the time of the adoption of such
resolution if there were no vacancies, and by no other person or persons.
ARTICLE X.
REMOVAL OF DIRECTORS AND FILLING OF VACANCIES
Any director may be removed, either with or without cause, at any
time, by the affirmative vote of at least 50% of the total number of votes
entitled to be cast at a special meeting of shareholders called for that
purpose.
Any director may be removed for cause, at any time, by a majority
vote of the entire Board of Directors at a meeting called for that purpose,
the notice of meeting for which states that a purpose of the meeting is the
removal of a director.
Any vacancy in the Board of Directors arising at any time and for
any cause, may be filled by the vote of a majority of the directors remaining
in office. Any vacancy not filled by the Board of Directors may be filled by
the shareholders at an annual meeting or at a special meeting of shareholders
called for that purpose.
Dated: February 20, 1996
/s/ T. Kevin Dunnigan
----------------------------------
T. Kevin Dunnigan, Incorporator
/s/ Clyde R. Moore
----------------------------------
Clyde R. Moore, Incorporator
<PAGE>
ARTICLES OF MERGER OF
THOMAS & BETTS CORPORATION, A NEW JERSEY CORPORATION
WITH AND INTO
THOMAS & BETTS TENNESSEE, INC., A TENNESSEE CORPORATION
To the Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-21-102 of the Tennessee Code
Annotated, the undersigned corporation adopts the following Articles of Merger
for the purpose of merging into a single corporation:
1. The Agreement and Plan of Merger is attached hereto as Appendix "A" and
incorporated herein by reference.
2. As to Thomas & Betts Tennessee, Inc., the surviving corporation to the
merger, the Agreement and Plan of Merger was duly adopted and approved
by the board of directors by unanimous consent effective March 11, 1996
and by its sole shareholder, on April 18, 1996.
3. As to Thomas & Betts Corporation, the Agreement and Plan of Merger and
performance of its terms were duly authorized by all action required by
the laws under which it was organized and by its certificate of
incorporation. The Agreement and Plan of Merger was approved by the
board of directors at a meeting duly called and held on February 7,
1996, and by the requisite vote of the shareholders pursuant to the New
Jersey Business Corporation Act on May 1, 1996.
4. The merger shall be effective upon the filing of these Articles of
Merger with the Secretary of State of the State of Tennessee and the
filing of the certificate of merger with the Secretary of State of New
Jersey in accordance with the New Jersey Business Corporation Act.
5. Pursuant to the Agreement and Plan of Merger, at the effective time of
the merger, the Charter of Thomas & Betts Tennessee, Inc., the surviving
corporation, shall be amended to change its name to Thomas & Betts
Corporation.
IN WITNESS WHEREOF, the undersigned have caused this document to be
executed as of the 1st day of May 1996.
THOMAS & BETTS CORPORATION THOMAS & BETTS TENNESSEE, INC.
By: /s/ T. Kevin Dunnigan By: /s/ T. Kevin Dunnigan
-------------------------------- ------------------------------
T. Kevin Dunnigan, Chairman T. Kevin Dunnigan, Chairman
and Chief Executive Officer and Chief Executive Officer
<PAGE>
ARTICLES OF AMENDMENT TO THE CHARTER
CORPORATE CONTROL NUMBER: 0307723
PURSUANT TO THE PROVISIONS OF SECTION 48-20-106 OF THE TENNESSEE BUSINESS
CORPORATION ACT, THE UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES OF
AMENDMENT TO ITS CHARTER:
1. PLEASE INSERT THE NAME OF THE CORPORATION AS IT APPEARS ON RECORD:
Thomas & Betts Corporation
IF CHANGING THE NAME, INSERT THE NEW NAME ON THE LINE BELOW:
N/A
2. PLEASE INSERT ANY CHANGES THAT APPLY:
A. PRINCIPAL ADDRESS: 8155 T&B Boulevard, Memphis, TN 38125
B. REGISTERED AGENT:
C. REGISTERED ADDRESS:
D. OTHER CHANGES:
3. THE CORPORATION IS FOR PROFIT.
4. THE MANNER (IF NOT SET FORTH IN THE AMENDMENT) FOR IMPLEMENTATION OF ANY
EXCHANGE, RECLASSIFICATION, OR CANCELLATION OF ISSUED SHARES IS AS FOLLOWS:
See attached resolutions
5. THE AMENDMENT WAS DULY ADOPTED ON December 3, 1997
BY:
THOMAS & BETTS CORPORATION
/s/ Clyde R. Moore
---------------------------------
Clyde R. Moore Signature
President and Chief
Executive Officer
<PAGE>
AS OF DECEMBER 3, 1997
RESOLUTION ADOPTING SHAREHOLDER RIGHTS PLAN
WHEREAS, the Board of Directors deems it desirable and in the best
interests of the Corporation and its shareholders that steps be taken to
preserve for shareholders the long-term value of the Corporation in the event
of a potential takeover; and
WHEREAS, the Board of Directors believes that a dividend to holders of
the Corporation's common stock, no par value per share ("Common Shares"), of
rights ("Rights") to purchase shares of a newly established and designated
series of the Corporation's preferred stock, having the relative rights,
preferences and limitations set forth below ("Preferred Shares"), on the
terms and subject to the conditions hereinafter provided will contribute to
the preservation of the Corporation's long-term value for its shareholders.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
declares that a dividend of one Right for each Common Share be paid on
December 15, 1997 to stockholders of record of the Common Shares issued and
outstanding at the close of business on such date, each Right representing
the right to purchase 1/200 of a Preferred Share upon the terms and subject
to the conditions set forth in the summary of a shareholder rights agreement
presented to this meeting.
RESOLVED FURTHER, that the exercise price of the Rights shall be $200
per Right and that the redemption price therefor shall be $.005 per Right.
RESOLVED FURTHER, that the proper officers of the Corporation be, and
each of them hereby is, authorized in the name and on behalf of the
Corporation to execute a rights agreement (the "Rights Agreement"), with such
modifications as the officers executing the same, with advice of counsel,
shall approve, and to deliver the same to the Rights Agent thereunder, such
execution and delivery conclusively to evidence the due authorization and
approval thereof by the Corporation.
RESOLVED FURTHER, that certificates evidencing the Rights (the "Rights
Certificates") shall be substantially in the form set forth in the Rights
Agreement and shall be issued and delivered as provided therein.
RESOLVED FURTHER, that the Rights Certificates shall be signed by the
President and Chief Executive Officer, the Vice President-Finance and
Treasurer or any Vice President and shall be attested by the Secretary or the
Assistant Secretary of the Corporation, provided that the signature of any of
said officers of the Corporation may, but need not be, a facsimile signature
imprinted or otherwise reproduced on the Rights Certificates, and that the
Corporation hereby adopts for such purpose the facsimile signature of the
present or any future President and Chief Executive Officer, Vice
President-Finance and Treasurer, Vice President, Secretary or Assistant
Secretary of the Corporation, notwithstanding the fact that at the time the
Rights Certificates shall be authenticated and delivered or disposed of he or
she shall have ceased to be such officer.
1
<PAGE>
RESOLVED FURTHER, that the proper officers of the Corporation be, and
each of them hereby is, authorized to execute on behalf of the Corporation
Rights Certificates issued to replace lost, stolen, mutilated or destroyed
Rights Certificates, and such Rights Certificates as may be required for
exchange, substitution or transfer as provided in the Rights Agreement in the
manner and form to be required in, or contemplated by, the Rights Agreement.
RESOLVED FURTHER, that the Rights Certificates shall be manually
countersigned by the Rights Agent and books for the registration and transfer
of the Rights Certificates shall be maintained by the Rights Agent at its
principal offices.
RESOLVED FURTHER, that pursuant to the authority granted to and vested
in the Board of Directors of the Corporation in accordance with the
provisions of its Charter, the Board of Directors hereby creates a series of
Preferred Stock, no par value per share, of the Corporation and hereby states
the designation and number of shares, and fixes the relative rights,
preferences and limitations thereof (in addition to the provisions set forth
in the Charter of the Corporation, which are applicable to the Preferred
Stock of all classes and series), as set forth in the Certificate of
Designation comprising an exhibit to the Rights Agreement.
RESOLVED FURTHER, that 300,000 Preferred Shares be, and they hereby are,
initially reserved for issuance upon exercise of the Rights, such number to
be subject to adjustment from time to time in accordance with the Rights
Agreement.
RESOLVED FURTHER, that the First Chicago Trust Company of New York (the
"Bank") be, and it hereby is, appointed Rights Agent under the Rights
Agreement, and that upon presentation to it of Rights Certificates for
exercise in accordance with the Rights Agreement, the Bank is authorized, as
Transfer Agent and Registrar for the Preferred Shares, to issue originally,
countersign, register and deliver the Preferred Shares issuable upon such
exercise.
RESOLVED FURTHER, that the proper officers of the Corporation be, and
each of them hereby is, authorized, for and on behalf of the Corporation, to
execute personally or by attorney-in-fact and to cause to be filed with the
Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), for the
registration of the Preferred Shares issuable upon exercise of the Rights,
and thereafter to execute and cause to be filed any amended registration
statement or registration statements and amended prospectus or prospectuses,
or amendments or supplements to any of the foregoing, and to cause such
registration statement and any amendments thereto to become effective in
accordance with the Securities Act and the General Rules and Regulations of
the Securities and Exchange Commission thereunder.
RESOLVED FURTHER, that the Vice President-General Counsel of the
Corporation be, and he hereby is, appointed as agent for service of the
Corporation with respect to said registration statement with all the powers
and functions specified in the General Rules and Regulations of the
Securities and Exchange Commission under the Securities Act.
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RESOLVED FURTHER, that the proper officers of the Corporation be, and
each of them hereby is, authorized, jointly and severally, in the name and on
behalf of the Corporation, to take all such actions and to execute all such
documents as they may deem necessary or appropriate in connection with the
issuance of the Rights and the Preferred Shares issuable upon exercise of the
Rights in order to comply with the Securities Act and the Securities Exchange
Act of 1934, as amended.
RESOLVED FURTHER, that the proper officers of the Corporation be, and
each of them hereby is, authorized, jointly and severally, in the name and on
behalf of the Corporation, to execute and file such application or
applications, and amendments and supplements thereto, and take such other
action as may be necessary to list the Rights (and, if in the judgment of
such officers it is appropriate to do so, the Preferred Shares issuable upon
exercise thereof) on the New York Stock Exchange and on any other stock
exchanges deemed appropriate by such officers of the Corporation, and that
the proper officers of the Corporation be, and each of them hereby is,
authorized to appear before the Securities and Exchange Commission and any
stock exchanges, and to execute such papers and agreements as may be
necessary to conform with the requirements of the Securities and Exchange
Commission and any such stock exchanges and to effectuate such listing and
registration.
RESOLVED FURTHER, that the form of Indemnity Agreement required by the
New York Stock Exchange, indemnifying the New York Stock Exchange, and others
against loss resulting from reliance on the facsimile signatures of the
officers of the Corporation on the Rights (or Preferred Shares issuable upon
exercise thereof) be, and it hereby is, approved, and that the proper
officers of the Corporation be, and each of them hereby is, authorized to
execute and deliver such Indemnity Agreement.
RESOLVED FURTHER, that so long as the Rights are attached to the Common
Shares as provided in the Rights Agreement, one additional Right shall be
delivered with each Common Share that shall become outstanding after December
15, 1997, including but not limited to Common Shares issued upon conversion
of any convertible securities of the Corporation and the exercise of options
to purchase Common Shares granted by the Corporation.
RESOLVED FURTHER, that the Board of Directors deems it desirable and in
the best interests of the Corporation that the Preferred Shares issuable upon
exercise of the Rights be qualified or registered for sale in various
jurisdictions; that the President and Chief Executive Officer, the Vice
President-Finance and Treasurer, any Vice President, the Secretary and the
Assistant Secretary be, and each of them hereby is, authorized to determine
the jurisdictions in which appropriate action shall be taken to qualify or
register for sale all or such part of the Preferred Shares issuable upon
exercise of the Rights as said officers may deem advisable; that said
officers are hereby authorized to perform on behalf of the Corporation any
and all such acts as they may deem necessary or advisable in order to comply
with the applicable laws of any such jurisdictions, and in connection
therewith to execute and file all requisite papers and documents, including,
but not limited to, applications, reports, surety bonds, irrevocable consents
and appointments of attorneys for service of process; and the execution by
such officers of any such papers or documents or the
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doing by them of any act in connection with the foregoing matters shall
conclusively establish their authority therefor and the approval and
ratification by the Corporation of the papers and documents so executed and
the action so taken.
RESOLVED FURTHER, the Board of Directors hereby adopts, as if expressly
set forth herein, the form of any resolution required by any authority to be
filed in connection with any applications, consents to service, issuer's
covenants or other documents if (i) in the opinion of the officers of the
Corporation executing the same, the adoption of such resolutions is necessary
or desirable and (ii) the Secretary or the Assistant Secretary of the
Corporation evidences such adoption by inserting in the minutes of this
meeting copies of such resolutions, which will thereupon be deemed to be
adopted by the Board of Directors with the same force and effect as if
presented at this meeting.
RESOLVED FURTHER, that the proper officers of the Corporation be, and
each of them hereby is, authorized and directed, jointly and severally, for
and on behalf of the Corporation, to execute and deliver any and all
certificates, agreements and other documents, take any and all steps and do
any and all things which they may deem necessary or advisable, with advice of
counsel, in order to effectuate the purposes of each and all of the foregoing
resolutions.
RESOLVED FURTHER, that any actions taken by such officers prior to the
date of this meeting that are within the authority conferred hereby are
hereby ratified, confirmed and approved in all respect as the acts and deeds
of the Corporation.
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<PAGE>
BYLAWS
OF
THOMAS & BETTS CORPORATION
As Adopted by the Board of Directors on March 11, 1996 and
Amended on September 3, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE 1
MEETINGS OF SHAREHOLDERS
<S> <C>
Section 1. ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . 1
Section 2. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . 1
Section 3. PLACE OF MEETINGS. . . . . . . . . . . . . . . . . . . . 1
Section 4. NOTICE OF MEETINGS . . . . . . . . . . . . . . . . . . . 1
Section 5. QUORUM; ADJOURNMENT. . . . . . . . . . . . . . . . . . . 1
Section 6. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . 1
Section 7. VOTING . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 8. SHAREHOLDER LISTS. . . . . . . . . . . . . . . . . . . . 2
Section 9. NOTICE OF BUSINESS AND NOMINATIONS . . . . . . . . . . . 2
A. ANNUAL MEETINGS OF SHAREHOLDERS . . . . . . . . . . 2
B. SPECIAL MEETINGS OF SHAREHOLDERS. . . . . . . . . . 4
C. GENERAL . . . . . . . . . . . . . . . . . . . . . . 4
Section 10. INSPECTORS OF ELECTION; OPENING AND
CLOSING THE POLLS. . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2
BOARD OF DIRECTORS
Section 1. GENERAL POWERS . . . . . . . . . . . . . . . . . . . . . 5
Section 2. NUMBER, ELECTION AND TERM OF OFFICE. . . . . . . . . . . 5
Section 3. MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. PLACE OF MEETING . . . . . . . . . . . . . . . . . . . . 6
Section 5. NOTICE OF MEETINGS . . . . . . . . . . . . . . . . . . . 6
Section 6. QUORUM AND MANNER OF ACTION. . . . . . . . . . . . . . . 6
Section 7. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. RESIGNATIONS . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. REMOVAL OF DIRECTORS . . . . . . . . . . . . . . . . . . 7
Section 10. VACANCIES. . . . . . . . . . . . . . . . . . . . . . . . 7
Section 11. COMPENSATION . . . . . . . . . . . . . . . . . . . . . . 7
Section 12. INCREASING NUMBER OF DIRECTORS . . . . . . . . . . . . . 7
ARTICLE 3
EXECUTIVE AND OTHER COMMITTEES
Section 1. EXECUTIVE COMMITTEE, GENERAL POWERS AND MEMBERSHIP 8
Section 2. PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3. OTHER COMMITTEES . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
i
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<TABLE>
<CAPTION>
ARTICLE 4
OFFICERS
<S> <C>
Section 1. ELECTION, TERM OF OFFICE AND QUALIFICATIONS 9
Section 2. REMOVAL. . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3. RESIGNATIONS . . . . . . . . . . . . . . . . . . . . . . 9
Section 4. VACANCIES. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5. CHAIRMAN OF THE BOARD OF DIRECTORS . . . . . . . . . . . 9
Section 6. PRESIDENT. . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7. CHIEF EXECUTIVE OFFICER. . . . . . . . . . . . . . . . . 10
Section 8. SECRETARY AND ASSISTANT SECRETARY. . . . . . . . . . . . 10
Section 9. TREASURER. . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. RIGHT TO INDEMNIFICATION . . . . . . . . . . . . . . . . 11
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. . . . . . . . . . . . . 11
Section 3. NON-EXCLUSIVITY OF RIGHTS; CONTINUATION OF RIGHTS. . . . 12
Section 4. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 6
EXECUTION OF INSTRUMENTS, ETC.
Section 1. CONTRACTS, ETC.. HOW EXECUTED. . . . . . . . . . . . . . 13
Section 2. DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3. CHECKS, DRAFTS, ETC. . . . . . . . . . . . . . . . . . . 13
ARTICLE 7
SHARES AND THEIR TRANSFER; SHAREHOLDER RECORDS
Section 1. CERTIFICATES OF STOCK. . . . . . . . . . . . . . . . . . 13
Section 2. TRANSFER OF SHARES . . . . . . . . . . . . . . . . . . . 14
Section 3. CLOSING OF TRANSFER BOOKS; RECORD DATE . . . . . . . . . 14
Section 4. LOST AND DESTROYED CERTIFICATES. . . . . . . . . . . . . 14
Section 5. REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . 14
Section 6. EXAMINATION OF SHAREHOLDER LIST. . . . . . . . . . . . . 15
ARTICLE 8
NOTICE
Section 1. WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
ii
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<TABLE>
<CAPTION>
ARTICLE 9
MISCELLANEOUS
<S> <C>
Section 1. FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . 15
Section 2. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 10
AMENDMENTS
Section 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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BYLAWS
ARTICLE 1
MEETINGS OF SHAREHOLDERS
Section 1. ANNUAL MEETING. The annual meeting of shareholders for
the election of directors and for the transaction of such other business as
may properly come before said meeting shall be held on a day during the
period from April 15 to May 15, or on any other day, and at a time determined
by the Board of Directors.
Section 2. SPECIAL MEETINGS. Except as otherwise required by law, a
special meeting of shareholders may be called at any time by the Chairman of
the Board of Directors if he or she is an officer of the Corporation or by
the President or by the Board of Directors pursuant to a resolution adopted
by a majority of the total number of directors which the Corporation would
have at the time of the adoption of such resolution if there were no
vacancies (the "Whole Board") and by no other person or persons.
Section 3. PLACE OF MEETINGS. All meetings of shareholders shall be
held at the principal office of the Corporation in the State of Tennessee, or
at other places in or outside of such State as may be designated by the Board
of Directors and specified in the notice of meeting.
Section 4. NOTICE OF MEETINGS. Notice of each meeting stating the
purpose or purposes for which the meeting is called and the time when and the
place where it is to be held, shall be served upon each shareholder of record
entitled to vote at such meeting, either personally or by mailing such notice
to him or her, not less than 10 days nor more than two months before the time
fixed for such meeting. If mailed, it shall be directed to a shareholder at
his or her address as it appears on the shareholder list. Any previously
scheduled meeting of the shareholders may be postponed by resolution of the
Board of Directors upon public notice given prior to the date previously
scheduled for such meeting of shareholders.
Section 5. QUORUM; ADJOURNMENT. Except as otherwise provided by law
or by the Charter, at each meeting of shareholders, the holders of record of
a majority of the total number of the shares of capital stock entitled to
vote must be present in person or by proxy to constitute a quorum for the
transaction of business. Whether or not there is a quorum at any meeting, the
shareholders present and entitled to cast a majority of the votes thereat or
the Chairman of the meeting may adjourn and readjourn the meeting from time
to time. At any such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally called.
Section 6. ORGANIZATION. At every meeting of the shareholders, the
Chairman of the Board of Directors, or, in his or her
<PAGE>
absence, the President, or, in his or her absence, a Vice President
designated by the President or, in the absence of such designation, a
chairman designated by the Board of Directors, shall act as Chairman. The
Secretary or the Assistant Secretary or such officer of the Corporation
designated by the chairman shall act as secretary of each meeting of the
shareholders.
Section 7. VOTING. Each shareholder of record present shall be
entitled at each meeting of shareholders to such number of votes as shall be
prescribed by the Charter for the shares of capital stock recorded in his or
her name in the shareholder records of the Corporation
(a) at the record date fixed as provided in Section 3 of
Article 7, or
(b) if no such record date shall have been fixed, then at the
close of business on the eleventh day before the day of
such meeting.
The voting at any meeting of shareholders need not be by ballot,
unless specifically required by law or requested by a qualified voter present
in person or by proxy.
Except to the extent permitted under the Tennessee Business
Corporation Act, shares of the Corporation's capital stock shall not be
entitled to vote if such shares are owned, directly or indirectly, by another
corporation of which the Corporation owns, directly or indirectly, a majority
of the shares entitled to vote for directors of such corporation.
Notwithstanding, the foregoing shall not limit the power of the Corporation
to vote any shares, including its own shares, held by it in a fiduciary
capacity.
Section 8. SHAREHOLDER LISTS. The Transfer Agent or the Secretary,
or such other officer as may be designated by the Board of Directors, shall
make a full, true and complete list, in alphabetical order, of all
shareholders entitled to vote at each annual or special meeting of
shareholders, and the address and the number of shares of capital stock held
by each. The Board of Directors shall produce such list at the time and place
of the meeting, to remain there during the meeting. Such list shall be the
only evidence as to who are the shareholders entitled to vote at the meeting.
Section 9. NOTICE OF BUSINESS AND NOMINATIONS.
A. ANNUAL MEETINGS OF SHAREHOLDERS.
[1] Nominations of persons for election to the Board of
Directors of the Corporation and any proposal of business to be considered
by the shareholders may be made at an annual meeting of shareholders only
(a) pursuant to the
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Corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any shareholder of the Corporation who was a
shareholder of record at the time of giving of notice provided for in this
Section, who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section.
[2] For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (c) of
paragraph (A) (1) of this Section, the shareholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60 days nor
more than 90 days prior to the first anniversary of the preceding year's
annual meeting; provided, how-ever, that in the event that the date of the
annual meeting is advanced by more than 30 days or delayed by more than 60
days from such anniversary date, notice by the shareholder to be timely
must be so delivered not earlier than the 90th day prior to such annual
meeting and not later than the close of business on the later of the 60th
day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made.
Such shareholder's notice shall set forth (a) as to each person whom
the shareholder proposes to nominate for election or reelection as a
director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (including
such person's written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); (b) as to any other
business that the shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material
interest in such business of such shareholder and the beneficial owner, if
any, on whose behalf the proposal is made; and (c) as to the shareholder
giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made (i) the name and address of such
shareholder, as such name and address appear in the Corporation's
shareholder records, and of such beneficial owner and (ii) the class and
number of shares of the Corporation which are owned beneficially and of
record by such shareholder and such beneficial owner.
[3] Notwithstanding anything in the second sentence of paragraph
(A) (2) of this Section to the contrary, in the event that the number of
directors to be elected to the Board
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of Directors of the Corporation is increased and there is no public
announcement naming all of the nominees for director or specifying the size
of the increased Board of Directors made by the Corporation at least 70
days prior to the first anniversary of the preceding year's annual meeting,
a shareholder's notice required by this Section shall also be considered
timely, but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business
on the 10th day following the day on which such public announcement is
first made by the Corporation.
B. SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall be
conducted at a special meeting of shareholders as shall have been brought
before the meeting pursuant to the notice of meeting. Nominations of persons
for election to the Board of Directors may be made at a special meeting of
shareholders at which directors are to be elected pursuant to the notice of
meeting (a) by or at the direction of the Board of Directors or (b) by any
shareholder of the Corporation who is a shareholder of record at the time of
giving of notice provided for in this Section, who shall be entitled to vote
at the meeting and who complies with the notice procedures set forth in this
Section. Nominations by shareholders of persons for election to the Board of
Directors may be made at such a special meeting of shareholders if the
shareholder's notice required by paragraph (A) (2) of this Section shall be
delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the 90th day prior to such special meeting and
not later than the close of business on the later of the 60th day prior to
such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
C. GENERAL.
[1] Only such persons who are nominated in accordance with the
procedures set forth in this Section shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
shareholders as shall have been brought before the meeting in accordance
with the procedures set forth in this Section. Except as otherwise provided
by law, the Chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set forth in
this Section and, if any proposed nomination or business is not in
compliance with this Section, to declare that such defective proposal or
nomination shall be disregarded.
[2] For purposes of this Section, "public announce-
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<PAGE>
ment" shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15 (d) of the Exchange Act.
[3] Notwithstanding the foregoing provisions of this Section, a
shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section. Nothing in this Section shall be deemed
to affect any rights of shareholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange
Act.
Section 10. INSPECTORS OF ELECTIONS; OPENING AND CLOSING THE POLLS.
The Board of Directors by resolution shall appoint one or more inspectors,
which inspector or inspectors may include individuals who serve the
Corporation in other capacities, including, without limitation, as officers,
employees, agents or representatives of the Corporation, to act at the
meeting and make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate has been appointed to act or is able to act at a
meeting of shareholders, the chairman of the meeting shall appoint one or
more inspectors to act at the meeting. Each inspector, before discharging his
or her duties, shall take and sign an oath or affirmation faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his or her ability.
The chairman of the meeting shall fix and announce at the meeting
the date and time of the opening and the closing of the polls for each matter
upon which the shareholders will vote at a meeting.
ARTICLE 2
BOARD OF DIRECTORS
Section 1. GENERAL POWERS. The business of the Corporation, except as
otherwise expressly provided by law or by the Charter, shall be managed by the
Board of Directors.
Section 2. NUMBER, ELECTION AND TERM OF OFFICE. A Board of Directors of
not less than seven nor more than fifteen members as may be determined by the
Board of Directors at a meeting held prior to the annual meeting shall be
elected at the annual meeting of shareholders. The number of directors to be
elected shall be stated in the notice of the meeting. Subject to such
limitation, the persons receiving the greatest number of votes shall be the
directors and they shall hold office until the next annual meeting
5
<PAGE>
and until their successors shall have been elected and qualified, or until
death, resignation, disqualification or removal. Each director shall within one
month's time of his or her election and so long as he or she shall continue to
be a director, be a bona fide holder of at least one share of the Common Stock
of the Corporation.
Section 3. MEETINGS. The Board of Directors shall hold regular
meetings on such days and at such hours as may be fixed by the Board of
Directors from time to time, except that a regular meeting shall be held as soon
as practicable after the adjournment of the annual meeting of the shareholders
at which such Board of Directors shall have been elected, for the purpose of
organization, the election of officers and the transaction of such other
business as may properly come before the meeting.
Special meetings shall be held whenever called by the Chairman of the
Board of Directors or by the President or any two directors.
Section 4. PLACE OF MEETING. Meetings of the Board of Directors shall
be held at the principal office of the Corporation or at such other place as the
Board of Directors may from time to time determine.
Section 5. NOTICE OF MEETINGS. Notice need not be given for regular
Board of Directors meetings, the dates, times, and places of which have been
fixed by the Board of Directors in advance for the calendar year. Notice of a
special meeting or of a change in the date, time, or place of holding a regular
Board of Directors meeting shall be communicated (i) in writing to each director
at the director's residence or usual place of business, or at such other address
as the director may have designated in a written request filed with the
Secretary, at least two days before the day on which the meeting is to be held,
or (ii) orally, in person or by telephone, at least 24 hours before the time at
which the meeting is to be held. Notice of any meeting of the Board of Directors
may be waived in writing by any director either before or after the time of such
meeting; and at any meeting at which every director shall be present, even
though without any notice, any business may be transacted.
Section 6. QUORUM AND MANNER OF ACTING. A majority of the total number
of directors shall be present in person or by telephone at any meeting of the
Board of Directors in order to constitute a quorum for the transaction of
business thereat. Whether or not there is a quorum at any meeting, a majority of
the directors who are present may adjourn and readjourn any meeting from time to
time to a day and hour certain.
Section 7. ORGANIZATION. At every meeting of the Board of Directors,
the Chairman of the Board of Directors, or, in his or
6
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her absence, the President, or, in his or her absence, a chairman chosen by a
majority of the directors present, shall preside. The Secretary of the
Corporation shall act as secretary of the meetings of the Board of Directors. At
any meeting of the Board of Directors, in the absence of the Secretary, the
chairman of such meeting shall appoint a person to act as secretary of the
meeting.
Section 8. RESIGNATIONS. Any director may resign at any time by
giving written notice to the Chairman of the Board of Directors or to the
President or to the Secretary of the Corporation or to the Board of
Directors. Such resignation shall take effect at the time specified therein
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 9. REMOVAL OF DIRECTORS. Any director may be removed,
either with or without cause, at any time, by the affirmative vote of at
least 50% of the total number of votes entitled to be cast at a special
meeting of shareholders called for that purpose. Any director may be removed
for cause, at any time, by a majority vote of the entire Board of Directors
at a meeting called for that purpose, the notice of meeting for which states
that a purpose of the meeting is the removal of a director.
Section 10. VACANCIES. Any vacancy in the Board of Directors arising
at any time and for any cause, may be filled by the vote of a majority of the
directors remaining in office. Any vacancy not filled by the Board of
Directors may be filled by the shareholders at an annual meeting or at a
special meeting of shareholders called for that purpose.
Section 11. COMPENSATION. The Board of Directors, by the affirmative
vote of a majority of directors in office and irrespective of any personal
interest of any of them, shall have the authority to establish reasonable
compensation, including reimbursement of expenses, of directors for services
to the Corporation as directors, officers or otherwise. Nothing herein
contained shall be construed to preclude any director from serving in any
other capacity or receiving compensation for such service.
Section 12. INCREASING NUMBER OF DIRECTORS. The Board of Directors
shall have power at any time when the shareholders as such are not assembled
in a meeting, regular or special, to increase the number of directors elected
by the shareholders and forthwith to fill such position or positions by the
election of one or more directors, to hold office until the next annual
meeting of shareholders, and until his, her or their successor or successors
are elected and qualified.
7
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ARTICLE 3
EXECUTIVE AND OTHER COMMITTEES
Section 1. EXECUTIVE COMMITTEE, GENERAL POWERS AND MEMBERSHIP. From
time to time, the Board of Directors may, by a majority of the Whole Board,
appoint from its members an Executive Committee consisting of at least three
members of the Board of Directors, a majority of whom shall not be employees
of the Corporation, and the Committee shall meet at the call of the Chairman,
or, in the absence of the Chairman, at the call of any member of such
committee, to act for the Board of Directors, to the extent permitted by law,
in any situation in which action of the Board of Directors is required and it
is not practicable to have a meeting of the Board of Directors. The Executive
Committee shall have and may exercise all the powers of the Board of
Directors except the power to authorize or approve distributions or
reacquisition of shares, except according to a formula or method prescribed
by the Board of Directors, the power to appoint or remove a member of the
Executive Committee or other committee, the power to fill vacancies in the
Board of Directors, the power to remove an officer appointed by the Board of
Directors, the power to amend or repeal these Bylaws and the power to
authorize or approve the issuance or sale or contract for sale of shares, or
to determine the designation and relative rights, preferences, and
limitations of a class or series of shares, except as authorized by the Board
of Directors within limits specifically prescribed by the Board of Directors.
All actions of the Executive Committee shall be reported to the Board of
Directors at its meeting next succeeding such action and, insofar as the
rights of third parties shall not be affected thereby, shall be subject to
revision and alteration by the Board of Directors.
All members of the Board of Directors not appointed to the
Executive Committee may be authorized by appropriate action of the Board of
Directors to attend the meetings of the Executive Committee as observers but
without any right to vote at such meetings and shall be entitled to receive
such fees as shall be fixed by the Board of Directors.
Section 2. PROCEDURE. The Executive Committee shall fix its own
rules of procedure and shall meet where and as provided by such rules or by
resolution of the Board of Directors. The presence in person or by telephone
of a majority shall be necessary to constitute a quorum and in every case the
affirmative vote of a majority of all members of the committee shall be
necessary.
Section 3. OTHER COMMITTEES. From time to time, the Board of
Directors, by resolution adopted by a majority vote of the Whole Board, may
appoint any other committee or committees for any purpose or purposes with
such powers as shall be specified in the resolution of appointment and
permitted by law.
8
<PAGE>
ARTICLE 4
OFFICERS
Section 1. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Board of
Directors shall elect a President, a Secretary and a Treasurer and it may
elect a Chairman of the Board of Directors, who may or may not be designated
an officer of the Corporation, one or more Vice Presidents and such other
officers as it may deem necessary from time to time, with such authority and
such duties as may be prescribed by the Board of Directors from time to time.
Subject to the provisions of Section 2 and Section 3 of this Article each
elected officer shall hold office until the next annual election and until
his or her successor is chosen and qualified. Divisional officers, who shall
not be officers of the Corporation, may be appointed by the Chief Executive
Officer to perform such duties as may be assigned from time to time by the
Chief Executive Officer.
The same person, whether an officer of the Corporation or a
divisional officer, may hold more than one office, so far as permitted by
law, except the offices of president and secretary, and exercise and perform
the powers and duties thereof.
Section 2. REMOVAL. Any officer may be removed, either with or
without cause, at any time, by resolution adopted by a majority of the Whole
Board, at any meeting of the Board of Directors, or by any committee or
officer upon whom such power of removal shall have been conferred by
resolution adopted by a majority of the Whole Board.
Section 3. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Chairman of the Board of Directors if he or she
is an officer of the Corporation or to the President or to the Secretary or
to the Board of Directors. Any such resignation shall take effect at the time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 4. VACANCIES. A vacancy in any office arising from any cause
may be filled for the unexpired portion of the term in the manner prescribed
in these Bylaws for election to such elective office.
Section 5. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors shall preside at all shareholders' meetings and meetings
of the Board of Directors. He or she shall perform such additional duties and
possess such additional powers as from time to time shall be prescribed for
him or her by the Board of Directors.
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<PAGE>
Section 6. PRESIDENT. The President shall perform such duties and
possess such powers as from time to time shall be prescribed for him or her
by the Board of Directors. In the absence of the Chairman of the Board of
Directors he or she shall perform the duties and possess the powers of the
Chairman of the Board of Directors.
Section 7. CHIEF EXECUTIVE OFFICER. The Board of Directors may from
time to time designate either the Chairman of the Board of Directors or the
President as the Chief Executive Officer of the Corporation to be in general
charge of the business of the Corporation in all its departments. This shall
require the affirmative vote of a majority of the Whole Board given at any
meeting.
Section 8. SECRETARY AND ASSISTANT SECRETARY. The Secretary shall:
A. keep the minutes of all meetings of the shareholders and of
the Board of Directors, and of any committee of the Board of Directors to
which a secretary shall not have been appointed, in books to be kept for the
purpose;
B. see that all notices are duly given in accordance with these
Bylaws or as required by law;
C. be custodian of the records (other than financial) and have
charge of the seal of the Corporation and see that it is used upon all papers
or documents whose execution on behalf of the Corporation under its seal is
required by law or duly authorized in accordance with these Bylaws; and
D. in general, perform all duties incident to the office of the
Secretary, and such other duties as from time to time may be assigned by the
Board of Directors or by the Chairman of the Board of Directors if he or she
is an officer of the Corporation or by the President or by any committee
thereunto authorized.
The Assistant Secretary shall, in the absence of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such other duties as from time to time may be assigned by the
Board of Directors or by the Chairman of the Board of Directors if he or she
is an officer of the Corporation or by the President or by any committee
thereunto authorized.
Section 9. TREASURER. The Treasurer shall:
A. have charge and custody of, and be responsible for, all funds
and securities of the Corporation; and
B. in general, perform all the duties incident to the office of
Treasurer, and such other duties as from time to time may be assigned by the
Board of Directors or by the Chairman of the Board of Directors if he or she
is an officer of the Corporation or by the President or by any committee
thereunto authorized.
10
<PAGE>
ARTICLE 5
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. RIGHT TO INDEMNIFICATION. 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 or officer of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director or officer or in any
other capacity while serving as a director or officer, shall be indemnified
and held harmless by the Corporation to the fullest extent authorized or
permitted by the Tennessee Business Corporation Act, 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, judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director or officer and shall inure to
the benefit of his or her heirs, executors and administrators; provided,
however, that the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated
by such person only if such proceeding (or part thereof) was authorized by
the Board of Directors. The right to indemnification conferred in this
Section shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Tennessee Business Corporation
Act requires, the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director
or officer, including, without limitation, service to an employee benefit
plan) in advance of the final disposition of a proceeding, shall be made only
upon delivery to the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it shall ultimately
be determined that such director or officer is not entitled to be indemnified
under this Section or otherwise.
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 1
of this Article is not paid in full by the Corporation within ninety days
after a written claim has been received by the Corporation, the claimant may
at any time thereaf-
1
<PAGE>
ter bring suit against the Corporation to recover the unpaid amount of the
claim, and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense
to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Tennessee Business Corporation
Act for the Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel, or its shareholders) 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 Tennessee Business Corporation Act, nor an actual
determination by the Corporation (including its Board of Directors,
independent legal counsel, or its shareholders) 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. NON-EXCLUSIVITY OF RIGHTS; CONTINUATION OF RIGHTS. The
right to indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in this Article
shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Charter, Bylaw,
agreement, vote of shareholders or disinterested directors or otherwise. All
rights to indemnification under this Article shall be deemed to be a contract
between the Corporation and each director or officer of the Corporation who
serves or served in such capacity at any time while this Article is in
effect. Any repeal or modification of this Article or any repeal or
modification of relevant provisions of the Tennessee Business Corporation Act
or any other applicable laws shall not in any way diminish any rights to
indemnification of such director or officer or the obligations of the
Corporation arising hereunder.
Section 4. INSURANCE. The Corporation may maintain insurance, at
its expense, to protect itself and any director or officer of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability
or loss under the Tennessee Business Corporation Act.
12
<PAGE>
ARTICLE 6
EXECUTION OF INSTRUMENTS, ETC.
Section 1. CONTRACTS, ETC., HOW EXECUTED. All contracts and other
corporate instruments shall be executed in the name of and in behalf of the
Corporation and delivered by the Chairman of the Board of Directors if he or
she is an officer of the Corpora- tion, the President, the President of a
division of the Corporation, any Vice President or the Treasurer and may be
attested by the Secretary, Assistant Secretary or the Vice President-General
Counsel unless the Board of Directors shall specifically direct otherwise.
Section 2. DEPOSITS. Funds of the Corporation may be deposited from
time to time to the credit of the Corporation with such depositaries as may
be selected by the Board of Directors or by any committee or officer or
officers, agent or agents of the Corporation to whom such power may be
delegated from time to time by the Board of Directors.
Section 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders
for the payment of money, notes, acceptances, or other evidences of
indebtedness issued in the name of the Corporation shall be signed by the
Vice President-Finance and/or the Treasurer or such agent or agents of the
Corporation as shall be designated from time to time by the Vice
President-Finance and/or Treasurer. Unless otherwise provided by resolution
of the Board of Directors, endorsements for deposit to the credit of the
Corporation in any of its duly authorized depositaries may be made without
counter signature, by the President or any Vice President, or the Treasurer,
or by any other officer or agent of the Corporation to whom such power shall
have been delegated by the Vice President-Finance and/or Treasurer and may be
made by hand-stamped impression in the name of the Corporation.
ARTICLE 7
SHARES AND THEIR TRANSFER; SHAREHOLDER RECORDS
Section 1. CERTIFICATES OF STOCK. The stock of the Corporation
shall be represented by certificates signed by the Chairman of the Board of
Directors if he or she is an officer of the Corporation or by the President
and the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer, and sealed with the seal of the Corporation. Such seal may be a
facsimile, engraved or printed. Where any such certificate is signed by a
Transfer Agent or Assistant Transfer Agent or by a Transfer Clerk and by a
Registrar, the signatures of the Chairman of the Board of Directors,
President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer
and of the Transfer Agent, Assistant Transfer Agent, Transfer Clerk and
Registrar upon such certificate may be facsimiles, engraved or printed.
13
<PAGE>
Section 2. TRANSFER OF SHARES. Transfers of shares of the capital
stock of the Corporation shall be recorded in the shareholder records of the
Corporation when duly assigned by the holder of record of such shares or by
his or her attorney thereunto duly authorized, and on surrender of the
certificate or certificates, for such shares or pursuant to the abandoned
property laws of any state of the United States if the shareholder's share
interest shall be properly within the jurisdiction of the state and has been
deemed abandoned and subject to custodial retention under the laws of such
state.
Section 3. CLOSING OF TRANSFER BOOKS; RECORD DATE. The Board of
Directors may close the stock transfer books for a period not exceeding 60
days preceding the date of any meeting of shareholders or the date for
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall go into
effect; provided, however, in lieu of closing the stock transfer books, as
aforesaid the Board of Directors may at its discretion fix in advance a date,
not exceeding 60 days preceding the date of any meeting of shareholders, or
the date for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital
stock shall go into effect, as a record date for the determination of the
shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of any such dividend, or any such allotment of
rights, or to exercise the rights in respect to any such change, conversion
or exchange of capital stock, and all persons who are holders of record at
such time of the class of stock involved, and no others, shall be entitled to
such notice of, and to vote at, such meeting, or to receive payment of such
dividend, or allotment of rights or exercise of such rights, as the case may
be.
Section 4. LOST AND DESTROYED CERTIFICATES. The holder of record of
any certificate of stock who shall claim that such certificate is lost or
destroyed may make an affidavit or affirmation of that fact and advertise the
same in such manner as the Board of Directors, the Transfer Agent or the
Registrar may require and give a bond, if required to do so, in the form and
in such sum as the Board of Directors, the Transfer Agent or the Registrar
may direct, sufficient to indemnify the Corporation, the Transfer Agent and
the Registrar against any claim that may be made on account of such
certificate, whereupon one or more new certificates may be issued of the same
tenor and for the same aggregate number of shares as the one alleged to be
lost or destroyed.
Section 5. REGULATIONS. The Board of Directors may make such rules
and regulations as it may deem expedient concerning the issuance, transfer
and registration of certificates of stock; it may appoint one or more
transfer agents or registrars of transfers or both, and may require all
certificates of stock to bear the signature of either or both.
14
<PAGE>
Section 6. EXAMINATION OF SHAREHOLDER LIST. Subject to the
limitations provided by law, upon the written request of any shareholder, a
list containing the names and addresses of all shareholders, and the number
of shares of capital stock held by each, shall be available during regular
business hours at the registered office of the Corporation or at the office
of its principal transfer agent for inspection by any shareholder of record
of the Corporation.
ARTICLE 8
NOTICE
Section 1. WAIVER OF NOTICE. No notice of the time, place or
purpose of any meeting of shareholders or directors, or of any committee, or
any publication thereof, whether prescribed by law, by the Charter or by
these Bylaws, need be given to any person who attends such meeting, or who,
in writing, executed either before or after the holding thereof, waives such
notice, and such attendance or waiver shall be deemed equivalent to notice.
ARTICLE 9
MISCELLANEOUS
Section 1. FISCAL YEAR. The fiscal year of the Corporation shall
end on the Sunday closest to the end of the calendar year.
Section 2. SEAL. The seal of the Corporation shall be a device,
circular in form, containing the name of the Corporation, the figures "1996"
and the words, "Corporate Seal" and "Tennessee." The corporate seal may be
used in printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or document, by
any process whatsoever, an impression facsimile, or other reproduction of the
corporate seal. The Secretary, Assistant Secretary, Vice President-General
Counsel or any other person specifically authorized by the Board of
Directors, may use the seal of the Corporation in connection with corporate
contracts or instruments.
ARTICLE 10
AMENDMENTS
Section 1. These Bylaws may be amended or repealed by the
shareholders at any annual meeting, or at any special meeting if notice of
the proposed amendment or new Bylaws is included in the notice of such
meeting. These Bylaws may be amended or repealed by the affirmative vote of a
majority of the Whole Board given at any meeting, the notice or waiver of
notice whereof mentions such amendment or repeal as one of the purposes of
such meeting.
15
<PAGE>
Exhibit 10.4
AMENDMENT NO. 3 TO CREDIT AGREEMENT
AMENDMENT dated as of December 5, 1997 among THOMAS & BETTS CORPORATION
(the "Borrower"), the BANKS listed on the signature pages hereof (the
"Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent').
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of March 29, 1995 (as heretofore amended, the
"Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as specified
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS; REFERENCES. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof," "hereunder," "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. AMENDMENT OF DEFINITIONS. The definition of "Consolidated
Operating Cash Flow" in Sectiion 1.01 of the Agreement is amended to read as
follows:
"Consolidated Operating Cash Flow" means, for any fiscal quarter, the
sum of the consolidated net income of the Borrower and its Consolidated
Subsidiaries for such fiscal quarter plus, to the extent deducted in
determining such consolidated net income for such fiscal quarter,
depreciation and amortization.
SECTION 3. RECEIVABLES SALES. The amount of "$100,000,000" in Section
5.12(b) is changed to "250,000,000."
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants that as of the date hereof and after giving effect
hereto:
(a) no Default has occurred and is contuing; and
(b) each representation and warranty of the Borrower set forth in the
Agreement is true and correct as though made on and as of such date.
SECTION 5. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE>
SECTION 6. COUNTERPARTS; EFFECTIVENESS. This Amendment may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Required banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
THOMAS & BETTS CORPORATION
By /s/ Joseph C. Sullivan
---------------------------------
Title: Assistant Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Jeffrey Hwang
--------------------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES
By /s/ Stephan A. Wiedemann
--------------------------------
Title: Director
By /s/ Thomas A. Foley
--------------------------------
Title: Assistant Vice President
WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Charles Dee O'Dell II
--------------------------------
Title: Senior Vice President
ABN AMRO BANK N.V.
ATLANTA AGENCY
By /s/ Patrick A. Thom
--------------------------------
Title: Vice President
<PAGE>
By /s/ W.T. Fischer
--------------------------------
Title: Senior Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Laurens F. Schaad, Jr.
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
--------------------------------
Title: Senior Manager Loan Operations
CIBC, INC.
By /s/ Kathryn W. Sax
--------------------------------
Title: Executive Director, CIBC
Oppenheimer Corp. as Agent
NORTHERN TRUST COMPANY
By /s/ John Conway
--------------------------------
Title: Vice President
PNC BANK, KENTUCKY, INC.
By /s/ Ralph A. Phillips
--------------------------------
Title: Vice President
THE SUMITOMO BANK, LTD.
By /s/ Masayuki Fukushima
--------------------------------
Title: Joint General Manager
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as successor by
merger to FIRST FIDELITY BANK, N.A.
By /s/ Mark B. Felker
--------------------------------
Title: Senior Vice President
<PAGE>
THE BANK OF NEW YORK
By /s/ Ann Marie Hughes
--------------------------------
Title: Assistant Vice President
FIRST AMERICAN NATIONAL BANK
By /s/ William R. Stutts
--------------------------------
Title: Senior Vice President
THE CHASE MANHATTAN BANK
By /s/ Carol A. Ulmer
--------------------------------
Title: Vice President
UNION PLANTERS NATIONAL BANK
By /s/ Elizabeth Rouse
--------------------------------
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Jeffrey Hwang
--------------------------------
Title: Vice President
<PAGE>
THOMAS & BETTS CORPORATION
1993 MANAGEMENT STOCK OWNERSHIP PLAN
(AS AMENDED THROUGH MARCH 5, 1998)
1. PURPOSE. The purpose of the Thomas & Betts Corporation 1993
Management Stock Ownership Plan (the "Plan") is to promote the long-term
success of Thomas & Betts Corporation (the "Corporation") by providing its
officers and selected employees with incentives for continued service with
the Corporation, its subsidiaries and affiliates. Both by encouraging such
officers and employees to become owners of the common stock of the
Corporation through stock options and by providing actual ownership through
share awards, the Plan promotes participants' identification with the
Corporation's shareholders. The Corporation believes the Plan will assist in
attracting and retaining in its employ outstanding people with the training,
experience and ability to lead the Corporation.
2. TERM. The Plan shall be effective as of May 5, 1993 and shall remain
in effect until terminated by the Corporation's Board of Directors (the
"Board"). After termination of the Plan, no future awards may be granted, but
previously granted awards shall remain outstanding in accordance with their
applicable terms and conditions and the terms and conditions of the Plan.
3. PLAN ADMINISTRATION. A committee appointed by the Board (the
"Committee") shall be responsible for administering the Plan. The Committee
shall be comprised of three or more members of the Board, each of whom meets
the definition of an "outside director" as set forth in Internal Revenue
Code Section 162(m), paragraph (e)(3) and a "disinterested person" as set
forth in Rule 16b-3(c)(i) of the Securities and Exchange Act of 1934 (the
"1934 Act"), or any successor rule. The Committee shall have full and
exclusive power to interpret the Plan and to adopt such rules, regulations
and guidelines for carrying out the Plan as it may deem necessary or proper,
all of which power shall be exercised in the best interests of the
Corporation and in keeping with the objectives of the Plan. These powers
include, but are not limited to, selecting award recipients, establishing
terms and conditions of awards, and adopting modifications, amendments,
procedures, sub-plans and the like as are necessary to comply with the laws
and regulations of other countries in which the corporation operates in order
to assure the viability of awards granted under the Plan to participants
employed in such other countries. Except for the power to amend this Plan as
provided in Section 13, the Committee may delegate to the Chief Executive
Officer and/or to other senior officers of the Corporation its duties under
the Plan pursuant to such conditions or limitations as the Committee may
establish, except that only the Committee may make any awards to or
determinations regarding grants to employees who are subject to Section 16 of
the 1934 Act.
<PAGE>
4. ELIGIBILITY. Any employee of the Corporation, including any entity
that is directly or indirectly controlled by the Corporation or any entity in
which the Corporation has a significant equity interest, as determined by the
Committee, shall be eligible to receive one or more awards under the Plan;
provided, however, only employees of the Corporation or a parent or
subsidiary of the Corporation shall be eligible to receive an award of an
incentive stock option ("ISO").
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN. (a) For each calendar
year, up to one and one-quarter percent (1-1/4%) of the issued and outstanding
common stock of the Corporation, no par value (the "Common Stock") as of the
first day of such year shall be available for issuance as grants or awards
under the Plan. In addition, the aggregate number of (i) any shares of
Common Stock which as of the effective date of the Plan are reserved for
issuance under the 1990 Stock Option Plan (the "Prior Plan") and which are
not thereafter issued; (ii) any shares available for issuance as grants or
awards under the Plan in previous years but not actually issued; (iii) any
shares which have been exchanged by a participant as full or partial payment
to the Corporation in connection with any award under the Plan; and (iv) any
shares subject to any grant or award that is forfeited or terminated without
issuance of the shares or other consideration, shall again be available for
issuance under the Plan.
(b) In no event, however, except as subject to adjustment as provided
in Section 6, shall more than 1,500,000 (one million, five hundred thousand)
shares of Common Stock be cumulatively available for issuance pursuant to the
exercise of ISOs awarded under the Plan.
(c) Any award of restricted stock pursuant to Section 7(c) that is not
subject to criteria other than continuous service with the Corporation will
be counted as two shares for purposes of determining the number of shares
available for issuance as grants or awards in any calendar year.
(d) In instances where a stock appreciation right ("SAR") or other
award is settled in cash or any form other than shares, then the shares
covered by these settlements shall not be deemed issued and shall remain
available for issuance under the Plan. Further, the payment of cash
dividends and dividend equivalents in conjunction with outstanding awards
shall not be counted against the shares available for issuance. Any shares
that are issued by the Corporation, and any awards that are granted by, or
become obligations of, the Corporation through the assumption by the
Corporation or an affiliate of, or in substitution for, outstanding awards
previously granted by an acquired company shall not, except in the case of
awards granted to employees who are subject to Section 16 of the 1934 Act,
be counted against the shares available for issuance under the Plan.
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<PAGE>
(e) Any shares issued under the Plan will consist of authorized and
unissued shares and no fractional shares shall be issued under the Plan.
Cash may be paid in lieu of any fractional shares in settlements of awards
under the Plan.
(f) Except for a grant that meets all of the requirements for
performance-based compensation set forth in Internal Revenue Code Section
162(m), paragraph (e), and subject to adjustment as provided in Section 6, no
officer or employee may receive, in any given year, grants of stock options
and/or SARs which, singly or in the aggregate, cover more than 200,000 shares
of the Common Stock. [Amended by shareholders May 7, 1997.]
6. ADJUSTMENTS AND REORGANIZATIONS. In the event of any stock dividend,
stock split, combination or exchange of shares, merger, consolidation, spin-off
or other distribution (other than normal cash dividends) of Corporation assets
to shareholders, or any other change affecting shares, such proportionate
adjustments, if any, as the Committee in its discretion may deem appropriate to
reflect such change shall be made with respect to (i) the aggregate number of
shares that may be issued under the Plan; (ii) each outstanding award made under
the Plan; and (iii) the price per share for any outstanding stock options, SARs
and stock awards under the Plan.
In the event that the Corporation undergoes a change of control (as
defined below), or is not the surviving company in a merger, consolidation or
amalgamation with another company, or in the event of a liquidation or
reorganization of the Corporation, all outstanding awards under the Plan
shall be immediately vested and the Committee, as constituted before such
change of control, in its sole discretion, may provide for appropriate
adjustments and settlements of such awards either at the time of the award or
at a subsequent date. [Amended by Human Resources Committee June 4, 1997.]
For purposes of this Plan, a "change of control" of the Corporation
shall mean a change of control of a nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the 1934 Act;
provided that, without limitation, such a "change of control" shall be deemed
to have occurred if; (i) a third person, including a "group" as such term is
used in Section 13(d)(3) of the 1934 Act, becomes the beneficial owner,
directly or indirectly, of 25% or more of the combined voting power of the
Corporation's outstanding voting securities ordinarily having the right to
vote for the election of directors of the Corporation; or (ii) individuals
who, as of the date hereof, constitute the Board of Directors of the
Corporation (the "Board" generally and as of the date hereof the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to the date
-3-
<PAGE>
hereof whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Corporation, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the 1934 Act) shall be, for
purposes of this Plan, considered as though such person were a member of the
Incumbent Board.
7. AWARDS. The Committee shall determine the type or types of award(s)
to be granted to each participant. Awards may be granted singly, in
combination or in tandem. Awards may also be made in combination or in
tandem with, in replacement of, as alternatives, or in payment for grants or
rights under any other employee or compensation plan of the Corporation,
including the plan of any acquired entity.
(a) STOCK OPTION. This is an award consisting of a right to purchase
a specified number of shares of Common Stock during a specified period as
determined by the Committee. The purchase price of each option shall be not
less than 100% of Fair Market Value (as defined in Section 10) on the date of
grant, except that, in the case of a stock option granted retroactively in
tandem with or in substitution for another award, the exercise or designated
price may be no lower than the Fair Market Value on the date such other award
was granted. A stock option may be in the form of an ISO which, in addition
to being subject to applicable terms, conditions, and limitations established
by the Committee, complies with Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Any ISO granted pursuant to the Plan must be
granted within ten years from the date the Plan is approved by the
Corporation's shareholders. The price at which shares of Common Stock may be
purchased under a stock option shall be paid in full at the time of the
exercise in cash or such other method as provided by the Committee at the
time of grant, including tendering Common Stock, surrendering a stock award
valued at Fair Market Value on the date of surrender, surrendering a cash
award, or any combination thereof. If the option price is paid by tendering
Common Stock acquired under an ISO, such ISO shall have been granted at least
two years prior thereto and the Common Stock shall have been owned by the
optionee for at least one year prior to such payment. The Committee may
grant stock options that provide for the award of a new option when the
exercise price has been paid by tendering shares of Common Stock, such new
option to be for the number of shares tendered, with the exercise price set
at the Fair Market Value on the date of option exercise.
-4-
<PAGE>
(b) STOCK APPRECIATION RIGHT. This is an award consisting of a right
to receive a payment in cash and/or Common Stock equal to the excess of the
Fair Market Value of a specified number of shares of Common Stock on the date
the SAR is exercised over the Fair Market Value of such shares on the date of
grant as set forth in the applicable award agreement except that, in the case
of an SAR granted retroactively in tandem with or in substitution for another
award, the exercise or designated price may be no lower than the Fair Market
Value of the Common Stock on the date such other award was granted.
(c) STOCK AWARD. This is an award made in stock or denominated in units
of stock. All or part of any stock award may be subject to conditions and
restrictions established by the Committee and set forth in the award
agreement, which may include, but are not limited to, continuous service with
the Corporation, achievement of specific business objectives, and other
measurements of individual, business unit or Corporation performance.
8. DIVIDENDS AND DIVIDEND EQUIVALENTS. The Committee may provide that
awards under the Plan earn dividends or dividend equivalents. Such dividends or
dividend equivalents may be paid currently or may be credited to a participant's
account. Any crediting of dividends or dividend equivalents shall be subject to
such restrictions and conditions as the Committee may establish, including
reinvestment in additional shares or share equivalents.
9. DEFERRALS AND SETTLEMENTS. Payment of awards may be in the form of
cash, stock, other awards, or in combinations thereof as the Committee shall
determine, and with such restrictions as it may impose. The Committee may
require, or permit participants to elect, that the issuance of shares or the
settlement of cash awards be deferred under such rules and procedures as it may
establish. It may also provide that deferred settlements include the payment or
crediting of interest on the deferred amounts or the payment or crediting of
dividend equivalents on deferred settlements denominated in shares.
10. FAIR MARKET VALUE. "Fair Market Value" for all purposes under the
Plan shall mean the average of the high and low prices of Common Stock as
reported on the composite tape for securities listed on the New York Stock
Exchange for the date in question, or if no sales of Common Stock were made on
said Exchange on that date, the average of the high and low prices of Common
Stock as reported on said composite tape for the preceding day on which sales of
Common Stock were made on said Exchange.
11. TRANSFERABILITY AND EXERCISABILITY. Unless otherwise determined by
the Committee with respect to nonqualified stock options, all awards under the
Plan shall not be nontransferable and shall not be assignable, alienable,
saleable or otherwise transferable by the participant other than by will or
the
-5-
<PAGE>
laws of descent and distribution, by designation of a beneficiary after
death, or pursuant to a qualified domestic relations order (as defined by the
Code).
12. AWARD AGREEMENTS. Awards under the Plan shall be evidenced by
agreements that set forth the terms, conditions and limitations for each
award which may include the term of an award (except that in no event shall
the term of any ISO exceed a period of ten years from the date of its grant),
the provisions applicable in the event the participant's employment
terminates, and the Corporation's authority to unilaterally or bilaterally
amend, modify, suspend, cancel or rescind any award. The Committee need not
require the execution of any such agreement by the recipient, in which case
the delivery of the award to the respective participant will constitute the
participant's acceptance and agreement to the terms of the award.
13. PLAN AMENDMENT. The Committee may amend the Plan as it deems
necessary or appropriate to better achieve the purpose of the Plan, except
that no such amendment shall be made without the approval of the
Corporation's shareholders that would increase the number of shares available
for issuance in accordance with Sections 5 and 6 of the Plan or otherwise
cause the Plan not to comply with Rule 16b-3 or any successor role under the
1934 Act, or any other legal requirement.
14. TAX WITHHOLDING. The Corporation shall have the right to deduct
from any settlement of an award made under the Plan, including the delivery
or vesting of shares, a sufficient amount to cover withholding of any
federal, state or local taxes required by law, or to take such other action
as may be necessary to satisfy any such withholding obligations. The
Committee may permit a recipient of an award to tender shares of Common Stock
to the Corporation to be used to satisfy required tax withholding, and such
Common Stock shall be valued at the Fair Market Value as of the settlement
date of the applicable award.
15. OTHER CORPORATION BENEFIT AND COMPENSATION PROGRAMS. Unless
otherwise specifically determined by the Committee, settlements of awards
received by participants under the Plan shall not be deemed a part of a
participant's regular, recurring compensation for purposes of calculating
payments or benefits from any corporation benefit plan or severance program
or the severance pay law of any country. Further, the Corporation may adopt
other compensation programs, plans or arrangements as it deems appropriate or
necessary.
16. UNFUNDED PLAN. Unless otherwise determined by the Committee, the
Plan shall be unfunded and shall not create (or be construed to create) a
trust or a separate fund or funds. The Plan
-6-
<PAGE>
shall not establish any fiduciary relationship between the Corpo- ration
and any participant or other person. To the extent any person holds any
rights by virtue of a grant awarded under the Plan, such right (unless
otherwise determined by the Committee) shall be no greater than the right of
an unsecured general creditor of the Corporation.
17. FUTURE RIGHTS. No person shall have any claim or rights to be
granted an award under the Plan, and no participant shall have any rights
under the Plan to be retained in the employ of the Corporation.
18. GOVERNING LAW. The validity, construction and effect of the Plan
and any actions taken or relating to the Plan shall be determined in
accordance with the laws of the State of Tennessee and applicable federal law.
19. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and assigns of a participant, including, without limitation, the
estate of such participant and the executor, administrator or trustee of such
estate, or any receiver or trustee in bankruptcy or representative of the
participant's creditors.
20. RIGHTS AS A SHAREHOLDER. Except as otherwise provided in the award
agreement, a participant shall have no rights as a shareholder until he or
she becomes the holder of record.
21. ANNUAL LIMIT ON ISO GRANTS. The aggregate fair market value
(determined on the date the option is granted) of Common Stock subject to
ISOs granted to an optionee in any calendar year shall not exceed any
limitation imposed by the Code.
-7-
<PAGE>
GRANT AGREEMENT
NONQUALIFIED STOCK OPTION
Thomas & Betts Corporation (the "Corporation"), for and in consideration of
the provisions and conditions as stated herein and in the Corporation's 1993
Management Stock Ownership Plan (the "Plan") and other good and valuable
consideration, does hereby grant to the employee (one of the key employees of
the Corporation) identified in the attached Notice of Grant of Stock Option
(the "Optionee") this option to purchase from the Corporation the number of
shares of Common Stock of the Corporation at the price per share set forth in
the Notice of Grant of Stock Option, which option is not intended to qualify
as an incentive stock option ("ISO") as that term is defined in Section
422A(b) of the Internal Revenue Code of 1986, as amended (the "Code").
The option granted pursuant to this Grant Agreement (the "Option") shall be
subject to the following conditions:
(1) Subject to the provisions of Paragraph 4, the Option shall become
exercisable in three installments in accordance with the following
schedule and after the expiration of the following periods of time:
<TABLE>
<CAPTION>
Portion of Period from which
Installment Option Granted Option Granted
----------- -------------- -----------------
<S> <C> <C>
First One-third 12 months
Second One-third 24 months
Third One-third 36 months
</TABLE>
If the Optionee does not purchase the full number of shares which he has at
any time become entitled to purchase, he may purchase all of any part of
those shares at any subsequent time during the term of this Option.
(2) The Option herein granted to the extent that it is exercisable may
be exercised by giving written notice to the Corporate Human
Resources Department or other designated person of the Corporation
at its principal office no later than the Expiration Date (as
defined in Paragraph 3). Such notice shall include a statement of
the number of shares with respect to which this Option is being
exercised and the exercise date, and shall be accompanied by full
tender of the purchase price payable which may be made in whole or
in part either in cash or by the exchange of such number of whole
shares of Thomas & Betts Corporation Common Stock owned by the
Optionee whose fair market value as of the close of the business
day immediately preceding the specified Exercise Date does not
exceed the purchase price payable; provided, however, that if the
shares to be exchanged were acquired by exercise by an ISO, such
ISO shall have been granted at least two years prior thereto and
the Common Stock shall have been owned by the Optionee for at least
one year prior to such payment, and further provided that the
Committee shall have the right, upon prior notice to the holders of
options, to modify, suspend or cancel the right to pay the purchase
price in whole or in part by exchange of shares at any time in the
event the Committee determines that there has been a change in tax
or accounting consequences to the Corporation or to any Optionee.
Nothing in this agreement shall confer upon the Optionee any rights
as a stockholder prior to the time of the delivery to the Optionee
of a stock certificate for the shares purchased under this
agreement.
<PAGE>
(3) Unless this Option expires earlier in accordance with any provision of
Paragraph 4, this Option shall expire on the date which is ten (10) years
from the Date of Grant (the "Expiration Date").
(4) If, prior to the Expiration Date, the Optionee (i) becomes totally and
permanently disabled as determined by the Corporation in its sole
discretion, (ii) retires, (iii) dies, or (iv) otherwise terminates or is
terminated as an employee of the Corporation, this option shall be
exercisable under the circumstances and for the time periods set forth
below, but only to the extent such time periods do not extend beyond the
Expiration Date:
(a) If the Optionee's employment terminates or is terminated for any
reason other than (i) retirement, (ii) the Optionee becoming
totally and permanently disabled, (iii) death, or (iv) under the
circumstances described in Paragraph 4(b), this Option may be
exercised within thirty (30) days of the date of such termination
to the extent exercisable in accordance with the provisions of
Paragraph 1;
(b) In the event that (i) the Optionee has an employment agreement
with the Corporation which provides for his continued employment
following a change in control ("Employment Agreement") and (ii) a
"Change in Control," as defined in Section 2 of such Employment
Agreement, occurs, this Option shall become fully exercisable
upon the "Effective Date," as defined in Section 1(a) of such
Employment Agreement, notwithstanding any provision in Paragraph
1 to the contrary; in addition, if such Optionee's employment
with the Corporation is thereafter terminated under the
circumstances described in Section 7(d) of such Employment
Agreement, this Option shall remain exercisable at any time prior
to the Expiration Date;
(c) If the Optionee retires at his normal or later retirement date
or, with the consent of the Corporation, takes early retirement,
this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within six (6) years of
the date of retirement;
(d) If the Optionee becomes totally and permanently disabled, this
Option may he exercised in full, notwithstanding the provisions
of Paragraph 1, at any time within six (6) years of the date the
Optionee's service as an employee is terminated within the
meaning of the Code by reason of being totally and permanently
disabled;
(e) If the Optionee dies while he is employed or within three (3)
years of his retirement in accordance with subparagraph (c)
above, this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within three (3) years of
the Optionee's date of death by the legal representative of the
Optionee or any person who acquires this Option by bequest or
inheritance; and
<PAGE>
(f) For purpose of this Paragraph 4, a sick leave or other bona fide
leave of absence granted in accordance with the Corporation's
usual procedure which does not operate to interrupt continuous
employment for other benefits granted by the Corporation shall
not be considered a termination of employment or interruption of
continuous employment hereunder and an employee who is granted
such a leave of absence shall be considered to be continuously
employed during such period of leave; provided, that if the Code
or the regulations promulgated thereunder establish a more
restrictive rule defining termination of employment applicable to
the option granted herein, such rule shall be substituted here
for.
(5) The Optionee agrees, by the acceptance of this Option, for himself and
his executors and administrators, that if a registration statement under
the Securities Act of 1933 is not in effect at the time of the exercise
of any portion of this Option, with respect to the sale by the
Corporation and the resale by the Optionee of the shares issuable upon
such exercise, it shall be a condition precedent to the right to
purchase such shares that the notice of exercise shall be accompanied by
a written representation that the Optionee or his executor or
administrator is acquiring such shares for his own or such executor's or
administrator's account for investment and not with a view to the
distribution thereof.
(6) The Corporation shall be not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the
exercise of this Option until the admission of such shares to listing on
any stock exchange on which the Corporation's stock may then be listed
and until the Corporation takes such steps as may be required by law and
applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange as above
mentioned, or until, in the opinion of counsel for the Corporation, any
such listing or registration or other steps are not required.
(7) The shares issued may be authorized but unissued stock, or treasury
stock, and the number of shares with respect to which this Option may be
exercised, and the price payable with respect thereto, shall be properly
adjusted if the Corporation shall at any time declare a stock split,
issue any stock dividend, or make a reclassification of such stock, so
that the Optionee or his executors, administrators, legatees or
distributees entitled hereunder shall not be in any way in a better or
worse position as to the number of shares acquired and the aggregate
amount paid therefore, solely from having exercised this option with
respect to any of said shares after, rather than before, such stock
split, stock dividend, or reclassification.
(8) The granting of this Option shall not constitute or be evidence of any
agreement or understanding, express or implied, on the part of the
Corporation or any of its subsidiaries to employ the Optionee for any
specified period. The Company continues to retain the absolute right to
terminate the employment relationship with the Optionee at any time,
with or without good cause.
(9) This Option shall be binding upon the Corporation and its successors and
assigns, and upon the Optionee and his administrators and executors.
<PAGE>
(10) Whenever the Corporation is required to issue or transfer shares of its
Common Stock to Optionee pursuant hereto, the Corporation shall have the
right to require the Optionee to remit to the Corporation an amount
sufficient to satisfy all federal, state and local withholding tax
requirements, if any.
(11) The Optionee agrees, by the acceptance of this Option, to the amendment
of this Grant Agreement, the Notice of Grant of Stock Option and the
form of exercise of option provided by the Corporation, in any manner
requested by the Corporation pursuant to advice from the Securities and
Exchange Commission at any time during the term of this Option, and to
execute any and all instruments relative thereto when so requested by
the Corporation.
(12) Throughout this agreement, the masculine gender shall be deemed to include
the feminine.
(13) This Option is not transferable by the Optionee otherwise than by will or
by the laws of descent and distribution and during the lifetime of the
Optionee it is exercisable only by the Optionee.
<PAGE>
GRANT AGREEMENT
NONQUALIFIED STOCK OPTION
Thomas & Betts Corporation (the "Corporation"), for and in consideration of
the provisions and conditions as stated herein and in the Corporation's 1993
Management Stock Ownership Plan (the "Plan") and other good and valuable
consideration, does hereby grant to the employee (one of the key employees of
the Corporation) identified in the attached Notice of Grant of Stock Option
(the "Optionee") this option to purchase from the Corporation the number of
shares of Common Stock of the Corporation at the price per share set forth in
the Notice of Grant of Stock Option, which option is not intended to qualify
as an incentive stock option ("ISO") as that term is defined in Section
422A(b) of the Internal Revenue Code of 1986, as amended (the "Code")
The option granted pursuant to this Grant Agreement (the "Option") shall be
subject to the following conditions:
(1) Subject to the provisions of Paragraph 4, the Option shall become
exercisable in three installments in accordance with the following schedule
and after the expiration of the following periods of time:
<TABLE>
<CAPTION>
Portion of Period from which
Installment Option Grant Option Granted
----------- ------------ -----------------
<S> <C> <C>
First One-third 12 months
Second One-third 24 months
Third One-third 36 months
</TABLE>
If the Optionee does not purchase the full number of shares which he
has at any time become entitled to purchase, he may purchase all or
any part of those shares at any subsequent time during the term of
this Option.
(2) The Option herein granted to the extent that is exercisable may be
exercised by giving written notice to the Corporate Human Resources
Department or other
<PAGE>
designated person of the Corporation at its principal office no later than
the Expiration Date (as defined in Paragraph 3). Such notice shall
include a statement of the number of shares with respect to which this
Option is being exercised and the exercise date, and shall be
accompanied by full tender of the purchase price payable which may be
made in whole or in part either in cash or by the exchange of such
number of whole shares of Thomas & Betts Corporation Common Stock owned
by the Optionee whose fair market value as of the close of the business
day immediately preceding the specified Exercise Date does not exceed
the purchase price payable; provided, however, that if the shares to be
exchanged were acquired by exercise of an ISO, such ISO shall have been
granted at least two years prior thereto and the Common Stock shall have
been owned by the Optionee for at least one year prior to such payment,
and further provided that the Committee shall have the right, upon prior
notice to the holders of options, to modify, suspend or cancel the right
to pay the purchase price in whole or in part by exchange of shares at
any time in the event the Committee determines that there has been a
change in tax or accounting consequences to the Corporation or to any
Optionee. Nothing in this agreement shall confer upon the Optionee any
rights as a stockholder prior to the time of the delivery to the
Optionee of a stock certificate for the shares purchased under this
agreement.
(3) Unless this Option expires earlier in accordance with any provision of
Paragraph 4, this Option shall expire on the date which is ten (10) years
from the Date of Grant (the "Expiration Date").
(4) If, prior to the Expiration Date, the Optionee (i) becomes totally and
permanently disabled as determined by the Corporation in its sole
discretion, (ii) retires, (iii) dies, or (iv) otherwise terminates or is
terminated as an employee of the Corporation, this Option shall be
exercisable under the circumstances and for the time periods set forth
below, but only to the extent such time periods do not extend beyond the
Expiration Date:
(a) If the Optionee's employment terminates or is terminated for any
reason other than (i) retirement, (ii) the Optionee becoming
totally and permanently disabled, or (iii) death, this Option may
be exercised within thirty (30) days of the date of such
termination to the extent exercisable in accordance with the
provisions of Paragraph 1.
<PAGE>
(b) If the Optionee retires at his normal or later retirement date
or, with the consent of the Corporation, takes early retirement,
this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within six (6) years of
the date of retirement;
(c) If the Optionee becomes totally and permanently disabled, this
Option may be exercised in full, notwithstanding the provisions
of Paragraph 1, at any time within six (6) years of the date the
Optionee's service as an employee is terminated within the
meaning of the Code by reason of being totally and permanently
disabled;
(d) If the Optionee dies while he is employed or within three (3)
years of his retirement in accordance with subparagraph (b)
above, this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within three (3) years of
the Optionee's date of death by the legal representative of the
Optionee or any person who acquires this Option by bequest or
inheritance; and
(e) For purpose of this Paragraph 4, a sick leave or other bona fide
leave of absence granted in accordance with the Corporation's
usual procedure which does not operate to interrupt continuous
employment for other benefits granted by the Corporation shall
not be considered a termination of employment or an interruption
of continuous employment hereunder and an employee who is granted
such a leave of absence shall be considered to be continuously
employed during such period of leave; provided, that if the Code
or the regulations promulgated thereunder establish a more
restrictive rule defining termination of employment applicable to
the option granted herein, such rule shall be substituted
herefor.
(5) The Optionee agrees, by the acceptance of this Option, for himself and
his executors and administrators, that if a registration statement
under the Securities Act of 1933 is not in effect at the time of the
exercise of any portion of this Option, with respect to the sale by
the Corporation and the resale by the Optionee of the shares issuable
upon such exercise, it shall be a condition precedent to the right to
purchase such shares that the notice of exercise shall be accompanied
by a written representation that the Optionee or his executor or
administrator is acquiring such shares for his own or such executor's
or administrator's account for investment and not with a view to the
distribution thereof.
<PAGE>
(6) The Corporation shall not he required to issue or deliver any
certificate or certificates for shares of stock purchased upon the
exercise of this Option until the admission of such shares to listing on
any stock exchange on which the Corporation's stock may then be listed
and until the Corporation takes such steps as may be required by law and
applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange as above
mentioned, or until, in the opinion of counsel for the Corporation, any
such listing or registration or other steps are not required.
(7) The shares issued may be authorized but unissued stock, or treasury
stock, and the number of shares with respect to which this Option may be
exercised, and the price payable with respect thereto, shall be properly
adjusted if the Corporation shall at any time declare a stock split,
issue any stock dividend, or make a reclassification of such stock, so
that the Optionee or his executors, administrators, legatees or
distributees entitled hereunder shall not be in any way in a better or
worse position as to the number of shares acquired and the aggregate
amount paid therefore, solely from having exercised this option with
respect to any of said shares after, rather than before, such stock
split, stock dividend, or reclassification.
(8) The granting of this Option shall not constitute or be evidence of any
agreement or understanding, express or implied, on the part of the
Corporation or any of its subsidiaries to employ the Optionee for any
specified period. The Company continues to retain the absolute right to
terminate the employment relationship with the Optionee at any time,
with or without good cause.
(9) This Option shall be binding upon the Corporation and its successors
and assigns, and upon the Optionee and his administrators and
executors.
(10) Whenever the Corporation is required to issue or transfer shares of
its Common Stock to Optionee pursuant hereto, the Corporation shall
have the right to require the Optionee to remit to the Corporation an
amount sufficient to satisfy all federal, state and local withholding
tax requirements, if any.
(11) The Optionee agrees, by the acceptance of this Option, to the
amendment of this Grant Agreement, the Notice of Grant of Stock Option
and the form of exercise of option provided by the Corporation in any
manner requested by the Corporation pursuant to advice from the
Securities and Exchange Commission at any time during the term of this
Option, and to execute any and all instruments relative thereto when
so requested by the Corporation.
<PAGE>
(12) Throughout this agreement, the masculine gender shall be deemed to
include the feminine.
(13) This Option is not transferable by the Optionee otherwise than by will
or by the laws of descent and distribution and during the lifetime of
the Optionee it is exercisable only by the Optionee.
<PAGE>
GRANT AGREEMENT
INCENTIVE STOCK OPTION
Thomas & Betts Corporation (the "Corporation"), for and in consideration of the
provisions and conditions as stated herein and in the Corporation's 1993
Management Stock Ownership Plan (the "Plan") and other good and valuable
consideration, does hereby grant to the employee (one of the key employees of
the Corporation) identified in the attached Notice of Grant of Stock Option (the
"Optionee") this option to purchase from the Corporation the number of shares of
Common Stock of the Corporation at the price per share set forth in the Notice
of Grant of Stock Option, which option, except as provided in Paragraph 4, is
intended to qualify as an incentive stock option ("ISO") as that term is defined
in Section 422A(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
The option granted pursuant to this Grant Agreement (the "Option")shall be
subject to the following conditions:
(1) Subject to the provisions of Paragraph 4, the Option shall become
exercisable in three installments in accordance with the following
schedule and after the expiration of the following periods of time:
<TABLE>
<CAPTION>
Portion of Period from which
Installment Option Grant Option Granted
----------- ------------ -----------------
<S> <C> <C>
First One-third 12 months
Second One-third 24 months
Third One-third 36 months
</TABLE>
If the Optionee does not purchase the full number of shares which he
has at any time become entitled to purchase, he may purchase all or
any part of those shares at any subsequent time during the term of
this Option.
(2) The Option herein granted to the extent that it is exercisable may be
exercised by giving written notice to the Corporate Human Resources
Department or other designated person of the Corporation at its
principal office no later than the Expiration Date (as defined in
Paragraph 3). Such notice shall include a statement of the number of
shares with respect to which this Option is being exercised and the
exercise date, and shall be accompanied by full tender of the purchase
price payable which may be made in whole or in part either in cash or by
the exchange of such number of whole shares of Thomas & Betts
Corporation Common Stock owned by the Optionee whose fair market value
as of the close of the business day immediately preceding the specified
Exercise Date does not exceed the purchase price payable; provided,
however. that if the shares to be exchanged were acquired under an ISO,
such ISO shall have been granted at least two years prior thereto and
the Common Stock shall have been owned by the Optionee for at least one
year prior to such payment, and further provided that the Committee
shall have the right, upon prior notice to the holders of options, to
modify, suspend or cancel the right to pay the purchase price in whole
or in part by exchange of shares at any time in the event the Committee
determines that there has been a change in tax or accounting
consequences to
<PAGE>
the Corporation or to any Optionee. Nothing in this agreement shall
confer upon the Optionee any rights as a stockholder prior to the time
of the delivery to the Optionee of a stock certificate for the shares
purchased under this agreement.
(3) Unless this Option expires earlier in accordance with any provision of
Paragraph 4, this Option shall expire on the date which is ten (10)
years from the Date of Grant (the "Expiration Date").
(4) If, prior to the Expiration Date, the Optionee (i) becomes totally and
permanently disabled as determined by the Corporation in its sole
discretion, (ii) retires, (iii) dies, or (iv) otherwise terminates or is
terminated as an employee of the Corporation, this Option shall be
exercisable under the circumstances and for the time periods set forth
below, but only to the extent such time periods do not extend beyond the
Expiration Date:
(a) If the Optionee's employment terminates or is terminated for any
reason other than (i) retirement, (ii) the Optionee becoming
totally and permanently disabled, (iii) death, or (iv) under the
circumstances described in Paragraph 4(b), this Option may be
exercised within thirty (30) days of the date of such
termination to the extent exercisable in accordance with the
provisions of Paragraph 1;
(b) In the event that (i) the Optionee has an employment agreement
with the Corporation which provides for his continued employment
following a change in control ("Employment Agreement") and (ii)
a "Change in Control," as defined in Section 2 of such
Employment Agreement, occurs, this Option shall become fully
exercisable upon the "Effective Date," as defined in Section
1(a) of such Employment Agreement, notwithstanding any provision
in Paragraph 1 to the contrary, provided, however, that to the
extent (if any) that the limitation set forth in Code Section
422(d) is exceeded, the Option shall be treated as a
Nonqualified Stock Option; in addition, if such Optionee's
employment with the Corporation is thereafter terminated under
the circumstances described in Section 7(d) of such Employment
Agreement, this Option shall remain exercisable at any time
prior to the Expiration Date, provided, however, that if such
exercise occurs more than three (3) months after the date of
such Optionee's termination of employment, the Option shall be
treated as a Nonqualified Stock Option;
(c) If the Optionee retires at his normal or later retirement date
or, with the consent of the Corporation, takes early retirement,
this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within six (6) years of
the date of retirement; provided, however, that if such exercise
occurs more than three (3) months after the date of such
retirement, the Option shall be treated as a Nonqualified Stock
Option;
(d) If the Optionee becomes totally and permanently disabled, this
Option may be exercised in full, notwithstanding the provisions
of Paragraph 1, at any time within six (6) years of the date the
Optionee's service as an employee is terminated within
<PAGE>
the meaning of the Code by reason of being totally and
permanently disabled; provided, however, that if such Exercise
occurs more than one (1) year after the date the Optionee's
employment is terminated due to such disability, this Option
shall be treated as a Nonqualified Stock Option;
(e) If the Optionee dies while he is employed or within three (3)
years of his retirement in accordance with subparagraph (c)
above, this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within three (3) years of
the Optionee's date of death by the legal representative of the
Optionee or any person who acquires this Option by bequest or
inheritance; provided, however, if the Optionee's date of death
is more than three (3) months from the date of such retirement,
this Option shall be treated as a Nonqualified Stock Option, and
(f) For purpose of this Paragraph 4, a sick leave or other bona fide
leave of absence granted in accordance with the Corporation's
usual procedure which does not operate to interrupt continuous
employment for other benefits granted by the Corporation shall
not be considered a termination of employment or interruption of
continuous employment hereunder and an employee who is granted
such a leave of absence shall be considered to be continuously
employed during such period of leave; provided, that if the Code
or the regulations promulgated thereunder establish a more
restrictive rule defining termination of employment applicable
to the option granted herein, such rule shall be substituted
here for.
(5) The Optionee agrees, by the acceptance of this Option, for himself and
his executors and administrators, that if a registration statement under
the Securities Act of 1933 is not in effect at the time of the exercise
of any portion of this Option, with respect to the sale by the
Corporation and the resale by the Optionee of the shares issuable upon
such exercise, it shall be a condition precedent to the right to
purchase such shares that the notice of exercise shall be accompanied by
a written representation that the Optionee or his executor or
administrator is acquiring such shares for his own or such executor's or
administrator's account for investment and not with a view to the
distribution thereof.
(6) The Corporation shall be not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the
exercise of this Option until the admission of such shares to listing on
any stock exchange on which the Corporation's stock may then be listed
and until the Corporation takes such steps as may be required by law and
applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange as above
mentioned, or until, in the opinion of counsel for the Corporation, any
such listing or registration or other steps are not required.
(7) The shares issued may be authorized but unissued stock, or treasury
stock. and the number of shares with respect to which this Option may be
exercised, and the price payable with respect thereto, shall be properly
adjusted if the Corporation shall at any time declare a stock split,
issue any stock dividend, or make a reclassification of such stock, so
that the Optionee or his executors, administrators, legatees or
distributees entitled hereunder shall not be in any
<PAGE>
way in a better or worse position as to the number of shares acquired
and the aggregate amount paid therefore, solely from having exercised
this option with respect to any of said shares after, rather than
before, such stock split, stock dividend, or reclassification.
(8) The granting of this Option shall not constitute or be evidence of any
agreement or understanding, express or implied, on the part of the
Corporation or any of its subsidiaries to employ the Optionee for any
specified period. The Company continues to retain the absolute right to
terminate the employment relationship with the Optionee at any time,
with or without good cause.
(9) This Option shall be binding upon the Corporation and its successors and
assigns, and upon the Optionee and his administrators and executors.
(10) Whenever the Corporation is required to issue or transfer shares of its
Common Stock to Optionee pursuant hereto, the Corporation shall have the
right to require the Optionee to remit to the Corporation an amount
sufficient to satisfy all federal, state and local withholding tax
requirements, if any.
(11) The Optionee agrees, by the acceptance of this Option, to the amendment
of this Grant Agreement, the Notice of Grant of Stock Option and the
form of exercise of option provided by the Corporation, in any manner
requested by the Corporation pursuant to advice from the Securities and
Exchange Commission at any time during the term of this Option, and to
execute any and all instruments relative thereto when so requested by
the Corporation.
(12) Throughout this agreement, the masculine gender shall be deemed to
include the feminine.
(13) This Option is not transferable by the Optionee otherwise than by will
or by the laws of descent and distribution and during the lifetime of
the Optionee it is exercisable only by the Optionee.
<PAGE>
GRANT AGREEMENT
INCENTIVE STOCK OPTION
Thomas & Betts Corporation (the "Corporation"), for and in consideration of the
provisions and conditions as stated herein and in the Corporation's 1993
Management Stock Ownership Plan (the "Plan") and other good and valuable
consideration, does hereby grant to the employee (one of the key employees of
the Corporation) identified in the attached Notice of Grant of Stock Option (the
"Optionee") this option to purchase from the Corporation the number of shares of
Common Stock of the Corporation at the price per share set forth in the Notice
of Grant of Stock Option, which option, except as provided in Paragraph 4, is
intended to qualify as an incentive stock option ("ISO") as that term is defined
in Section 422A(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
The option granted pursuant to this Grant Agreement (the "Option")shall be
subject to the following conditions:
(1) Subject to the provisions of Paragraph 4, the Optionshall become
exercisable in three installments in accordance with the following
schedule and after the expiration of the following periods of time:
<TABLE>
<CAPTION>
Portion of Period from which
Installment Option Grant Option Granted
----------- ------------ --------------
<S> <C> <C>
First One-third 12 months
Second One-third 24 months
Third One-third 36 months
</TABLE>
If the Optionee does not purchase the full number of shares which he
has at any time become entitled to purchase, he may purchase all or
any part of those shares at any subsequent time during the term of
this Option.
(2) The Option herein granted to the extent that it is exercisable may be
exercised by giving written notice to the Corporate Human Resources
Department or other designated person of the Corporation at its
principal office no later than the Expiration Date (as defined in
Paragraph 3). Such notice shall include a statement of the number of
shares with respect to which this Option is being exercised and the
exercise date, and shall be accompanied by full tender of the
purchase price payable which may be made in whole or in part either
in cash or by the exchange of such number of whole shares of Thomas &
Betts Corporation Common Stock owned by the Optionee whose fair
market value as of the close of the business day immediately
preceding the specified Exercise Date does not exceed the purchase
price payable; provided, however. that if the shares to be exchanged
were acquired under an ISO, such ISO shall have been granted at least
two years prior thereto and the Common Stock shall have been owned by
the Optionee for at least one year prior to such payment, and further
provided that the Committee shall have the right, upon prior notice
to the holders of options, to modify, suspend or cancel the right to
pay the purchase price in whole or in part by exchange of shares at
any time in the event the Committee determines that there has been a
change in tax or accounting consequences to
<PAGE>
the Corporation or to any Optionee. Nothing in this agreement
shall confer upon the Optionee any rights as a stockholder prior to
the time of the delivery to the Optionee of a stock certificate for
the shares purchased under this agreement.
(3) Unless this Option expires earlier in accordance with any provision
of Paragraph 4, this Option shall expire on the date which is ten
(10) years from the Date of Grant (the "Expiration Date").
(4) If, prior to the Expiration Date, the Optionee (i) becomes totally
and permanently disabled as determined by the Corporation in its sole
discretion, (ii) retires, (iii) dies, or (iv) otherwise terminates or
is terminated as an employee of the Corporation, this Option shall be
exercisable under the circumstances and for the time periods set
forth below, but only to the extent such time periods do not extend
beyond the Expiration Date:
(a) If the Optionee's employment terminates or is terminated for any
reason other than (i) retirement, (ii) the Optionee becoming
totally and permanently disabled, (iii) death, or (iv) under the
circumstances described in Paragraph 4(b), this Option may be
exercised within thirty (30) days of the date of such
termination to the extent exercisable in accordance with the
provisions of Paragraph 1;
(b) If the Optionee retires at his normal or later retirement date
or, with the consent of the Corporation, takes early retirement,
this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within six (6) years of
the date of retirement; provided, however, that if such exercise
occurs more than three (3) months after the date of such
retirement, the Option shall be treated as a Nonqualified Stock
Option;
(c) If the Optionee becomes totally and permanently disabled,
this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within six (6) years
of the date the Optionee's service as an employee is
terminated within the meaning of the Code by reason of being
totally and permanently disabled; provided, however, that if
such Exercise occurs more than one (1) year after the date
the Optionee's employment is terminated due to such
disability, this Option shall be treated as a Nonqualified
Stock Option;
(d) If the Optionee dies while he is employed or within three (3)
years of his retirement in accordance with subparagraph (c)
above, this Option may be exercised in full, notwithstanding the
provisions of Paragraph 1, at any time within three (3) years of
the Optionee's date of death by the legal representative of the
Optionee or any person who acquires this Option by bequest or
inheritance; provided, however, if the Optionee's date of death
is more than three (3) months from the date of such retirement,
this Option shall be treated as a Nonqualified Stock Option, and
(e) For purpose of this Paragraph 4, a sick leave or other bona fide
leave of absence
<PAGE>
granted in accordance with the Corporation's usual procedure
which does not operate to interrupt continuous employment for
other benefits granted by the Corporation shall not be
considered a termination of employment or interruption of
continuous employment hereunder and an employee who is
granted such a leave of absence shall be considered to be
continuously employed during such period of leave; provided,
that if the Code or the regulations promulgated thereunder
establish a more restrictive rule defining termination of
employment applicable to the option granted herein, such rule
shall be substituted here for.
(5) The Optionee agrees, by the acceptance of this Option, for himself
and his executors and administrators, that if a registration
statement under the Securities Act of 1933 is not in effect at the
time of the exercise of any portion of this Option, with respect to
the sale by the Corporation and the resale by the Optionee of the
shares issuable upon such exercise, it shall be a condition precedent
to the right to purchase such shares that the notice of exercise
shall be accompanied by a written representation that the Optionee or
his executor or administrator is acquiring such shares for his own or
such executor's or administrator's account for investment and not
with a view to the distribution thereof.
(6) The Corporation shall be not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the
exercise of this Option until the admission of such shares to listing
on any stock exchange on which the Corporation's stock may then be
listed and until the Corporation takes such steps as may be required
by law and applicable regulations, including rules and regulations of
the Securities and Exchange Commission and any stock exchange as
above mentioned, or until, in the opinion of counsel for the
Corporation, any such listing or registration or other steps are not
required.
(7) The shares issued may be authorized but unissued stock, or treasury
stock. and the number of shares with respect to which this Option may
be exercised, and the price payable with respect thereto, shall be
properly adjusted if the Corporation shall at any time declare a
stock split, issue any stock dividend, or make a reclassification of
such stock, so that the Optionee or his executors, administrators,
legatees or distributees entitled hereunder shall not be in any
way in a better or worse position as to the number of shares acquired
and the aggregate amount paid therefore, solely from having exercised
this option with respect to any of said shares after, rather than
before, such stock split, stock dividend, or reclassification.
(8) The granting of this Option shall not constitute or be evidence of
any agreement or understanding, express or implied, on the part of
the Corporation or any of its subsidiaries to employ the Optionee for
any specified period. The Company continues to retain the absolute
right to terminate the employment relationship with the Optionee at
any time, with or without good cause.
(9) This Option shall be binding upon the Corporation and its successors
and assigns, and upon the Optionee and his administrators and
executors.
<PAGE>
(10) Whenever the Corporation is required to issue or transfer shares of
its Common Stock to Optionee pursuant hereto, the Corporation shall
have the right to require the Optionee to remit to the Corporation an
amount sufficient to satisfy all federal, state and local withholding
tax requirements, if any.
(11) The Optionee agrees, by the acceptance of this Option, to the
amendment of this Grant Agreement, the Notice of Grant of Stock
Option and the form of exercise of option provided by the
Corporation, in any manner requested by the Corporation pursuant to
advice from the Securities and Exchange Commission at any time during
the term of this Option, and to execute any and all instruments
relative thereto when so requested by the Corporation.
(12) Throughout this agreement, the masculine gender shall be deemed to
include the feminine.
(13) This Option is not transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and during the
lifetime of the Optionee it is exercisable only by the Optionee.
<PAGE>
Exhibit 10.8
THE THOMAS & BETTS
PENSION RESTORATION PLAN
(EFFECTIVE JANUARY 1, 1995)
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Applicable Code Limits. . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.8 Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.9 Employer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10 Normal Annuity Option. . . . . . . . . . . . . . . . . . . . . 2
Section 1.11 Normal Retirement Date . . . . . . . . . . . . . . . . . . . . 3
Section 1.12 Participant. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.13 Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.14 Pension Restoration Benefit. . . . . . . . . . . . . . . . . . 3
Section 1.15 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.16 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.17 SEIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.18 Surviving Spouse Benefit . . . . . . . . . . . . . . . . . . . 3
Section 1.19 Gender and Number. . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II - PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2 Former Employees. . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III - PENSION RESTORATION BENEFIT. . . . . . . . . . . . . . . . . . 4
Section 3.1 Amount of Benefit . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Form and Time of Payment of Pension Restoration Benefit . . . . 5
Section 3.3 Payment of Small Benefits . . . . . . . . . . . . . . . . . . . 5
Section 3.4 Nonduplication of Benefits. . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV - SURVIVING SPOUSE BENEFIT. . . . . . . . . . . . . . . . . . . . 6
Section 4.1 Amount of Benefit . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.2 Form and Time of Payment of Surviving Spouse Benefit. . . . . . 6
Section 4.3 Payment of Small Benefits . . . . . . . . . . . . . . . . . . . 6
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 4.4 Nonduplication of Benefits. . . . . . . . . . . . . . . . . . . 7
ARTICLE V - OTHER BENEFIT PROVISIONS . . . . . . . . . . . . . . . . . . . . 7
Section 5.1 Vesting; Termination of Employment. . . . . . . . . . . . . . . 7
Section 5.2 Payment to Guardian . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.3 Withholding; Payroll Taxes. . . . . . . . . . . . . . . . . . . 8
Section 5.4 Domestic Relations Orders . . . . . . . . . . . . . . . . . . . 8
Section 5.5 Nonalienation of Benefits . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI - SOURCE OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.1 Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VII - ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.1 The Committee . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.2 Records and Reports . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.3 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.4 Indemnification for Liability . . . . . . . . . . . . . . . . . 10
Section 7.5 Claims Procedure. . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VIII - AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . 12
Section 8.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.3 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IX - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . 13
Section 9.1 No Contract of Employment . . . . . . . . . . . . . . . . . . . 13
Section 9.2 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.3 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.4 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.5 Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
-ii-
<PAGE>
THE THOMAS & BETTS
PENSION RESTORATION PLAN
(EFFECTIVE JANUARY 1, 1995)
WHEREAS, Thomas & Betts Corporation (the "Company") desires to
establish a supplemental retirement plan in order to provide certain
employees with benefits which they would otherwise lose under The Thomas &
Betts Pension Plan (the "Pension Plan") as a result of (i) certain Internal
Revenue Code limitations on benefits which may be provided under the Pension
Plan and/or (ii) elective deferrals of compensation under The Thomas & Betts
Supplemental Executive Investment Plan (the "SEIP"); and
WHEREAS, the Company intends that this supplemental retirement plan
be unfunded and be maintained "primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees," within the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of
the Employee Retirement Income Security Act of 1974, as amended;
NOW, THEREFORE, effective January 1, 1995, the Company hereby
establishes The Thomas & Betts Pension Restoration Plan as follows:
ARTICLE I
DEFINITIONS
The following words and phrases, as used herein, shall have the
following meanings unless the context clearly indicates otherwise:
<PAGE>
Section 1.1 APPLICABLE CODE LIMITS: The limitations on benefits
contained in Section 401(a)(17) and Section 415 of the Code, including any
amendments or modifications of such provisions or any successor provisions of
the Code.
Section 1.2 BENEFICIARY: The person or persons designated (or
deemed to be designated) by a Participant or Beneficiary to receive benefits
under the Pension Plan payable upon the death of the Participant or
Beneficiary, respectively, as provided under the Pension Plan.
Section 1.3 BOARD: The Board of Directors of the Company.
Section 1.4 CODE: The Internal Revenue Code of 1986, as amended.
Section 1.5 COMMITTEE: The Retirement Plans Committee appointed by
the Board.
Section 1.6 COMPANY: Thomas & Betts Corporation, or its successor
or successors who assume the obligations of the Company under the Plan.
Section 1.7 COMPENSATION: An Eligible Employee's compensation from
the Employer which is taken into account for purposes of determining his
accrued benefit under the Pension Plan.
Section 1.8 ELIGIBLE EMPLOYEE: An individual employed by the
Employer on or after January 1, 1995 (a) who is a participant in the Pension
Plan, and (b) who is eligible to participate in the SEIP and/or whose benefit
under the Pension Plan is reduced by the Applicable Code Limits.
Section 1.9 EMPLOYER: The Company and any subsidiary of the
Company which participates in the Pension Plan.
Section 1.10 NORMAL ANNUITY OPTION: An annuity providing monthly
payments to the Participant for his lifetime with a guaranteed minimum of 120
monthly payments, as defined in and administered under the Pension Plan.
-2-
<PAGE>
Section 1.11 NORMAL RETIREMENT DATE: The Participant's normal
retirement date under the Pension Plan.
Section 1.12 PARTICIPANT: An Eligible Employee who is accruing, or
who has accrued, a Pension Restoration Benefit under the Plan.
Section 1.13 PENSION PLAN: The Thomas & Betts Pension Plan, as
amended from time to time.
Section 1.14 PENSION RESTORATION BENEFIT: The supplemental
retirement benefit described in Article III of the Plan.
Section 1.15 PLAN: The Thomas & Betts Pension Restoration Plan, as
set forth herein and as amended from time to time.
Section 1.16 PLAN YEAR: A period of twelve consecutive months
beginning on January 1 and ending on the following December 31.
Section 1.17 SEIP: The Thomas & Betts Supplemental Executive
Investment Plan, as it presently exists and as it may be amended from time to
time.
Section 1.18 SURVIVING SPOUSE BENEFIT: The supplemental
pre-retirement survivor benefit described in Article IV of the Plan.
Section 1.19 GENDER AND NUMBER: The masculine pronoun wherever
used shall include the feminine and the singular may include the plural, and
vice versa, as the context may require.
-3-
<PAGE>
ARTICLE II
PARTICIPATION
Section 2.1 PARTICIPATION. An Eligible Employee shall be a
Participant if he is accruing, or has accrued, a benefit under the Pension
Plan, and if the amount of such benefit is reduced by reason of the
Applicable Code Limits and/or because he has elected to defer any of his
Compensation under the SEIP.
Section 2.2 FORMER EMPLOYEES. An individual shall not be an
Eligible Employee or a Participant if his employment with the Employer
terminated before January 1, 1995.
ARTICLE III
PENSION RESTORATION BENEFIT
Section 3.1 AMOUNT OF BENEFIT. The amount of the Pension
Restoration Benefit payable under the Plan shall be equal to the monthly
benefit which would be payable under the Pension Plan to or on behalf of a
Participant if:
(a) the Applicable Code Limits were inapplicable; and
(b) the Participant had not elected to defer any of his
Compensation under the SEIP,
less the monthly benefit actually payable to or on behalf of the Participant
under the Pension Plan.
The amounts described in (a) and (b) above shall be expressed as the
monthly benefit payable in the form of the Normal Annuity Option commencing at
the Participant's Normal Retirement Date, or the date of determination, if
later.
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<PAGE>
Section 3.2 FORM AND TIME OF PAYMENT OF PENSION RESTORATION
BENEFIT. Except as otherwise provided in Section 3.3, the Pension Restoration
Benefit payable to or on behalf of a Participant, as determined under Section
3.1, shall be paid in the same form and at the same time as the benefit paid
to or on behalf of the Participant under the Pension Plan, and shall be
adjusted by the factors used under the Pension Plan to reflect the payment
option chosen by the Participant and the Participant's annuity starting date.
Section 3.3 PAYMENT OF SMALL BENEFITS. Notwithstanding the
provisions of Section 3.2, if the actuarial equivalent present value of the
Pension Restoration Benefit to which a Participant is entitled does not
exceed $25,000, such present value shall be distributed to the Participant in
a lump sum. For purposes of this Section 3.3, the actuarial equivalent
present value of a Participant's Pension Restoration Benefit shall be
determined as of the later of (a) February 1 of the calendar year following
the year in which he terminates employment with the Employer and all
affiliates or (b) November 1, 1997, using the interest and mortality
assumptions which would be used under the Pension Plan for purposes of
determining lump sum present values as of such determination date. Any lump
sum benefit payable under this Section 3.3 shall be paid within 60 days
following the applicable determination date.
Section 3.4 NONDUPLICATION OF BENEFITS. Notwithstanding any other
provision of this Plan, if a Participant is also covered by The Thomas &
Betts Executive Retirement Plan, the amount of the Pension Restoration
Benefit otherwise payable under this Plan shall be reduced by the value of
any benefit which such Participant is entitled to receive under the Executive
Retirement Plan.
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<PAGE>
ARTICLE IV
SURVIVING SPOUSE BENEFIT
Section 4.1 AMOUNT OF BENEFIT. If a Participant who has accrued a
Pension Restoration Benefit dies prior to the distribution, or commencement
of distribution, of such Pension Restoration Benefit, and if a pre-retirement
survivor annuity is payable from the Pension Plan to his surviving spouse, a
Surviving Spouse Benefit shall be payable from this Plan. The amount of such
Surviving Spouse Benefit shall be equal to the monthly benefit which would be
payable under the Pension Plan to the surviving spouse if:
(a) the Applicable Code Limits were inapplicable; and
(b) the Participant had not elected to defer any of his
Compensation under the SEIP,
less the monthly benefit actually payable to the surviving spouse under the
Pension Plan.
The amounts described in (a) and (b) above shall be expressed in the
form of the pre-retirement survivor annuity payable under the Pension Plan.
Section 4.2 FORM AND TIME OF PAYMENT OF SURVIVING SPOUSE BENEFIT.
Except as otherwise provided in Section 4.3, the Surviving Spouse Benefit
payable under Section 4.1 shall be paid in the same form and at the same time as
the pre-retirement survivor annuity paid to the surviving spouse under the
Pension Plan, and shall be adjusted by the factors used under the Pension Plan
to reflect the annuity starting date.
Section 4.3 PAYMENT OF SMALL BENEFITS. Notwithstanding the provisions
of Section 4.2, if the actuarial equivalent present value of the Surviving
Spouse Benefit to which a surviving spouse is
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<PAGE>
entitled does not exceed $25,000, such present value shall be distributed to
the surviving spouse in a lump sum. For purposes of this Section 4.3, the
actuarial equivalent present value of a Surviving Spouse Benefit shall be
determined as of the later of (a) February 1 of the calendar year following
the year in which the Participant dies or (b) November 1, 1997, using the
interest and mortality assumptions which would be used under the Pension Plan
for purposes of determining lump sum present values as of such determination
date. Any lump sum benefit payable under this Section 4.3 shall be paid
within 60 days following the applicable determination date.
Section 4.4 NONDUPLICATION OF BENEFITS. Notwithstanding any other
provision of this Plan, if a Participant is also covered by The Thomas &
Betts Executive Retirement Plan, the amount of the Surviving Spouse Benefit
otherwise payable under this Plan upon such Participant's death shall be
reduced by the value of any pre-retirement death benefit which such surviving
spouse is entitled to receive under the Executive Retirement Plan.
ARTICLE V
OTHER BENEFIT PROVISIONS
Section 5.1 VESTING; TERMINATION OF EMPLOYMENT. No benefit shall
be payable under this Plan to, or with respect to, any Participant who has
not earned a vested right to his accrued benefit under the Pension Plan.
No benefit shall be payable under this Plan to, or with respect to,
a Participant prior to his termination of employment with the Employer and
all affiliates.
Section 5.2 PAYMENT TO GUARDIAN. If an amount is payable under
this Plan to a minor, a person declared incompetent or a person incapable of
handling the disposition of property, the
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<PAGE>
Committee or its appointed representative may direct the payment of the
amount to the guardian, legal representative or person having the care and
custody of the minor, incompetent or incapable person. The Committee or its
appointed representative may require proof of incompetency, minority,
incapacity or guardianship as it may deem appropriate prior to the
distribution of the amount. The distribution shall completely discharge the
Committee and its appointed representative and the Employer from all
liability with respect to the amount distributed.
Section 5.3 WITHHOLDING; PAYROLL TAXES. The Employer shall
withhold from payments made under the Plan any taxes required to be withheld
from a Participant's wages for federal, state or local government income or
other payroll taxes.
Section 5.4 DOMESTIC RELATIONS ORDERS. In the event a
Participant's pension benefit under the Pension Plan is subject to a
qualified domestic relations order, the Pension Restoration Benefit provided
by this Plan shall be paid without regard to the order, unless the order
specifically applies to benefits payable under this Plan.
Section 5.5 NONALIENATION OF BENEFITS. Except as provided in
Section 5.4 with respect to certain domestic relations orders, none of the
benefits or rights of a Participant or any Beneficiary under this Plan shall
be subject to the claim of any creditor. In particular, to the fullest
extent permitted by law, all such benefits and rights shall be free from
attachment, garnishment or any other legal or equitable process available to
any creditor of the Participant or his Beneficiary. Neither the Participant
nor his Beneficiary shall have the right to alienate, anticipate, commute,
pledge, encumber or assign any of the payments which he may expect to
receive, contingently or otherwise, under this Plan.
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<PAGE>
ARTICLE VI
SOURCE OF FUNDS
Section 6.1 SOURCE OF FUNDS. This Plan shall be unfunded, and
payment of benefits hereunder shall be made from the general assets of the
Employer. Any asset which may be set aside, earmarked or identified as being
intended for the provision of benefits under this Plan, shall remain an asset
of the Employer and shall be subject to the claims of its general creditors.
Each Participant and Beneficiary shall be a general creditor of the Employer
to the extent of the value of his benefit accrued hereunder, and he shall
have no right, title or interest in any specific asset that the Employer may
set aside or designate as intended to be applied to the payment of benefits
under this Plan. The Employer's obligation under the Plan shall be merely an
unfunded and unsecured promise to pay money in the future.
ARTICLE VII
ADMINISTRATION
Section 7.1 THE COMMITTEE. This Plan shall be administered by the
Retirement Plans Committee appointed by the Board. The Committee and/or its
appointed representative shall have sole discretion to construe and interpret
the provisions of the Plan and to determine all questions oncerning benefit
entitlements, including the power to construe and determine disputed or
doubtful terms. To the maximum extent permissible under law, the
determinations of the Committee and/or its appointed representative on all
such matters shall be final and binding upon all persons involved.
Section 7.2 RECORDS AND REPORTS. The Committee or its appointed
representative shall keep a record of its proceedings and actions and shall
maintain all books of account, records and other data as shall be necessary
for the proper administration of the Plan. Such records shall contain all
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<PAGE>
relevant data pertaining to individual Participants and their rights under
the Plan. The Committee or its appointed representative shall have the duty
to carry into effect all rights or benefits provided hereunder to the extent
assets of the Employer are properly available therefor.
Section 7.3 PAYMENT OF EXPENSES. The Employer shall pay all
expenses of administering the Plan. Such expenses shall include any expenses
incident to the functioning of the Committee or its appointed representative.
Section 7.4 INDEMNIFICATION FOR LIABILITY. The Employer shall
indemnify the members of the Committee, and the employees of the Employer to
whom the Committee delegates duties under the Plan, against any and all
claims, losses, damages, expenses and liabilities arising from their carrying
out of their responsibilities in connection with the Plan, unless the same is
determined to be due to gross negligence or willful misconduct.
Section 7.5 CLAIMS PROCEDURE. The procedure for presenting claims
under the Plan and appealing denials thereof shall be as follows:
(a) FILING OF CLAIMS. Any Participant or Beneficiary (the
"claimant") may file a written claim for a Plan benefit with the Committee
or its appointed representative.
(b) NOTICE OF DENIAL OF CLAIM. In the event of a denial of any
benefit requested by any claimant, the claimant shall be given a written
notification containing specific reasons for the denial. The written
notification shall contain specific reference to the pertinent Plan
provisions on which the denial is based. In addition, it shall contain a
description of any additional material or information necessary for the
claimant to perfect a claim and an explanation of why such material or
information is necessary. The
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<PAGE>
notification shall also provide appropriate information as to the steps
to be taken if the claimant wishes to submit his claim for review.
The written notification shall be given to the claimant within 90
days after receipt of his claim by the Committee or its appointed
representative unless special circumstances require an extension of time
for processing, in which case written notice of the extension shall be
furnished to the claimant prior to the termination of the original 90-day
period, and such notice shall indicate the special circumstances which make
the extension appropriate. In no event shall the extension exceed a total
of 180 days from the date of the original receipt of the claim.
(c) RIGHT OF REVIEW. In the event of a denial of a claim for
benefits, the claimant shall be permitted to review the pertinent documents
and to submit to the Committee or its appointed representative issues and
comments in writing. In addition, the claimant may make a written request
for a review of his claim and its denial by the Committee or its appointed
representative. Such written request must be received by the Committee or
its appointed representative within 60 days after receipt by the claimant
of written notification of the denial of the claim.
(d) DECISION ON REVIEW.
(1) A decision shall be rendered by the Committee or its
appointed representative within 60 days after the receipt of the
request for review. However, where special circumstances make a
longer period for decision necessary or appropriate, the decision of
the Committee or its appointed representative may be postponed on
written notice to the claimant (prior to the expiration of the initial
60-
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<PAGE>
day period) for an additional 60 days. In no event shall the decision
of the Committee or its appointed representative be rendered more
than 120 days after the receipt of the request for review.
(2) Any decision by the Committee or its appointed
representative shall be furnished to the claimant in writing in a
manner calculated to be understood by the claimant and shall set forth
the specific reason(s) for the decision and the specific Plan
provision(s) on which the decision is based.
ARTICLE VIII
AMENDMENT AND TERMINATION
Section 8.1 AMENDMENT. The Board shall have the right to amend or
modify the Plan at any time and for any reason. The Committee shall have
such authority to amend the Plan as shall be delegated to it by the Board in
the Retirement Plans Committee Charter or by resolution.
Section 8.2 TERMINATION. The Board shall have the right to
terminate the Plan, in whole or in part, at any time and for any reason.
Section 8.3 LIMITATIONS. No amendment or termination of the Plan
shall decrease the amount of any Participant's Pension Restoration Benefit
accrued or in pay status as of the date of amendment or termination
(determined as if the Participant had terminated employment as of such date,
or, if earlier, as of his actual date of termination).
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<PAGE>
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 NO CONTRACT OF EMPLOYMENT. Nothing contained herein
shall be construed as conferring upon any person the right to be employed by
the Employer or to continue in the employ of the Employer, and nothing
contained herein shall be construed to limit the right of the Employer to
terminate the employment of any Eligible Employee.
Section 9.2 APPLICABLE LAW. The provisions of this Plan shall be
construed and interpreted according to the laws of the State of Tennessee, to
the extent not superseded by federal law.
Section 9.3 HEADINGS. The headings of the Articles and Sections of
the Plan are for reference only. In the event of a conflict between a
heading and the contents of an Article or Section, the contents of the
Article or Section shall control.
Section 9.4 ENTIRE AGREEMENT. This Plan contains the entire
agreement by the Employer with respect to the subject matter hereof. No
modification or claim of waiver of any of the provisions hereof shall be
valid unless in writing and signed by the party against whom such
modification or waiver is sought to be enforced.
Section 9.5 SUCCESSORS. The provisions of this Plan shall bind and
inure to the benefit of the Employer and its successors and assigns. The
term "successors" as used herein shall include any corporate or other
business entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of the
Employer and successors of any such corporation or other business entity.
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<PAGE>
IN WITNESS WHEREOF, Thomas & Betts Corporation has caused these
presents to be duly executed this ______ day of ______________, 1997.
Attest: THOMAS & BETTS CORPORATION
_________________________ By:___________________________
Secretary Title:
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<PAGE>
THOMAS & BETTS CORPORATION RETIREMENT PLAN
FOR NONEMPLOYEE DIRECTORS
(as amended December 3, 1997)
Effective as of September 6, 1989, THOMAS & BETTS CORPORATION hereby
establishes the Thomas & Betts Corporation Retirement Plan for Nonemployee
Directors, including Nonemployee Directors that have retired on or after May
1, 1987, a nonqualified deferred compensation plan for the exclusive benefit
of its Nonemployee Directors, pursuant to authorization of the Board of
Directors of THOMAS & BETTS CORPORATION.
ARTICLE I
INTRODUCTION
Section 1.1 NAME OF PLAN. The name of the plan is the "Thomas & Betts
Corporation Retirement Plan for Nonemployee Directors." It is also referred to
as the "Plan."
Section 1.2 EFFECTIVE DATE. The effective date of the Plan is
September 6, 1989.
ARTICLE II
DEFINITIONS
Section 2.1 "Beneficiary" shall mean the person or persons, natural or
otherwise, designated by a Participant under Section 4.1 to receive a death
benefit payable under Section 3.4.
Section 2.2 "Board" shall mean the Board of Directors of Thomas & Betts
Corporation.
Section 2.3 "Board Service Year" shall mean the interval between two
successive Annual Meetings of Shareholders. Any fraction of a year shall be
deemed a full Board Service Year.
Section 2.4 "Change of Control" shall mean a change of control of a
nature that would be required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
provided that, without limitation, such a "Change of Control" shall be deemed
<PAGE>
to have occurred if: (i) a third person, including a "group" as such term is
used in Section 13(d)(3) of the Exchange Act, becomes the beneficial owner,
directly or indirectly, of 25% or more of the combined voting power of the
Company's outstanding voting securities ordinarily having the right to vote
for the election of directors of the Company; or (ii) individuals who, as of
the date hereof, constitute the Board (the Board generally and as of the date
hereof the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for
purposes of this Plan, considered as though such person were a member of the
Incumbent Board.
Section 2.5 "Company" shall mean Thomas & Betts Corporation.
Section 2.6 "Committee" shall mean the Corporate Governance Committee of
the Board or its delegate.
Section 2.7 "Nonemployee Director" shall mean a director serving on the
Board of the Company who is not and has never been an employee of the Company or
any of its subsidiaries or affiliated business entities.
Section 2.8 "Participant" shall mean a person who satisfies or has
satisfied all eligibility requirements necessary to receive benefits under this
Plan pursuant to Section 3.1.
Section 2.9 "Payment Date" shall mean the last business day in April of
each calendar year.
<PAGE>
Section 2.10 "Retainer" shall mean the annual retainer fee in effect at
the time that a Participant's service on the Board as a Nonemployee Director is
terminated.
ARTICLE III
BENEFITS UNDER THE PLAN
Section 3.1 ELIGIBILITY TO RECEIVE BENEFITS. A Nonemployee Director
shall be eligible to receive benefits under this Plan if (1) he or she was
elected a member of the Board prior to December 4, 1997, and (2) at the time of
termination from service as a Nonemployee Director, such person has completed
at least five (5) Board Service Years (whether or not such periods are
consecutive) as a Nonemployee Director or there has been a Change of Control.
Section 3.2 VESTING OF BENEFITS. No Participant shall be vested in
any benefits under this Plan until such Participant completes five (5) Board
Service Years (whether or not such periods are consecutive) as a Nonemployee
Director. After completion of five (5) Board Service Years (whether or not such
periods are consecutive) as a Nonemployee Director, a Participant shall be
vested fifty percent (50%) in the benefits provided under the Plan. For each
additional Board Service Year as a Nonemployee Director thereafter, a
Participant shall vest an additional ten percent (10%) until such Participant is
fully vested. In the case of any break in service, all Board Service Years
shall be aggregated to measure the total period of service. Notwithstanding
any provision in this Section 3.2, in the event of a Change of Control, a
Participant shall be one hundred percent (100%) vested in the benefits provided
under this Plan.
Section 3.3 AMOUNT OF ANNUAL BENEFIT PAYABLE. A participant who is
eligible to receive benefits under this Plan shall be entitled to receive an
annual benefit of an amount equal
<PAGE>
to the Participant's vested percentage (calculated in accordance with Section
3.2) of the Retainer (the "Annual Benefit").
Section 3.4 TIME AND DURATION OF PAYMENTS. The Annual Benefit
shall be paid to the Participant or his or her Beneficiary on each Payment
Date, beginning with the Payment Date immediately following the Participant's
termination from service as a Nonemployee Director (the "First Payment
Date"). The Annual Benefit shall be paid for a number of Payment Dates (which
includes the First Payment Date) not to exceed the lesser of:
(a) The Participant's number of Board Service Years as a Nonemployee
Director; or
(b) 10 payment dates.
In the event of the death of a Participant, any benefit under the plan that
remains unpaid shall be paid to his or her Beneficiary at the same time and in
the same manner that the benefit would have been paid to the Participant.
However, a Participant may elect to defer the commencement date for the
payment of benefits under this Plan from the First Payment Date to the Payment
Date immediately following the date on which such Participant attains age 70.
Such election must be in writing and delivered to the committee prior to the
date that such Participant terminates service as a Nonemployee Director. In the
case of an election pursuant to this Section 3.4, the amount of the Annual
Benefit for each year provided by Section 3.3 shall be increased annually, until
such Annual Benefit is paid, by interest in an amount equal to the rate of
interest that the Company could obtain for an investment in a one-year
Certificate of Deposit on the Payment Date.
Section 3.5 NON-ASSIGNABILITY OF INTERESTS. The interests herein and
the right to receive benefits hereunder may not be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered, or subjected to any charge or legal
process, and if any attempt is made to do so, or
<PAGE>
a Participant becomes bankrupt, the interests under the Plan of the person
affected may be terminated by the Committee, which, in its sole discretion,
may cause the same to be held or applied for the benefit of one or more of
the dependents of such person or make any other disposition of such interests
as it deems appropriate.
Section 3.6 UNFUNDED AND UNSECURED PROMISE TO PAY. Any benefit
under this Plan shall be an unfunded and unsecured promise to pay and any
payments made by the Company pursuant to this Plan shall be made from the
general assets of the Company. However, the Company may in its discretion
set aside assets or purchase annuity or life insurance contracts to discharge
all or a part of its obligation under this Plan. Any such assets shall
remain the property of the Company, subject to creditors of or claims against
the Company. However, nothing contained in this Plan shall be construed as
the creation by the Company of an escrow account or trust fund or any other
form of asset segregation. The rights of a Participant or his or her
Beneficiary shall be only those of an unsecured creditor and such persons
shall not have any right, title or interest in any assets of the Company.
The only right of the Participant or his or her Beneficiary shall be the
right to receive the benefits provided by this Plan.
Section 3.7 FORFEITURE OF BENEFITS. All benefits not yet paid for
which a Nonemployee Director would be otherwise eligible under this Plan
shall be forfeited in the event that the Committee determines that any of the
following circumstances has occurred:
(a) The Nonemployee Director has engaged in knowing and willful misconduct
in connection with his or her service as a director; or
(b) The Nonemployee Director, without the consent of the Board at any time
during or after his or her period of service as a Nonemployee
Director, is employed by, becomes associated with, renders service (as
a director or otherwise) to, or owns an
<PAGE>
interest (other than as a shareholder with a nonsubstantial interest) in,
any business which is competitive with, or which controls a business which
is competitive with the Company or any affiliates of the Company.
ARTICLE IV
BENEFICIARIES
Section 4.1 DESIGNATION OF BENEFICIARY. Each Participant may
designate from time to time any person or persons, natural or otherwise, as
his or her Beneficiary or Beneficiaries to whom benefits under Section 3.4
are to be paid. Each Beneficiary designation shall be made on a form
prescribed by the Committee and shall be effective only if one executed copy
thereof is mailed, filed or otherwise delivered to the Committee during the
Participant's lifetime. Each executed Beneficiary designation mailed, filed
or otherwise delivered during the Participant's lifetime to the Committee
shall revoke all Beneficiary designations previously made by the Participant.
If no beneficiary designation is on file with the Committee at the time of
the Participant's death, or if the person or persons designated as
Beneficiary shall have predeceased the Participant, or if there is a dispute
as to the Participant's legal beneficiary, the benefits under Section 3.4
shall be paid to the Participant's estate.
ARTICLE V
PLAN ADMINISTRATION
Section 5.1 ADMINISTRATION. This Plan shall be administered by the
Committee. The Committee shall have the authority to interpret this Plan and
any such interpretation shall be final and binding on all parties. The
Committee shall have the authority to delegate to others the duties and
responsibilities of maintaining records and making distributions hereunder.
The Board, or if
<PAGE>
specifically delegated, its delegate, may amend or terminate this Plan at any
time, provided that no such amendment or termination shall adversely affect
the amounts payable under the Plan before the time of such amendment or
termination unless the Participant becomes entitled to a benefit at least
equal in value to such amount under another plan or practice adopted by the
Company, and provided, further, that after a Change of Control this Plan may
not be amended with respect to the amount or treatment of benefits already
accrued under this Plan without the written consent of a majority of
Participants determined as of the day before such Change of Control. The
Company will pay for all distributions made pursuant to this Plan and for all
costs, charges and expenses relating to the administration of this Plan.
Section 5.2 APPLICABLE LAW. All questions pertaining to the
construction, validity and effect of this Plan shall be determined in
accordance with the laws of the State of Tennessee.
<PAGE>
EXHIBIT 10.10
THOMAS & BETTS CORPORATION
DEFERRED FEE PLAN FOR NONEMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1998)
ARTICLE 1
INTRODUCTION
1.1 RECITALS.
(a) Effective January 1, 1986, the Board of Directors (the "Board")
of Thomas & Betts Corporation (the "Corporation") approved and adopted the
Thomas & Betts Deferred Fee Plan for Nonemployee Directors for the purpose
of providing nonemployee directors with the opportunity to defer receipt of
compensation earned as a director to a date following termination of such
service and to aid the Corporation in attracting and retaining as members
of its Board of Directors persons whose abilities, experience and judgment
can contribute to the well being of the Corporation.
(b) The Thomas & Betts Deferred Fee Plan for Nonemployee Directors
was amended and restated effective November 3, 1993, as the Deferred Fee
Plan for Nonemployee Directors of Thomas & Betts Corporation (the "Plan").
(c) The Board, desiring to amend the Plan to provide nonemployee
directors with nonelective deferred fees in the form of stock credits, to
add alternative reference funds as an additional mode of elective fee
deferral, and to make certain other changes, hereby amends and restates the
Deferred Fee Plan for Nonemployee Directors of Thomas & Betts Corporation
in its entirety to read as set forth herein, effective January 1, 1998.
1.2 NAME AND PURPOSE. The name of this Plan is the "Deferred Fee Plan for
Nonemployee Directors of Thomas & Betts Corporation." The purpose of the Plan
is as stated in Section 1.1 above.
1.3 DEFINITIONS. Whenever used in the Plan, the following terms shall
have the meaning set forth or referenced below:
(a) "Account" means a Stock Account, a Mutual Fund Account, or a
pre-1998 Cash Account.
(b) "Board" has the meaning set forth in Section 1.1(a) above.
<PAGE>
(c) "Board Year" means a year beginning with the day on which the
annual meeting of the shareholders of the Corporation (the "Shareholders'
Meeting") is held, and ending on the day prior to the annual Shareholders'
Meeting in the next calendar year.
(d) "Business Day" means a day except for a Saturday, Sunday or a
legal holiday.
(e) "Cash Account" means a bookkeeping account which reflects the
Compensation deferred by a Participant for a Plan Year prior to 1998
pursuant to the provisions of the Plan then in effect.
(f) "Cash Credit" means a credit to a pre-1998 Cash Account,
expressed in whole dollars and fractions thereof.
(g) "Closing Price" means the closing price of the Common Stock as
reported in the New York Stock Exchange Composite Tape.
(h) "Committee" means, unless otherwise determined by the Board, the
Corporate Governance Committee of the Board, or a committee consisting of
at least two Nonemployee Directors who shall be appointed by the Board. If
the Board does not appoint a committee, then references to Committee in the
Plan shall be deemed to be references to the Board.
(i) "Common Stock" means (i) the common stock, no par value, of the
Corporation, adjusted as provided in Section 4.8, or (ii) if there is a
merger or consolidation and the Corporation is not the surviving
corporation thereof, the capital stock of the surviving corporation given
in exchange for such common stock of the Corporation.
(j) "Compensation" means retainer fees for service on, and fees for
attendance at meetings of, the Board and any committees thereof, which are
payable to a Nonemployee Director during a Plan Year.
(k) "Corporation" has the meaning set forth in Section 1.1(a) above.
(l) "Deferred Compensation Account" means a bookkeeping account
established for a Participant under the Thomas & Betts Deferred Fee Plan
for Nonemployee Directors before November 3, 1993, which was converted to a
Cash Account or a Stock Account on or prior to December 31, 1993.
(m) "Fair Market Value" means the average of the high and the low
sales prices of the Common Stock as reported in the New York Stock Exchange
Composite Tape.
(n) "Mutual Fund Account" means a bookkeeping account which reflects
the Compensation deferred by a Participant pursuant to Section 2.5.
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<PAGE>
(o) "Mutual Fund Credit" means a credit to the Mutual Fund Account,
expressed in units or shares.
(p) "Nonemployee Director" means any individual serving on the Board
who is not an employee of the Corporation or any of its subsidiaries or
affiliates.
(q) "Participant" means:
(i) A Nonemployee Director who has filed an election to
participate in the Plan under Section 2.2 of the Plan with regard to
any Plan Year, or who has deferred Compensation to an Account; and
(ii) Any Nonemployee Director who is eligible to receive Stock
Credits under Article 3.
(r) "Plan" has the meaning set forth in Section 1.1(b) above.
(s) "Plan Year" means the calendar year.
(t) "Stock Account" means a bookkeeping account which reflects: (i)
the Compensation deferred by a Participant pursuant to Section 2.4; and
(ii) the Deferred Fees credited pursuant to Article 3.
(u) "Stock Credit" means a credit to a Stock Account, calculated
pursuant to Section 2.4 or Article 3.
ARTICLE 2
ELECTIVE FEE DEFERRALS
2.1 ELIGIBILITY. Any Nonemployee Director may participate in the Plan by
making an election to defer Compensation pursuant to Section 2.2.
2.2 ELECTION TO PARTICIPATE.
(a) Each Nonemployee Director, and each first-time nominee for
director who is not an employee of the Corporation or any of its
subsidiaries or affiliates, may elect to defer payment of all or any
portion of his or her Compensation that is payable during any Plan Year.
Such election must be made prior to the date that services are rendered in
the Plan Year in which such Compensation otherwise would be paid.
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(b) An election to defer any Compensation under Section 2.2(a) above
shall be: (i) in writing; (ii) delivered to the Committee or to the
Secretary of the Corporation; and (iii) irrevocable with respect to a
current Plan Year. If a director does not elect to defer Compensation
payable to him or her during a Plan Year, all such Compensation shall be
paid directly to such Nonemployee Director in accordance with resolutions
adopted by the Board from time to time.
2.3 MODE OF DEFERRAL.
(a) For Plan Years commencing on or after January 1, 1998, a
Participant may elect to defer all or a portion of his or her Compensation
for a Plan Year to a Stock Account, a Mutual Fund Account or a combination
of such Accounts. Any such election shall be specified in the writing
referred to in Section 2.2(b) above that is delivered by the Nonemployee
Director to the Committee. A separate Stock Account and Mutual Fund
Account, as appropriate, shall be established for a Participant for each
such Plan Year in which he or she participates in the Plan under this
Article 2 or Article 3.
(b) For Plan Years commencing on or after January 1, 1994 and before
January 1, 1998, a Participant could elect to defer all or a portion of his
or her Compensation for a Plan Year to a Cash Account, a Stock Account or a
combination of such Accounts. A separate Cash Account and Stock Account,
as appropriate, was established for a Participant for each such Plan Year
in which he or she participated in the Plan. Separate Cash Accounts and
Stock Accounts were also established for the conversion of Participants'
Deferred Compensation Accounts on or prior to December 31, 1993.
(c) The Committee shall maintain such Accounts in the name of the
Participant. Compensation deferred to a Stock Account, a Mutual Fund
Account, or a pre-1998 Cash Account shall result in Stock Credits, or
Mutual Fund Credits, or Cash Credits, respectively.
2.4 STOCK ACCOUNT. The Stock Account of a Participant established with
respect to a Plan Year shall be credited, as of the day of such Plan Year on
which the deferred Compensation otherwise would have been payable to such
Participant, with Stock Credits equal to the number of shares of Common Stock
(including fractions of a share) that are equal in value to the amount of such
deferred Compensation, using the Fair Market Value of shares of Common Stock on
the day on which such Stock Account is so credited. The Stock Account of a
Participant who is eligible to participate under Article 3 shall also be
credited with the Stock Credits described in Article 3.
As of the date any dividend is paid to holders of shares of Common Stock,
such Stock Account shall be credited with additional Stock Credits equal to the
number of shares of Common Stock (including fractions of a share) that are equal
in value, using the Fair Market Value of shares of Common Stock on the dividend
payment date, to the amount which would have been paid as dividends on that
number of shares (including fractions of a share) of Common Stock which is equal
to the number of Stock Credits attributed to such Stock Account as of the record
date for the
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dividend payment. In the case of dividends paid in property other
than cash, the amount of the dividend shall be deemed to be the fair market
value of the property at the time of the payment of the dividend, as determined
in good faith by the Committee.
2.5 MUTUAL FUND ACCOUNT. For Plan Years commencing on or after January 1,
1998, the Mutual Fund Account of a Participant established with respect to a
Plan Year shall be credited, as of a date which is no later than ten Business
Days after the day of such Plan Year on which the deferred Compensation
otherwise would have been payable to such Participant, with Mutual Fund Credits
determined in accordance with the following. A Participant's Mutual Fund
Account may consist of any one or more of the investment funds or vehicles made
available by the Corporation from time to time under the Thomas & Betts
Corporation Supplemental Executive Investment Plan (hereinafter referred to as
"Reference Funds"). A Participant who has elected to defer all or a portion of
his or her Compensation for a Plan Year to a Mutual Fund Account shall further
elect which one or more of the Reference Funds shall be used for purposes of
crediting hypothetical investment gains (or losses) to such Mutual Fund
Account. The number of Mutual Fund Credits credited to a Participant's Mutual
Fund Account, if any, shall be based on the Participant's investment election,
the amount of Compensation deferred, and standard recordkeeping practices of
the Reference Funds selected by the Participant. The Mutual Fund Credits shall
be deemed, for bookkeeping purposes only, to increase or decrease to reflect
the hypothetical earnings and the hypothetical realized and unrealized gains
and losses of the Reference Funds selected by the Participant. Quarterly
Participant investment elections with respect to Reference Funds shall apply to
past or current contributions to the Participant's Mutual Fund Account(s), as
elected by the Participant.
2.6 CASH ACCOUNT. The Cash Account of a Participant established with
respect to a Plan Year ending prior to January 1, 1998 shall continue to be
credited as of the last day of each month, or as of the date the Cash Account is
distributed, if earlier, with Cash Credits in an amount equal to the product of
(a) the daily average balance in such Cash Account during such month and (b) the
ratio of the number of days in the month to 365 days, multiplied by the rate of
interest that the Corporation, on the first business day of each January, could
obtain for an investment in a one-year Certificate of Deposit, as determined by
the Committee.
ARTICLE 3
NONELECTIVE FEE DEFERRALS
3.1 ELIGIBILITY. Effective May 6, 1998, each Nonemployee Director shall
be eligible to participate in the Plan pursuant to this Article 3, unless he or
she is in one of the following excluded categories:
(a) A Nonemployee Director who is a participant in the Thomas & Betts
Corporation Retirement Plan for Nonemployee Directors (the "Retirement
Plan"), and who elects to continue to participate in the Retirement Plan,
as described in Section 3.2; or
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(b) A Nonemployee Director who has an individual compensation
agreement with the Corporation, unless such agreement expressly provides
for participation under this Article 3.
3.2 ELECTION RE RETIREMENT PLAN. On or before May 6, 1998, each
Nonemployee Director who is a participant in the Retirement Plan shall elect, in
writing, one of the following alternatives:
(a) To continue to participate in the Retirement Plan, in which event
he or she shall not be eligible to receive any Stock Credits under this
Article 3; or
(b) To cease to participate in the Retirement Plan, to participate in
the Plan pursuant to this Article 3, and to have his or her accrued benefit
under the Retirement Plan converted to initial Stock Credits to his or her
Stock Account established with respect to the 1998 Plan Year, as described
in this Section 3.2. A Nonemployee Director who makes this election shall
thereby waive all rights and benefits under the Retirement Plan.
If a Nonemployee Director makes the election described in paragraph (b)
above, his or her Stock Account with respect to the 1998 Plan Year shall be
credited with initial Stock Credits under this Article 3 equal to the number of
shares of Common Stock (including fractions of a share) that are equal in value
to the lump sum present value of his or her accrued benefit under the Retirement
Plan, using the Fair Market Value of shares of Common Stock on May 5, 1998. The
lump sum present value of the Nonemployee Director's accrued benefit under the
Retirement Plan shall be determined as of May 5, 1998, assuming solely for
purposes of such determination (i) full vesting, (ii) retirement at age 70, or
current age, if later, and (iii) an interest rate equal to the interest
assumption used by the Corporation for 1998 for financial reporting purposes for
qualified retirement plans.
3.3 ANNUAL GRANT OF STOCK CREDITS. Effective for Board Years beginning on
and after May 6, 1998, each Participant under this Article 3 who serves as a
director for a Board Year shall be entitled to have his or her Stock Account for
the Plan Year in which such Board Year ends credited with Stock Credits as
herein described. If the Participant serves as a director for the full Board
Year, his or her applicable Stock Account shall be credited as of the close of
such Board Year with Stock Credits equal to the number of shares of Common Stock
(including fractions of a share) that are equal in value to $7,500, using the
Fair Market Value of shares of Common Stock on the last Business Day of such
Board Year. The applicable Stock Account of a Participant under this Article 3
who serves for less than a full Board Year shall be credited as of the close of
the Board Year with pro-rata Stock Credits. Additional Stock Credits
attributable to dividends on Common Stock shall be credited to the applicable
Stock Accounts of Participants pursuant to Section 2.4.
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ARTICLE 4
DISTRIBUTION OF ACCOUNTS.
4.1 ELECTION OF TIME AND METHOD OF PAYMENT.
(a) Distribution of each Stock Account, Mutual Fund Account or
pre-1998 Cash Account of a Participant shall commence, in accordance
with such Participant's irrevocable election with respect to such
Account, as of (i) one month following such Participant's termination of
service as a director, (ii) January 15 of the Plan Year following the
Plan Year in which such Participant's service as a director ceases, or
(iii) January 15 of a Plan Year prior to the Plan Year in which the
Participant is scheduled to retire as a director, as specified by such
Participant at the time of his or her election; PROVIDED, HOWEVER, that
distribution of a Stock Account may not commence within six months of
the date a deferral election was made under Article 2 to defer
Compensation to such Account, and FURTHER PROVIDED that the distribution
of any Stock Account or Cash Account created by conversion of the
balance of a Deferred Compensation Account on or prior to December 31,
1993 shall be made pursuant to the election or elections in effect prior
to November 3, 1993, with respect to such Deferred Compensation Account.
If the date elected by a Participant for commencement of such
distribution is not a Business Day, such distribution shall commence as
of the next succeeding Business Day.
(b) Distribution of each Stock Account, Mutual Fund Account and
pre-1998 Cash Account shall be made, in accordance with the
Participant's irrevocable election with respect to such Account, in a
lump sum or in a number of annual installments (not to exceed 10). If
no such election is made, distribution shall be made in a lump sum.
Such payment or payments shall be in amounts determined pursuant to
Section 4.3 below, and shall be made as of the date specified pursuant
to Section 4.1(a) above, and such date of each succeeding Plan Year as
applicable.
(c) A Participant's irrevocable elections pursuant to Section 4.1(a)
and (b) above must be in writing and be delivered to the Committee with
such Participant's election to participate in the Plan for the applicable
Plan Year.
4.2 DISTRIBUTION IN CASH. Distribution of a Participant's Stock Accounts,
Mutual Fund Accounts, or pre-1998 Cash Accounts shall be made only in cash.
4.3 INSTALLMENT AMOUNT.
(a) STOCK ACCOUNT. The amount of each installment with respect to a
Stock Account of a Participant shall be equal to the product of the number
of Stock Credits attributable to such installment and the average of the
Closing Prices of shares of Common Stock on each Business Day during the
Corporation's fiscal month immediately preceding
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the day on which such installment is to be paid, except as otherwise
specified in the Plan. The number of Stock Credits attributable to an
installment with respect to such Stock Account (unless otherwise
specified in the Plan) shall be equal to the product of the current
number of Stock Credits attributed to such Stock Account and a fraction,
the numerator of which is one and the denominator of which is the number
of installments yet to be paid.
(b) MUTUAL FUND ACCOUNT. The amount of each installment with respect
to a Mutual Fund Account of a Participant shall be equal to the product of
the total current value of the Participant's Mutual Fund Account and a
fraction, the numerator of which is one and the denominator of which is the
number of installments yet to be paid. Such installment payments shall be
deemed to be made pro-rata from the Reference Funds in which such Mutual
Fund Account is hypothetically invested.
(c) CASH ACCOUNT. The amount of each installment with respect to a
pre-1998 Cash Account of a Participant shall be equal to the product of the
current balance in such Cash Account and a fraction, the numerator of which
is one and the denominator of which is the number of installments yet to be
paid.
4.4 SEVERE FINANCIAL HARDSHIP. Notwithstanding any other Section of this
Article 4, at the written request of a Participant or a Participant's legal
representative, the Committee, in its sole discretion upon a finding that
continued deferral will result in severe financial hardship to the Participant,
may authorize (i) the payment of all or a part of a Participant's Stock
Account(s), Mutual Fund Account(s), and pre-1998 Cash Account(s) in a single
installment prior to the distribution commencement date(s) for such Account(s)
elected by the Participant pursuant to Section 4.1(a), or (ii) the acceleration
of payment of any multiple installments thereof.
4.5 CONVERSIONS.
(a) A Participant who is no longer serving as a director of the
Corporation may elect to convert all or any portion of his or her Stock
Accounts for any Plan Years to Mutual Fund Accounts for such Plan Years.
The amount to be credited to such Participant's Mutual Fund Account for any
Plan Year shall be equal to the product of the number of Stock Credits then
credited to the Stock Account for such Plan Year as to which such election
has been made and the average of the Closing Prices of shares of Common
Stock on each Business Day during the Corporation's fiscal month
immediately preceding or ending on the day before the effective date of the
conversion. A dividend earned on the number of Stock Credits that are
credited to the Stock Account as of a record date that occurs prior to the
effective date of the conversion shall be credited before making such
conversion, or, if the dividend payment date is after the effective date of
the conversion, the dividend amount shall be credited on the dividend
payment date as a Mutual Fund Credit to the Mutual Fund Account.
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(b) A Participant shall not be permitted to convert any portion of
his or her Mutual Fund Account(s) to a Stock Account, or to convert any
portion of his or her pre-1998 Cash Account(s) to a Stock Account or a
Mutual Fund Account.
(c) Any election by a Participant under this Section 4.5 shall be
irrevocable, and to be effective shall be in a writing delivered to the
Committee prior to the end of any Corporation fiscal quarter.
4.6 DISTRIBUTION UPON DEATH. Notwithstanding any other provision of this
Plan, upon the death of a Participant, the Committee shall pay all of such
Participant's Stock Accounts, Mutual Fund Accounts, and pre-1998 Cash Accounts
in a single installment to such person or persons or the survivors thereof,
including corporations, unincorporated associations or trusts, as the
Participant may have designated. All such designations shall be made in writing
and delivered to the Committee. A Participant may from time to time revoke or
change any such designation by written notice to the Committee. If there is no
designation on file with the Committee at the time of the Participant's death,
or if the person or persons designated therein shall have all predeceased the
Participant or otherwise ceased to exist, or if there is a dispute among
designees of a Participant, such distributions shall be made to the executor or
administrator of the Participant's estate. Any distribution under this Section
4.6 shall be made as soon as practicable after the Committee is notified of the
Participant's death or is satisfied as to the identity of the appropriate payee,
whichever is later. The amount payable under this Section 4.6 with respect to a
Participant's Stock Accounts shall be equal to the product of the number of
Stock Credits with which such Stock Accounts then are credited and the average
of the Closing Prices of shares of Common Stock on each Business Day during the
Corporation's fiscal month immediately preceding or ending on the day of such
Participant's death.
4.7 WITHHOLDING TAXES. The Corporation shall deduct from all distributions
under the Plan any taxes required to be withheld by federal, state, or local
governments.
4.8 ADJUSTMENT OF STOCK ACCOUNTS. If at any time the number of
outstanding shares of Common Stock shall be increased as the result of any stock
dividend, stock split, subdivision or reclassification of shares, the number of
Stock Credits with which each Stock Account of a Participant is credited shall
be increased in the same proportion as the outstanding number of shares of
Common Stock is increased. If the number of outstanding shares of Common Stock
shall at any time be decreased as the result of any combination, reverse stock
split or reclassification of shares, the number of Stock Credits with which each
Stock Account of a Participant is credited shall be decreased in the same
proportion as the outstanding number of shares of Common Stock is decreased. In
the event the Corporation shall at any time be consolidated with or merged into
any other corporation and holders of shares of Common Stock receive shares of
the capital stock of the resulting or surviving corporation (or any
consideration other than shares of capital stock), there shall be credited to
each Stock Account of a Participant, in place of the Stock Credits then credited
thereto, new Stock Credits in an amount equal to the product of the number of
shares of capital stock (or consideration other than shares of capital stock)
exchanged for one share of Common Stock upon
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such consolidation or merger and the number of Stock Credits with which such
Account then is credited.
ARTICLE 5
THE COMMITTEE
5.1 AUTHORITY. The Committee shall have full power and authority to
administer the Plan, including the power to (a) promulgate forms to be used with
respect to the Plan, (b) promulgate rules of Plan administration, (c) settle any
disputes as to rights or benefits arising from the Plan, (d) interpret and
construe the terms of the Plan, including, but not limited to, determining
entitlement to benefits and the amount of such benefits, and (e) make such
decisions or take such action as the Committee, in its sole discretion, deems
necessary or advisable to aid in the proper administration of the Plan. Any
decision made by the Committee shall be final and binding on the Corporation,
Participants and their heirs or successors. The Committee may delegate its
power and authority to administer the Plan to officers and employees of the
Corporation.
5.2 OPERATION. The Committee may act (a) by majority vote of its members
meeting in person or by telephone, or (b) by consent in writing signed by all of
the members of the Committee. Two members of the Committee shall constitute a
quorum for the transaction of business at a meeting.
5.3 ELECTIONS, NOTICES. All elections and notices required to be provided
to the Committee under the Plan must be in such form or forms prescribed by, and
contain such information as is required by, the Committee.
ARTICLE 6
MISCELLANEOUS
6.1 FUNDING. All amounts payable under the Plan shall constitute a
general unsecured obligation of the Corporation. The Board may, however, in the
event of a change of control of the Corporation or for administrative reasons,
fully fund the Plan by means of a contribution to the Thomas & Betts Corporation
Agreement and Plans Trust dated May 20, 1988 (the "Rabbi Trust"), as amended, or
other "rabbi" trust selected by the Committee.
6.2 NON-ALIENATION OF BENEFITS. No benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to do so shall be void. No such
benefit, prior to receipt thereof pursuant to the provisions of the Plan, shall
be in any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Participant.
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6.3 GOVERNING LAW. This Plan shall be governed by the laws of the State
of Tennessee.
6.4 AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board at any
time may terminate and in any respect amend or modify the Plan; PROVIDED,
HOWEVER, that no such termination, amendment or modification shall adversely
affect the rights of any Participant or beneficiary, including his or her rights
with respect to Stock Credits, Mutual Fund Credits, and Cash Credits credited
prior to such termination, amendment or modification, without his or her
consent.
6.5 SUCCESSORS AND HEIRS. The Plan and any properly executed elections
hereunder shall be binding upon the Corporation and Participants, and upon any
assignee or successor in interest to the Corporation and upon the heirs, legal
representatives and beneficiaries of any Participant.
6.6 STATUS OF PARTICIPANTS. Stock Credits are not, and do not constitute,
shares of Common Stock; and Mutual Fund Credits are not, and do not constitute,
shares of a mutual fund. No right as a holder of shares of Common Stock or a
mutual fund shall devolve upon a Participant by reason of his or her
participation in the Plan.
6.7 STATEMENT OF ACCOUNTS. In February of each Plan Year, each
Participant in the Plan during the immediately preceding Plan Year shall receive
a statement of his or her Accounts under the Plan as of December 31 of such
preceding Plan Year. Such statement shall be in a form and contain such
information as is deemed appropriate by the Committee.
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110797
EMPLOYMENT AGREEMENT
AGREEMENT between THOMAS & BETTS CORPORATION, a Tennessee corporation (the
"Corporation"), and __________________________ (the "Executive"), dated as of
the ______ day of ____________, 199__.
The Corporation, on behalf of itself and its shareholders, wishes to
continue to attract and retain well-qualified executive and key personnel who
are an integral part of the management of the Corporation, such as Executive,
and to assure both itself of continuity of management and Executive of continued
employment in the event of any Change of Control (as defined in Section 2 of
this Agreement) of the Corporation;
IT IS, THEREFORE, AGREED:
1. OPERATION OF AGREEMENT. (a) The "Effective Date" shall be the date
during the "Change-of-Control Period" (as defined in Section 1(b)) on which a
Change of Control occurs. Anything in this Agreement to the contrary
notwithstanding, if the Executive's employment with the Corporation is
terminated prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination (i) was at the
request of a third party who has taken steps
<PAGE>
reasonably calculated to effect a Change of Control or (ii) otherwise arose
in connection with a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination.
(b) The "Change-of-Control Period" is the period commencing on the date
hereof and ending on the second anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change-of-Control Period
shall be automatically extended so as to terminate two years from such Renewal
Date, unless at least 60 days prior to the Renewal Date the Corporation shall
give notice that the Change-of-Control Period shall not be so extended.
2. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall mean a change of control during the Change-of-Control Period of a
nature that would be required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
provided that, without limitation, such a "Change of Control" shall be deemed to
have occurred if: (i) a third person, including a "group" as such term is used
in Section 13(d)(3) of the Exchange Act, becomes the beneficial owner,
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directly or indirectly, of 25% or more of the combined voting power of the
Corporation's outstanding voting securities ordinarily having the right to
vote for the election of directors of the Corporation; or (ii) individuals
who, as of the date hereof, constitute the Board of Directors of the
Corporation (the "Board" generally and as of the date hereof the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Corporation's shareholders,
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Corporation, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the incumbent Board.
3. EMPLOYMENT PERIOD. The Corporation hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Corporation, for the period commencing on the Effective Date and ending
on the third anniversary of such date (the "Employment Period").
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4. POSITION AND DUTIES. (a) During the Employment Period, (i) the
Executive's position (including status, offices, titles and reporting
relationships), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period immediately
preceding the Effective Date, and (ii) the Executive's services shall be
performed at the location where the Executive was employed immediately preceding
the Effective Date or any office or location less than thirty-five (35) miles
from such location.
Such position, authority, duties and responsibilities shall be regarded as
not commensurate if, as a result of a Change of Control, (i) the Corporation
becomes a direct or indirect subsidiary of another corporation or corporations
or becomes controlled, directly or indirectly, by one or more unincorporated
entities (such other corporation or unincorporated entity owning or controlling,
directly or indirectly, the greatest amount of equity (by vote) of the
Corporation is hereinafter referred to as a "Parent Company"), or (ii) all or
substantially all of the assets of the Corporation are acquired by another
corporation or unincorporated entity or group of corporations or unincorporated
entities owned or controlled, directly or indirectly, by another corporation or
unincorporated entity (such other acquiring or controlling corporation or
unincorporated entity is hereinafter referred to as a "Successor"), unless, in
each case, (x) Section
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13(c) of this Agreement shall have been complied with and (y) the Executive
shall have assumed a position with such Parent Company or Successor, as the
case may be, and the Executive's position, authority, duties and
responsibilities with such Parent Company or Successor, as the case may be,
are at least commensurate in all material respects with the most significant
of those held, exercised and assigned with the Corporation at any time during
the 90-day period immediately preceding the Effective Date, or (iii) more
than one unrelated corporation or unincorporated entity acquires a
significant portion of the assets of the Corporation.
(b) During the Employment Period, excluding periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. The Executive may (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (iii) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities. It is expressly understood and agreed that to the
extent that any such
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activities have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Corporation.
5. COMPENSATION. (a) BASE SALARY. During the Employment Period, the
Executive shall receive a base salary ("Base Salary") at a monthly rate at
least equal to the highest monthly base salary paid to the Executive by the
Corporation, together with any of its affiliate companies, during the
twelve-month period immediately preceding the month in which the Effective
Date occurs. During the Employment Period, the Base Salary shall be reviewed
at least annually and shall be increased at any time and from time to time as
shall be consistent with increases in base salary awarded in the ordinary
course of business to other key executives. Any increase in the Base Salary
shall not serve to limit or reduce any other obligation to the Executive
under this Agreement. The Base Salary shall not be reduced after any such
increase. As used in this Agreement, the term "affiliated companies"
includes any company controlling, controlled by or under common control with
the Corporation.
(b) ANNUAL BONUS. In addition to the Base Salary, the Executive shall be
awarded, for each fiscal year of the
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Corporation ("Fiscal Year") during the Employment Period, an annual bonus (an
"Annual Bonus") (either pursuant to a bonus, profit-sharing or incentive plan
or program of the Corporation or otherwise) in cash at least equal to the
average bonus paid or payable to the Executive in respect of each of the
Fiscal Years (annualized with respect to any such Fiscal Year for which the
Executive has been employed only during a portion thereof) during the three
Fiscal Years immediately prior to the Fiscal Year in which the Effective Date
occurs. Each such Annual Bonus shall be paid no later than March 15 of the
Fiscal Year next following the Fiscal Year for which the Annual Bonus is
awarded, unless the Executive shall otherwise elect to defer the receipt of
such Annual Bonus.
(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition to the Base
Salary and Annual Bonus payable as hereinabove provided, the Executive shall be
entitled to participate, during the Employment Period, in all incentive, savings
and retirement plans and programs applicable to other key executives (including
the Corporation's restricted stock and stock option plans), but in no event
shall such plans and programs, in the aggregate, provide the Executive with
compensation, benefits and reward opportunities less favorable than the most
favorable of those provided by the Corporation and its affiliated companies for
the Executive under such plans and programs as in effect at any time during the
90-day period immediately preceding the Effective Date
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or, if more favorable to the Executive, as provided at any time thereafter
with respect to other key executives.
(d) WELFARE BENEFIT PLANS. During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under each welfare benefit
plan of the Corporation, including, without limitation, all medical,
prescription, dental, disability, salary continuance, group life, accidental
death and travel accident insurance plans and programs of the Corporation and
its affiliated companies, in each case comparable to those in effect at any
time during the 90-day period immediately preceding the Effective Date which
would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key
executives.
(e) EXPENSES. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable to the Executive of
the policies and procedures of the Corporation in effect at any time during
the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect at any time thereafter with respect
to other key executives.
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(f) FRINGE BENEFITS. During the Employment Period, the Executive shall
be entitled to fringe benefits, including use of an automobile and payment of
related expenses, in accordance with the most favorable to the Executive of
the policies of the Corporation in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key
executives.
(g) OFFICE AND SUPPORT STAFF. During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to secretarial and other assistance, at least equal to
those provided to the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as provided
at any time thereafter with respect to other key executives.
(h) VACATION. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable to the Executive
of the policies of the Corporation in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key
executives.
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(i) RESTRICTED STOCK; STOCK OPTIONS. On the Effective Date, restricted
stock held by the Executive shall become immediately vested and non-forfeitable,
and all of the Executive's stock options shall become immediately exercisable.
6. TERMINATION OF EMPLOYMENT. (a) DISABILITY. During the Employment
Period, the Corporation may terminate the Executive's employment, after
having established the Executive's Disability (pursuant to the definition of
"Disability" set forth below), by giving to the Executive written notice of
its intention so to terminate the Executive's employment. In such a case,
the Executive's employment with the Corporation shall terminate effective on
the 180th day after receipt of such notice (the "Disability Effective Date"),
provided that, within 180 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" means disability which, after the
expiration of 26 weeks or more after its commencement, is determined to be
total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal
representative (such agreement to acceptability not to be withheld
unreasonably).
(b) CAUSE. During the Employment Period, the Corporation may terminate
the Executive's employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of
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dishonesty taken by the Executive and intended to result in substantial
personal enrichment of the Executive, (ii) repeated violations by the
Executive of the Executive's obligations under Section 4(b) of this Agreement
which are demonstrably willful and deliberate on the Executive's part or
(iii) the conviction of the Executive of a felony.
(c) GOOD REASON. During the Employment Period, the Executive's
employment may be terminated by the Executive for Good Reason. For purposes
of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles and reporting relationships), authority, duties or
responsibilities as contemplated by Section 4 of this Agreement or (B)
any other action by the Corporation which results in a diminution in
such position, authority, duties or responsibilities, other than an
insubstantial and inadvertent action which is remedied by the
Corporation promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Corporation to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial
and inadvertent failure which is
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remedied by the Corporation promptly after receipt of notice thereof
given by the Executive;
(iii) the Corporation's requiring the Executive to be based at any
office or location other than as described in Section 4(a)(ii) hereof,
except for travel reasonably required in the performance of the
Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's
employment otherwise than as permitted by this Agreement, it being
understood that any such purported termination shall not be effective
for any purpose of this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section
13(c) of this Agreement.
For purposes of this Section 6(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
(d) NOTICE OF TERMINATION. Any termination by the Corporation for Cause
under Section 6(b) or by the Executive for Good Reason under Section 6(c) shall
be communicated by Notice of Termination to the other party hereto given in
accordance with
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Section 14(b) of this Agreement. For purposes of this Agreement, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated
and (iii) if the termination date is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 15
days after the giving of such notice).
(e) DATE OF TERMINATION. "Date of Termination" means the date of receipt
of the Notice of Termination or any later date specified therein, as the case
may be. If the Executive's employment is terminated by the Corporation during
the Employment Period other than for Cause or Disability, the Date of
Termination shall be the date on which the Executive receives notice of such
termination.
7. OBLIGATIONS OF THE CORPORATION UPON TERMINATION OF EMPLOYMENT. (a)
DEATH. If, during the Employment Period, the Executive's employment is
terminated by reason of the Executive's death, the Corporation shall not have
any further obligations to the Executive's legal representatives under this
Agreement, other than those obligations accrued hereunder at the date of the
Executive's death, and except as provided in this Section 7(a). The Executive's
family shall be entitled to receive benefits at
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least equal to the most favorable benefits provided by the Corporation to
surviving families of executives of the Corporation under such plans,
programs, and policies relating to family death benefits, if any, as in
effect at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect on the date of the Executive's death with respect to
other key executives and their families.
(b) DISABILITY. If, during the Employment Period, the Executive's
employment is terminated by reason of the Executive's Disability (as defined in
Section 6(a)), the Executive shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to the most
favorable of those provided by the Corporation to disabled employees and/or
their families in accordance with such plans, programs and policies relating to
disability, if any, as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Executive
and/or the Executive's family, as in effect at any time thereafter with respect
to other key executives and their families.
(c) CAUSE. If, during the Employment Period, the Executive's employment
shall be terminated for Cause (as defined in Section 6(b)), the Corporation
shall pay the Executive his full Base Salary through the Date of Termination at
the rate in
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effect at the time Notice of Termination is given and shall have no further
obligations to the Executive under this Agreement.
(d) GOOD REASON; OTHER THAN FOR CAUSE OR BY REASON OF DEATH OR
DISABILITY. If, during the Employment Period, the Executive's employment is
terminated other than for Cause or by reason of Death or Disability, or the
employment of the Executive shall be terminated by the Executive for Good
Reason:
(i) the Corporation shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
(A) to the extent not theretofore paid, the Executive's Base
Salary through the Date of Termination at the rate in effect on
the Date of Termination or, if higher, at the highest rate in
effect at any time within the 90-day period preceding the
Effective Date; and
(B) the product of (x) the Annual Bonus paid to the Executive for
the last Fiscal Year ending prior to the Date of Termination and
(y) a fraction the numerator of which is the number of days in
the period extending from the beginning of the Fiscal Year in
which the Date of Termination
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occurs up to the Date of Termination and the denominator
of which is 365; and
(C) except as otherwise provided under the Corporation's
Supplemental Executive Investment Plan, any undistributed amounts
relating to compensation previously deferred by the Executive;
and
(D) the product of (x) the Executive's Base Salary at the
monthly rate in effect on the Date of Termination or, if higher,
at the highest rate in effect at any time within the 90-day
period preceding the Effective Date and (y) the number of months
in the period extending from the Termination Date to the end of
the Employment Period (hereinafter the "Remainder of the
Employment Period"); and
(E) the product of (x) one-twelfth of the greater of (1) the
greatest annual bonus paid to the Executive for any of the last
five Fiscal Years ending prior to the Date of Termination or (2)
the highest midpoint of the Executive's bonus range for any of
such Fiscal Years and (y) the number of months in the Remainder
of the Employment Period;
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(ii) the Corporation shall continue benefits for the Remainder of the
Employment Period to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the plans, programs and policies described in Sections
5(d) and 5(f) of this Agreement if the Executive's employment had not
been terminated, including health insurance, life insurance and use of
a leased car, if and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other
key executives and their families; provided, however, that any amounts
paid or benefits provided under this Section shall not duplicate any
similar benefits earned by the Executive as of result of employment by
another employer;
(iii) the Executive shall be entitled to receive retirement benefits
under the change-of-control provisions of the Corporation's Executive
Retirement Plan; and
(iv) the Corporation shall provide for standard outplacement
services by any one qualified outplacement
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agency selected by the Executive and reasonably satisfactory to the
Corporation.
Anything in this Agreement to the contrary notwithstanding, immediately
prior to the Effective Date, the Corporation shall transfer funds to the
Thomas & Betts Agreement & Plans Trust in an amount which it shall in good
faith estimate to be sufficient to make the payments that would be required
under this Section 7(d) and under Section 11 if the Executive's employment
were terminated under Section 7(d) immediately following the Effective Date.
If the Corporation subsequently determines that the amount so transferred is
inadequate, it shall transfer additional funds to said Trust in order to
provide sufficient funds to make such payments.
In addition, at any time prior to the Effective Date, upon the request
of the Executive, the Corporation may offer to extend the exercise period of
any stock option previously granted to the Executive by the Corporation. If
so requested, the Corporation may offer the Executive the opportunity to
extend until the expiration date the exercise period of any or all of such
stock options in the event that the Executive's employment is terminated
during the Employment Period under the circumstances described in Section
7(d). If the Corporation makes such an offer, it shall not be effective
unless accepted by the Executive.
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8. NO DUTY TO MITIGATE. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement, nor shall the amount of any payment hereunder be reduced, except
as otherwise specifically provided herein, by any compensation earned by the
Executive as a result of employment by another employer.
9. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Corporation or any
of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive
may have under any stock option or other agreements with the Corporation or
any of its affiliated companies. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or program of
the Corporation or any of its affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan or program.
Anything herein to the contrary notwithstanding, if the Executive becomes
entitled to payments pursuant to paragraph 7(d) hereof, such Executive agrees
to waive payments under any severance plan or program of the Corporation.
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10. FULL SETTLEMENT. The Corporation's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right
which the Corporation may have against the Executive or others. The
Corporation agrees to pay, to the full extent permitted by law, all legal
fees and expenses which the Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Corporation or others of
the validity or enforceability of, or liability under, any provision of this
Agreement (including Section 11) or any guarantee of performance thereof,
plus in each case interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Internal Revenue Code (the "Code").
11. TAX PAYMENT. (a) WITHHOLDINGS AND DEDUCTIONS. Any payment made
pursuant to Section 7(d) shall be paid, less standard withholdings and other
deductions authorized by Executive or required by law.
(b) GROSS-UP FOR CERTAIN TAXES. All determinations required to be made
under this Section 11 shall be made by KPMG Peat Marwick LLP, or other
comparable national accounting firm selected in good faith by the Corporation
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the
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Corporation and the Executive within 15 (fifteen) business days of the Date
of Termination or such earlier time as is requested by the Corporation.
If it is determined by the Accounting Firm that any benefit received or
deemed received by the Executive from the Corporation pursuant to this
Agreement or otherwise (collectively, the "Payments") is or will become
subject to any excise tax under Section 4999 of the Code or any similar tax
payable under any United States federal, state, local or other law (such
excise tax and all such similar taxes collectively, "Excise Taxes"), then the
Corporation shall, immediately after such determination, pay the Executive an
amount ("the Gross-up Payment") such that the net amount retained by the
Executive, after the deduction of any Excise Taxes (including any applicable
interest and penalties) on the Payments, and any federal, state, and local
income tax, and any Excise Tax (including any applicable interest and
penalties on all such taxes), upon such Gross-up Payment, shall be equal to
the amount of the Payments in the absence of the imposition of such Excise
Tax and the Gross-up Payment. For purposes of determining the amount of the
Gross-up Payment, the Executive shall be deemed to pay income taxes at the
highest marginal rates of the applicable federal, state and local income
taxation in the calendar year in which the Gross-up Payment is to be made.
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(c) DETERMINATION BY THE EXECUTIVE. If at any time following
determination of the Gross-up Payment by the Accounting Firm, the Executive
disputes the amount of the Gross-up Payment, the Executive may elect to
demand payment of the amount which the Executive, in accordance with an
opinion of counsel to the Executive ("Executive Counsel Opinion"), determines
to be the Gross-up Payment. Any such demand by the Executive shall be made
by delivery to the Corporation of a written notice which specifies the
Gross-up Payment determined by the Executive and an Executive Counsel Opinion
regarding such Gross-up Payment (such written notice and opinion
collectively, the "Executive's Determination"). Within 14 days after
delivery of the Executive's Determination to the Corporation, the Corporation
shall either (i) pay the Executive the Gross-up Payment set forth in the
Executive's Determination (less the portion of such amount, if any,
previously paid to the Executive by the Corporation) or (ii) deliver to the
Executive a certificate specifying the Gross-up Payment determined by the
Accounting Firm, together with an opinion of the Corporation's counsel
("Corporation Counsel Opinion"), and pay the Executive the Gross-up Payment
specified in such certificate. If for any reason the Corporation fails to
comply with clause (ii) of the preceding sentence, the Gross-up Payment
specified in the Executive's Determination shall be controlling for all
purposes.
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(d) OPINION OF COUNSEL. "Executive Counsel Opinion" means a legal
opinion of a nationally recognized executive compensation counsel that there
is a reasonable basis to support a conclusion that the Gross-up Payment
determined by the Executive has been calculated in accordance with this
Section and applicable law. "Corporation Counsel Opinion" means a legal
opinion of a nationally recognized executive compensation counsel that (i)
there is a reasonable basis to support a conclusion that the Gross-up Payment
set forth by the Accounting Firm has been calculated in accordance with this
Section and applicable law, and (ii) there is no reasonable basis for the
calculation of the Gross-up Payment determined by the Executive.
(e) ADDITIONAL GROSS-UP AMOUNTS. If, despite the initial conclusion of
the Corporation and/or the Executive that certain Payments are neither
subject to Excise Taxes nor to be counted in determining whether other
Payments are subject to Excise Taxes (any such item, a "Non-Parachute Item"),
it is later determined (pursuant to the subsequently-enacted provisions of
the Code, final regulations or published rulings of the IRS, final judgment
of a court of competent jurisdiction or the Accounting Firm) that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any Payments are subject to Excise Taxes, with the result
that the amount of Excise Taxes payable by the Executive is greater than the
amount determined by the Corporation or the Executive pursuant to this
Section, as
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applicable, then the Corporation shall pay the Executive an additional
Gross-up Payment in order to compensate the Executive for (i) such additional
Excise Taxes, any interest, fines, penalties, expenses or other costs
incurred by the Executive as a result of having taken a position in
accordance with a determination made pursuant to Section 11(b, and (ii) any
federal, state, and local income tax, and any Excise Tax upon such additional
Gross-up Payments, calculated in the manner described in Section 11(b).
(f) AMOUNT INCREASED OR CONTESTED. The Executive shall notify the
Corporation in writing of any claim by the IRS or other taxing authority
that, if successful, would require the payment by the Corporation of a
Gross-up Payment. Such notice shall include the nature of such claim and the
date on which such claim is due to be paid. The Executive shall give such
notice as soon as practicable, but no later than 10 business days, after the
Executive first obtains actual knowledge of such claim; provided, however,
that any failure to give or delay in giving such notice shall affect the
Corporation's obligations under this Section only if and to the extent that
such failure results in actual prejudice to the Corporation. The Executive
shall not pay such claim less than 30 days after the Executive gives such
notice to the Corporation (or, if sooner, the date on which payment of such
claim is due). If the Corporation notifies the
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Executive in writing before the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Corporation any information that it reasonably requests
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Corporation reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Corporation,
(iii) cooperate with the Corporation in good faith to contest such
claim, and
(iv) permit the Corporation to participate in any proceedings
relating to such claim;
provided, however, that the Corporation shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax, including
related interest and penalties, imposed as a result of such representation
and payment of costs and expenses. Without limiting the foregoing, the
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Corporation shall control all proceedings in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner. The Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Corporation shall
determine; provided, however, that if the Corporation directs the Executive
to pay such claim and sue for a refund, the Corporation shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify the Executive, on an after-tax basis, for any Excise Tax or income
tax, including related interest or penalties, imposed with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. The Corporation's control of the
contest shall be limited to issues with respect to which a Gross-up Payment
would be payable. The Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the IRS or other taxing authority.
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(g) REFUNDS. If, after the receipt by the Executive of an amount
advanced by the Corporation pursuant to Section 11(f), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Corporation's complying with the requirements of
Section 11(f)) promptly pay the Corporation the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount advanced by
the Corporation pursuant to Section 11(f), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Corporation does not notify the Executive in writing of its intent to
contest such determination before the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required
to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-up Payment required to be paid. Any contest of
a denial of refund shall be controlled by Section 11(f).
12. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the
Corporation or any of its affiliated companies and which shall not be public
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knowledge (other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's
employment with the Corporation, the Executive shall not, without the prior
written consent of the Corporation, communicate or divulge any such
information, knowledge or data to anyone other than the Corporation and those
designated by it. In no event shall an asserted violation of the provisions
of this Section 12 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
13. SUCCESSORS. (a) This Agreement is personal to the Executive and
without the prior written consent of the Corporation shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Corporation and its successors.
(c) The Corporation will require any Successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent
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that the Corporation would be required to perform it if no such succession
had taken place. As used in this Agreement, "Corporation" shall mean the
Corporation as hereinbefore defined and any Successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
14. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, or by a courier
service such as Federal Express addressed as follows:
IF TO THE EXECUTIVE:
name/address
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IF TO THE CORPORATION:
8155 T&B Boulevard
Memphis, TN 38125
Attention: Vice President-General Counsel,
or to the then current address of the Corporation's principal executive
offices, or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this
Agreement such federal, state, or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) This Agreement contains the entire understanding between the
Corporation and the Executive with respect to the subject matter hereof and
supersedes and nullifies any previous change-of-control employment agreement
between the parties.
(f) The Executive and the Corporation acknowledge that the employment
of the Executive by the Corporation is "at will," and,
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prior to the Effective Date, may be terminated by either the Executive or the
Corporation at any time. Upon a termination of the Executive's employment or
upon the Executive's ceasing to be an officer of the Corporation, in each
case, prior to the Effective Date, there shall be no further rights under
this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his or her hand and,
pursuant to the authorization from its Board of Directors, the Corporation has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
---------------------------------------
NAME
THOMAS & BETTS CORPORATION
By
-------------------------------------
Clyde R. Moore
President and Chief Executive Officer
Attest:
-----------------------------------
Janice H. Way, Secretary
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THOMAS & BETTS CORPORATION
EXECUTIVE RETIREMENT PLAN
(AS AMENDED FEBRUARY 5, 1997)
<PAGE>
THOMAS & BETTS CORPORATION
EXECUTIVE RETIREMENT PLAN
INTRODUCTION
Thomas & Bett Corporation (the "Company") has adopted this Executive Retirement
Plan effective as of September 2, 1992, and as amended on December 16, 1993 and
February 5, 1997, to provide additional retirement income and death benefit
protection to certain officers of the Company in recognition of their
contribution to the Company in carrying out senior management responsibilities.
The terms and conditions of participation and benefits under this Executive
Retirement Plan are set out in this document.
All benefits payable under this Plan, which is intended to constitute a
non-qualified, unfunded deferred compensation plan for a select group of
management employees under Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), shall be paid out of the general assets of
the Company.
<PAGE>
THOMAS & BETTS CORPORATION
EXECUTIVE RETIREMENT PLAN
AS AMENDED 02/05/97
ARTICLE 1. DEFINITIONS
1.01 "ACTUARIAL EQUIVALENT" shall mean the equivalent value when computed
based on the UP-84 Mortality Table and an interest rate equal to 100
percent of the interest rate which would be used by the Pension Benefit
Guaranty Corporation (under the pre-11/1/93 methodology) for valuing
immediate annuities for single employer plans that terminate on the first
day of the month in which the Eligible Employee's Benefit payments
commence (the "PBGC Interest Rate").
1.02 "AFFILIATED COMPANY" shall mean any company not participating in the Plan
which is a member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which also includes as a member of the
Company; any trade or business under common control (as defined in
Section 414(c) of the Code) with the Company; any organization (whether
or not incorporated) which is a member of an affiliated service group (as
defined in Section 414(m) of the Code) which includes the Company; and
any other entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code.
1.03 "AVERAGE MONTHLY COMPENSATION" shall mean the average monthly
compensation of an Eligible Employee during any sixty (60) consecutive
months during his employment with the Company or an Affiliated Company
affording the highest such average.
<PAGE>
1.04 "BENEFICIARY" shall mean the person or persons designated by an Eligible
Employee as beneficiary in a time and manner determined by the Committee.
If the Eligible Employee fails to designate a Beneficiary or if the
Beneficiary predeceases the Eligible Employee, the Eligible Employee's
spouse shall be the Beneficiary or if no spouse survives the Eligible
Employee, the Eligible Employee's estate shall be the Beneficiary. An
Eligible Employee may change his designated Beneficiary in a time and
manner determined by the Committee.
1.05 "BENEFIT" shall mean the payments payable under Article 2 of this Plan.
1.06 "BOARD OF DIRECTORS" shall mean the Board of Directors of Thomas & Betts
Corporation.
1.07 "CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
1.08 "COMMITTEE" shall mean the Company's Human Resources Committee of the
Board of Directors, any successor or substitute committee thereto, or,
during any period of time when no such committee is in existence, the
Company's entire Board of Directors.
1.09 "COMPANY" shall mean the Thomas & Betts Corporation or any successor by
merger, purchase or otherwise, with respect to its employees and such
affiliated companies authorized by the Board of Directors, on such terms
and conditions as the Board may determine, to participate in the Plan.
<PAGE>
1.10 "COMPENSATION" shall mean the base cash compensation paid to an Eligible
Employee in respect of each month for services rendered to the Company by
such Eligible Employee (in respect of each month for services rendered to
the Company by such Eligible Employee), plus the amount paid pursuant to
the provisions of the Officer Profit Sharing Plan and the Management
Incentive Plan or such substitute or similar plans, determined prior to
any pre-tax contributions under a "qualified cash or deferred
arrangement" (as defined under Section 401(k) of the Code and its
applicable regulations) or under a "cafeteria plan" (as defined under
Section 125 of the Code and its applicable regulations).
l.11 "CREDITED SERVICE" shall mean, with respect to an Eligible Employee,
service determined pursuant to the provisions of Section 2.9 of the
Retirement Plan. Notwithstanding the foregoing, an Eligible Employee may,
subject to the approval by the Board of Directors, be granted additional
months or years of age or of Credited Service for purposes of determining
the amount of Benefits under the Plan or for purposes of satisfying the
service eligibility requirements necessary for Benefits under the Plan,
or both. The number of additional months or years of age or of Credited
Service so granted, if any, shall be set forth in Appendix A.
1.12 "EFFECTIVE DATE" shall mean September 2, 1992.
1.13 "ELIGIBLE EMPLOYEE" mean an employee who occupies a position of senior
management with the Company who has been approved by the Committee and
who is listed on Appendix A, as amended from time to time. No employee
who is a party to a
<PAGE>
Supplemental Executive Retirement Contract (the "SERC") shall be so
approved by the Committee unless such employee has executed, in form
satisfactory to the Committee, a written agreement terminating all of
the obligations of the Company under the SERC and canceling any
entitlements thereunder in respect of such employee.
1.14 "INVESTMENT PLAN" shall mean the Thomas & Betts Corporation Employees'
Investment Plan.
1.15 "NORMAL RETIREMENT DATE" shall mean the first day of the calendar month
following an Eligible Employee's 65th birthday.
1.16 "PLAN" shall mean the Thomas & Betts Corporation Executive Retirement
Plan, as amended from time to time.
1.17 "RETIREE" shall mean an Eligible Employee (i) who has attained age 55 and
completed 20 or more years of Credited Service or (ii) whose combined
years of age and Credited Service (each completed to the nearest full
month with any fractional part of a month of less than 15 days
disregarded) equals 70 or more as of the Effective Date, and in each
case, who either voluntarily or upon the Company's request or demand
terminates employment with the Company and all Affiliated Companies
after the Effective Date.
1.18 "RETIREMENT PLAN" shall mean The Thomas & Betts Pension Plan, as
amended from time to time.
<PAGE>
1.19 "SOCIAL SECURITY BENEFIT" shall mean the annual old-age Insurance benefit
which the Eligible Employee is entitled to receive under Title II of the
Social Security Act as in effect on his Normal Retirement Date or which
he would be entitled to receive on his Normal Retirement Date if he did
not disqualify himself from receiving Social Security Benefits by
entering into covered employment or for any other reason.
1.20 "10 YEAR CERTAIN AND LIFE ANNUITY" shall mean an annuity which provides a
benefit payable during the Retiree's life and, if such Retiree dies
during the 10 year period after the date such benefit began, a lump-sum
payment shall be made to the Retiree's Beneficiary in respect of the
balance of the payments for such 10 year period.
ARTICLE 2. AMOUNT OF PAYMENT OF BENEFITS
2.01 Payment of Benefit
Except as otherwise provided in Section 2.07 hereof, Benefits shall be
payable by the Company only with respect to an Eligible Employee who
becomes a Retiree, subject to the provisions of Section 3.07. Such
benefits shall be payable from the general assets of the Company.
2.02 Amount of Benefit
The monthly amount of the Benefit payable in the form of 10 Year Certain
and Life
Annuity shall be equal to:
(A) the greater of (i) or (ii) where
<PAGE>
(i) equals 2.5 percent of the Eligible Employee's Average Monthly
Compensation multiplied by the first 20 years of his Credited
Service plus 1.5 percent of the Eligible Employee's Average Monthly
Compensation multiplied by the next 15 years of his Credited
Service, and
(ii) equals 50 percent of the Eligible Employee's Average Monthly
Compensation
MINUS
(b) The sum of(i), (ii), (iii) and (iv) where
(i) equals the monthly amount of benefit which is or would be
payable to the Eligible Employee, assuming such benefit commenced
on his date of termination of employment pursuant to the provisions
of the Retirement Plan in the form of a 100% Joint and Survivor
Annuity (an Eligible Employee who is unmarried at the time the
Benefit is determined shall be deemed, for purposes of the Plan, to
have a survivor annuitant born on the same date as the Eligible
Employee),
(ii) equals the monthly amount of benefit to which the Eligible
Employee would be entitled if his Company Contribution Account
under the Investment Plan determined as of his date of termination
of employment plus the amount of each withdrawal made from such
Company Contribution Account on and after July 1, 1992 accumulated
with interest at a rate of 8 percent, compounded annually from the
date of each withdrawal to the Eligible Employee's termination of
employment, was used to purchase a 100% Joint and Survivor Annuity
based on the interest
<PAGE>
and mortality assumptions used to determine Actuarial Equivalent
as defined in Section 1.01 (an Eligible Employee who is unmarried
at the time the Benefit is determined shall be deemed, for the
purposes of the Plan, to have a survivor annuitant born on the same
date as the Eligible Employee),
(iii) equals 50 percent of the Eligible Employee's monthly Social
Security Benefit, and
(iv) equals the monthly amount of benefit payable under a prior
employer's retirement program as set forth in Appendix A.
Notwithstanding the foregoing, the offset of the Eligible
Employee's monthly Social Security Benefit as described in Section
2.02(b)(iii) shall not, in the case of any Benefit payable in the
forms described in Sections 2.03(a) and (b) be made until the
Eligible Employee reaches his Normal Retirement Date. In the case
of a Benefit paid in the form described in Section 2.03(c), the
Committee shall, in good faith, determine the appropriate amount of
offset under Section 2.02(b)(iii) to be used in calculating such
Benefit, consistent with the preceding sentence and information
available to the Committee at such time. In addition, the Committee
shall determine, in good faith, the appropriate amount of offset
under Section 2.02(b)(iv) to be used in calculating any Benefit
under this Plan (including. without limitation, converting such
monthly benefit under Section 2.02(b)(iv) an appropriate benefit
form) and each Eligible Employee shall cooperate with the Committee
by providing any information (certifiable or otherwise) necessary
to make such determination.
2.03 Form of Payment
(a) Unless a Retiree has elected an optional form of benefit, as provided
herein, the
<PAGE>
automatic form of payment under this Plan deemed to have been elected
by such Retiree upon becoming an Eligible Employee shall be a 10 Year
Certain and Life Annuity, providing for monthly payments to the
Retiree for his lifetime with a guaranteed minimum of one hundred twenty
(120) monthly payments and if the Retiree dies prior to receiving the
full one hundred twenty (120) monthly payments, the remainder of
guaranteed payments shall be commuted and paid in one lump sum to the
named Beneficiary in full discharge of the obligation of the Plan. In
the absence of a named Beneficiary the commuted value of the remaining
guaranteed payments will be paid to the Retiree's estate.
(b) Any Eligible Employee may, upon becoming an Eligible Employee, elect in
writing that his Benefit be paid in the form of a 100% Joint and Survivor
Annuity of Actuarial Equivalent value to the Benefit otherwise payable
under Section 2.03(a) above, providing for a reduced monthly benefit
during his lifetime with 100% of such reduced monthly benefit continuing
to his surviving spouse to whom he was married on the date his Benefit
payments commenced for the remainder of such spouse's lifetime. If the
Retiree and the spouse to whom he was married on the date his Benefit
payments commenced dies before receiving one hundred twenty (120) monthly
payments, the remainder of the one hundred twenty (120) guaranteed
payments will be commuted and paid in one lump sum to the named
beneficiary of the last surviving annuitant in full discharge of the
obligation of the Plan. This optional form of benefit shall become
effective on the first day of the month for which the Retiree's Benefit
is first payable. If the Retiree's spouse dies before the first day of
the month for which the Retiree's Benefit is first payable, this optional
form of payment shall be revoked and payments shall be made pursuant to
the provisions of Section 2.03(a) above.
<PAGE>
(c) Any Eligible Employee may, upon becoming an Eligible Employee, elect in
writing that his Benefit be paid to him (or his Beneficiary if he dies
prior to payment under paragraph (d) below) in one single payment of
Actuarial Equivalent value to the Benefit otherwise payable under Section
2.03(a) above.
(d) Payments shall commence as of the first day of the month following
the Eligible Employee's termination of employment or as soon as
administratively practicable thereafter.
(e) Any Eligible Employee may change his payment form election by
making a new payment form election at any time; provided, however, that
no such election shall be effective unless it shall have been made and
submitted to the Committee prior to the last day of the calendar year
prior to the calendar year in which the Eligible Employee terminates
employment with the Company and each Affiliated Company.
2.04 Commencement of Benefit on or after Normal Retirement Date
A Retiree who terminates employment on or after his Normal Retirement
Date shall receive his Benefit commencing on the first day of the month
following his termination of employment, subject to the provisions of
Section 3.07. In that case, his Benefit shall be equal to the Benefit
determined pursuant to the provisions of Section 2.02 on the basis of his
Average Monthly Compensation and Credited Service on the date of his
termination of employment.
2.05 Commencement of Benefit Before Normal Retirement Date
(a) Unless the provisions of Section 2.05(b) below are applicable a Retiree
whose employment terminates for any reason prior to his Normal Retirement
Date shall receive a Benefit commencing on the first day of the month
following his termination of employment, subject to the provisions of
Section 3.07. In such case, his Benefit shall be
<PAGE>
equal to the Benefit determined under the provisions of Section 2.02 on
the basis of his Average Monthly Compensation and Credited Service on the
date of his termination of employment; provided, however, the portion of
his Benefit determined under the provisions of Section 2.02(a) shall be
reduced by 3.6% for each year and 1/12 of 3.6% for each month of a
fractional year by which the date the Retiree's Benefit begins prior to
the 60th anniversary of his birth.
(b) A Retiree who terminates employment at the Company's request prior to his
Normal Retirement Date shall, subject to the approval of the Committee and
the provisions of Section 3.07, receive a special early Benefit commencing
on the first day of the month following his termination of employment. The
special early Benefit shall be equal to:
(i) his Benefit determined pursuant to the provisions of Section 2.02
on the basis of his Average Monthly Compensation and Credited Service on
his date of termination of employment; provided, however, the portion of
his Benefit determined under the provisions of Section 2.02(a)(i) shall
be calculated on the basis of the Credited Service he accrued to his date
of termination of employment plus any additional service he would have
accrued pursuant to the provisions of Section 1.11 after his termination
of employment if he had remained in the employ of the Company until
his 60th birthday; increased by
(ii) (A) in the case of any Benefit payable in the form described in
Sections 2.03(a) or (b), the Social Security cost of living
percentage increase granted on Social Security benefits paid
in the year of such Retiree's termination of employment and on
each anniversary of such Retiree's termination of
<PAGE>
employment occurring prior to his Normal Retirement Date, the
Benefit determined under the provisions of Section 2.02(a) and
paragraph (b) of this Section 2.05 shall be increased by the
Social Security cost of living percentage increase granted on
Social Security benefits paid in such calendar year; provided,
however, the total number of such cost of living increases
applied to a Retiree's Benefit under this subparagraph (ii)
shall not exceed five, and the cost of living increase
percentage applied to a Retiree's Benefit under this
subparagraph (ii) each year shall not exceed 5%; or
(B) in the case of any Benefit payable in the form described in Section
2.03(c), a projected and compounded deemed Social Security cost of
living percentage increase equal to 5% of such Benefit for the year
of such Retiree's termination and 5% of such Benefit as
cumulatively increased, for each anniversary of such Retiree's
termination occurring prior to his Normal Retirement Date;
provided, however, the total number of such deemed cost of living
increases applied to a Retiree's Benefit under this subparagraph
(ii)(B) shall not exceed five.
2.06 Disability Benefit
An Eligible Employee who has not reached his Normal Retirement Date and
who ceases to be employed by the Company and each Affiliate Company on
account of disability shall continue to be credited with Credited Service
if (i) as of the Effective Date, such Eligible Employee's combined years
of age and Credited Service (computed in the same manner described in
Section 1.17) equals 70 or more, (ii) such Eligible Employee has reached
his 55th birthday and completed 20 years of Credited Service (computed in
the same manner described in Section 1.17), or (iii) such employment
cessation occurs after the date specified
<PAGE>
in Appendix A with respect to such Eligible Employee; PROVIDED, HOWEVER,
such Credited Service shall only continue if such Eligible Employee is
eligible for and is continuously receiving disability benefits under the
Company's long-term disability program. There shall also be included in
his Credited Service any applicable waiting period for disability benefits
under the Company's long-term disability plan; provided that after
expiration of such period the Eligible Employee becomes entitled to such
disability benefits. Upon reaching age 65, such disabled Eligible
Employee shall be entitled to a disability Benefit in an amount determined
under Section 2.02, based on his Average Monthly Compensation at the time
he ceased employment on account of disability and his Credited Service
based on Section 1.11 and the preceding provisions of this Section 2.06.
2.07 Pre-Retirement Death Benefit
(a) If (i) an Eligible Employee whose combined years of age and Credited
Service (computed in the same manner described in Section 1.17) equals 70
or more as of the Effective Date dies prior to his termination of
employment, (ii) prior to his employment
termination, an Eligible Employee dies after he has reached his 55th
birthday and completed 20 or more years of Credited Service, (iii) an
Eligible Employee dies prior to his termination of employment, hut after
the date specified in Appendix A with respect to such Eligible Employee,
or (iv) an Eligible Employee dies while accruing Credit Service under
Section 2.06, a spouse's Benefit shall be payable to his surviving
spouse. Such spouse's Benefit shall be a lump sum payment which is
Actuarial Equivalent to the amount of monthly benefit the spouse would
have received if the Benefit which the Eligible Employee would have
received under Section 2.02 of this Plan, reduced pursuant to the
provision of Section 2.05(a) of this Plan, had commenced on the Eligible
Employee's date of death in the form of a 100% joint
<PAGE>
and survivor annuity and the Eligible Employee had died immediately
thereafter. Such spouse's benefit shall be paid as soon as practicable
following such Eligible Employee's date of death.
2.08 Restoration of Service
If an Eligible Employee who retired or otherwise terminated employment is
restored to employment with the Company or an Affiliated Company, the
monthly payments under the Plan shall he discontinued and, upon
subsequent retirement or termination of employment with the Company or
any Affiliated Company, the Eligible Employee's Benefit shall be computed
in accordance with the provisions of this Article 2, as applicable, and
shall be reduced by the actuarial equivalent value of the Benefit
payments he received prior to his subsequent retirement.
2.09 Designation of Beneficiary
For purposes of Sections 2.03 and 2.07, each Eligible Employee shall file
a written designation of Beneficiary with the Committee upon qualifying
for participation hereunder. Such designation shall remain in force until
revoked by the Eligible Employee by filing a new beneficiary form with
the Committee.
2.10 Receipt of Single-Sum Payment
If any Retiree has received a single sum payment under Section 2.03(c)
above, such Retiree's Beneficiary shall have no further interest in the
Plan or any benefits payable thereunder.
ARTICLE 3. GENERAL PROVISIONS
3.01 Administration
The administration of the Plan, the exclusive power to interpret it, and
the responsibility
<PAGE>
for carrying out its provisions are vested in the Committee. The Committee
shall have full discretionary authority to interpret the Plan and resolve
all matters arising in connection with the Plan. The Committee may adopt
procedural rules and may employ and rely on such legal counsel, actuaries,
accountants and agents as it may deem advisable to assist in the
administration of the Plan. Decisions of the Committee shall be conclusive
and binding on all persons. The expenses of the Committee attributable
to the administration of this Plan shall be paid directly by the Company.
3.02 Funding
(a) All amounts payable in accordance with this Plan shall constitute a
general unsecured obligation of the Company. Such amounts, as well as any
administrative costs relating to the Plan, shall be paid out of the
general assets of the Company, unless the provisions of paragraph (b)
below are applicable.
(b) The Board of Directors may, for administrative reasons, establish a
grantor trust for the benefit of Eligible Employees in the Plan. The
assets of said trust will be held separate and apart from other Company
funds and shall be used exclusively for the purposes set forth in the
Plan and the applicable trust agreement, subject to the following
conditions:
(i) the creation of said trust shall not cause the Plan to be other
than "unfunded" for purposes of Title I of ERISA;
(ii) the Company shall be treated as the "grantor" of said trust for
purposes of Sections 671 and 677 of the Internal Revenue Code; and
(iii) said trust agreement shall provide that its assets may be used
to satisfy claims of the Company's general creditors, provided
that the rights of such general creditors
<PAGE>
are enforceable under federal and state law.
3.03 No Contract of Employment
The establishment of the Plan shall not be construed as conferring any
legal right upon any person for a continuation of employment, nor shall
it interfere with the right of the Company to discharge any employee.
3.04 Competency
If the Committee shall find that any person to whom any amount is or was
payable hereunder is unable to care for his affairs because of illness or
accident, or has died, then the Company, if it so elects, may direct that
any payment due him or his estate (unless a prior claim therefore has
been made by a duly appointed legal representative) or any part thereof
be paid or applied for the benefit of such person or for the benefit of
his spouse, children or other dependents, an institution maintaining or
having custody of such person, any other person deemed by the Committee
to be a proper recipient on behalf of such person otherwise entitled to
payment, or any of them, in such manner and proportion as the Company may
deem proper. Any such payment shall be in complete discharge of the
liability of the Company therefor.
3.05 Withholding Taxes
The Company shall have the right to deduct from each payment to be made
under the Plan any required withholding taxes.
3.06 Nonalienation
Except insofar as may otherwise be required by law, no amount payable at
any time under the Plan shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment,
charge or encumbrance of any kind nor in
<PAGE>
any manner be subject to the debts or liabilities of any person and any
attempt to so alienate or subject any such amount, whether presently or
thereafter payable, shall be void. If any person shall attempt to, or
shall, alienate, sell, transfer, assign, pledge, attach, charge or
otherwise encumber any amount payable under the Plan, or any part thereof,
or if by reason of his bankruptcy or other event happening at any such
time such amount would be made subject to his debts or liabilities or
would otherwise not be enjoyed by him, then the Committee, if it so
elects, may direct that such amount be withheld and that the same or any
part thereof be paid or applied to or for the benefit of such person,
his spouse, children or other dependents, or any of them, in such manner
and proportion as the Committee may deem proper.
3.07 Forfeiture for Cause
In the event that an Eligible Employee or Retiree shall at any time be
convicted for a crime involving dishonesty or fraud on the part of such
Eligible Employee or Retiree in his relationship with the Company or an
Affiliated Company, all benefits that would otherwise be payable to him
under the Plan shall be forfeited. If a Retiree shall at any time be
under indictment for any such crime any Benefit amounts payable to such
Retiree shall be suspended pending conviction, dismissal or acquittal in
respect thereof. If the Retiree is not convicted, the suspended amounts
shall be paid to him (with simple interest accruing at the PBGC Interest
Rate) within thirty days after the date of the dismissal or acquittal.
For this purpose. any so-called ALFORD plea or plea of NOLO CONTENDERE
shall be deemed to constitute an acquittal.
3.08 Mergers/Transfers
This Plan shall be binding upon and inure to the benefit of the Company
and its
<PAGE>
successors and assignees and the Eligible Employee, his designees
and his estate. Nothing in this Plan shall preclude the Company from
consolidating or merging into or with, or transferring all or
substantially all of its assets to, another corporation which assumes
this Plan and all obligations of the Company hereunder. Upon such a
consolidation. merger or transfer of assets and assumption, the term
"Company" shall refer to such other corporation and this Plan shall
continue in full force and effect.
3.09 Calculations
Whenever, under this Plan, it is necessary to determine whether one
benefit is less than, equal to, or larger than another, whether or not
such benefits are provided under this Plan, such determination shall be
made by the Company's independent consulting actuary, using mortality and
interest (unless otherwise specified in this Plan) and any other
assumptions normally used at the time by such actuary in determining
actuarial equivalents under the Retirement Plan.
3.10 Elections
All elections, designations, requests, notices, instructions, and other
communications from an Eligible Employee, Retiree, or other person to the
Committee required or permitted under the Plan shall be in such form as
is prescribed from time to time by the Committee, shall be mailed by
Certified or Registered mail, Return Receipt Requested, or personally
delivered to the principal offices of the Corporation, and shall be deemed
to have been given and delivered only upon actual receipt thereof at
such location.
3.11 Acceleration of Payment
Notwithstanding any other provision of the Plan to the contrary, the
Company shall make payments hereunder to a Retiree or Beneficiary before
such payments are otherwise due if
<PAGE>
the Committee determines, based on a change in the tax or revenue laws
of the United States of America, a published ruling or similar
announcement issued by the Internal Revenue Service, a regulation issued
by the Secretary of the Treasury or his delegate, a decision by a court
of competent jurisdiction involving an Eligible Employee, Retiree or
Beneficiary, or a closing agreement made under Code Section 7121 that is
approved by the Internal Revenue Service and involves an Eligible
Employee, Retiree or Beneficiary, that an Eligible Employee, Retiree or
Beneficiary has recognized or will recognize income for federal income tax
purposes with respect to amounts that are or will be payable to him under
the Plans before they are paid to him. In such cases, any such Retiree or
Beneficiary so affected shall receive the remaining Benefit payments
payable to him and, where appropriate his Beneficiary in one single
payment of Actuarial Equivalent value to such remaining payments. Upon
receipt of such accelerated payment the provisions of Section 2.10 shall
apply to any Beneficiary of such Retiree.
3.12 Construction
(a) The Plan is intended to constitute an unfunded deferred compensation
arrangement for a select group of management or highly compensated
employees and therefore exempt from the requirements or Sections 201, 301
and 401 of ERISA. All rights hereunder shall be governed by and construed
in accordance with the laws of the State of Tennessee and, except to the
extent otherwise herein provided, in accordance with the provisions of
the Retirement Plan.
(b) The masculine pronoun shall mean the feminine wherever appropriate.
<PAGE>
(c) The captions preceding the sections and articles hereof have been
inserted solely as a matter of convenience and in no way define or limit
the scope or intent of any provisions of the Plan.
3.13 Insurance Products
The Company may require each Eligible Employee to assist it in obtaining
life insurance policies on the lives of each Eligible Employee, which
policies would be owned by, and be payable to, the Company. The Eligible
Employee may be required to complete an application for life insurance,
furnish underwriting information including medical examinations by a life
insurance company-approved examiner, and authorize release of medical
history to the life insurance company's underwriter, as designated by the
Company. An Eligible Employee shall have no right or interest in such
policies or the proceeds thereof.
3.14 Nature of Obligation
No Eligible Employee, Retiree or Beneficiary shall have any interest in
any specific asset of the Company or any Affiliated Company as a result
of the Plan. Nothing contained herein shall be deemed to create a trust
of any kind or any fiduciary relationship between the Company (or any
Affiliated Company) and any Eligible Employee, Retiree or Beneficiary.
Any right to receive any Benefit under the Plan shall only be the right
of a general unsecured creditor.
3.15 Legal Fees
In the event that any claim by an Eligible Employee for payment of any
benefit under the Plan is disputed by the Company or the trustee of any
"rabbi" trust created in connection therewith, or any other dispute in
respect of the Plan or any such trust arises between any
<PAGE>
Eligible Employee, the Company and/or such trustee, any such Eligible
Employee shall be promptly reimbursed for all reasonable attorney fees and
expenses, after satisfaction by the Eligible Employee of a lifetime
deductible equal to $25,000, incurred by any such Eligible Employee
(i) in pursuing any such claim, or (ii) in connection with any such
other dispute.
ARTICLE 4. AMENDMENT, TERMINATION, OR PARTICIPANT REMOVAL
The Board of Directors reserves the right to modify or to amend, in whole or in
part, or to terminate this Plan at any time. However, no modification, amendment
or termination of the Plan shall reduce the Benefit being paid to a Retiree as
of the date of any such amendment or termination. In respect of any Eligible
Employee, no modification or amendment shall adversely affect such Eligible
Employee, unless such Eligible Employee consents to such modification or
amendment in writing, and, if the Plan is terminated by the Company, each
Eligible Employee shall be entitled to a Benefit calculated under Article 2
above, based on such Eligible Employee's service and compensation to the date of
such plan termination.
Also, with respect to an Eligible Employee who is not a Retiree pursuant to
Section 1.17 of the Plan, if such Eligible Employee is removed as a
participant from the Plan by the Committee, then such former Eligible
Employee shall have no rights to any Benefits under the Plan, but rather such
former Eligible Employee shall only have those rights that are available to
such former Eligible Employee under the Company's other benefit plans.
<PAGE>
FINANCIAL HIGHLIGHTS
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
In thousands
(except per share data) 1997 1996
- ------------------------------------------------------ ---------- ----------
<S> <C> <C>
Net sales............................................. $2,114,718 $1,985,145
Special charges(1).................................... $ -- $ 97,067
Net earnings (after special charges).................. $ 154,861 $ 59,868
Net earnings per common share:
Basic............................................... $ 2.83 $ 1.13
Diluted............................................. $ 2.81 $ 1.12
Average shares outstanding:
Basic............................................... 54,717 53,059
Diluted............................................. 55,090 53,512
Cash dividends declared per common share.............. $ 1.12 $ 1.12
Shareholders' equity.................................. $ 977,381 $ 868,382
Capital expenditures.................................. $ 116,719 $ 107,807
Employees............................................. 16,400 14,700
Shareholders of record................................ 5,039 5,611
- ------------------------------------------------------ ---------- ----------
- ------------------------------------------------------ ---------- ----------
</TABLE>
[CHART]
(1) Special charges of $97.1 million pretax in 1996 consisted of merger costs,
restructuring costs and other charges. Excluding those charges, earnings per
share would have been $2.36 basic and $2.34 diluted in 1996.
(2) Special charges in 1996 reduced net sales, net earnings, diluted earnings
per share and return on average shareholders' equity as shown.
1
<PAGE>
FINANCIAL REVIEW
RESULTS OF OPERATIONS
THOMAS & BETTS CORPORATION (THOMAS & BETTS OR THE CORPORATION) ACHIEVED
RECORD SALES AND EARNINGS IN 1997. Net sales for 1997 increased to $2,114.7
million, 7% above 1996 sales of $1,985.1 million, reflecting strong volume
gains and business acquisitions made during 1997 and 1996. Negative currency
translations effectively reduced 1997 reported sales by approximately one
percentage point. As in the two prior years, about one-quarter of Thomas &
Betts sales came from sales outside the U.S.
Net sales for 1996 increased 15%, or $251.8 million, from 1995. Sales
growth from expanding the Corporation's existing businesses, coupled with
acquisitions, accounted for the majority of the growth. Particularly
significant was the acquisition of Amerace Corporation (Amerace) in January
1996, accounted for as a purchase. The acquisition of Augat Inc. in December
1996, the largest acquisition in the Corporation's history, was accounted for
as a pooling of interests and resulted in financial results of Augat being
combined with those of the Corporation for all periods presented.
Electrical Construction and Maintenance Components (Electrical) segment
sales grew to $764.2 million, or 19% from 1996, following an increase of 12%
in 1996, compared with 1995. Solid economic conditions in North America and
greater market penetration of the segment's product offering resulted in
strong volume increases in that segment in both 1997 and 1996. Volume gains
accounted for over one-half of the segment's growth in those years. Several
product-line acquisitions and favorable pricing also contributed to the
improvements.
Sales in the Electronic/OEM Components (Electronics) segment were
$893.9 million in 1997, or 1% lower than 1996, following an 8% increase in
1996 over 1995. Weaker foreign currencies throughout 1997 negatively impacted
Electronics sales by 3%. Volume increases in a number of product lines in
1997 were offset by anticipated declines in certain product lines, primarily
automotive-related. Pricing in the segment declined slightly in 1997 from
1996, and acquisitions contributed a small increase to sales. The 8% gain in
1996 over 1995 was primarily volume-driven, reflecting increased penetration
of the domestic professional electronics market, acquisitions and new
products for original equipment manufacturers (OEMs).
At year-end 1997, Thomas & Betts contributed assets, which generated
1997 sales of $85.9 million, to a joint venture, Exemplar/Thomas & Betts
Electrical Systems, LLC (ET&B). Under terms of the joint venture agreement,
Thomas & Betts owns a 49% interest in ET&B, and has a 100% income interest in
the results generated by its contributed net assets plus a 49% interest in
income generated by jointly developed future business. The Corporation's
investment in ET&B will be accounted for using the equity method. The use of
that accounting method will not affect net results but will reduce net sales,
costs and expenses by the amounts previously attributable to the contributed
assets.
Other Products and Components sales of $456.7 million were 4% higher
than 1996 after having risen 34% in 1996 over 1995. In 1997, gains in heating
and utility component product lines and increased marketing leverage, from
acquisitions of both the Elastimold utility component product lines acquired
with Amerace and the Reznor Europe heating product lines, more than offset
the negative effect of planned phase-outs of low-margin
contract-manufacturing volumes related to divested product lines. The
pronounced sales increase from 1995 to 1996 was primarily due to the addition
of Elastimold.
CONSOLIDATED GROSS MARGIN IMPROVED TO 31.9%, compared with 29.6% and
29.5% in 1996 and 1995, respectively. Excluding the special charges of $13.8
million in 1996 and $2.5 million in 1995, gross margin improved from 30.4% in
1996 and 29.7% in 1995. The 1997 gross margin reflected the positive impact
of restructuring efforts, including the assimilation of Augat operations.
17
<PAGE>
Marketing, general and administrative (MG&A) expense was 16.4% of sales
in 1997. Excluding special charges of $19.7 million in 1996 and $1.8 million
in 1995, those expenses were 16.1% and 16.3% of sales in the two earlier
years, respectively. The higher level of MG&A in 1997 was due to increased
marketing expense from a change in the electrical-components channel
U.S.-sales structure, somewhat offset by lower administrative expense
realized from integration of acquired businesses.
The Corporation spent 2.5% of sales on research and development (R&D)
during 1997, versus 2.4% in 1996 and 2.5% in 1995. Most R&D activity took
place in the Electronics segment with efforts in 1997 focused in part on the
Metallized Particle Interconnect (MPI-TM), a next-generation microprocessor
socket for high-end computers and workstations. Amortization expense rose in
both years due to additional amortization of goodwill related to acquisitions.
Thomas & Betts recorded $97.1 million in special charges in 1996,
primarily related to the acquisition and assimilation of Augat. (See
footnotes 3 and 4 to the financial statements.) Included in those charges
were merger expenses, resulting from legal and financial advisory fees and
change-of-control payments, and provisions for restructured operations
related to the integration of Augat and initiatives to optimize operations
and improve future profitability.
The 1995 provision for restructured operations was recorded at Augat
for closing redundant or excess facilities, abandoning excess equipment,
discontinuing inventory in low-margin product lines and paying employee
severance costs.
EARNINGS FROM OPERATIONS IN 1997 INCREASED 17% from 1996 (excluding
special charges) and 25% in 1996 versus 1995 (excluding restructuring
charges). Earnings from operations of Electrical, excluding special charges,
rose 24% in 1997 over 1996, and 17% in 1996 over 1995, due to higher sales
volumes and wider operating margins resulting from restructuring programs.
Earnings from operations of Electronics improved 10% and 9% year over year
for 1997 and 1996, respectively, if special charges are excluded. The 1997
improvement reflected the benefits of restructuring and the Augat
integration, while the increase in 1996 was attributed to higher sales. Other
Products and Components earnings from operations declined 8% in 1997 versus
1996, compared with a 54% increase in 1996 versus 1995, excluding special
charges. Volume declines in certain markets impacted the 1997 gross margin in
that segment, while 1996 results reflected the acquisition of Amerace, higher
sales volume, favorable sales mix and lower commodity costs.
Other expense-net for 1997 decreased from 1996's level due to the
absence of special charges related to the Augat merger. Excluding the special
charges of $6.1 million, other expense in 1997 rose $1.3 million, compared
with 1996. The increase was primarily due to greater interest expense
resulting from higher-average net-debt levels that offset increased equity
income. Other expense-net in 1996 rose $14.5 million from 1995 as a result of
the special charges and higher interest expense on increased debt from the
acquisition of Amerace, offset in part by higher equity income.
The effective income tax rate for 1997 of 31.0% was 3.1 points below
the rate for 1996 and 0.4 points lower than the 1995 rate. The higher 1996
rate was due to non-deductible, merger-related special charges associated
with the Augat acquisition. Thomas & Betts has been able to maintain a tax
rate below the statutory rate because of tax benefits derived from operations
in Puerto Rico and other proactive tax initiatives.
NET EARNINGS IN 1997 OF $154.9 MILLION WERE THEIR HIGHEST EVER,
significantly greater than the 1996 and 1995 levels of $59.9 million and
$88.5 million, respectively, primarily due to the special charges recorded in
each of those years, as well as higher volumes and wider margins. Net
earnings in 1996 included special charges of $97.1 million ($65.6 million
after tax, $1.23 per share), while 1995 included a $23.0 million ($15.3
million after tax, $0.29 per share) restructuring charge recorded by Augat.
Excluding the impact of those charges, net earnings in those
18
<PAGE>
years would have been $125.5 million in 1996 and $103.8 million in 1995.
Comparing year-to-year results, excluding the impact of charges, 1997 net
earnings were 23% higher than those in 1996, and 1996 net earnings were 21%
above those in 1995.
Effective for 1997, Thomas & Betts began reporting earnings per share
(EPS) on both basic and diluted bases in compliance with Statement of
Financial Accounting Standard No. 128. Previously, in accordance with the
earlier accounting standard, the Corporation reported "simple" EPS. The
impact of adopting the new accounting standard was minimal for all years
restated, with no change to basic EPS and only a 1 CENTS or 2 CENTS decrease
from simple EPS to diluted EPS, reflecting slight dilutive effects from
assumed employee-stock-option conversions. Excluding the effects of the
special charges discussed above, EPS (both on basic and diluted bases)
increased 20% in 1997 over 1996, and 19% in 1996 over 1995. Including the
special charges, the changes were 151% and (33%), respectively.
In 1997, the Financial Accounting Standards Board issued Statements No.
130, "Reporting Comprehensive Income," and No. 131, "Disclosures about
Segments of an Enterprise and Related Information." Both statements are
effective in 1998, and both will require additional interim or annual
financial disclosure without changing the overall financial results of the
Corporation. Although Thomas & Betts has not concluded what presentation
changes will be required, if any, it does not currently believe that adoption
of those standards will significantly affect the characterization of its
business.
LIQUIDITY AND FINANCIAL RESOURCES
CASH PROVIDED BY OPERATING ACTIVITIES INCREASED IN 1997 due to higher net
earnings for the year and the sale of $145.2 million of trade accounts
receivable under an asset-securitization program commenced in December 1997.
Those sources funded capital expenditures, dividends, restructuring
expenditures provided for predominantly in 1996 and net working-capital
levels required to support higher sales.
CAPITAL SPENDING OF $116.7 MILLION IN 1997 ROSE 8% FROM 1996'S LEVEL,
but spending in 1996 decreased 18% from 1995, a year in which the Corporation
undertook a major spending program on distribution facilities. Projects in
1997 included restructuring-related spending to consolidate the operations of
recent acquisitions, expansion of production capabilities, efficiency-related
improvements and new systems software. Projects in 1996 included completion
of the central distribution center, continued expansion of Mexican operations
and restructuring-related spending at Augat. Projects in 1995 included
spending on three state-of-the-art distribution facilities, expansion of
production capabilities, equipment and efficiency-related improvements.
Management expects capital expenditures to be slightly higher in 1998
than the normal run rate as the Corporation undertakes numerous information
technology projects.
THE CORPORATION IS ACTIVELY ENGAGED IN A CORPORATE-WIDE PROGRAM TO
ENSURE ITS COMPUTER SYSTEMS ARE YEAR 2000 COMPLIANT. That effort included a
comprehensive review of automated systems in use throughout the Corporation.
In several significant areas, the Corporation is currently installing new
systems with greatly enhanced functionality that also solve potential Year
2000 problems in those areas. Other actions have or will include
software-release upgrades and modifications to coding in software that will
not be replaced. A significant portion of the cost of the new systems will be
capitalized. Management does not expect the total amounts, to be expended
over the next two years for both enhanced functionality and Year 2000
compliance, to be material to its financial position or results of
operations. Virtually all systems are expected to be Year 2000 compliant by
year-end 1998.
THOMAS & BETTS COMPLETED SIX ACQUISITIONS DURING 1997 for total
consideration of approximately $62 million, consisting of cash and 793,560
shares of the Corporation's common stock. Those acquisitions were: in
January, Taylor Wiring Duct, a major supplier
19
<PAGE>
of wiring duct and accessories to the industrial OEM market; in March, Marr
Group Limited, a manufacturer of twist-on electrical-wire connectors, plastic
electrical- outlet boxes and box connectors; in April, the assets of
Electro-Resources Corporation of Texas, which sold under the name
TANCO-Registered Trademark-, a supplier of electrical enclosures; in June,
Electroline Manufacturing Company, a manufacturer of electrical conduit
fittings; in July, Patriot Products, Inc., a maker of in-floor duct systems;
and, also in July, Diamond Communication Products, Inc., a manufacturer of
drop hardware for the worldwide communications industry. The Taylor, Marr,
Tanco and Patriot acquisitions were accounted for using the purchase method
of accounting. The acquisitions of Electroline and Diamond were accounted for
as immaterial poolings of interests. Those six acquisitions represented $57.6
million of 1997 sales.
Thomas & Betts closed eight acquisitions in 1996, the two largest of
which were Augat and Amerace. In December 1996, approximately 12.8 million
shares of the Corporation's common stock were exchanged for all of the
outstanding common stock of Augat in a transaction valued at approximately
$570 million. In January 1996, the Corporation acquired all the outstanding
stock of Amerace for $212.5 million in cash.
Thomas & Betts makes selective acquisitions to broaden its business
worldwide. The Corporation currently is evaluating several acquisition
possibilities and expects to do so from time to time in the future. The
Corporation may finance any such acquisitions that it consummates through the
issuance of private or public debt or equity, internally generated funds or a
combination of those sources.
DEBT DECLINED $176.1 MILLION IN 1997 FROM 1996'S LEVEL, reflecting the
application of cash generated from operations and proceeds from the sale of
accounts receivable. Debt increased by $277.3 million in 1996 from 1995's
level due to the issuance of debt in early 1996 to finance the Amerace
acquisition. Pretax interest coverage grew from 3.6 times in 1996 (excluding
special charges) to 4.0 times in 1997.
In June 1997, Thomas & Betts initiated a commercial paper program,
which is backed by a $500.0 million revolving-credit agreement. At year-end,
$79.9 million of commercial paper was outstanding. Management believes that
its external financial resources and internally generated funds are
sufficient to meet the Corporation's capital needs for the foreseeable future.
CASH AND SHORT-TERM INVESTMENTS DECLINED $66.0 MILLION in 1997
primarily due to repatriation of funds on a tax-effective basis. Thomas &
Betts maintains a portfolio of marketable securities and cash equivalents in
Puerto Rico, which at year-end 1997 was valued at $77.7 million. Although
those investments represent currently available funds, they remain invested
so that the Corporation can obtain favorable, partially tax-exempt status on
earnings generated in Puerto Rico.
OTHER MATTERS
Thomas & Betts is committed to complying with all applicable laws and to
pursuing actions and practices that promote a safer, healthier environment.
The Corporation expended approximately $3.0 million, $2.0 million and $1.5
million for environmental remediation and corrective matters for years 1997,
1996 and 1995, respectively, with payments for Superfund-related sites being
less than $0.7 million in any year.
FORWARD-LOOKING STATEMENTS
Statements in this financial review or made by management of the Corporation
that contain more than historical information may be considered to be
"forward-looking statements" (as such term is defined in the Private
Securities Litigation Reform Act of 1995), which are subject to many risks
and uncertainties. Actual results may vary materially from those expressed in
the forward-looking statements because of uncertainties identified in the
Corporation's latest Annual Report on Form 10-K filed with the Securities and
Exchange Commission.
20
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
In thousands (except per share data) 1997 1996 1995
- ------------------------------------------ ---------- ---------- ----------
<S> <C> <C> <C>
NET SALES................................. $2,114,718 $1,985,145 $1,733,368
---------- ---------- ----------
COSTS AND EXPENSES
Cost of sales............................. 1,440,303 1,398,031 1,221,463
Marketing, general and administrative..... 346,046 339,124 283,861
Research and development.................. 51,896 47,229 44,083
Amortization of intangibles............... 17,355 15,323 11,314
Merger expense............................ -- 30,558 --
Provision for restructured operations..... -- 24,501 18,700
---------- ---------- ----------
1,855,600 1,854,766 1,579,421
---------- ---------- ----------
Earnings from operations.................. 259,118 130,379 153,947
Other expense -- net...................... 34,682 39,501 25,017
---------- ---------- ----------
Earnings before income taxes.............. 224,436 90,878 128,930
Income taxes.............................. 69,575 31,010 40,428
---------- ---------- ----------
NET EARNINGS.............................. $ 154,861 $ 59,868 $88,502
---------- ---------- ----------
NET EARNINGS PER COMMON SHARE:
Basic................................... $ 2.83 $ 1.13 $ 1.69
Diluted................................. $ 2.81 $ 1.12 $ 1.68
Average shares outstanding:
Basic................................... 54,717 53,059 52,494
Diluted................................. 55,090 53,512 52,722
Cash dividends declared per share......... $ 1.12 $ 1.12 $ 1.12
- ------------------------------------------ ---------- ---------- ----------
- ------------------------------------------ ---------- ---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
21
<PAGE>
CONSOLIDATED BALANCE SHEETS
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 28, December 29,
In thousands 1997 1996
- -------------------------------------------- ------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.................... $ 43,872 $ 126,355
Marketable securities........................ 52,382 35,940
Receivables -- net........................... 273,565 361,511
Inventories.................................. 373,977 363,306
Deferred income taxes........................ 43,452 62,121
Prepaid expenses............................. 8,902 7,818
---------- ----------
Total Current Assets......................... 796,150 957,051
PROPERTY, PLANT AND EQUIPMENT
Land......................................... 21,670 16,944
Buildings.................................... 219,381 217,792
Machinery and equipment...................... 833,540 765,240
---------- ----------
1,074,591 999,976
Less accumulated depreciation................ 504,829 460,032
---------- ----------
569,762 539,944
INTANGIBLE ASSETS -- NET..................... 505,225 519,276
INVESTMENTS IN UNCONSOLIDATED COMPANIES...... 127,703 76,368
OTHER ASSETS................................. 39,835 38,598
---------- ----------
TOTAL ASSETS................................. $2,038,675 $2,131,237
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable................................ $ 25,997 $ 49,365
Current maturities of long-term debt......... 5,256 15,690
Accounts payable............................. 208,056 190,184
Accrued liabilities.......................... 140,584 189,961
Income taxes................................. 44,514 35,372
Dividends payable............................ 15,401 11,328
---------- ----------
Total Current Liabilities.................... 439,808 491,900
LONG-TERM LIABILITIES
Long-term debt............................... 502,813 645,096
Other long-term liabilities.................. 92,206 100,676
Deferred income taxes........................ 26,467 25,183
SHAREHOLDERS' EQUITY
Common stock................................. 316,922 284,639
Retained earnings............................ 668,189 569,869
Cumulative translation adjustment............ (3,523) 15,084
Other........................................ (4,207) (1,210)
---------- ----------
Total Shareholders' Equity................... 977,381 868,382
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY... $2,038,675 $2,131,237
- --------------------------------------------- ---------- ----------
- --------------------------------------------- ---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
22
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
In thousands 1997 1996 1995
- ------------ --------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings............................................ $ 154,861 $ 59,868 $ 88,502
Adjustments:
Depreciation and amortization......................... 95,324 91,581 76,495
Provision for restructured operations................. -- 24,501 18,700
Accrued merger and other special charges.............. -- 51,145 4,300
Deferred income taxes................................. 19,771 (26,728) 7,782
Changes in operating assets and liabilities, net:
Receivables......................................... 79,066 (63,147) (10,980)
Inventories......................................... (17,900) (29,159) (16,984)
Accounts payable.................................... 21,471 22,386 (7,118)
Accrued liabilities................................. (60,866) (30,847) (26,977)
Income taxes payable................................ 9,316 20,789 (5,681)
Other................................................. (11,231) 492 (5,615)
--------- --------- ---------
Net cash provided by operating activities............... 289,812 120,881 122,424
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of and investments in businesses.............. (19,326) (256,390) (19,983)
Purchases of property, plant and equipment.............. (116,719) (107,807) (131,442)
Proceeds from sale of property, plant and equipment..... 6,098 37,535 4,993
Marketable securities acquired.......................... (81,365) (26,636) (50,925)
Proceeds from matured marketable securities............. 64,807 51,387 49,500
Other................................................... -- -- 4,502
--------- --------- ---------
Net cash used in investing activities................... (146,505) (301,911) (143,355)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in borrowings with original
maturities less than 90 days.......................... (6,850) (16,798) 46,938
Proceeds from long-term debt and other borrowings....... 170,412 386,437 24,789
Repayment of long-term debt and other borrowings........ (354,394) (95,137) (31,658)
Stock options exercised................................. 25,945 12,812 10,194
Cash dividends paid..................................... (56,898) (48,305) (47,138)
--------- --------- ---------
Net cash provided by (used in) financing activities..... (221,785) 239,009 3,125
--------- --------- ---------
EFFECT OF EXCHANGE-RATE CHANGES ON CASH................. (4,005) (6,779) 2,755
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents.... (82,483) 51,200 (15,051)
Cash and cash equivalents -- beginning of year.......... 126,355 75,155 90,206
--------- --------- ---------
Cash and cash equivalents -- end of year................ $ 43,872 $126,355 $ 75,155
- -------------------------------------------------------- --------- --------- ---------
- -------------------------------------------------------- --------- --------- ---------
Cash payments for interest............................. $ 54,185 $ 37,359 $ 32,176
Cash payments for taxes................................ $ 40,480 $ 29,066 $ 36,699
</TABLE>
See Notes to Consolidated Financial Statements.
23
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional Cumulative
------------------ Paid-in Retained Translation Treasury
In thousands Shares Amount Capital Earnings Adjustment Stock
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 51,673 $ 25,837 $ 230,953 $516,537 $ 19,749 $(2,719)
------ -------- --------- -------- -------- -------
Immaterial poolings of interests........ 656 328 1,616 2,309 -- --
Net earnings............................ -- -- -- 88,502 -- --
Dividends declared...................... -- -- -- (47,380) -- --
Stock options and incentive awards...... 436 218 10,879 -- -- (685)
Translation adjustments................. -- - -- -- 4,506 --
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
Balance at December 31, 1995............ 52,765 26,383 243,448 559,968 24,255 (3,404)
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
Reincorporation......................... (107) 240,044 (243,448) -- -- 3,404
Net earnings............................ -- -- -- 59,868 -- --
Dividends declared...................... -- -- -- (48,412) -- --
Stock options and incentive awards...... 587 16,263 -- -- -- --
Business acquisitions and investments... 58 1,949 -- (39) -- --
Change in subsidiaries' year-end........ -- -- -- (1,516) -- --
Translation adjustments................. -- -- -- -- (9,171) --
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
Balance at December 29, 1996............ 53,303 284,639 -- 569,869 15,084 --
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
Immaterial poolings of interests........ 731 2,728 -- 4,430 -- --
Net earnings............................ -- -- -- 154,861 -- --
Dividends declared...................... -- -- -- (60,971) -- --
Stock options and incentive awards...... 910 25,945 -- -- -- --
Business acquisitions and investments... 62 3,610 -- -- -- --
Translation adjustments................. -- -- -- -- (18,607) --
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
Balance at December 28, 1997............ 55,006 $316,922 $ -- $668,189 $(3,523) $ --
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
- ---------------------------------------- ------ -------- --------- -------- ----------- --------
</TABLE>
Preferred Stock: Authorized 500,000 shares, no par value. None issued to
date, but 300,000 shares are reserved for the Corporation's
Shareholder Rights Plan.
Common Stock: Authorized 80,000,000 shares, no par value.
- -------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 NATURE OF OPERATIONS
Thomas & Betts Corporation (the Corporation) is a leading manufacturer of
connectors and components for worldwide electrical and electronics markets.
With international headquarters in Memphis, Tenn., the Corporation operates
more than 100 manufacturing and distribution facilities in 20 countries
around the globe. The Corporation designs, manufactures and sells components
that allow others to assemble electrical and electronic systems. The
Corporation's products include: electromechanical components and subsystems
that provide solutions for information processing, communications and
automotive industries in North America, Europe and Asia; electrical
connectors and accessories for industrial, commercial, utility, residential
and project construction, renovation and maintenance applications primarily
in North America; transmission poles, towers and industrial lighting products
for domestic and international customers; and heating units and accessories
for mechanical and refrigeration markets in North America and Europe.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Corporation
and its wholly owned domestic and foreign subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The Corporation uses the equity method of accounting for its investments in
20-to-50-percent-owned companies. Under generally accepted accounting
principles (GAAP), there is a presumption that the equity method should be
used to account for those investments. If the Corporation were to determine
that it no longer
24
<PAGE>
had the ability to exercise significant influence over the operating and
financial policies of those companies, GAAP would require the Corporation
to use the cost method rather than the equity method to account for those
investments. The Corporation regularly monitors its relationships with
those companies.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
FISCAL YEAR
The Corporation's fiscal year ends on the Sunday closest to the end of the
calendar year. Results for 1997, 1996 and 1995 are for the 52 weeks ended
December 28, 1997, December 29, 1996 and December 31, 1995, respectively.
In 1996, the Corporation's Augat Inc. (Augat) subsidiary changed the
fiscal year of its European and Far Eastern subsidiaries from November 30
to the Corporation's fiscal year-end, thus eliminating a one-month
reporting lag. That change resulted in a charge against retained earnings
of $1.5 million.
FINANCIAL INSTRUMENTS AND CONCENTRATIONS
OF CREDIT RISK
When deemed appropriate, the Corporation enters into forward
foreign-exchange contracts to hedge foreign-currency-transaction exposures
for periods consistent with those committed exposures. Those contracts are
with major financial institutions and may at times be concentrated with
certain counterparties. The creditworthiness of counterparties is subject
to continuing review, and full performance by those counterparties is
anticipated. Foreign-exchange contracts generally have maturities that do
not exceed one year.
Currency hedging reduces the impact of foreign-exchange-rate movements
on the Corporation's operating results, as gains and losses on contracts are
offset by losses and gains on any assets, liabilities and transactions being
hedged. A high correlation is maintained between the transactions and the
hedges to minimize currency risk. In most cases, both the exposed
transactions and the hedging contracts are marked to market monthly with
gains and losses included in earnings as other income or expense. Gains and
losses on certain contracts that hedge specific foreign-currency denominated
commitments are deferred and recognized in the period in which the
transaction is completed. Unrealized gains are reported as prepaid expenses,
and unrealized losses are reported as accrued liabilities.
As of December 28, 1997, and December 29, 1996, the Corporation had
outstanding contracts, all maturing within 240 days, to buy $22.5 million and
sell $10.7 million, respectively, of principally Canadian, Japanese and
European currencies for U.S. dollars. Deferred contract gains and losses at
December 28, 1997, and December 29, 1996, were not significant.
The Corporation is exposed to risk from fluctuating prices for
commodities used to manufacture its products, primarily copper, zinc,
aluminum, gold and resins. Some of that risk is hedged through the use of
futures and swap contracts that fix the price the Corporation will pay for
the commodity. Cost of sales reflects the commodity cost, including the
effects of the commodity hedge. The total quantity of commodity contracts
purchased is kept at least 20% below the actual quantity of commodities
expected to be purchased for production. As of December 28, 1997, the
Corporation had $22.3 million of those contracts outstanding, maturing
through December 1998. The maturity of the contracts highly correlates with
the actual purchases of the commodity. The amounts paid or received are
calculated based on the notional amounts under the contracts. The use of such
commodity contracts effectively protects the Corporation against changes in
the price of the commodity to the extent of the notional amount under the
contract. As of December 28, 1997, the net unrealized loss on those commodity
contracts was $1.7 million. That value will change as commodity prices change
and will be recorded only at the time the underlying commodity is actually
purchased.
Credit risk, with respect to trade receivables, is limited due to the
large number of customers comprising the Corporation's customer base and
their dispersion across many different industries and geographic areas.
The Corporation will, on occasion, enter into interest-rate swaps to
reduce the impact of changes in interest rates on portions of its
floating-rate debt. The rate differential paid or received under those
agreements is accrued monthly, consistent with the terms of the agreements
and market interest rates. Those agreements are with financial institutions
having at least a single-A credit rating, which minimizes non-performance
risk. As of December 28, 1997, the Corporation had no outstanding
interest-rate swaps.
RECEIVABLES
Receivables are stated net of allowance for doubtful accounts and cash
discounts of $11.4 million at December 28, 1997, and $8.7 million at
December 29, 1996.
In December 1997, the Corporation entered into an asset-securitization
agreement. The agreement permits the Corporation to continually sell accounts
receivable through December 19, 2002, to a maximum purchasers' investment of
$150.0 million.
25
<PAGE>
That maximum investment is subject to decrease based on the level of
eligible accounts receivable and restrictions on concentrations of
receivables. In December 1997, the Corporation sold a fractional ownership
interest in a defined pool of trade accounts receivable for approximately
$145.2 million. That transaction has been accounted for as a sale of assets
under the provisions of Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." The sold accounts receivable are reflected
as a reduction of receivables in the accompanying consolidated balance sheet.
The discount rate on the receivables sold in December 1997 was approximately
6.10%.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the last-in, first-out (LIFO) method for approximately 60% of the
Corporation's inventories, and the first-in, first-out (FIFO) method for the
remainder of inventories. The LIFO value of inventories held at December 28,
1997, approximated their current cost.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Expenditures for
maintenance and repair are charged to expense as incurred. Significant
renewals and betterments that extend the lives of assets are capitalized.
Depreciation is computed principally on the straight-line method over the
estimated useful lives of the assets, which range principally from 10 to 25
years for land improvements, 5 to 45 years for buildings, and 3 to 15 years
for machinery and equipment.
INTANGIBLE ASSETS
Intangible assets consist principally of the excess of cost over the fair
value of net assets (goodwill) acquired in business combinations accounted
for as purchases. Those assets are being amortized on a straight-line basis
over various periods not exceeding 40 years. Goodwill is reevaluated when
business events and circumstances indicate that the carrying amount may not
be recoverable. Reevaluation is based on projections of related,
undiscounted, future cash flows. As of December 28, 1997, and December 29,
1996, accumulated amortization of intangible assets was $93.6 and $71.6
million, respectively.
INCOME TAXES
The Corporation uses the asset and liability method of accounting for income
taxes. That method recognizes the expected future tax consequences of
temporary differences between the book and tax bases of assets and
liabilities, and provides a valuation allowance based on a
"more-likely-than-not" standard.
Undistributed earnings of foreign subsidiaries held for reinvestment in
overseas operations amounted to $83.1 million at December 28, 1997.
Additional U.S. income taxes may be due upon remittance of those
earnings (net of foreign tax credits resulting from the distribution), but
determining the amount of any such additional taxes is impractical.
SHAREHOLDERS' EQUITY
In May 1996, the Corporation's state of incorporation was changed from New
Jersey to Tennessee. The reincorporation resulted in each outstanding share
of the Corporation's common stock, par value of $0.50, being converted into
one share of common stock, no par value. Tennessee law requires shares
repurchased by a corporation to be returned to the status of authorized but
unissued shares; accordingly, the shares of common stock previously held in
treasury were canceled. There was no change in total shareholders' equity as
a result of the elimination of par value and treasury stock.
Shareholders' equity included increases of $0.7 million at December 28,
1997, and $0.8 million at both December 29, 1996, and December 31, 1995,
which related to unrealized gains on marketable securities and decreases of
$4.9 million, $2.0 million and $0.5 million at December 28, 1997, December
29, 1996, and December 31, 1995, respectively, related to non-vested
restricted stock awards. Compensation expense, related to the restricted
stock awards, is recognized over the vesting period.
STOCK PURCHASE RIGHTS
On December 3, 1997, the Corporation's board of directors declared a dividend
of one preferred-share purchase right for each outstanding share of common
stock of the Corporation. The dividend was payable to shareholders of record
as of December 15, 1997. The rights are attached to and automatically trade
with the outstanding shares of the Corporation's common stock.
The rights will become exercisable only in the event that any person or
group of affiliated persons becomes a holder of 15% or more of the
Corporation's outstanding common stock, or commences a tender exchange offer,
which, if consummated, would result in that person's or affiliated persons'
owning at least 15% of the Corporation's outstanding common stock. Once the
rights become exercisable, they entitle all shareholders, other than an
acquiring person, to purchase one two-hundredths of a share of preferred
stock, which entitles the holder to purchase, for $200, a number of shares of
common stock having a market value of twice the exercise price. In addition,
at any time after any person has become an acquiring person, but before any
person becomes the beneficial owner of 50% or more of the outstanding common
stock, the board of directors may exchange all or part of the rights (other
than rights beneficially owned by an acquiring person and certain affiliated
persons) for shares of common stock at an exchange ratio of one share of
common stock per right. The rights may be redeemed at a price of $.005 per
right at any time prior to their expiration on December 15, 2000.
26
<PAGE>
EARNINGS PER SHARE
During the fourth quarter of 1997, the Corporation adopted SFAS No. 128,
"Earnings Per Share." The earnings-per-share (EPS) information in prior
periods has been restated to conform to such presentation.
Basic EPS is computed by dividing net earnings by the weighted-average
number of shares of common stock outstanding during the year. Diluted EPS is
computed by dividing net earnings by the sum of (1) the weighted-average
number of shares of common stock outstanding during the period and (2) the
dilutive effect of the assumed exercise of stock options using the treasury
stock method.
The following is a reconciliation of the numerators and denominators of
the per share computations:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
In thousands
(except per share data) 1997 1996 1995
- ----------------------- -------- ------- -------
<S> <C> <C> <C>
Net earnings $154,861 $59,868 $88,502
- ----------------------- -------- ------- -------
Basic -- Average shares
outstanding 54,717 53,059 52,494
Basic EPS $ 2.83 $ 1.13 $ 1.69
- ----------------------- -------- ------- -------
- ----------------------- -------- ------- -------
Diluted -- Average shares
outstanding 54,717 53,059 52,494
- ----------------------- -------- ------- -------
Plus assumed exercise
of stock options 373 453 228
- ----------------------- -------- ------- -------
55,090 53,512 52,722
- ----------------------- -------- ------- -------
Diluted EPS $ 2.81 $ 1.12 $ 1.68
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
ENVIRONMENTAL COSTS
Environmental expenditures that relate to current operations are expensed or
capitalized, as appropriate. Remediation costs that relate to an existing
condition caused by past operations are accrued, on an undiscounted basis,
when it is probable that those costs will be incurred and can be reasonably
estimated based on evaluations of currently available facts related to each
site.
CASH FLOW INFORMATION
Cash equivalents consist of investments, with maturities at date of purchase
of less than 90 days, that have a low risk of change in value due to interest
rate changes. Foreign-currency cash flows have been converted to U.S. dollars
at appropriately weighted-average exchange rates or the exchange rates in
effect at the time of the cash flows, where determinable.
3 MERGERS, ACQUISITIONS AND DIVESTITURES
AUGAT INC.
On December 11, 1996, the Corporation acquired all of the outstanding
common stock of Augat Inc. in exchange for 12,821,337 shares of the
Corporation's common stock. In addition, options to acquire Augat common
stock were converted to options to acquire 791,400 shares of the
Corporation's common stock.
The acquisition was accounted for as a pooling of interests, and the
Corporation's financial statements were restated to include the results of
Augat for all periods presented, except for dividends per share, which
reflect the Corporation's historical per share amount.
In the fourth quarter of 1996, the Corporation recorded special charges
totaling $97.1 million. The charges provided for merger expenses, including
legal and financial advisory fees and change-of-control payments;
restructuring expenses related to both the Corporation's existing operations
and the operations of Augat (see Note 4); adjustments to accounting estimates
of Augat's liabilities, primarily environmental, litigation, warranty and
employee-benefit accruals, and provisions for inventory obsolescence; the
cost of index-put options purchased and held through the merger's
stock-pricing period; and other one-time expenses, including certain
termination benefits related to the Corporation's executive retirement plan
and previously idled facility charges. The charges were recorded in the
statement of earnings as follows: net sales, $2.4 million; cost of sales,
$13.8 million; marketing, general and administrative, $19.7 million; merger
expense, $30.6 million; provision for restructured operations, $24.5 million;
and other expense, $6.1 million.
AMERACE CORPORATION
On January 2, 1996, the Corporation acquired all of the outstanding stock of
Amerace Corporation for $212.5 million in cash. That acquisition was
accounted for using the purchase method. The aggregate purchase price was
allocated to the acquired assets of Amerace based on their respective fair
values, with the excess of approximately $150 million allocated to goodwill.
Results of operations of Amerace after the acquisition date are included
in the Consolidated Statements of Earnings. If the acquisition and its
financing had occurred on January 2, 1995, management estimates that on an
unaudited pro-forma basis, net sales, net earnings and net earnings per share
would have been $1,890.4 million, $93.9 million and $1.79 per share,
respectively, for the year-ended December 31, 1995. Those pro-forma results
have been prepared for comparative purposes only and are not necessarily
indicative of the combined results of operations that would have resulted had
the acquisition taken place on January 2, 1995, nor are they necessarily
indicative of results of operations for any future period. On May 14, 1996,
the Corporation sold most of the assets of the Hendrix Wire and Cable
business of Amerace Corporation. No gain or loss was incurred as a result of
that sale.
OTHER
The Corporation completed six acquisitions during 1997 for total
consideration of $62.0 million, consisting of cash and 793,560 shares of the
Corporation's common stock. Two of those acquisitions were accounted for as
immaterial poolings of interests, and
27
<PAGE>
the results of those acquisitions have been included in the Corporation's
results as of the beginning of 1997 without restating prior years' results.
The remaining four acquisitions were accounted for under the purchase method
of accounting. The six acquisitions represented approximately $57.6 million
of sales reported by the Corporation in 1997. The excess of the purchase
price over the fair value of the acquired assets in the purchase acquisitions
was approximately $14.6 million and has been recorded as goodwill.
On December 28, 1997, the Corporation completed the creation of a joint
venture with Exemplar Manufacturing Company, a privately owned business based
in Ypsilanti, Michigan, to manufacture and sell power distribution, battery
cable and wiring systems to the U.S. automotive industry. In exchange for a
49% interest in the ownership of the joint venture, the Corporation
contributed net assets with a carrying value of approximately $41.0 million;
no gain or loss was recognized as a result of that transaction. The
joint-venture agreement provides that each venturer retains a 100% income
interest in earnings generated by its respective contributed business; income
from jointly developed business will be allocated in accordance with the
ownership percentages. Sales generated in 1997 by the assets contributed by
the Corporation to that joint venture were $85.9 million.
The Corporation completed six acquisitions during 1996, in addition to
Augat and Amerace, for a total of approximately $46.0 million, consisting of
cash and 57,714 shares of the Corporation's common stock. All were accounted
for using the purchase method of accounting, and represented approximately
$37.0 million of sales reported by the Corporation in 1996. The excesses of
the purchase prices over the fair values of the acquired assets in the above
acquisitions were approximately $26.0 million, recorded as goodwill.
In 1995, the Corporation completed five acquisitions for approximately
$48.0 million, consisting of cash and 657,810 shares of the Corporation's
common stock. Three acquisitions were accounted for using the purchase method
of accounting, and two acquisitions were accounted for as immaterial poolings
of interests without restating prior years' results. Businesses acquired in
1995 represented approximately $39.0 million of sales reported by the
Corporation in 1995.
On August 10, 1994, the Corporation completed the purchase of a minority
interest (29.1% of the outstanding common stock representing 23.55% of the
voting common stock) in Leviton Manufacturing Co., Inc., a leading U.S.
manufacturer of wiring devices, for approximately $51.0 million in cash and
common stock. Leviton's chief executive officer opposed the Corporation's
acquisition of the stock. The chief executive officer, with his wife, owns
approximately 50.5% of Leviton's outstanding common stock (76.45% of
Leviton's voting common stock) through a voting trust (a majority sufficient
for the approval of all corporate actions that Leviton might undertake;
however, the majority is not sufficient to permit either federal-income-tax
consolidation or pooling-of-interests accounting treatment in a merger). The
remainder of the outstanding common stock, all of which is non-voting, is
owned by approximately 19 other Leviton family members. The opposition of the
chief executive officer to the Corporation's investment has resulted in
litigation between Leviton and the Corporation, consisting of the
Corporation's proceeding in Delaware in February 1995 to compel Leviton to
make additional financial and other information available to the Corporation,
and of Leviton's subsequent action against the Corporation and other parties
in New York seeking damages and other relief in connection with the
transaction in which the Corporation acquired its Leviton investment. The
Corporation does not have and has not sought representation on Leviton's
board of directors, which would be opposed by Leviton's chief executive
officer, and does not receive copies of Leviton's board minutes.
Notwithstanding the existence of an adversarial relationship with the
controlling shareholder of Leviton, the Corporation has developed
relationships with certain key members of Leviton management and believes
that those relationships and other factors support management's conclusion
that the Corporation has the ability to exercise significant influence over
Leviton's financial and operating policies. The Corporation owns more than
20% of Leviton's voting stock, and there are no restrictions on the
Corporation's ability to exercise the attributes of ownership (situations
have not arisen to date in which the Corporation has had an opportunity to
vote its Leviton shares in a matter that would demonstrate significant
influence over Leviton's financial and operating policies). In addition,
because the Corporation is a non-family shareholder, the Corporation believes
that it has a greater ability than other shareholders to challenge actions by
Leviton management that the Corporation considers adverse to shareholders'
interests. Senior management responsible for Leviton's day-to-day operations
and operating and financial policies has engaged in an ongoing dialogue over
the past 20 months with the Corporation and has acknowledged that the
Corporation's presence as a Leviton shareholder has influenced the manner in
which Leviton conducts business. Further, Leviton has taken certain actions,
following discussions with the Corporation, which have been consistent with
the Corporation's requests and suggestions. The Corporation's equity in the
earnings of Leviton has been typically less than 5% and, of late, never more
than 7% of the Corporation's net income before special charges and typically
less than 7% and, of late, never more than 9% of the Corporation's net income
after special charges. Should the Corporation
28
<PAGE>
determine that it no longer has the ability to influence the operating
and financial policies of Leviton, the Corporation, in compliance with GAAP,
will adopt the cost method on a prospective basis.
4 RESTRUCTURING
During the fourth quarter of 1996, the Corporation recorded a restructuring
charge of $24.5 million relating to the integration of Augat and initiatives
affecting Augat's and other of the Corporation's operations. Restructuring
initiatives included the closure of Augat's corporate-headquarters facility
in Mansfield, Mass., and redundant non-U.S. administrative facilities, as
well as the rationalization of the combined sales forces and manufacturing
operations. With respect to that restructuring charge, the Corporation has
expended $14.6 million for cash severance and other employee-benefit costs
and $0.7 million for other non-cash losses through December 1997, with $3.3
million remaining for cash-related activities and $5.9 million remaining for
non-cash losses due to the disposal of property and equipment associated with
closed facilities. Those restructuring actions are expected to be completed
by the end of the third quarter of 1998.
In the fourth quarter of 1995, Augat recorded a restructuring charge of
$18.7 million for redundant or excess facilities and equipment being closed
or abandoned, inventory in low-margin product lines to be discontinued and
employee-severance and benefit costs.
Management believes that reserves established by the 1996 and 1995
restructuring charges are adequate for the purposes for which they were
established.
5 INCOME TAXES
The components of earnings before income taxes were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
In thousands 1997 1996 1995
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $179,192 $45,330 $ 83,875
Foreign 45,244 45,548 45,055
- ---------------------------------------------------------------------
Total $224,436 $90,878 $128,930
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
The components of income tax expense were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
In thousands 1997 1996 1995
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Current
Federal $32,892 $33,923 $14,250
Foreign 16,217 17,112 15,023
State and local 513 4,982 2,263
- ---------------------------------------------------------------------
Total current 49,622 56,017 31,536
- ---------------------------------------------------------------------
Deferred
Domestic 19,341 (23,682) 7,333
Foreign 612 (1,325) 1,559
- ---------------------------------------------------------------------
Total deferred 19,953 (25,007) 8,892
- ---------------------------------------------------------------------
Income taxes $69,575 $31,010 $40,428
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
The reconciliation between the federal statutory tax rate and the
Corporation's effective tax rate was as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
1997 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Federal statutory tax rate 35.0% 35.0% 35.0%
Increase (reduction) resulting from:
State tax -- net of federal tax
benefit 0.4 2.3 1.3
Partially tax-exempt income (6.3) (9.4) (4.8)
Goodwill 2.0 4.5 2.4
Merger expenses -- 5.6 --
Change in valuation allowance (1.9) (5.0) (1.4)
Other 1.8 1.1 (1.1)
- --------------------------------------------------------------------------
Effective tax rate 31.0% 34.1% 31.4%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
The components of the Corporation's net deferred tax asset were as
follows:
<TABLE>
<CAPTION>
DECEMBER 28, December 29,
In thousands 1997 1996
- --------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets
Special-charge-related reserves $ 16,596 $ 33,773
Accrued employee benefits 10,146 10,333
Other accruals 19,504 24,197
Asset reserves 14,845 10,289
Foreign tax-credit and loss
carryforwards 7,644 11,087
Pension benefits 6,569 7,470
Other 4,611 11,206
Valuation allowance (3,373) (10,825)
- --------------------------------------------------------------------------
Net deferred tax assets 76,542 97,530
- --------------------------------------------------------------------------
Deferred tax liabilities
Property, plant and equipment (36,885) (42,044)
Other (22,672) (18,548)
- --------------------------------------------------------------------------
Total deferred tax liabilities (59,557) (60,592)
- --------------------------------------------------------------------------
Net deferred tax asset $16,985 $36,938
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
The valuation allowance for deferred tax assets was decreased by $7.4
million in 1997, $4.3 million due to utilization and $3.1 million due to
expiration of foreign net operating-loss and foreign-tax credit
carryforwards. The remaining valuation allowance at December 28, 1997,
related to foreign net operating loss carryforwards.
6 FAIR VALUE OF FINANCIAL INSTRUMENTS
The Corporation's financial instruments include cash and cash equivalents,
marketable securities, short-term borrowings, long-term debt, commodity swaps
and foreign-currency contracts. The carrying amounts of those financial
instruments generally approximated their fair values at December 28, 1997,
and at December 29, 1996, except that, based on the borrowing rates currently
available to the Corporation, the fair value of long-term debt was
approximately $519.4 and $664.9 million at December 28, 1997, and at
December 29, 1996, respectively.
29
<PAGE>
The cost basis and fair market value of marketable securities at
December 28, 1997, and at December 29, 1996, were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Amortized Gross Gross Fair
Cost Unrealized Unrealized Market
In thousands Basis Gains Losses Value
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 28, 1997
Certificates of deposit $27,447 $ -- $ -- $27,447
Mortgage-backed 22,588 1,281 (213) 23,656
Equity and other 1,074 234 (29) 1,279
- -----------------------------------------------------------------------------
Total $51,109 $1,515 $(242) $52,382
- -----------------------------------------------------------------------------
December 29, 1996
Mortgage-backed $33,477 $1,442 $(583) $34,336
Equity and other 1,074 530 -- 1,604
- -----------------------------------------------------------------------------
Total $34,551 $1,972 $(583) $35,940
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
There were no sales of available-for-sale securities during the year.
The mortgage-backed securities held at December 28, 1997, have expected
maturities ranging from one to 22 years.
7 LONG-TERM DEBT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
- --------------------------------------------------------------------
DECEMBER 28, December 29,
In thousands 1997 1996
- --------------------------------------------------------------------
<S> <C> <C>
Revolving-credit facility $ -- $205,000
Notes payable with a weighted-
average interest rate at
December 28, 1997, of 7.3%,
due through 2006 273,478 353,821
Other bank borrowings with a
weighted-average interest rate at
December 28, 1997, of 5.70% 104,573 44,419
Commercial paper with a
weighted-average interest rate at
December 28, 1997, of 5.83% 79,907 --
Non-U.S. borrowings with a
weighted-average interest rate
of 4.03% at December 28, 1997,
due through 2002 20,352 25,094
Industrial revenue bonds with a
weighted-average interest rate
at December 28, 1997, of 3.93%,
due through 2010 19,855 23,900
Other 9,904 8,552
- --------------------------------------------------------------------
508,069 660,786
Less current portion 5,256 15,690
- --------------------------------------------------------------------
Long-term debt $502,813 $645,096
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
Principal payments on long-term debt, including capital leases in each
of the five years subsequent to December 28, 1997, are $5.3, $8.3, $189.9,
$12.0 and $15.5 million, respectively.
The Corporation has a revolving-credit facility with a group of banks
that provides for a commitment of $500.0 million through March 29, 2000. The
Corporation has the option, at the time of drawing funds under that facility,
of selecting an interest rate based on a number of benchmarks, including
LIBOR, the certificate of deposit rate and the prime rate of the agent bank.
The credit facility includes covenants, among which are limitations on the
amount of future indebtedness that are based on certain financial ratios.
Dividends are permitted to continue at the current rate per share and may be
increased, provided the annual payout does not exceed 50% of net earnings.
In June 1997, the Corporation initiated a commercial paper program,
which is backed by the $500.0-million revolving-credit facility. The
Corporation has a number of committed and uncommitted credit facilities to
provide funding for its international operations. In the normal course of its
business activities, the Corporation is required under certain contracts to
provide letters of credit that may be drawn upon in the event the Corporation
fails to perform under the contracts. Outstanding letters of credit, or
similar financial instruments, amounted to $49.9 million at December 28, 1997.
Credit facility and commercial paper borrowings are classified as
long-term based on the Corporation's ability and intent to refinance such
borrowings.
8 STOCK OPTION AND INCENTIVE PLANS
The Corporation has stock-incentive plans that provide for awards of stock
options and restricted stock to its key employees. At December 28, 1997, a
total of 2,491,911 shares was reserved for issuance under those plans.
The following is a summary of the option transactions for the years
1997, 1996 and 1995:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Average
Per Share
Shares Option Price
- ----------------------------------------------------------------------
<S> <C> <C>
Balance at January 1, 1995 2,319,516 $28.07
- ----------------------------------------------------------------------
Granted 660,128 27.08
Exercised (380,210) 23.26
Terminated (189,310) 29.66
- ----------------------------------------------------------------------
Balance at December 31, 1995 2,410,124 28.45
- ----------------------------------------------------------------------
Granted 375,063 37.36
Exercised (502,420) 23.90
Terminated (116,535) 31.85
- ----------------------------------------------------------------------
Balance at December 29, 1996 2,166,232 30.71
- ----------------------------------------------------------------------
Granted 545,237 45.70
Exercised (801,132) 27.11
Terminated (61,592) 35.87
- ----------------------------------------------------------------------
BALANCE AT DECEMBER 28, 1997 1,848,745 $36.53
- ----------------------------------------------------------------------
Exercisable at December 31, 1995 1,111,612 $27.48
Exercisable at December 29, 1996 1,536,214 $28.95
EXERCISABLE AT DECEMBER 28, 1997 1,074,759 $32.02
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
</TABLE>
30
<PAGE>
The following is a summary of options outstanding at December 28, 1997:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Options Outstanding Options Exercisable
--------------------------------------------------- --------------------------------
Range Weighted-Average
of Number Remaining Weighted-Average Number Weighted-Average
Exercise Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$18.49 - $32.38 677,702 4.8 years $30.08 614,377 $29.88
$32.65 - $38.59 633,494 6.7 $35.77 453,283 $34.77
$39.50 - $45.75 537,549 9.1 $45.55 7,099 $42.01
- ----------------------------------------------------------------------------------------------------------
$18.49 - $45.75 1,848,745 6.7 $38.53 1,074,759 $32.02
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The 1993 Management Stock Ownership Plan provides that, for each
calendar year, up to 1.25% of the outstanding common stock of the Corporation
will be available for issuance as grants or awards. That plan provides for
granting stock options at a price not less than the fair market value on the
date of grant with a term not to exceed 10 years. The plan also provides for
the issuance of restricted stock awards as incentive compensation to key
employees. The awards are subject to certain restrictions, including full
vesting if the recipient remains in the employ of the Corporation for three
years after receipt of the award. The value of the awards is recorded as
compensation expense. Restricted shares, plus cash payments for federal and
state taxes awarded under that plan, amounted to 127,641 shares awarded in
1997; 63,844 shares, plus $0.5 million, awarded in 1996; and 41,748 shares,
plus $0.6 million, awarded in 1995.
The Corporation has a restricted stock plan for nonemployee directors
under which each director receives 200 restricted shares of common stock
annually for a full year of service. Those shares remain restricted during
the director's tenure. Shares issued under that plan were 2,000 in 1997;
2,162 in 1996; and 1,850 in 1995.
The Corporation continues to account for its stock-based
employee-compensation plans in accordance with Accounting Principals Board
Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, no
compensation cost has been recognized for fixed stock-option plans. In
accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," a
valuation using the fair-value-based accounting method has been made for
stock options issued in 1997, 1996 and 1995. That valuation was performed
using the Black-Scholes option-pricing model.
The Corporation's 10-year term options were valued assuming risk-free
interest rates of 6.25%, 5.25% and 7.5% on their respective issuance dates in
1997, 1996 and 1995; a dividend yield of 2.5%; an average expected-option
life of five years; and volatility of 20%. The valuation determined a per
share weighted-average fair value for 10-year options granted during 1997,
1996 and 1995 of $10.36, $8.03 and $8.20, respectively. Had those options
been accounted for using the fair-value method, they would have resulted in
additional compensation cost of $2.4 million, $1.1 million and $0.6 million,
net of taxes for 1997, 1996 and 1995, respectively. Since the fair-value
method amortizes the estimated value of those options over their three-year
vesting period, the full pro-forma effect of the method is only evident in
1997.
The Corporation also has five-year term options outstanding that were
issued in exchange for outstanding options of Augat. Those options were
valued using an assumed risk-free interest rate of 5.4% on their original
issuance date in 1995, a dividend yield of 2.5%, an average expected-option
life of 2.5 years and volatility of 20%. The value of five-year options
issued in 1996 was not significant, and no options were granted subsequent to
1996. The valuation resulted in a per share weighted-average fair value for
those five-year options of $11.91. Under the fair-value method, the entire
value of those options would have been recorded as additional compensation
cost of $3.2 million net of taxes in 1996 due to accelerated vesting of those
options upon change of control of Augat.
Had the Corporation adopted the fair-value-based accounting method for
stock options effective January 2, 1995, net earnings would have been $152.3
million ($2.78 basic earnings per share; $2.76 diluted earnings per share) in
1997; $55.6 million ($1.05 basic earnings per share; $1.04 diluted earnings
per share) in 1996; and $87.9 million ($1.67 basic earnings per share; $1.66
diluted earnings per share) in 1995.
9 POSTRETIREMENT BENEFITS
PENSION PLANS
The Corporation and its subsidiaries have several noncontributory pension
plans covering most employees. Those plans generally provide pension benefits
that are based on compensation levels and
31
<PAGE>
years of service. Annual contributions to the plans are made according to the
established laws and regulations of the applicable countries. Plan assets are
primarily invested in equity securities, fixed-income securities and cash
equivalents.
Net periodic pension costs for 1997, 1996 and 1995 for the Corporation's
defined benefit pension plans included the following components:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
In thousands 1997 1996 1995
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Service cost -- benefits
earned during the period $ 8,279 $ 7,773 $ 6,344
Interest cost on projected
benefit obligation 14,657 13,110 11,670
Actual return on assets (23,341) (22,848) (18,308)
Net amortization and deferral 5,099 6,136 4,087
- ---------------------------------------------------------------------
Net periodic pension cost $ 4,694 $ 4,171 $ 3,793
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
Assumptions used in developing the net periodic pension costs were as
follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
U.S. Plans Non-U.S. Plans
----------------------------------------
1997 1996 1995 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------
Discount rate 7.8% 7.5% 7.9% 6.3% 7.2% 7.4%
Rate of increase in
compensation level 4.5% 4.5% 5.5% 4.2% 4.8% 5.0%
Expected long-term
rate of return
on plan assets 9.0% 9.0% 8.5% 7.7% 8.6% 8.5%
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
Rates are weighted averages.
The following table sets forth the funded status of the Corporation's
defined benefit plans and amounts recognized in the Corporation's balance
sheet:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
DECEMBER 28, December 29,
1997 1996
- ---------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of
projected benefits based on
employment service to date
and present pay levels:
Vested employees $197,160 $162,557
Non-vested employees 6,853 5,372
- ---------------------------------------------------------------------
Accumulated benefit
obligation 204,013 167,929
Additional amounts related
to projected pay increases 16,832 12,061
- ---------------------------------------------------------------------
Projected benefit obligation 220,845 179,990
Plan assets at fair value 210,832 192,849
- ---------------------------------------------------------------------
Plan assets in excess of (less than)
projected benefit obligation (10,013) 12,859
Unrecognized transition assets (4,818) (6,407)
Unrecognized net (gain) loss 7,024 (11,461)
Unrecognized prior service cost 1,873 2,338
- ---------------------------------------------------------------------
Accrued pension cost $ (5,934) $ (2,671)
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
The present value of projected benefits for U.S. plans recorded at
December 28, 1997, and at December 29, 1996, was determined using discount
rates of 7.25% and 7.75%, respectively, and an assumed rate of increase in
compensation of 4.5% for both years.
The Corporation maintains certain other non-U.S. pension plans. Pension
expense related to those non-U.S. plans in 1997, 1996 and 1995 was $2.0, $1.5
and $0.9 million, respectively.
The Corporation maintains a non-qualified supplemental pension plan
covering certain key executives, which provides for benefit payments that
exceed the limit for deductibility imposed by income tax regulations, and a
retirement plan for non-employee directors (closed effective December 1997),
which provides benefits based on compensation and years of service. The
projected benefit obligation relating to those unfunded plans was $12.3
million at December 28, 1997, and $18.5 million at December 29, 1996. Pension
expense for those plans was $2.2, $10.7 and $2.4 million in 1997, 1996 and
1995, respectively. The 1996 pension expense includes $7.9 million for early
retirement of certain executives.
OTHER POSTRETIREMENT BENEFIT PLANS
The Corporation sponsors defined contribution 401(k) savings plans for its
U.S. employees not represented by a labor organization for which the
Corporation's contributions are based on a percentage of employee
contributions. The cost of those plans was $5.0, $4.5 and $3.5 million in
1997, 1996 and 1995, respectively.
The Corporation provides certain health-care and life-insurance benefits
to certain retired employees and certain active employees who meet age and
length-of-service requirements. The Corporation is recognizing the estimated
liability for those benefits over the estimated lives of the individuals
covered. The Corporation is not funding that liability. The Plan has been
closed to new entrants.
32
<PAGE>
The net periodic cost for postretirement health-care and life-insurance
benefits in 1997, 1996 and 1995 included the following components:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
In thousands 1997 1996 1995
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Service cost -- benefits earned
during the period $ 37 $ 89 $ 108
Interest cost on accumulated
benefits 1,888 2,430 1,377
Net amortization (1,111) 829 590
- ---------------------------------------------------------------------
Net periodic postretirement cost $ 814 $3,348 $2,075
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
The following table shows the Corporation's accumulated postretirement
benefit obligations and the amounts recognized in the Corporation's balance
sheet:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
DECEMBER 28, December 29,
In thousands 1997 1996
- ---------------------------------------------------------------------
<S> <C> <C>
Retirees $ 24,885 $ 30,332
Fully eligible active participants 587 624
Other active participants 861 1,775
- ---------------------------------------------------------------------
Total accumulated postretirement
benefit obligation 26,333 32,731
- ---------------------------------------------------------------------
Unrecognized transition liability (14,918) (15,927)
Unrecognized net gain 7,478 4,643
Unrecognized prior-service cost (121) (162)
- ---------------------------------------------------------------------
Accrued postretirement
benefit $ 18,772 $ 21,285
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% in 1997 and 7.5% in 1996. An
increase in the cost of covered health-care benefits of 8.9% was assumed for
1998 and was graded down annually to 5.5% for 2005 and future years. A 1%
increase in the health-care-cost trend rate would increase the accumulated
postretirement benefit obligation by $1.4 million at December 28, 1997, and
the net periodic cost by $0.1 million for the year then ended.
10 COMMITMENTS
The Corporation and its subsidiaries are parties to various leases relating
to plants, distribution facilities, office facilities, automobiles and other
equipment. Related real estate taxes and insurance and maintenance expenses
are normally obligations of the Corporation. It is expected that in the
normal course of business, the majority of the leases will be renewed or
replaced by other leases. Capitalized leases are not significant.
Future minimum payments under noncancelable operating leases consisted
of the following at December 28, 1997:
<TABLE>
<CAPTION>
- ----------------------------------------------------
- ----------------------------------------------------
Future Minimum
In thousands Payments
- ----------------------------------------------------
<S> <C>
1998 $ 27,780
1999 15,339
2000 12,190
2001 10,315
2002 9,052
Thereafter 48,747
- ----------------------------------------------------
Total minimum operating
lease payments $123,423
- ----------------------------------------------------
- ----------------------------------------------------
</TABLE>
Rent expense for operating leases was $34.8, $34.2 and $32.3 million in
1997, 1996 and 1995, respectively.
11 OTHER FINANCIAL DATA
Other expense -- net consisted of the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
- --------------------------------------------------------------------
In thousands 1997 1996 1995
- --------------------------------------------------------------------
<S> <C> <C> <C>
Investment income $ 7,246 $ 8,716 $ 7,197
Interest expense (51,623) (48,689) (31,775)
Index put options -- (5,452) --
Income from equity
investees 13,909 7,920 2,149
Foreign currency losses (3,759) (2,065) (100)
Foreign-exchange contract
gains (losses) 2,071 1,077 (658)
Other (2,526) (1,008) (1,830)
- --------------------------------------------------------------------
Other expense -- net $(34,682) $(39,501) $(25,017)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
Interest-rate swaps increased interest expense by $0.1 million in 1997
and 1996, while reducing interest expense by $0.2 million in 1995.
The Corporation expenses the cost of advertising as it is incurred.
Total advertising expense was $21.9 million in 1997, $18.0 million in 1996,
and $17.3 million in 1995.
Accrued liabilities, including salaries, fringe benefits and other
compensation, amounted to $47.7 and $37.4 million in 1997 and 1996,
respectively.
Inventories consisted of the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
DECEMBER 28, December 29,
In thousands 1997 1996
- ---------------------------------------------------------------------
<S> <C> <C>
Finished goods $157,095 $153,067
Work in process 66,726 64,979
Raw materials 150,156 145,260
- ---------------------------------------------------------------------
Total inventories $373,977 $363,306
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
33
<PAGE>
12 BUSINESS SEGMENTS
The Corporation operates in three business segments: Electrical Construction
and Maintenance Components (Electrical), Electronic/OEM Components
(Electronic), and Other Products and Components (Other). Net sales are
comprised of sales to unaffiliated customers. Segment earnings from
operations consist of net sales less the cost of sales and operating
expenses. General corporate expenses have not been allocated to segments.
General corporate assets not allocated to segments are principally cash and
investments.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
In thousands 1997 1996(a)(b) 1995(a)(b)
- ----------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES
Electrical $ 764,161 $ 643,376 $ 573,580
Electronic 893,904 903,942 834,123
Other 456,653 437,827 325,665
- ----------------------------------------------------------------------
Total $2,114,718 $1,985,145 $1,733,368
- ----------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Electrical $ 131,303 $ 104,556 $ 90,541
Electronic 109,205 32,061 68,309
Other 50,454 51,452 35,734
General Corporate (31,844) (57,690) (40,637)
- ----------------------------------------------------------------------
Total $ 259,118 $ 130,379 $ 153,947
- ----------------------------------------------------------------------
IDENTIFIABLE ASSETS
Electrical $ 563,414 $ 546,723 $ 516,171
Electronic 702,994 728,621 615,086
Other 521,881 577,236 331,356
General Corporate 250,386 278,657 204,245
- ----------------------------------------------------------------------
Total $2,038,675 $2,131,237 $1,666,858
- ----------------------------------------------------------------------
CAPITAL EXPENDITURES
Electrical $ 47,538 $ 32,164 $ 55,762
Electronic 44,454 60,553 59,747
Other 22,313 14,837 15,727
General Corporate 2,414 253 206
- ----------------------------------------------------------------------
Total $ 116,719 $ 107,807 $ 131,442
- ----------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Electrical $ 33,152 $ 28,728 $ 26,401
Electronic 39,113 40,868 36,961
Other 22,388 21,804 12,919
General Corporate 671 181 214
- ----------------------------------------------------------------------
Total $ 95,324 $ 91,581 $ 76,495
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
</TABLE>
- ------------------------------
(a) 1996 included special charges of $1.5 million in Electrical, $67.1
million in Electronic, $3.5 million in Other and $18.9 million in General
Corporate. 1995 included special charges of $23.0 million in Electronic.
See Notes 3 and 4.
(b) Certain prior-year amounts have been reclassified to conform to the
current-year presentation.
13 FINANCIAL INFORMATION RELATING TO OPERATIONS
IN DIFFERENT GEOGRAPHIC AREAS
The Corporation operates in three principal areas: U.S., Europe and
other locations (primarily Canada, Mexico and the Far East). Transfers
between geographic areas were priced on a basis that yielded an appropriate
rate of return based on assets employed, risk and other factors.
General corporate expenses have not been allocated to geographic areas.
General corporate assets not allocated to geographic areas are
principally cash and investments.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
In thousands 1997 1996(a) 1995(a)
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
SALES TO UNAFFILIATED CUSTOMERS
U.S. $1,621,946 $1,504,210 $1,306,458
Europe 204,238 201,853 202,153
Other 288,534 279,082 224,757
- -----------------------------------------------------------------------------
Total $2,114,718 $1,985,145 $1,733,368
- -----------------------------------------------------------------------------
SALES OR TRANSFERS BETWEEN
GEOGRAPHIC AREAS
U.S. $ 115,251 $ 101,272 $ 87,425
Europe 8,825 12,787 15,432
Other 60,564 49,452 32,198
- -----------------------------------------------------------------------------
Total $ 184,640 $ 163,511 $ 135,055
- -----------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES
U.S. $ 218,333 $ 125,517 $ 131,209
Europe 20,974 23,052 27,658
Other 46,820 39,700 35,717
General Corporate (27,009) (57,890) (40,637)
- -----------------------------------------------------------------------------
Earnings from
operations 259,118 130,379 153,947
Other expense -- net (34,682) (39,501) (25,017)
- -----------------------------------------------------------------------------
Total $ 224,436 $ 90,878 $ 128,930
- -----------------------------------------------------------------------------
IDENTIFIABLE ASSETS
U.S. $1,265,174 $1,397,562 $1,088,188
Europe 167,607 209,066 160,732
Other 278,838 230,963 200,980
General Corporate 328,328 294,912 221,551
Adjustments and
eliminations (1,272) (1,266) (4,593)
- -----------------------------------------------------------------------------
Total $2,038,675 $2,131,237 $1,666,858
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
(a) 1996 included charges of $61.9 million in U.S., $6.7 million in
Europe, $3.5 million in Other, $18.9 million in General Corporate and $6.1
million in Other expense. 1995 included charges of $19.9 million in U.S.,
$1.0 million in Europe and $2.1 million in Other.
See Notes 3 and 4.
34
<PAGE>
COMPANY REPORT ON FINANCIAL STATEMENTS
TO THE SHAREHOLDERS OF
THOMAS & BETTS CORPORATION:
The accompanying financial statements, as well as all financial data in this
annual report, have been prepared by the Corporation in accordance with
generally accepted accounting principles consistently applied. As such, they
include certain amounts that are based on the Corporation's estimates and
judgments. The Corporation has systems of internal control that are designed
to provide reasonable assurance that the financial records are reliable for
preparing financial statements and maintaining accountability for assets, and
that assets are safeguarded against loss from unauthorized use or
disposition. Those systems are augmented by the positive attitude of
management in maintaining a sound control environment, communication of
established written policies and procedures, the maintenance of a qualified
internal auditing group, the selection and training of qualified personnel
and an organizational structure that provides appropriate delegation of
authority, segregation of duties and regular review of financial performance
by management. To complement the systems of internal control, additional
safeguards are provided by the independent auditors and the Audit Committee
of the Board of Directors. The independent auditors, whose report is set
forth opposite, perform an objective, independent audit of the Corporation's
financial statements taken as a whole. The Audit Committee, composed entirely
of outside directors, meets periodically with the independent auditors,
director of internal audit and members of management to review matters
relating to the quality of financial reporting and internal-accounting
control and the nature, extent and results of audit efforts.
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
THOMAS & BETTS CORPORATION:
We have audited the accompanying consolidated balance sheets of Thomas &
Betts Corporation and subsidiaries as of December 28, 1997 and December 29,
1996, and the related consolidated statements of earnings, cash flows, and
shareholders' equity for each of the years in the three-year period ended
December 28, 1997. These consolidated financial statements are the
responsibility of the Corporation's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits. We did not audit the financial statements of Augat Inc. (a wholly
owned subsidiary) as of December 29, 1996 and for each of the years in the
two year period then ended, which statements reflect total assets
constituting 20 percent as of December 29, 1996 and total revenues
constituting 29 percent and 31 percent for each of the years in the two-year
period ended December 29, 1996, respectively, of the related consolidated
totals. Those statements were audited by other auditors whose unqualified
report, dated February 6, 1997, has been furnished to us, and our opinion,
insofar as it relates to the amounts included for Augat Inc., is based solely
on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report
of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other
auditors, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Thomas & Betts
Corporation and subsidiaries at December 28, 1997 and December 29, 1996 and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 28, 1997, in conformity with generally
accepted accounting principles.
KPMG PEAT MARWICK LLP
Memphis, Tennessee
February 5, 1998
35
<PAGE>
QUARTERLY REVIEW
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
- --------------------------------------------------------- -------------- ------------
- --------------------------------------------------------- -------------- ------------
In thousands
(except per share data) 1997 1996(a) 1995(b)
- --------------------------------------------------------- -------------- ------------
<S> <C> <C> <C>
FIRST QUARTER
Net sales.................................$ 515,919 $ 486,733 $ 435,062
Gross profit.............................. 159,021 143,298 125,050
Net earnings.............................. 30,334 26,080 22,788
Earnings per common share
Basic................................. .56 .49 .44
Diluted............................... .56 .49 .43
Cash dividends declared per share......... .28 .28 .28
Market price range........................$ 471/2-421/2 $391/2-3515/16 $343/8-323/8
SECOND QUARTER
Net sales.................................$ 545,847 $ 499,780 $ 428,707
Gross profit.............................. 172,064 151,276 130,061
Net earnings.............................. 38,344 30,965 26,419
Earnings per common share
Basic................................. .70 .58 .50
Diluted............................... .69 .58 .50
Cash dividends declared per share......... .28 .28 .28
Market price range........................$ 553/8-41 $ 401/4-37 $341/4-313/8
THIRD QUARTER
Net sales.................................$ 520,395 $ 497,046 $ 430,165
Gross profit.............................. 165,266 150,894 126,954
Net earnings.............................. 40,253 33,622 25,473
Earnings per common share
Basic................................. .73 .63 .49
Diluted .............................. .73 .63 .48
Cash dividends declared per share......... .28 .28 .28
Market price range........................$ 5811/16-519/16 $ 391/2-343/4 $351/8-321/4
FOURTH QUARTER
Net sales.................................$ 532,557 $ 501,586 $ 439,434
Gross profit.............................. 178,063 141,646 129,840
Net earnings (loss)....................... 45,930 (30,799) 13,822
Earnings (loss) per common share
Basic................................. .84 (.57) .26
Diluted............................... .83 (.57) .26
Cash dividends declared per share......... .28 .28 .28
Market price range........................$5513/16-4315/16 $ 457/8-377/8 $375/8-311/4
- --------------------------------------------------------- -------------- ------------
- --------------------------------------------------------- -------------- ------------
</TABLE>
Restated to include the results of Augat Inc., acquired December 11, 1996,
and accounted for as a pooling of interests. Includes the results of Amerace
Corporation from January 2, 1996. Basic per share amounts are based on
average shares outstanding in each quarter. Diluted per share amounts also
reflect potential dilution from stock options.
(a) 1996 included special charges of $97.1 million pretax ($1.23 basic and
$1.22 diluted per share).
(b) 1995 included special charges of $23.0 million pretax ($0.29 basic and
diluted per share).
36
<PAGE>
SIX-YEAR SUMMARY OF SELECTED FINANCIAL DATA
THOMAS & BETTS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
Dollars and shares in thousands
(except per share data) 1997 1996 1995 1994 1993 1992
- ------------------------------------------------------- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONAL DATA
Net sales.................................. $ 2,114,718 $ 1,985,145 $ 1,733,368 $ 1,573,602 $1,349,446 $ 1,273,080
----------- ---------------------------------------------------------------------
Costs and expenses
Cost of sales.......................... 1,440,303 1,398,031 1,221,463 1,118,224 945,102 880,326
Marketing, general and administrative.. 346,046 339,124 283,861 255,073 239,231 227,027
Research and development............... 51,896 47,229 44,083 40,543 37,176 36,346
Amortization of intangibles............ 17,355 15,323 11,314 12,345 13,072 14,760
Merger expense......................... -- 30,558 -- -- -- --
Provision for restructured operations.. -- 24,501 18,700 79,011 -- 15,000
----------- ---------------------------------------------------------------------
1,855,600 1,854,766 1,579,421 1,505,196 1,234,581 1,173,459
----------- ---------------------------------------------------------------------
Earnings from operations................... 259,118 130,379 153,947 68,406 114,865 99,621
Other expense--net......................... (34,682) (39,501) (25,071) (28,212) (31,323) (36,883)
Earnings from continuing operations
before income taxes.................... 224,436 90,878 128,930 40,194 83,542 62,738
Income taxes............................... 69,575 31,010 40,428 12,107 24,353 15,572
----------- ---------------------------------------------------------------------
Earnings from continuing operations
before cumulative effect of change
in accounting for income taxes......... 154,861 59,868 88,502 28,087 59,189 47,166
----------- ---------------------------------------------------------------------
Net earnings(a)............................ $ 154,861 $ 59,868 $ 88,502 $ 94,020 $ 72,139 $ 57,509
----------- ---------------------------------------------------------------------
Net return on sales........................ 7.3% 3.0% 5.1% 6.0% 5.3% 4.5%
Return on average shareholders' equity..... 16.8% 7.0% 10.8% 12.8% 10.9% 9.7%
FINANCIAL POSITION (AT YEAR-END)
Current assets............................. $ 796,150 $ 957,051 $ 750,386 $ 732,453 $ 665,599 $ 621,104
Current liabilities ....................... $ 439,808 $ 491,900 $ 402,874 $ 353,987 $ 263,045 $ 249,426
Working capital ........................... $ 356,342 $ 465,151 $ 347,512 $ 378,466 $ 402,554 $ 371,678
Current ratio ............................. 1.8 to 1 1.9 to 1 1.9 to 1 2.1 to 1 2.5 to 1 2.5 to 1
Property, plant and equipment-net.......... $ 569,762 $ 539,944 $ 472,833 $ 396,364 $ 396,003 $ 394,400
Long-term debt............................. $ 502,813 $ 645,096 $ 353,666 $ 354,552 $ 439,299 $ 477,284
Shareholders' equity ...................... $ 977,381 $ 868,382 $ 850,312 $ 790,564 $ 682,443 $ 644,543
Total assets............................... $ 2,038,675 $ 2,131,237 $ 1,666,858 $ 1,566,170 $1,451,042 $ 1,412,511
COMMON STOCK DATA
Average shares outstanding:
Basic.................................. 54,717 53,059 52,494 50,862 49,616 49,110
Diluted................................ 55,090 53,512 52,722 51,160 50,027 49,732
Cash dividends declared ................... $ 60,971 $ 48,412 $ 47,380 $ 44,958 $ 42,220 $ 41,948
Percent of net earnings................ 39% 81% 54% 48% 59% 73%
Per share
Earnings from continuing operations
Basic .............................. $ 2.83 $ 1.13 $ 1.69 $ 0.55 $ 1.19 $ 0.96
Diluted ............................ $ 2.81 $ 1.12 $ 1.68 $ 0.55 $ 1.18 $ 0.95
Net earnings
Basic .............................. $ 2.83 $ 1.13 $ 1.69 $ 1.85 $ 1.45 $ 1.17
Diluted ............................ $ 2.81 $ 1.12 $ 1.68 $ 1.84 $ 1.44 $ 1.16
Cash dividends declared ............... $ 1.12 $ 1.12 $ 1.12 $ 1.12 $ 1.12 $ 1.12
Shareholders' equity .................. $ 17.77 $ 16.29 $ 16.15 $ 15.33 $ 13.69 $ 13.09
Market price range..................... $5811/16-41 $457/8-343/4 $375/8-311/4 $355/8-291/8 $ 36-281/2 $341/2-273/8
OTHER DATA
Capital expenditures ...................... $ 116,719 $ 107,807 $ 131,442 $ 98,358 $ 58,932 $ 61,929
Depreciation............................... $ 77,969 $ 76,258 $ 65,181 $ 63,674 $ 60,592 $ 56,011
Employees at year-end...................... 16,400 14,700 12,600 11,800 12,300 11,500
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
Restated to include the results of Augat Inc., acquired December 11, 1996,
and accounted for as a pooling of interests. Includes the results of Amerace
Corporation from January 2, 1996, and American Electric from January 2, 1992.
(a) Net earnings for 1996 included special charges of $97.1 million pretax
($1.23 basic and $1.22 diluted per share). Net earnings for 1995 included
special charges of $23.0 million pretax ($0.29 basic and diluted per share).
Net earnings in 1994, 1993 and 1992 included after-tax earnings from
discontinued operations (Vitramon, Inc.), of $7.4 million, $11.3 million
and $10.3 million, respectively. Net earnings in 1994 also included a
pretax gain from the sale of Vitramon of $99.1 million, a pretax
restructuring charge of $79.0 million and a pretax operating write-down of
$10.6 million for previously vacated facilities. Those items offset each
other on an after-tax basis. Net earnings in 1993 also included a positive
impact from a cumulative effect of change in accounting for income taxes of
$1.6 million ($0.03 basic and diluted per share).
37
<PAGE>
DIRECTORS
ERNEST H. DREW
FORMER CHIEF EXECUTIVE OFFICER,
INDUSTRIES AND TECHNOLOGY GROUP,
WESTINGHOUSE ELECTRIC CORPORATION
DIRECTOR SINCE 1989(2)(3)
T. KEVIN DUNNIGAN
CHAIRMAN OF THE BOARD
OF THE CORPORATION
DIRECTOR SINCE 1975(2)(3)
JEANANNE K. HAUSWALD
FORMER VICE PRESIDENT AND TREASURER,
THE SEAGRAM COMPANY LTD.
DIRECTOR SINCE 1993(4)
THOMAS W. JONES
VICE CHAIRMAN, TRAVELERS GROUP, INC.,
AND CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
SMITH BARNEY ASSET MANAGEMENT DIVISION OF
TRAVELERS GROUP, INC. (FINANCIAL SERVICES)
DIRECTOR SINCE 1992(1)
ROBERT A. KENKEL
FORMER CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND
CHIEF OPERATING OFFICER,
THE PULLMAN CO.
DIRECTOR SINCE 1994(3)(4)
JOHN N. LEMASTERS
FORMER CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER, AUGAT INC.
DIRECTOR SINCE 1996(4)
(1)AUDIT COMMITTEE
(2)CORPORATE GOVERNANCE COMMITTEE
(3)EXECUTIVE COMMITTEE
(4)HUMAN RESOURCES COMMITTEE
KENNETH R. MASTERSON
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY, FDX CORPORATION
(TRANSPORTATION SERVICES)
DIRECTOR SINCE 1995(2)
THOMAS C. MCDERMOTT
PROPRIETOR, FORBES PRODUCTS, L.L.C.
(CUSTOM VINYL BUSINESS PRODUCTS)
DIRECTOR SINCE 1996(1)
CLYDE R. MOORE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OF THE CORPORATION
DIRECTOR SINCE 1993(2)(3)
JEAN-PAUL RICHARD
PRIVATE INVESTOR; FORMER PRESIDENT AND
CHIEF EXECUTIVE OFFICER, AGCO CORPORATION
DIRECTOR SINCE 1996(1)
IAN M. ROSS
PRESIDENT EMERITUS,
AT&T BELL LABORATORIES
DIRECTOR SINCE 1980(1)
WILLIAM H. WALTRIP
CHAIRMAN OF THE BOARD, BAUSCH & LOMB
INCORPORATED (OPTICAL PRODUCTS), AND
CHAIRMAN OF THE BOARD, TECHNOLOGY
SOLUTIONS COMPANY (COMPUTER TECHNOLOGY
SERVICES) DIRECTOR SINCE 1983(3)(4)
OFFICERS
CLYDE R. MOORE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
T. ROY BURTON
PRESIDENT -- ELECTRONICS/OEM GROUP
GREGORY M. LANGSTON
GROUP PRESIDENT -- INTERNATIONAL
W. NEIL PARKER
PRESIDENT -- ELECTRICAL COMPONENTS GROUP
JOHN R. JANULIS
VICE PRESIDENT -- CONTROLLER
FRED R. JONES
VICE PRESIDENT -- FINANCE AND TREASURER
JERRY KRONENBERG
VICE PRESIDENT -- GENERAL COUNSEL
DAVID D. MYLER
VICE PRESIDENT -- ADMINISTRATION
GARY R. STEVENSON
VICE PRESIDENT -- OPERATIONS
JANICE H. WAY
CORPORATE SECRETARY
38
<PAGE>
CORPORATE INFORMATION
ANNUAL MEETING
The annual meeting of shareholders will be held on Wednesday, May 6, 1998, at
10:00 a.m. at the Winegardner Auditorium, The Dixon Gallery and Gardens, 4339
Park Avenue, Memphis, Tennessee.
ANNUAL REPORT ON FORM 10-K
A copy of the Corporation's Annual Report on Form 10-K (excluding exhibits),
filed with the Securities and Exchange Commission, is available free of
charge by writing to Renee Johansen, Director - Investor Relations, at
Corporate Headquarters. Our Form 10-K, and other documents filed
electronically with the SEC, may be accessed from our website at www.tnb.com.
TRANSFER AGENT, REGISTRAR, AND DIVIDEND DISBURSING AGENT
First Chicago Trust Company of New York
P.O. Box 2534, Suite 4692
Jersey City, New Jersey 07303-2534
Fax (201) 222-4129
Telephone Response Center (800) 446-2617
(24 hours a day, 7 days a week)
Fax (201) 222-4892. TDD Service (201) 222-4955
Correspondence concerning change of address, dividends, lost stock
certificates and stock transfer requirements should be directed to the
address above. Inquiries regarding the Dividend Reinvestment Plan should be
directed to the address below.
DIVIDEND REINVESTMENT PLAN
First Chicago Trust Company of New York
Dividend Reinvestment Plan
P.O. Box 2598
Jersey City, New Jersey 07303-2598
Internet address: www.fctc.com
LISTED NEW YORK STOCK EXCHANGE
Trading symbol: TNB
CORPORATE HEADQUARTERS
Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
(901) 252-8000
INVESTOR INQUIRIES
Inquiries should be directed to the Investor Relations Department at
Corporate Headquarters. Investor information is also available on our website.
VISIT US ON THE WORLD WIDE WEB AT WWW.TNB.COM FOR INVESTOR INFORMATION,
TECHNICAL PRODUCT BACKGROUND OR A GENERAL OVERVIEW OF THOMAS & BETTS.
This entire report is printed on recycled paper.
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
Place of Incorporation
Name Or Organization
------ -------------------------
Thomas & Betts Corporation Tennessee
DCP Holding Corp. Delaware
Diamond Communication Products, Inc. Delaware
Electroline Manufacturing Company Ohio
FL Amelec, Inc. Texas
American Electric de Mexico, S.A. de C.V. Mexico
Thomas & Betts Monterrey S.A. de C.V. Mexico
Thomas & Betts Export, Inc. Barbados
Thomas & Betts International, Inc. Delaware
Amerace Corporation Delaware
Augat Inc. Massachusetts
Augat Communication Products Inc. Washington
Augat Europe, Inc. Delaware
Augat Pty. Limited Australia
Augat Realty, Inc. Massachusetts
Augat, SA de CV Mexico
Augat Wiring Systems Inc. Alabama
Elastomeric Technologies Inc. Pennsylvania
LRC Electronics, Inc. New York
Dutch L.P., Inc. Delaware
Thomas & Betts A Ltd. Israel
Thomas & Betts Asia Investments Japan
Thomas & Betts Caribe, Inc. Delaware
Thomas & Betts Europe, Inc. Delaware
Thomas & Betts Europe C.V. The Netherlands
Thomas & Betts Netherlands B.V. The Netherlands
Augat A.G. Switzerland
Augat GmbH Germany
Augat Components GmbH Germany
Reznor Lufttechnik GmbH Germany
Thomas & Betts GmbH Germany
Augat Mfg. SA Switzerland
Augat Srl Italy
Reznor Europe N.V. Belgium
Thomas & Betts AB Sweden
Thomas & Betts Benelux B.V.B.A. Belgium
Thomas & Betts Euro Distribution S.A. Belgium
Thomas & Betts Euro Service Centre B.V.B.A. Belgium
EX-21-1
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT (continued)
Place of Incorporation
Name Or Organization
Thomas & Betts European Centre B.V.B.A. Belgium
Thomas & Betts France France
Augat S.A. France
Thomas & Betts Holdings (U.K.) Limited United Kingdom
Augat Limited United Kingdom
Augat AB Sweden
Reznor Limited United Kingdom
Thomas & Betts Limited United Kingdom
Thomas & Betts Hungary Kft. Hungary
Thomas & Betts (Luxembourg) S.A. Luxembourg
Thomas & Betts S.p.A. Italy
Thomas & Betts Hong Kong, Limited Hong Kong
Thomas & Betts Investments Ltd. Canada
Thomas & Betts Japan, Ltd. Japan
Thomas & Betts (Malaysia) Sdn. Bhd. Malaysia
Thomas y Betts de Mexico S. de R.L. de C.V. Mexico
Thomas & Betts Pty. Limited Australia
Thomas & Betts (S.E. Asia) Pte Ltd. Singapore
Augat Pte Limited Singapore
Thomas & Betts, Limited Canada
T&B Commander Electrical Materials Inc. Canada
Thomas & Betts (Ontario) Ltd. Canada
Thomas & Betts-Photon Systems Inc. Canada
Thomas & Betts Puerto Rico Corporation Delaware
All subsidiaries are included in the consolidated financial statements.
EX-21-2
<PAGE>
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Shareholders and Board of Directors
Thomas & Betts Corporation:
We consent to incorporation by reference in the Registration Statements (No.
33-1403, No. 33-35297, No. 33-56789 and No. 33-68370) on Form S-8, in the
Registration Statements (No. 33-44153 and No. 333-34567) on Form S-3 and in
the Registration Statements (No. 33-15729 and No. 333-893) on Form S-4 of
Thomas & Betts Corporation of our report dated February 5, 1998, relating to
the consolidated balance sheets of Thomas & Betts Corporation and
subsidiaries as of December 28, 1997 and December 29, 1996 and the related
consolidated statements of earnings, cash flows and shareholders' equity for
each of the years in the three-year period ended December 28, 1997, which
report appears or is incorporated by reference in the December 28, 1997
annual report on Form 10-K of Thomas & Betts Corporation. Our report
contains a reference to our reliance on the report of other auditors who
performed the audit of Augat Inc., a wholly owned subsidiary, as of December
29, 1996 and for each of the years in the two-year period then ended.
KPMG Peat Marwick LLP
Memphis, Tennessee
March 12, 1998
EX-23.1
<PAGE>
EXHIBIT 23.2
ACCOUNTANTS' CONSENT
The Shareholders and Board of Directors
Thomas & Betts Corporation:
We consent to incorporation by reference in the Registration Statement Nos.
33-1403, 33-35297, 33-56789 and 33-68370 of Thomas & Betts Corporation on
Form S-8, Registration Statement Nos. 33-44153 and 333-34567 of Thomas &
Betts Corporation on Form S-3 and Registration Statement Nos. 33-14950,
333-893, and 333-15729 of Thomas & Betts Corporation on Form S-4 of our report
dated February 6, 1997 (relating to the consolidated financial statements of
Augat Inc. {a subsidiary of Thomas & Betts Corporation since December 11,
1996} and subsidiaries, not presented separately herein) appearing as Exhibit
99 in the Annual Report on Form 10-K of Thomas & Betts Corporation for the
year ended December 28, 1997.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 12, 1998
EX-23.2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Clyde R. Moore, Jerry Kronenberg, Fred
R. Jones, and each of them, his or her true and lawful attorney and agent,
with full power of substitution and resubstitution, for him or her and in his
or her name, to sign the Annual Report on Form 10-K of Thomas & Betts
Corporation for the year 1997, and any and all amendments and exhibits
thereto, and to file the same and any other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act necessary to be done as fully to all intents and purposes as he
or she could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ CLYDE R. MOORE President, Chief Executive March 4, 1997
Clyde R. Moore Officer and Director
/s/ FRED R. JONES Vice President-Finance and March 4, 1997
Fred R. Jones Treasurer
/s/ JERRY KRONENBERG Vice President-General Counsel March 4, 1997
Jerry Kronenberg
/s/ T. KEVIN DUNNIGAN Chairman of the Board March 4, 1997
T. Kevin Dunnigan
_____________________ Director
Ernest H. Drew
/s/ JEANANNE K. HAUSWALD Director March 4, 1997
Jeananne K. Hauswald
_____________________ Director
Thomas W. Jones
<PAGE>
/s/ ROBERT A. KENKEL Director March 4, 1997
Robert A. Kenkel
/s/ JOHN N. LEMASTERS Director March 4, 1997
John N. Lemasters
_____________________ Director
Kenneth R. Masterson
_____________________ Director
Thomas C. McDermott
/s/ JEAN-PAUL RICHARD Director March 4, 1997
Jean-Paul Richard
/s/ IAN M. ROSS Director March 4, 1997
Ian M. Ross
/s/ WILLIAM H. WALTRIP Director March 4, 1997
William H. Waltrip
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> DEC-28-1997
<CASH> 43,872
<SECURITIES> 52,382
<RECEIVABLES> 304,598
<ALLOWANCES> (31,032)
<INVENTORY> 373,977
<CURRENT-ASSETS> 796,150
<PP&E> 1,074,591
<DEPRECIATION> (504,829)
<TOTAL-ASSETS> 2,038,675
<CURRENT-LIABILITIES> 439,808
<BONDS> 502,813
0
0
<COMMON> 316,922
<OTHER-SE> 660,459
<TOTAL-LIABILITY-AND-EQUITY> 2,038,675
<SALES> 2,114,718
<TOTAL-REVENUES> 2,114,718
<CGS> 1,440,303
<TOTAL-COSTS> 415,297
<OTHER-EXPENSES> (16,942)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,623
<INCOME-PRETAX> 224,436
<INCOME-TAX> 69,575
<INCOME-CONTINUING> 154,861
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 154,861
<EPS-PRIMARY> 2.83
<EPS-DILUTED> 2.81
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-29-1996 DEC-31-1995
<PERIOD-START> DEC-31-1995 JAN-01-1995
<PERIOD-END> DEC-29-1996 DEC-31-1995
<CASH> 126,355 75,155
<SECURITIES> 35,940 60,638
<RECEIVABLES> 370,205 279,619
<ALLOWANCES> (8,694) (7,147)
<INVENTORY> 363,306 304,989
<CURRENT-ASSETS> 957,051 750,386
<PP&E> 999,976 891,904
<DEPRECIATION> (460,032) (419,071)
<TOTAL-ASSETS> 2,131,237 1,666,858
<CURRENT-LIABILITIES> 491,900 402,874
<BONDS> 645,096 353,666
0 0
0 0
<COMMON> 284,639 26,383
<OTHER-SE> 583,743 823,929
<TOTAL-LIABILITY-AND-EQUITY> 2,131,237 1,666,858
<SALES> 1,985,145 1,733,368
<TOTAL-REVENUES> 1,985,145 1,733,368
<CGS> 1,398,031 1,221,463
<TOTAL-COSTS> 456,735 357,958
<OTHER-EXPENSES> (472) 439
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 39,973 24,578
<INCOME-PRETAX> 90,878 128,930
<INCOME-TAX> 31,010 40,428
<INCOME-CONTINUING> 59,868 88,502
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 59,868 88,502
<EPS-PRIMARY> 1.13 1.69
<EPS-DILUTED> 1.12 1.68
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-28-1997 DEC-28-1997 DEC-28-1997
<PERIOD-START> DEC-29-1996 DEC-29-1996 DEC-29-1996
<PERIOD-END> MAR-30-1997 JUL-05-1997 OCT-04-1997
<CASH> 96,999 143,715 76,084
<SECURITIES> 31,868 31,689 69,460
<RECEIVABLES> 396,440 435,279 453,467
<ALLOWANCES> (22,296) (24,606) (22,647)
<INVENTORY> 379,176 377,336 375,838
<CURRENT-ASSETS> 949,590 1,034,205 1,005,064
<PP&E> 1,019,540 1,049,216 1,073,114
<DEPRECIATION> (472,270) (489,727) (504,285)
<TOTAL-ASSETS> 2,155,515 2,233,701 2,221,925
<CURRENT-LIABILITIES> 463,608 488,186 424,137
<BONDS> 679,508 702,361 730,295
0 0 0
0 0 0
<COMMON> 299,916 308,681 316,188
<OTHER-SE> 593,374 616,289 634,901
<TOTAL-LIABILITY-AND-EQUITY> 2,155,515 2,233,701 2,221,925
<SALES> 515,919 1,061,766 1,582,161
<TOTAL-REVENUES> 515,919 1,061,766 1,582,161
<CGS> 356,898 730,681 1,085,810
<TOTAL-COSTS> 105,457 212,045 311,494
<OTHER-EXPENSES> (4,200) (8,073) (12,242)
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 12,701 25,649 38,213
<INCOME-PRETAX> 45,063 101,464 158,886
<INCOME-TAX> 14,729 32,786 49,955
<INCOME-CONTINUING> 30,334 68,678 108,931
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 30,334 68,678 108,931
<EPS-PRIMARY> 0.56 1.26 1.99
<EPS-DILUTED> 0.56 1.25 1.98
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-29-1996 DEC-29-1996 DEC-29-1996
<PERIOD-START> DEC-31-1995 DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1996 JUN-30-1996 SEP-29-1996
<CASH> 78,639 96,610 105,378
<SECURITIES> 62,353 81,543 72,083
<RECEIVABLES> 330,251 350,877 378,492
<ALLOWANCES> (7,183) (7,545) (7,575)
<INVENTORY> 355,859 359,455 359,353
<CURRENT-ASSETS> 864,344 926,997 941,430
<PP&E> 969,221 984,219 986,493
<DEPRECIATION> (420,083) (429,913) (439,601)
<TOTAL-ASSETS> 2,050,434 2,096,621 2,102,488
<CURRENT-LIABILITIES> 451,093 423,983 419,165
<BONDS> 630,047 671,302 660,866
0 0 0
0 0 0
<COMMON> 26,475 199,444 200,269
<OTHER-SE> 840,508 689,102 714,629
<TOTAL-LIABILITY-AND-EQUITY> 2,050,434 2,096,621 2,102,488
<SALES> 486,733 986,513 1,483,559
<TOTAL-REVENUES> 486,733 986,513 1,483,559
<CGS> 343,435 691,939 1,038,091
<TOTAL-COSTS> 95,456 192,065 285,135
<OTHER-EXPENSES> (1,298) (4,290) (5,698)
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 9,255 19,700 29,605
<INCOME-PRETAX> 39,885 87,099 136,426
<INCOME-TAX> 13,805 30,054 45,759
<INCOME-CONTINUING> 26,080 57,045 90,667
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 26,080 57,045 90,667
<EPS-PRIMARY> 0.49 1.07 1.70
<EPS-DILUTED> 0.49 1.07 1.70
</TABLE>
<PAGE>
EXHIBIT 99
INDEPENDENT AUDITORS' REPORT
To the Directors and Shareholders of Augat Inc.:
We have audited the consolidated balance sheets of Augat Inc. (a wholly owned
subsidiary of Thomas & Betts Corporation since December 11, 1996) and its
subsidiaries as of December 29, 1996, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the two years in the
period ended December 29, 1996, not presented separately herein. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Augat Inc. and its subsidiaries at
December 29, 1996, and the results of their operations and their cash flows for
each of the two years in the period ended December 29, 1996, in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
February 6, 1997
