-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S0Qxd9Stpf8ukLcb1r/3VoZRYb8ClLgzWfRzabUk8c8376hPRODjhMDaDj6M7+26 HMgYi3QPvg2wwZIoMNreTQ== 0000950152-04-000999.txt : 20040212 0000950152-04-000999.hdr.sgml : 20040212 20040212134432 ACCESSION NUMBER: 0000950152-04-000999 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 38 FILED AS OF DATE: 20040212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARATHON STEEL CO CENTRAL INDEX KEY: 0001279223 IRS NUMBER: 860117273 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-01 FILM NUMBER: 04589797 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARATHON MANUFACTURING HOLDINGS INC CENTRAL INDEX KEY: 0001279222 IRS NUMBER: 752198246 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-02 FILM NUMBER: 04589798 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE INDUSTRIES LLC CENTRAL INDEX KEY: 0001279214 IRS NUMBER: 611337429 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-08 FILM NUMBER: 04589804 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728891 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE DE MEXICO DEL NORTE SA DE CV CENTRAL INDEX KEY: 0001279244 IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-11 FILM NUMBER: 04589807 MAIL ADDRESS: STREET 1: 4 TESSENEER DR CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE CO CENTRAL INDEX KEY: 0001279242 IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-13 FILM NUMBER: 04589809 MAIL ADDRESS: STREET 1: 4 TESSENEER DR CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE CANADA LTD CENTRAL INDEX KEY: 0001279240 IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-14 FILM NUMBER: 04589810 MAIL ADDRESS: STREET 1: 4 TESSENEER DR CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIVERSIFIED CONTRACTORS INC CENTRAL INDEX KEY: 0001279189 IRS NUMBER: 760081448 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-16 FILM NUMBER: 04589812 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE CORP /DE/ CENTRAL INDEX KEY: 0000886035 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 061398235 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744 FILM NUMBER: 04589796 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 6065728000 MAIL ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GK TECHNOLOGIES INC CENTRAL INDEX KEY: 0001279271 IRS NUMBER: 133064555 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-03 FILM NUMBER: 04589799 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE TECHNOLOGIES CORP CENTRAL INDEX KEY: 0001279217 IRS NUMBER: 510370763 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-05 FILM NUMBER: 04589801 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE MANAGEMENT LLC CENTRAL INDEX KEY: 0001279215 IRS NUMBER: 859572889 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-07 FILM NUMBER: 04589803 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728891 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE INDUSTRIES INC CENTRAL INDEX KEY: 0001279219 IRS NUMBER: 061009714 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-10 FILM NUMBER: 04589806 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENCA CORP CENTRAL INDEX KEY: 0001279190 IRS NUMBER: 222885883 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-15 FILM NUMBER: 04589811 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MLTC CO CENTRAL INDEX KEY: 0001279225 IRS NUMBER: 750866441 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-09 FILM NUMBER: 04589805 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE OVERSEAS HOLDINGS INC CENTRAL INDEX KEY: 0001279216 IRS NUMBER: 611345453 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-06 FILM NUMBER: 04589802 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE DE LATINOAMERICA SA DE CV CENTRAL INDEX KEY: 0001279243 IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-12 FILM NUMBER: 04589808 MAIL ADDRESS: STREET 1: 4 TESSENEER DR CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL CABLE TEXAS OPERATIONS LP CENTRAL INDEX KEY: 0001279220 IRS NUMBER: 611400258 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-112744-04 FILM NUMBER: 04589800 BUSINESS ADDRESS: STREET 1: 4 TESSENEER DRIVE CITY: HIGHLAND HEIGHTS STATE: KY ZIP: 41076 BUSINESS PHONE: 8595728000 S-4 1 l05578asv4.txt GENERAL CABLE CORP, ET AL S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 2004 REGISTRATION NO. 333-________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 GENERAL CABLE CORPORATION - -------------------------------------------------------------------------------- (and certain subsidiaries identified as co-registrants in the Table of Co-Registrants)
DELAWARE 3357 06-1398235 - ------------------------------- ------------------------------------------- ------------------------------- (State or Other Jurisdiction of (Primary Standard Industrial Classification (I.R.S. Employer Identification Incorporation or Organization) Code Number) Number)
4 TESSENEER DRIVE HIGHLAND HEIGHTS, KENTUCKY 41076 (859) 572-8000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ROBERT J. SIVERD, ESQ. EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY GENERAL CABLE CORPORATION 4 TESSENEER DRIVE HIGHLAND HEIGHTS, KENTUCKY 41076 (859) 572-8000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) Copy to: ALAN H. LIEBLICH, ESQ. KARIM K. SHEHADEH, ESQ. BLANK ROME LLP ONE LOGAN SQUARE PHILADELPHIA, PENNSYLVANIA 19103 (215) 569-5500 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [ ] CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Title of Each Class Of Securities Amount To Be Offering Price Aggregate Offering Amount Of To Be Registered Registered Per Unit Price Registration Fee (2) - --------------------------------- ------------ ---------------- ------------------ -------------------- 9.5% Senior Notes due 2010, Series B $285,000,000 100% $285,000,000 $36,110 Senior Note Guarantees (1)
(1) The 9.5% Senior Notes due 2010, Series B, are unconditionally (as well as jointly and severally) guaranteed by the Co-Registrants on an unsecured, senior basis. Pursuant to Rule 457(n) under the Securities Act of 1933, no separate filing fee will be paid in respect to these guarantees. (2) Calculated in accordance with Rule 457(f)(2) under the Securities Act of 1933. THE REGISTRANT AND CO-REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT AND CO-REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. TABLE OF CO-REGISTRANTS The subsidiaries of the Company shown in the table below are Co-Registrants, and are organized in the state or other jurisdiction indicated in the column next to their names. Where applicable, the Employer Identification Numbers issued to the Co-Registrants by the Internal Revenue Service are set forth in the third column of the table.
EXACT NAME OF CO-REGISTRANT STATE/JURISDICTION I.R.S. EMPLOYER AS SPECIFIED IN ITS CHARTER OF ORGANIZATION SIC CODE IDENTIFICATION NUMBER - ----------------------------------------------- ------------------ -------- --------------------- Diversified Contractors, Inc. Delaware 1799 76-0081448 Genca Corporation Delaware 3542 22-2885883 General Cable Canada, Ltd. Canada 3357 N/A General Cable Company Canada 3357 98-020868 General Cable Industries, Inc. Delaware 3351 06-1009714 General Cable Industries, LLC Delaware 3357 61-1337429 General Cable de Latinoamerica, S.A. de C.V. Mexico 3661 N/A General Cable Management LLC Delaware 3357 61-1400257 General Cable de Mexico del Norte, S.A. de C.V. Mexico 3661 N/A General Cable Overseas Holdings, Inc. Delaware 6719 61-1345453 General Cable Technologies Corporation Delaware 3357 51-0370763 General Cable Texas Operations, L.P. Delaware 3357 61-1400258 GK Technologies, Incorporated New Jersey 3357 13-3064555 Marathon Manufacturing Holdings, Inc. Delaware 6719 75-2198246 Marathon Steel Company Arizona none 86-0117273 MLTC Company Delaware none 75-0866441
THE ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF EACH OF THE CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES IS 4 TESSENEER DRIVE, HIGHLAND HEIGHTS, KENTUCKY 41076, (859) 572-8000. THE NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF THE AGENT FOR SERVICE OF PROCESS OF EACH OF THE CO-REGISTRANTS IS ROBERT J. SIVERD, ESQ., C/O GENERAL CABLE CORPORATION, 4 TESSENEER DRIVE, HIGHLAND HEIGHTS, KENTUCKY 41076. THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED , 2004 $285,000,000 [GENERAL CABLE LOGO] GENERAL CABLE CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING OLD 9.5% SENIOR NOTES DUE 2010 FOR NEW 9.5% SENIOR NOTES DUE 2010, SERIES B We are offering to exchange up to $285,000,000 of our 9.5% Senior Notes due 2010, which are not registered under the Securities Act of 1933, as amended (the Securities Act), for up to $285,000,000 of our 9.5% Senior Notes due 2010, Series B, which will be registered under the Securities Act. We are offering to issue the new notes to satisfy our obligations contained in the Registration Rights Agreement we entered into when we sold the old notes in an exempt transaction under the Securities Act. THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2004, UNLESS EXTENDED. - If you decide to participate in this exchange offer, the new notes you receive will be substantially the same as your old notes, except that, unlike your old notes, you will be able to offer and sell the new notes freely to any potential buyer in the United States. - No public market currently exists for the notes. We do not intend to list the new notes on any securities exchange, and, therefore, no active public market is anticipated. - If you fail to tender your old notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected. - We will not receive any proceeds from the exchange offer. - Each broker-dealer that receives new notes for its own account under this exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. AN INVESTMENT IN THE NOTES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 16 OF THIS PROSPECTUS AND ANY OTHER INFORMATION IN THIS PROSPECTUS BEFORE DECIDING TO PURCHASE THE NOTES. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR STATE SECURITIES REGULATORS HAVE APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS IS DATED , 2004 TABLE OF CONTENTS
Page Incorporation Of Certain Documents By Reference............................................ 1 Where You Can Find More Information........................................................ 2 Principal Executive Office................................................................. 2 Forward-Looking Statements................................................................. 2 Prospectus Summary......................................................................... 3 Risk Factors............................................................................... 16 Use Of Proceeds............................................................................ 26 Capitalization............................................................................. 27 Selected Historical Financial Information.................................................. 28 Management's Discussion And Analysis Of Financial Condition And Results Of Operations...... 31 Business................................................................................... 49 Management................................................................................. 65 Ownership Of Capital Stock................................................................. 67 The Exchange Offer......................................................................... 70 Description Of Senior Credit Facility And Preferred Stock.................................. 77 Description Of The New Notes............................................................... 80 Book-Entry; Delivery And Form.............................................................. 116 Plan Of Distribution....................................................................... 118 Material U.S. Federal Income Tax Consequences.............................................. 119 Legal Matters.............................................................................. 119 Experts.................................................................................... 119 Index To Financial Statements.............................................................. F-1
This prospectus includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this prospectus are the property of their respective owners. i INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The SEC's rules allow us to "incorporate by reference" information into this prospectus. This means that we can disclose important business and financial information to you by referring you to another document. Any information referred to in this way is considered part of this prospectus from the date we file that document. Any reports filed by us with the SEC after the date of the initial filing of the registration statement of which this prospectus forms a part and prior to the effectiveness of such registration statement, as well as any reports filed by us with the SEC after the date of this prospectus and before the date that the offering of the securities is terminated, will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until the exchange offer is completed: - The portion of our definitive Proxy Statement for the 2003 Annual Meeting of Shareholders, filed March 28, 2003, specifically incorporated by reference into Items 10 (Directors and Officers), 11 (Executive Compensation) and 13 (Certain Relationships and Related Transactions) of our Annual Report on Form 10-K for the year ended December 30, 2002, as amended by Amendment No. 1, filed on August 29, 2003. - All documents filed by us under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (excluding all information and related exhibits furnished in a Current Report on Form 8-K pursuant to Item 9 or Item 12) after the date of this prospectus and before the termination of this offering. We will provide without charge to each person to whom this prospectus is delivered, upon his or her written or oral request, a copy of the filed documents referred to above, excluding exhibits, unless they are specifically incorporated by reference into those documents. You can request those documents from our Director of Investor Relations, 4 Tesseneer Drive, Highland Heights, Kentucky 41076, telephone (859) 572-8000. YOUR REQUEST MUST BE MADE NOT LATER THAN 5 BUSINESS DAYS BEFORE THE DATE ON WHICH YOU ARE REQUIRED TO RETURN THE LETTER OF TRANSMITTAL PROVIDED HEREIN. 1 WHERE YOU CAN FIND MORE INFORMATION We are required to file annual, quarterly and special reports, proxy statements, any amendments to those reports and other information with the SEC. You may read and copy any documents filed by us with the SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Reports, proxy statements and information statements, any amendments to those reports and other information filed electronically by us with the SEC are available to the public at the SEC's website at http://www.sec.gov. We have filed a registration statement on Form S-4 with the SEC relating to the securities covered by this prospectus. This prospectus is a part of the registration statement and does not contain all of the information in the registration statement. Whenever a reference is made in this prospectus to a contract or other document of General Cable, please be aware that the reference is only a summary and that you should refer to the exhibits that are a part of the registration statement for a copy of the contract or other document. You may review a copy of the registration statement at the SEC's public reference room in Washington, D.C., as well as through the SEC's website. PRINCIPAL EXECUTIVE OFFICE Our principal executive offices are located at 4 Tesseneer Drive, Highland Heights, Kentucky 41076, and our telephone number at that address is (859) 572-8000. FORWARD-LOOKING STATEMENTS Certain of the matters we discuss in this prospectus, any prospectus supplement and other documents we file with the SEC may constitute forward-looking statements. You can identify a forward-looking statement because it contains words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions which concern strategy, plans or intentions. All statements we make relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These statements are necessarily estimates reflecting our judgment based upon current information and involve a number of risks and uncertainties. We cannot assure you that other factors will not affect the accuracy of these forward-looking statements or that our actual results will not differ materially from the results we anticipate in the forward-looking statements. While it is impossible for us to identify all the factors which could cause our actual results to differ materially from those we estimated, we describe some of these factors under the heading "Risk Factors." We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of us. 2 PROSPECTUS SUMMARY This prospectus summary may not contain all of the information that may be important to you. You should read the entire prospectus, including the financial data and related notes, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause or contribute to such differences include those discussed in "Risk Factors," "Forward-looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." OUR COMPANY We are a FORTUNE 1000 company that is a leading global developer and manufacturer in the wire and cable industry, an industry which is estimated to have had $58 billion in sales in 2002. We have leading market positions in the segments in which we compete due to our product, geographic and customer diversity and our ability to operate as a low cost provider. We sell over 11,500 copper, aluminum and fiber optic wire and cable products, which we believe represent the most diversified product line of any U.S. manufacturer. As a result, we are able to offer our customers a single source for most of their wire and cable requirements. We manufacture our product lines in 28 facilities and sell our products worldwide through our operations in North America, Europe and Oceania. Major customers for our products include leading utility companies such as Consolidated Edison and Arizona Public Service; leading distributors such as Graybar and Anixter; leading retailers such as The Home Depot and AutoZone; leading original equipment manufacturers, or OEMs, such as GE Medical Systems; and leading telecommunications companies such as Qwest Communications, Verizon Communications and SBC/Ameritech. Technical expertise and implementation of Lean Six Sigma strategies have allowed us to maintain our position as a low cost provider. Our operations are divided into three main segments: energy, industrial & specialty and communications. Our energy cable products include low-, medium- and high-voltage power distribution and power transmission products for overhead and buried applications. Our industrial & specialty wire and cable products conduct electrical current for industrial, OEM, commercial and residential power and control applications. Our communications wire and cable products transmit low-voltage signals for voice, data, video and control applications. We believe we are the number one supplier of energy and industrial & specialty cable products and the number three supplier of communications products in North America and a top three supplier in the majority of the segments in which we compete in Oceania. We believe we are the largest supplier in the Iberian region and a strong regional wire and cable manufacturer in the rest of Europe. For the year ended December 31, 2002, we had net sales of $1.5 billion and a net loss of $(24.0) million. PRODUCTS AND MARKETS The net sales generated by each of our three main segments (as a percentage of our total company results) over the twelve-month period ended December 31, 2002 are summarized below: [Pie Chart Omitted]
Products and Markets Percentage - -------------------- ---------- Energy 36% Industrial & Specialty 34% Communications 30%
3 The principal products, markets, distribution channels and end-users of each of our product categories are summarized below:
PRODUCT CATEGORY PRINCIPAL PRODUCTS PRINCIPAL MARKETS PRINCIPAL END-USERS - ---------------- ------------------ ----------------- ------------------- ENERGY Utility Low-Voltage, Power Utility Investor-Owned Utility Medium-Voltage Companies; State and Distribution; Bare Local Public Power Overhead Conductor; Companies; Rural High-Voltage Electric Associations; Transmission Cable Contractors INDUSTRIAL & SPECIALTY Instrumentation, Power, Rubber and Plastic- Industrial Power and Industrial Consumers; Control and Specialty Jacketed Wire and Cable; Control; Utility/Marine/ Contractors; OEMs; Power and Industrial Cable; Transit; Military; Military Customers; Instrumentation and Mining; Oil and Gas Telecommunications Control Cable Industrial; Power System Operators Generation; Infrastructure; Residential Construction Automotive Ignition Wire Sets; Automotive Aftermarket Consumers; OEMs Booster Cables COMMUNICATIONS Outside Voice and Data Outside Plant Telecom Local Loop Telecommunications (Telecommunications) Telecommunications Systems Operators Exchange Cable; Outside Service Wire Data Communications Multi-Conductor/Multi-Pair; Computer Networking Contractors; OEMs; Fiber Optic; Shipboard; and Multimedia Systems Integrators; Military Fiber Cable Applications Systems Operators; Military Customers Electronics Multi-Conductor; Building Management; Contractors; Consumers; Coaxial; Sound, Entertainment; Equipment Industrial Security/Fire Alarm Cable Control Assemblies Cable Harnesses; Telecommunications; Communications and Connector Cable Industrial Equipment; Industrial Equipment Medical Equipment Manufacturers
We operate our business globally, with 74% of net sales in 2002 generated from North America, 22% from Europe and 4% from Oceania. We estimate that we sold our products and services to customers in more than 70 countries in 2002. 4 STRATEGIC INITIATIVES Due to a decrease in net sales resulting from the global economic downturn in 2001 and 2002 and its impact particularly in the telecommunications markets globally and the industrial & specialty market in North America, we have implemented various management initiatives to improve productivity and maximize cash flow. These initiatives include the following: - Consolidating our North American manufacturing and distribution facilities, including closing three of seven plants that manufacture communications products and four of six distribution centers. - Reducing head count by 1,700 persons, or 22% of our work force employed in our continuing operations since September 30, 2000. - Reducing outstanding aggregate indebtedness, and borrowings under an off-balance sheet facility, by approximately 42%, or $347.8 million, from June 30, 2000 (our historical peak borrowing level) to September 30, 2003. As a result of the refinancing transactions, we further reduced our outstanding aggregate indebtedness. - Reducing inventory levels related to continuing operations from $296.4 million at September 30, 2000 to $247.0 million at September 30, 2003, a 17% decrease; this decrease is net of a $17.3 million impact from foreign exchange rate fluctuations on our reported inventory international levels. On a consistent foreign exchange basis, the decrease in inventory levels was $66.7 million, or 23%. - Reducing capital expenditures from continuing operations from $35.8 million in 2000 to $31.4 million in 2002 and further to $20.4 million in the twelve months ended September 30, 2003. - Exiting less profitable, non-core businesses, such as building wire and consumer cordsets. - Focusing on non-capital based productivity, such as Lean Six Sigma and reduction of manufacturing cycle time. In addition, in connection with reinforcing our position as a low-cost provider, we have announced the closure of one of and the reduced operation at another of our North American manufacturing facilities for our industrial & specialty segment. We also have initiated a study at another one of our other North American industrial & specialty manufacturing facilities to determine the feasibility of continuing manufacturing operations at that location. We believe that many of our markets have begun to stabilize as end users begin to increase their spending on infrastructure maintenance and new construction. Furthermore, the 2003 power outages in the U.S., Canada and Europe emphasize the need to upgrade the power transmission infrastructure used by electric utilities, which may over time cause an increase in demand for our products. As a result of our strategic initiatives and adequate manufacturing capacity in all our businesses, we believe that we are well positioned to capitalize on any upturn in our markets without significant additional capital expenditures. COMPETITIVE STRENGTHS We have adopted a "One Company" approach for our dealings with customers and vendors. This approach is becoming increasingly important as the electrical, industrial, data communications and electronic distribution industries continue to consolidate into a smaller number of larger regional and national participants with broader product lines. As part of our One Company approach, we have established cross-functional business teams, which seek opportunities to increase sales to existing customers and to new customers inside and outside of traditional market channels. Our One Company approach better integrates us with our major customers, thereby allowing us to become their leading source for wire and cable products. We believe this approach also provides us with purchasing leverage as we coordinate our North American sourcing requirements. Our competitive strengths include: 5 Leading Market Positions. We have achieved leading market positions in many of our business segments. For example, we believe that in 2002: - In the energy segment, we were the number one producer in North America, the number three producer in Oceania and a strong regional producer in Europe; - In the industrial & specialty segment, we were the number one producer in North America and the number three producer in Oceania; and - In the communications segment, we were the number three producer in North America and Oceania. Product, Geographic and Customer Diversity. We sell over 11,500 products under well-established brand names, including General Cable(R), Anaconda(R), BICC(R) and Carol(R), which we believe represent the most diversified product line of any U.S. wire and cable manufacturer. The breadth of our product line has enhanced our market share and operating performance by enabling us to offer a diversified product line to customers who previously purchased wire and cable from multiple vendors but prefer to deal with a smaller number of broader-based suppliers. We believe that the breadth of our products gives us the opportunity to expand our product offerings to existing customers. We distribute our products to over 3,000 customers through our operations in North America, Europe and Oceania. Our customers include utility companies, telecommunications systems operators, contractors, OEMs, system integrators, military customers, consumers and municipalities. The following summarizes sales as a percentage of our 2002 domestic net sales by each category of customers: [Pie Chart Omitted]
2002 Domestic Net Sales by Each Category of Customers Percentage - -------------------------- ---------- Electric Utility 32% OEMs & Electrical/Industrial Distributors 21% Telco Utility 17% Communication Distributors 15% Automotive Retail 8% Electrical Retail 6% Other 1%
We strive to develop supply relationships with leading customers who have a favorable combination of volume, product mix, business strategy and industry position. Our customers are some of the largest consumers of wire and cable products in their respective markets and include the following companies: Consolidated Edison, an electric utility company serving the New York City metropolitan area; Arizona Public Service, Arizona's largest electricity utility; Graybar, one of the largest electrical and communications distributors in the United States; Anixter, one of the largest domestic distributors of wire, cable and communications connectivity products; The Home Depot, a leading home center retail chain; AutoZone, the largest retailer of automotive aftermarket parts in the United States; GE Medical Systems, a global leader in medical imaging, interventional procedures, healthcare services and information technology; Verizon Communications, a leading provider of communications services in the Northeastern United States; and Qwest Communications and SBC/Ameritech, former regional bell operating companies. Our top 20 customers in 2002 accounted for 44% of our net sales, and no one customer accounted for more than 5% of our net sales. We believe that our diversity mitigates the risks associated with an excess concentration of sales in any one market or geographic region or to any one customer. Low Cost Provider. We are a low cost provider primarily because of our focus on lean manufacturing, centralized sourcing and distribution and logistics. We continuously focus on maintaining and optimizing our manufacturing infrastructure by promoting an organization-wide "lean" mentality in order to improve efficiencies. This enables us to maintain a low manufacturing cost structure, reduce waste, inventory levels and cycle time, as well as retain a high level of customer service. We have made a significant investment in Lean Six Sigma training 6 and have established a formal training program for employees supporting this. We also facilitate the sharing of manufacturing techniques through the exchange of best practices among design and manufacturing engineers across our global business units. We believe that these initiatives have enabled us to achieve a high degree of non-capital based productivity which will allow us to achieve further productivity improvements. Experienced and Proven Management Team. Our senior management team has, on average, over 15 years of experience in the wire and cable industry and 11 years with our company, and has successfully created a corporate-wide culture that focuses on our One Company approach and continuous improvement in all aspects of our operations. In addition, our senior management team has successfully reduced overhead and operating costs, improved productivity and increased working capital efficiency. For example, our SG&A expenses excluding corporate items have declined from $226.6 million, or 10.5% of net sales, in 2000 to $123.1 million, or 8.5% of net sales, in 2002. We believe that the level of our SG&A expenses as a percentage of our net sales is one of the lowest in the wire and cable industry. Additionally, our senior management team has restructured our business portfolio to eliminate less profitable, non-core businesses and capitalize on market opportunities by anticipating market trends and risks. BUSINESS STRATEGY We seek to distinguish ourselves from other wire and cable manufacturers through the following business strategies: Improving Operating Efficiency and Productivity. Our operations benefit from management's ongoing evaluations of operating efficiency. These evaluations have resulted in cost-saving initiatives designed to improve our profitability and productivity across all areas of our operations. Recent initiatives include rationalization of manufacturing facilities and product lines, consolidation of distribution locations, product redesign, improvement in materials procurement and usage, product quality and waste elimination and other non-capital based productivity initiatives. We also expect that continued successful execution of our One Company approach will provide more efficient purchasing, manufacturing, marketing and distribution for our products. Focus on Establishing and Expanding Long-Term Customer Relationships. Each of our top 20 customers has been our customer for at least five years. Our customer relationship strategy is focused on being the "wire provider of choice" for the most demanding customers by providing a diverse product line coupled with a high level of service. We place great emphasis on customer service and provide technical resources to solve customer problems and maintain inventory levels of critical products that are sufficient to meet fluctuating demands for such products. We have implemented a number of service and support programs, including Electronic Data Interchange ("EDI") transactions, web-based product catalogues, ordering and order tracking capabilities and Vendor Managed Inventory ("VMI") systems. VMI is an inventory management system integrated into certain of our customers' internal systems which tracks inventory turnover and places orders with us for wire and cable on an automated basis. These technologies create high supplier integration with these customers and position us to be their leading source for wire and cable products. Actively Pursue Strategic Initiatives. We believe that our management has the ability to identify key trends in the industry, which allows us to migrate our business to capitalize on expanding markets and new niche markets and exit declining or non-strategic markets in order to achieve better returns. For example, we exited the North American building wire business in late 2001. This business had historically been highly cyclical, very price competitive and had low barriers to entry. We also set aggressive performance targets for our businesses and intend to refocus, turn around or divest those activities that fail to meet our targets or do not fit our long-term strategies. We regularly consider selective acquisitions and joint ventures to strengthen our existing business lines. We believe there are strategic opportunities in many international markets, including South America and Asia, as countries in these markets continue to look to upgrade their power transmission and generation infrastructure and invest in new communications networks in order to participate in high speed, global communications. We are seeing increased opportunities in the European Union for our European manufacturing operations. For more details, see "Risk Factors--Other Risks Relating to Our Business--We may not be able to successfully identify, finance or integrate acquisitions." 7 Reduce Leverage. We intend to reduce our leverage in the near to intermediate term. As a result of our well-diversified business portfolio and recent operating initiatives, we believe we can improve our existing operating margin, which will allow us to generate increased cash flows. In order to achieve this goal of debt reduction, we currently expect to use a substantial portion of cash flow from operations and the net proceeds from any sale of non-strategic assets to strengthen our balance sheet. In pursuit of this strategy, we have reduced outstanding aggregate indebtedness, and borrowings under an off-balance sheet facility, by $347.8 million, or 42%, from June 30, 2000 to September 30, 2003 through a combination of cash flow from operations and strategic divestitures. We have adequate manufacturing capacity in all of our businesses and are well positioned to capitalize on any upturns in our markets without significant additional capital expenditures. THE REFINANCING On November 24, 2003, we issued $285 million aggregate principal amount of the old notes. The old notes bear interest at a rate 9.5% per annum, payable semi-annually on May 15 and November 15 of each year, beginning May 15, 2004, and will mature on November 15, 2010. The offering of the old notes was part of our comprehensive plan to improve our capital structure and provide us with increased financial and operating flexibility to execute our business plan by reducing leverage and extending debt maturities. This plan consisted of the following transactions which we refer to as the "refinancing transactions," which were consummated concurrently: (i) a $240 million senior secured revolving credit facility, (ii) the private offering of the old notes, (iii) a private offering of $103.5 million of Series A redeemable convertible preferred stock and (iv) a public offering of approximately $47.6 million of common stock (including the exercise of an over-allotment option on December 2, 2003). We applied the net proceeds from these refinancing transactions to repay all borrowings outstanding under our then existing senior secured revolving credit facility, then existing senior secured term loans and outstanding amounts under our then existing accounts receivable asset-backed securitization facility and to pay related fees and expenses. 8 THE EXCHANGE OFFER Securities to be Exchanged....................... On November 24, 2003, we issued $285,000,000 aggregate principal amount of our 9.5% Senior Notes due 2010 to the initial purchasers in the offering of the old notes in a transaction exempt from the registration requirements of the Securities Act. The terms of the old notes and the new notes will be substantially the same, except that, unlike the old notes, you will be able to offer and sell the new notes freely to any potential buyer in the United States. For more details, see "Description of the New Notes." The Exchange Offer............................... We are offering to issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of old notes. The terms of the new notes and the old notes are substantially identical. Registration Rights Agreement.................... We sold the old notes to the initial purchasers in a transaction exempt from the registration requirements under the Securities Act. The old notes were immediately resold by the initial purchasers in reliance on exemptions under the Securities Act. In connection with the sale, we, and those of our subsidiaries that are guarantors of the old and new notes, entered into a registration rights agreement with the initial purchasers requiring us to make an exchange offer. For more details, see "The Exchange Offer--Purpose and Effect." Ability to Resell New Notes...................... Based on interpretations by the staff of the SEC set forth in published no-action letters, we believe that you may offer for resale, resell or otherwise freely transfer the new notes you receive in exchange for old notes without further registration under the Securities Act and without delivery of a prospectus to prospective purchasers if: - you acquire the new notes in the ordinary course of your business; - you are not participating, do not intend to participate in and have no arrangement or understanding with any person to participate in the distribution of the new notes; and - you are not related to us. However, the SEC has not considered this exchange offer in the context of a no-action letter and we cannot be sure that the staff of the SEC would make the same determination with respect to the exchange offer as in other circumstances. Furthermore, you must, unless you are a broker-dealer, acknowledge that you are not engaged in, and do not intend to engage in, a distribution of your new notes and have no arrangement or understanding to participate in a distribution of new notes. If you are a broker-dealer that receives new notes for your own account pursuant to the exchange offer you must acknowledge that you will comply with the prospectus delivery requirements of the Securities Act in connection with any resale of your new notes. If you are a broker-dealer who acquired old notes directly from us and not as a result of market-making activities or other trading activities, you may not rely on the SEC staff's interpretations discussed above or participate in the exchange offer and must comply with the prospectus delivery requirements of the Securities Act in order to resell the new notes.
9 The exchange offer is not being made to: - holders of old notes in any jurisdiction in which the exchange offer or its acceptance would not comply with the securities or blue sky laws of that jurisdiction; and - holders of old notes who we control. Expiration Date................................. The exchange offer will expire at 5:00 p.m., New York City time, on, 2004, unless it is extended. Withdrawal ..................................... Unless we extend the date, you may withdraw your tendered old notes at any time before 5:00 p.m., New York City time, on the expiration date of the exchange offer. Interest on the New Notes ...................... Interest on the new notes will accrue from the date of the original issuance of the old notes or from the date of the last semi-annual payment of interest on the old notes, whichever is later. Conditions to the Exchange Offer ............... The exchange offer is subject to conditions, some of which we may waive. For more information, see "The Exchange Offer--Conditions to the Exchange Offer." Procedures for Exchanging Your Old Notes ................................. If you wish to exchange your old notes for new notes you must transmit to U.S. Bank National Association, our exchange agent, on or before the expiration date either: - a properly completed and executed letter of transmittal, which we have provided to you with this prospectus, or a facsimile of the letter of transmittal, together with your old notes and any other documentation requested by the letter of transmittal; - a computer generated message, in which you acknowledge and agree to be bound by the terms of the letter of transmittal, transmitted by means of the Depository Trust Company's Automated Tender Offer Program system; or - a notice of guaranteed delivery, in accordance with the procedures described under the heading "The Exchange Offer--Guaranteed Delivery Procedures." By agreeing to be bound by the terms of the letter of transmittal, you will be deemed to have made the representations described on page 70 under the heading "The Exchange Offer--Purpose and Effect." Shelf Registration Requirement.................. Pursuant to the registration rights agreement for the old notes, we are required to file a "shelf" registration statement for a continuous offering pursuant to Rule 415 under the Securities Act in respect of the old notes if: - because of any change in law or applicable interpretations of the staff of the SEC, we are not permitted to effect the exchange offer; - for any other reason the registration statement for the exchange
10 offer is not declared effective by May 21, 2004 or the exchange offer is not consummated by June 21, 2004; - upon the request of any of the initial purchasers; - any holder notifies us within 20 business days after the commencement of the exchange offer that (i) due to a change in applicable law or Commission policy it is not entitled to participate in the exchange offer, or it may not resell the new notes to the public without delivering a prospectus and the prospectus that forms part of the registration statement is not appropriate or available for such resales or (ii) it is a broker-dealer and owns old notes acquired directly from us or an affiliate of ours; or - any holder of old notes participates in the exchange offer and does not receive freely transferable new notes in exchange for old notes. United States Federal Income Tax Consequences................................ The exchange of the old notes for the new notes in the exchange offer should not constitute a sale or exchange for federal income tax purposes. See "Material U.S. Federal Income Tax Consequences." Effect of Not .................................. Tendering If you fail to tender your old notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected.
Please review the information under the heading "The Exchange Offer" for more detailed information concerning the exchange offer. TERMS OF THE NEW NOTES Issuer.......................................... General Cable Corporation. Securities Offered.............................. $285,000,000 in aggregate principal amount of our new 9.5% Senior Notes due 2010, Series B. Maturity ....................................... The new notes will mature on November 15, 2010. Interest Payment Dates.......................... Interest on the new notes will be payable semi-annually on May 15 and November 15 of each year, beginning on May 15, 2004. Optional Redemption............................. We may redeem the new notes, in whole or in part, at any time on or after November 15, 2007 at the redemption prices set forth in this prospectus. In addition, before November 15, 2006, we may redeem up to 35% of the aggregate principal amount of the new notes with the net proceeds of certain equity offerings at 109.5% of the principal amount thereof, plus accrued interest to the redemption date. For more details, see "Description of the New Notes--Optional Redemption." Change of Control .............................. Upon certain change of control events, each holder of new notes may require us to purchase all or a portion of such holder's new notes at a purchase price equal to 101% of the principal amount thereof, plus
11 accrued interest to the purchase date. For more details, see "Description of the New Notes--Repurchase at the Option of the Holders--Change of Control." Guarantees...................................... Each of our existing and future restricted subsidiaries that is a guarantor or borrower under any U.S. senior secured revolving credit facility will fully and unconditionally guarantee the new notes on a senior basis. Future subsidiaries also may be required to guarantee the new notes on a senior basis. See "Description of the New Notes--The Guarantees." Ranking......................................... The new notes will be unsecured senior obligations and will rank equally in right of payment with all of our existing and future unsubordinated indebtedness and senior to any future indebtedness that is expressly subordinated to the new notes. The new notes will be effectively subordinated to our secured indebtedness, including obligations under our senior secured revolving credit facility, to the extent of the value of the assets securing such indebtedness and effectively subordinated to the indebtedness and other liabilities (including trade payables) of our non-guarantor subsidiaries. The guarantees will be unsecured senior obligations of the guarantors and will rank equal in right of payment with the guarantors' existing and future unsubordinated indebtedness and senior to any future indebtedness that is expressly subordinated to the guarantees. The guarantees will be effectively subordinated to the guarantors' secured indebtedness, including their guarantees of our senior secured revolving credit facility, to the extent of the value of the assets securing such indebtedness. Certain Covenants............................... The indenture governing the new notes contains covenants that, among other things, limits our ability and the ability of certain of our subsidiaries to: - pay dividends on, redeem or repurchase our capital stock; - incur additional indebtedness; - make investments; - create liens; - sell assets; - engage in transactions with affiliates; - create or designate unrestricted subsidiaries; and - consolidate, merge or transfer all or substantially all assets. These covenants are subject to important exceptions and qualifications, which are described under the heading "Description of the New Notes" in this prospectus. Use of Proceeds................................. We will not receive any cash proceeds from the issuance of the new notes in connection with the exchange offer.
12 SUMMARY FINANCIAL INFORMATION The summary historical financial data for the years ended and as of December 31, 2000, 2001 and 2002 were derived from our audited consolidated financial statements. The summary financial data set forth for the nine months ended September 30, 2002 and 2003 and as of September 30, 2003 were derived from unaudited consolidated financial statements as filed with the SEC which, in the opinion of our management, include all adjustments necessary for a fair presentation of the results for the unaudited interim periods. The following summary financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes thereto. Certain reclassifications have been made to conform to the current year's presentation. The "as adjusted" data gives effect to (i) initial borrowings of $50.1 million under our senior secured revolving credit facility, (ii) a private offering of $285 million of the old notes, which will be exchanged for the new notes pursuant to the exchange offer that is the subject of this prospectus, (iii) a private offering of $103.5 million of Series A redeemable convertible preferred stock, (iv) a public offering of $47.6 million of common stock and (v) the use of proceeds to repay $391.3 million of indebtedness under our former senior secured credit facilities and $72.8 million of borrowings under our former off-balance sheet accounts receivable asset-backed securitization facility. The as adjusted data also gives effect to (i) pre-tax charges of approximately $5.3 million relating to the write-off of unamortized bank fees related to the former credit facility, (ii) pre-tax charges of approximately $0.8 million related to the payoff of our former accounts receivable asset-backed securitization facility; (iii) a charge of approximately $4.4 million resulting from a deemed dividend of the accumulated earnings of certain of our guarantor subsidiaries under our senior secured revolving credit facility and old notes and (iv) payment of $22.1 million for transaction fees and expenses that we anticipated incurring related to the refinancing transactions. In August 2000, we sold certain businesses acquired from BICC plc consisting primarily of the operations in the United Kingdom, Italy and Africa and a joint venture interest in Malaysia to Pirelli Cavie Sistemi S.p.A. The financial data presented below contain those operations sold to Pirelli during 2000 up through the date of sale. In September 2000, we acquired Telmag S.A. de C.V., a Mexico-based manufacturer of telecommunications cables. The financial data presented below include the results of operations of this business after the closing date. In March 2001, we sold our Pyrotenax business unit to Raychem HTS Canada, Inc. The results of operations of this business are included in the financial data presented below for the periods prior to the closing date. In September 2001, we announced our decision to exit the consumer cord sets business. In October 2001, we sold substantially all of the manufacturing assets and inventory of our building wire business to Southwire Company. The results of operations of these businesses are included in the financial data presented below for the periods prior to the closing date. Beginning in the third quarter of 2001, we have reported the building wire and cordsets segment as discontinued operations for financial reporting purposes. Administrative expenses formerly allocated to this segment are now reported in the continuing operations segments. Prior periods have been restated to reflect this change. 13
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ------------------------------------ ------------------------ 2000(1) 2001(1) 2002 2002 2003 ------- ------- -------- ---------- ---------- (IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales: Energy........................................... $ 733.6 $ 521.8 $ 516.0 $ 389.0 $ 413.5 Industrial & specialty........................... 796.7 537.6 499.4 383.1 395.1 Communications................................... 631.8 592.0 438.5 330.4 324.5 --------- --------- --------- --------- --------- Total net sales..................................... 2,162.1 1,651.4 1,453.9 1,102.5 1,133.1 Cost of sales....................................... 1,870.4 1,410.7 1,287.3 972.1 998.7 --------- --------- --------- --------- --------- Gross profit........................................ 291.7 240.7 166.6 130.4 134.4 Selling, general and administrative expenses........ 257.6 136.4 150.9 116.2 93.6 --------- --------- --------- --------- --------- Operating income.................................... 34.1 104.3 15.7 14.2 40.8 Other income........................................ -- 8.1 -- -- -- Interest expense, net............................... (59.8) (43.9) (42.6) (31.1) (32.8) Other financial costs............................... (3.3) (10.4) (1.1) -- -- --------- --------- --------- --------- --------- Income (loss) before taxes.......................... (29.0) 58.1 (28.0) (16.9) 8.0 Income tax benefit (provision)................... 10.3 (20.6) 9.9 6.0 (2.8) --------- --------- --------- --------- --------- Income (loss) from continuing operations......... (18.7) 37.5 (18.1) (10.9) 5.2 Loss from discontinued operations................ (7.7) (6.8) -- -- -- Loss on disposal of discontinued operations...... -- (32.7) (5.9) (3.9) -- --------- --------- --------- --------- --------- Net income (loss)................................... $ (26.4) $ (2.0) $ (24.0) $ (14.8) $ 5.2 ========= ========= ========= ========= =========
DECEMBER 31, SEPTEMBER 30, 2003 ------------------------------- ------------------- AS 2000 2001 2002 ACTUAL ADJUSTED --------- --------- ------- ------- --------- BALANCE SHEET DATA: Cash and cash equivalents ............ $ 21.2 $ 16.6 $ 29.1 $ 24.2 $ 24.2 Working capital(2) ................... 375.3 169.9 150.8 133.4 207.4 Property, plant and equipment, net ... 379.4 320.9 323.3 326.8 326.8 Total assets ......................... 1,319.2 1,005.3 973.3 977.9 1,056.0 Total debt(3) ........................ 642.6 460.4 451.9 404.0 347.8 Net debt(3)(4) ....................... 621.4 443.8 422.8 379.8 323.6 Shareholders' equity ................. 128.5 104.9 60.9 83.6 219.3
14
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- ------------- 2000(1) 2001(1) 2002 2002 2003 ------- ------- ---- ---- ---- (IN MILLIONS, EXCEPT RATIO AND METAL PRICE DATA) OTHER DATA: Cash flows of operating activities..................... $ 16.1 $ 83.2 $ 57.3 $ 75.9 $ 58.2 Cash flows of investing activities..................... 82.9 91.9 (28.6) (21.4) (10.2) Cash flows of financing activities..................... (115.8) (179.7) (16.2) (47.8) (52.9) Ratio of earnings to fixed charges(5).................. -- 2.1x -- -- 1.2x Average daily COMEX price per pound of copper cathode............................. $ 0.84 $ 0.73 $ 0.72 $ 0.72 $ 0.77 Average daily selling price per pound of aluminum rod..................................... $ 0.75 $ 0.69 $ 0.65 $ 0.65 $ 0.67
- -------------- (1) As of January 1, 2001, we changed our accounting method for non-North American metal inventories from the first-in first-out ("FIFO") method to the last-in first-out ("LIFO") method. The impact of the change was an increase in operating income of $4.1 million, or $0.08 of earnings per share, on both a basic and a diluted basis during 2001. As of January 1, 2000, we changed our accounting method for our North American non-metal inventories from the FIFO method to the LIFO method. The impact of the change was an increase in operating income of $6.4 million, or $0.12 of earnings per share, on both a basic and diluted basis, during 2000. (2) Working capital means current assets less current liabilities. The as adjusted amount for September 30, 2003 includes $72.8 million of accounts receivable previously part of our accounts receivable asset-backed securitization facility added back to the balance sheet as a result of the refinancing. (3) Excludes off-balance sheet borrowings of $67.8 million, $48.5 million and $72.8 million as of December 31, 2001 and 2002 and September 30, 2003 under our accounts receivable asset-backed securitization facility. We had no off-balance sheet borrowings as of December 31, 2000. (4) Net debt means our total debt less cash and cash equivalents. (5) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations before income taxes and fixed charges. Fixed charges include: (i) interest expense, whether expensed or capitalized; (ii) amortization of debt issuance cost; (iii) the portion of rental expense representative of the interest factor; and (iv) the amount of pretax earnings required to cover preferred stock dividends and any accretion in the carrying value of the preferred stock. For the years ended December 31, 2000 and 2002, the nine months ended September 30, 2002 and the twelve months ended September 30, 2003, earnings were insufficient to cover fixed charges by $28.9 million, $27.6 million, $16.5 million and $11.9 million, respectively. Our historical ratio of earnings to fixed charges and preferred stock dividends is the same as our historical ratio of earnings to fixed charges because we did not pay or accrue any preferred stock dividends during the periods presented. 15 RISK FACTORS You should carefully consider the following risk factors and other information contained herein before exchanging your old notes for the new notes. RISKS RELATED TO OUR BUSINESS RISKS RELATING TO OUR MARKETS OUR NET SALES, NET INCOME AND GROWTH DEPEND LARGELY ON THE ECONOMIES IN THE GEOGRAPHIC MARKETS THAT WE SERVE AND IF THESE MARKETS DO NOT IMPROVE OR BECOME WEAKER WE COULD SUFFER DECREASED SALES AND NET INCOME. Many of our customers use our products as components in their own products or in projects undertaken for their customers. Our ability to sell our products is largely dependent on general economic conditions, including how much our customers and end-users spend on information technology, new construction and building, maintaining or reconfiguring their communications network, industrial manufacturing assets and power transmission and distribution infrastructures. Over the past few years many companies have significantly reduced their capital equipment and information technology budgets, and construction activity that necessitates the building or modification of communication networks and power transmission and distribution infrastructures has slowed considerably as a result of a weakening of the U.S. and foreign economies. As a result, our net sales and financial results have declined significantly. In the event that these markets do not improve, or if they were to become weaker, we could suffer further decreased sales and net income and we could be required to enact further restructurings. THE MARKET FOR OUR PRODUCTS IS HIGHLY COMPETITIVE AND IF WE FAIL TO INVEST IN PRODUCT DEVELOPMENT, PRODUCTIVITY IMPROVEMENTS AND CUSTOMER SERVICE AND SUPPORT THE SALE OF OUR PRODUCTS COULD BE ADVERSELY AFFECTED. The markets for copper, aluminum and fiber optic wire and cable products are highly competitive, and some of our competitors may have greater financial resources than we do. We compete with at least one major competitor with respect to each of our business segments, although no single competitor competes with us across the entire spectrum of our product lines. Many of our products are made to common specifications and therefore may be fungible with competitors' products. Accordingly, we are subject to competition in many markets on the basis of price, delivery time, customer service and our ability to meet specific customer needs. We believe our competitors will continue to improve the design and performance of their products and to introduce new products with competitive price and performance characteristics. We expect that we will be required to continue to invest in product development, productivity improvements and customer service and support in order to compete in our markets. Furthermore, an increase in imports of products competitive with our products could adversely affect our sales. OUR BUSINESS IS SUBJECT TO THE ECONOMIC AND POLITICAL RISKS OF MAINTAINING FACILITIES AND SELLING PRODUCTS IN FOREIGN COUNTRIES. During 2002, approximately 26% of our sales and approximately 33% of our assets were in markets outside North America. Our financial results may be adversely affected by significant fluctuations in the value of the U.S. dollar against foreign currencies or by the enactment of exchange controls or foreign governmental or regulatory restrictions on the transfer of funds. In addition, negative tax consequences relating to repatriating certain foreign currencies, particularly cash generated by our operations in Spain, may adversely affect our cash flows. During 2002, our operations outside North America generated approximately 24% of our cash flows from operations. Furthermore, our foreign operations are subject to risks inherent in maintaining operations abroad, such as economic and political destabilization, international conflicts, restrictive actions by foreign governments, nationalizations, changes in regulatory requirements, the difficulty of effectively managing diverse global operations and adverse foreign tax laws. 16 CHANGES IN INDUSTRY STANDARDS AND REGULATORY REQUIREMENTS MAY ADVERSELY AFFECT OUR BUSINESS. As a manufacturer and distributor of wire and cable products we are subject to a number of industry standard-setting authorities, such as Underwriters Laboratories, the Telecommunications Industry Association, the Electronics Industries Association and the Canadian Standards Association. In addition, many of our products are subject to the requirements of federal, state and local or foreign regulatory authorities. Changes in the standards and requirements imposed by such authorities could have an adverse effect on us. In the event we are unable to meet any such standards when adopted our business could be adversely affected. In addition, changes in the legislative environment could affect the growth and other aspects of important markets served by us. While certain legislative bills and regulatory rulings are pending in the energy and telecommunications sectors which could improve our markets, any delay or failure to pass such legislation and regulatory rulings could adversely affect our opportunities and anticipated prospects may not arise. It is not possible at this time to predict the impact that any such legislation or regulation or failure to enact any such legislation or regulation, or other changes in laws or industry standards that may be adopted in the future, could have on our financial results, cash flows or financial position. ADVANCING TECHNOLOGIES, SUCH AS FIBER OPTIC AND WIRELESS TECHNOLOGIES, MAY MAKE SOME OF OUR PRODUCTS LESS COMPETITIVE. Technological developments could have a material adverse effect on our business. For example, a significant decrease in the cost and complexity of installation of fiber optic systems or increase in the cost of copper-based systems could make fiber optic systems superior on a price performance basis to copper systems and may have a material adverse effect on our business. Also, advancing wireless technologies, as they relate to network and communication systems, may represent some threat to both copper and fiber optic cable based systems by reducing the need for premise wiring. While we sell some fiber optic cable and components and cable that is used in certain wireless applications, if fiber optic systems or wireless technology were to significantly erode the markets for copper-based systems, our sales of fiber optic cable and products for wireless applications may not be sufficient to offset any decrease in sales or profitability of our other products that may occur. RISKS RELATING TO OUR OPERATIONS VOLATILITY IN THE PRICE OF COPPER AND OTHER RAW MATERIALS, AS WELL AS FUEL AND ENERGY, COULD ADVERSELY AFFECT OUR BUSINESSES. The costs of copper and aluminum, the most significant raw materials we use, have been subject to considerable volatility over the years. Volatility in the price of copper, aluminum, polyethylene and other raw materials, as well as fuel, natural gas and energy, will in turn lead to significant fluctuations in our cost of sales. Additionally, sharp increases in the price of copper can also reduce demand if customers decide to defer their purchases of copper wire and cable products or seek to purchase substitute products. Moreover, we do not engage in activities to hedge the underlying value of our copper and aluminum inventory. Although we attempt to reflect copper and other raw material price changes in the sale price of our products, there is no assurance that we can do so. INTERRUPTIONS OF SUPPLIES FROM OUR COPPER ROD MILL PLANT OR OUR KEY SUPPLIERS MAY AFFECT OUR RESULTS OF OPERATIONS AND FINANCIAL PERFORMANCE. Interruptions of supplies from our copper rod mill plant or our key suppliers could disrupt production or impact our ability to increase production and sales. During 2002, our copper rod mill plant produced approximately 50% of the copper rod used in our North American operations and two suppliers provided an aggregate of approximately 36% of our North American copper purchases. Any unanticipated problems or work stoppages at our copper rod mill facility could have a material adverse effect on our business. Additionally, we use a limited number of sources for most of the other raw materials that we do not produce. We do not have long-term or volume purchase agreements with most of our suppliers, and may have limited options in the short-term for alternative supply if these suppliers fail, for any reason, including their business failure or financial difficulties, to continue the supply of materials or components. Moreover, identifying and accessing alternative sources may increase our costs. 17 FAILURE TO NEGOTIATE EXTENSIONS OF OUR LABOR AGREEMENTS AS THEY EXPIRE MAY RESULT IN A DISRUPTION OF OUR OPERATIONS. Approximately 65% of our employees are represented by various labor unions. During the last five years, we have experienced only one strike, which was settled on satisfactory terms. Labor agreements covering approximately 18% of our employees expire prior to December 31, 2004. We cannot predict what issues may be raised by the collective bargaining units representing our employees and, if raised, whether negotiations concerning such issues will be successfully concluded. A protracted work stoppage could result in a disruption of our operations which could adversely affect our ability to deliver certain products and our financial results. OUR INABILITY TO CONTINUE TO ACHIEVE PRODUCTIVITY IMPROVEMENTS MAY RESULT IN INCREASED COSTS. Part of our business strategy is to increase our profitability by lowering costs through improving our processes and productivity. In the event we are unable to continue to implement measures improving our manufacturing techniques and processes, we may not achieve desired efficiency or productivity levels and our manufacturing costs may increase. In addition, productivity increases are related in part to factory utilization rates. Our decreased utilization rates over the past few years have adversely impacted productivity. WE ARE SUBSTANTIALLY DEPENDENT UPON DISTRIBUTORS AND RETAILERS FOR NON-EXCLUSIVE SALES OF OUR PRODUCTS AND THEY COULD CEASE PURCHASING OUR PRODUCTS AT ANY TIME. During 2002, approximately 36% of our domestic net sales were to independent distributors and four of our ten largest customers were distributors. Distributors accounted for a substantial portion of sales of our communications products and industrial & specialty products. During 2002, approximately 14% of our domestic net sales were to retailers and the two largest retailers, AutoZone and The Home Depot, accounted for approximately 3.3% and 3.1%, respectively, of our net sales. These distributors and retailers are not contractually obligated to carry our product lines exclusively or for any period of time. Therefore, these distributors and retailers may purchase products that compete with our products or cease purchasing our products at any time. The loss of one or more large distributors or retailers could have a material adverse effect on our ability to bring our products to end users and on our results of operations. Moreover, a downturn in the business of one or more large distributors or retailers could adversely affect our sales and could create significant credit exposure. WE FACE PRICING PRESSURES IN EACH OF OUR MARKETS THAT COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND FINANCIAL PERFORMANCE. We face pricing pressures in each of our markets as a result of significant competition or over-capacity, and price levels for most of our products have declined over the past few years. While we will work toward reducing our costs to respond to the pricing pressures that may continue, we may not be able to achieve proportionate reductions in costs. As a result of over-capacity and the current economic and industry downturn in the communications and industrial markets in particular, pricing pressures increased in 2002 and 2003. Pricing pressures are expected to continue into 2004 and for the foreseeable future. Further declines in prices, without offsetting cost-reductions, would adversely affect our financial results. OTHER RISKS RELATING TO OUR BUSINESS OUR SUBSTANTIAL DEBT COULD ADVERSELY AFFECT OUR BUSINESS. We have a significant amount of debt. As of September 30, 2003, assuming that our refinancing transactions had occurred on that date, we would have had $347.8 million of debt outstanding, $62.8 million of which would have been secured indebtedness and none of which would have been subordinated to the notes, and had approximately $135 million of additional borrowing capacity available (which is calculated after giving effect to $38.4 million of letters of credit outstanding) under our senior secured revolving credit facility. In addition, subject to the terms of the indenture governing the notes, we may also incur additional indebtedness, including secured debt, in the future. 18 The degree to which we are leveraged could have important adverse consequences to us. For example, it could: - make it difficult for us to make payments on or otherwise satisfy our obligations with respect to our indebtedness; - limit our ability to borrow additional amounts for working capital, capital expenditures, potential acquisition opportunities and other purposes; - limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business, regulatory and economic conditions in our industry; - place us at a competitive disadvantage against our less leveraged competitors; - subject us to increased costs, to the extent of the portion of our indebtedness that is subject to floating interest rates; and - cause us to fail to comply with applicable debt covenants and could result in an event of default that could result in all of our indebtedness being immediately due and payable. In addition, our ability to generate cash flow from operations sufficient to make scheduled payments on our debts as they become due will depend on our future performance, our ability to successfully implement our business strategy and our ability to obtain other financing. IF EITHER OF OUR UNCOMMITTED ACCOUNTS PAYABLE OR ACCOUNTS RECEIVABLE FINANCING ARRANGEMENTS FOR OUR EUROPEAN OPERATIONS IS CANCELLED BY OUR LENDERS, OUR LIQUIDITY WILL BE NEGATIVELY IMPACTED. Our European operation participates in arrangements with several European financial institutions which provide extended accounts payable terms to us. In general, the arrangements provide for accounts payable terms of up to 180 days. At September 30, 2003, the arrangements had a maximum availability limit of the equivalent of approximately $94 million of which approximately $77 million was drawn. We do not have firm commitments from these European financial institutions requiring them to continue to extend credit and they may decline to advance additional funding. We also have an approximate $25 million uncommitted facility in Europe, which allows us to sell at a discount, with limited recourse, a portion of our accounts receivable to a financial institution. At September 30, 2003, this facility was not drawn upon. We do not have a firm commitment from this institution to purchase our accounts receivable. Should the availability under these arrangements be reduced or terminated, we would be required to negotiate longer payment terms with our suppliers or repay the outstanding obligations with our suppliers under these arrangements over 180 days and/or seek alternative financing arrangements which could increase our interest expense. We cannot assure you that such longer payment terms or alternate financing will be available on favorable terms or at all. Failure to obtain alternative financing arrangements in such case would negatively impact our liquidity. In addition, in order to avoid an event of default under our senior secured credit facility, we must maintain foreign credit lines of at least the equivalent of $80.0 million during those periods when our average excess available funds under our senior secured credit facility is less than $100.0 million for a period of three consecutive months. WE WILL BE REQUIRED TO TAKE A CHARGE IN CONNECTION WITH A PLANT CLOSURE AND THE RATIONALIZATION OF ANOTHER PLANT AND WE MAY BE REQUIRED TO TAKE CERTAIN CHARGES TO OUR EARNINGS IN FUTURE PERIODS IN CONNECTION WITH A POTENTIAL PLANT CLOSURE AND OUR INVENTORY ACCOUNTING PRACTICES. We are in the process of closing one of our manufacturing facilities which we expect will result in approximately $7 million of costs, of which approximately $4 million will be cash costs. We are also in the process of significantly reducing operations at another facility which will result in approximately $16.0 million of costs, of which approximately $6.6 million will be cash costs. In addition, we are currently evaluating the closure of one additional facility. We plan to announce the result of our evaluation early in 2004. The cost to rationalize this 19 facility could approximate $4 million, with cash costs of approximately $1.5 million. The costs to be incurred as a result of the above actions will be reported over the period the operations are wound down. As a result of declining copper prices, the historic LIFO cost of our copper inventory exceeded its replacement cost by approximately $16 million at December 31, 2002 and $5 million at September 30, 2003. If we were not able to recover the LIFO value of our inventory at a profit in some future period when replacement costs were lower than the LIFO value of the inventory, we would be required to take a charge to recognize in our income statement all or a portion of the higher LIFO value of the inventory. During 2002 and in the nine months ended September 30, 2003, we recorded a $2.5 million and a $0.8 million charge, respectively, for the liquidation of LIFO inventory in North America as we significantly reduced our inventory levels. If LIFO inventory quantities are reduced in a future period when replacement costs are lower than the LIFO value of the inventory, we would experience a decline in reported earnings. WE ARE SUBJECT TO CERTAIN ASBESTOS LITIGATION AND UNEXPECTED JUDGMENTS OR SETTLEMENTS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL RESULTS. There are approximately 15,300 pending non-maritime asbestos cases involving our subsidiaries. The majority of these cases involve plaintiffs alleging exposure to asbestos-containing cable manufactured by our predecessors. In addition to our subsidiaries, numerous other wire and cable manufacturers have been named as defendants in these cases. Our subsidiaries have also been named, along with numerous other product manufacturers, as defendants in approximately 33,000 suits in which plaintiffs alleged that they suffered an asbestos-related injury while working in the maritime industry. These cases are referred to as MARDOC cases and are currently managed under the supervision of the U.S. District Court for the Eastern District of Pennsylvania. On May 1, 1996, the District Court ordered that all pending MARDOC cases be administratively dismissed without prejudice and the cases cannot be reinstated, except in certain circumstances involving specific proof of injury. We cannot assure you that any judgments or settlements of the pending non-maritime and/or MARDOC asbestos cases or any cases which may be filed in the future will not have a material adverse effect on our financial results, cash flows or financial position. Moreover, certain of our insurers may be financially unstable and in the event one or more of these insurers enter into insurance liquidation proceedings, we will be required to pay a larger portion of the costs incurred in connection with these cases. ENVIRONMENTAL LIABILITIES COULD POTENTIALLY ADVERSELY IMPACT US AND OUR AFFILIATES. We are subject to federal, state, local and foreign environmental protection laws and regulations governing our operations and use, handling, disposal and remediation of hazardous substances currently or formerly used by us and our affiliates. A risk of environmental liability is inherent in our and our affiliates' current and former manufacturing activities in the event of a release or discharge of a hazardous substance generated by us or our affiliates. Under certain environmental laws, we could be held jointly and severally responsible for the remediation of any hazardous substance contamination at our facilities and at third party waste disposal sites and could also be held liable for any consequences arising out of human exposure to such substances or other environmental damage. We and our affiliates have been named as potentially responsible parties in proceedings that involve environmental remediation. There can be no assurance that the costs of complying with environmental, health and safety laws and requirements in our current operations or the liabilities arising from past releases of, or exposure to, hazardous substances, will not result in future expenditures by us that could materially and adversely affect our financial results, cash flows or financial condition. GROWTH THROUGH ACQUISITION HAS BEEN A SIGNIFICANT PART OF OUR STRATEGY AND WE MAY NOT BE ABLE TO SUCCESSFULLY IDENTIFY, FINANCE OR INTEGRATE ACQUISITIONS. Growth through acquisition has been, and is expected to continue to be, a significant part of our strategy. We regularly evaluate possible acquisition candidates. We cannot assure you that we will be successful in identifying, financing and closing acquisitions at favorable prices and terms. Potential acquisitions may require us to issue additional shares of stock or obtain additional or new financing, and such financing may not be available on terms acceptable to us, or at all. The issuance of our common or preferred shares may dilute the value of shares held by our equityholders. Further, we cannot assure you that we will be successful in integrating any such acquisitions that are completed. Integration of any such acquisitions may require substantial management, financial and other resources and may pose risks with respect to production, customer service and market share of existing operations. 20 In addition, we may acquire businesses that are subject to technological or competitive risks, and we may not be able to realize the benefits expected from such acquisitions. TERRORIST ATTACKS AND OTHER ATTACKS OR ACTS OF WAR MAY ADVERSELY AFFECT THE MARKETS IN WHICH WE OPERATE, OUR OPERATIONS AND OUR PROFITABILITY. The attacks of September 11, 2001 and subsequent events, including the military action in Iraq, has caused and may continue to cause instability in our markets and have led and may continue to lead to, further armed hostilities or further acts of terrorism worldwide, which could cause further disruption in our markets. Acts of terrorism may impact any or all of our facilities and operations, or those of our customers or suppliers and may further limit or delay purchasing decisions of our customers. Depending on their magnitude, acts of terrorism or war could have a material adverse effect on our business, financial results, cash flows and financial position. We carry insurance coverage on our facilities of types and in amounts that we believe are in line with coverage customarily obtained by owners of similar properties. We continue to monitor the state of the insurance market in general and the scope and cost of coverage for acts of terrorism in particular, but we cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. Currently, we do not carry terrorism insurance coverage. If we experience a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged facilities, as well as the anticipated future net sales from those facilities. Depending on the specific circumstances of each affected facility, it is possible that we could be liable for indebtedness or other obligations related to the facility. Any such loss could materially and adversely affect our business, financial results, cash flows and financial position. IF WE FAIL TO RETAIN OUR KEY EMPLOYEES, OUR BUSINESS MAY BE HARMED. Our success has been largely dependent on the skills, experience and efforts of our key employees, and the loss of the services of any of our executive officers or other key employees could have an adverse effect on us. The loss of our key employees who have intimate knowledge of our manufacturing process could lead to increased competition to the extent that those employees are able to recreate our manufacturing process. Our future success will also depend in part upon our continuing ability to attract and retain highly qualified personnel, who are in great demand. DECLINING RETURNS IN THE INVESTMENT PORTFOLIO OF OUR DEFINED BENEFIT PLANS WILL INCREASE OUR PENSION EXPENSE AND REQUIRE US TO INCREASE CASH CONTRIBUTIONS TO THE PLANS. Pension expense for the defined benefit pension plans sponsored by us is determined based upon a number of actuarial assumptions, including an expected long-term rate of return on assets and discount rate. During the fourth quarter of 2002, as a result of declining returns in the investment portfolio of our defined benefit pension plans, we were required to record a minimum pension liability equal to the underfunded status of our plans. As of December 31, 2002, the defined benefit plans were underfunded by approximately $52 million based on the actuarial methods and assumptions utilized for purposes of FAS 87. We will experience an increase in our future pension expense and in our cash contributions to our defined benefit pension plan. Pension expense for our defined benefit plans is expected to increase from $2.0 million in 2002 to approximately $8.4 million in 2003 and our required cash contributions are expected to increase to $5.9 million in 2003 from $3.0 million in 2002. In 2004, cash contributions are expected to increase to $12.6 million. In the event that actual results differ from the actuarial assumptions, the funded status of our defined benefit plans may change and any such deficiency could result in additional charges to equity and an increase in future pension expense and cash contributions. AN OWNERSHIP CHANGE COULD RESULT IN A LIMITATION OF THE USE OF OUR NET OPERATING LOSSES. As of December 31, 2002, we had net operating loss, or NOL, carryforwards of approximately $177 million available to reduce taxable income in future years. Specifically, we generated NOL carryforwards of $55.2 million in 2000 and $68.4 million in 2002, which expire in 2020 and 2022, respectively. The 2001 NOL, which was reflected as a carryforward in the 2001 financial statements, was instead carried back to obtain a $37.0 million tax refund in 2002. We also have other NOL carryforwards that are subject to an annual limitation under section 382 of the Internal Revenue Code of 1986, as amended, or the Code. These section 382 limited NOL carryforwards expire 21 in varying amounts from 2006 to 2009. The total section 382 limited NOL carryforwards that may be utilized prior to expiration is estimated at $53.9 million. Our ability to utilize our NOL carryforwards may be further limited by section 382 if we undergo an ownership change as a result of the sale of our stock and/or as a result of subsequent changes in the ownership of our outstanding stock. We would undergo an ownership change if, among other things, the stockholders, or group of stockholders, who own or have owned, directly or indirectly, 5% or more of the value of our stock or are otherwise treated as 5% stockholders under section 382 and the regulations promulgated thereunder increase their aggregate percentage ownership of our stock by more than 50% over the lowest percentage of our stock owned by these stockholders at any time during the testing period, which is generally the three-year period preceding the potential ownership change. In the event of an ownership change, section 382 imposes an annual limitation on the amount of post-ownership change taxable income a corporation may offset with pre-ownership change NOL carryforwards and certain recognized built-in losses. The limitation imposed by section 382 for any post-change year would be determined by multiplying the value of our stock immediately before the ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate, which is 4.74% for December 2003. Any unused annual limitation may be carried over to later years, and the limitation may under certain circumstances be increased by built-in gains which may be present in assets held by us at the time of the ownership change that are recognized in the five-year period after the ownership change. Based upon our review of the aggregate change in percentage ownership during the current testing period and subject to any unanticipated increases in ownership by our "five percent shareholders" (as described above) with respect to our stock, we do not believe that we will experience a change in ownership as a result of the sale of our stock. However, such a determination is complex and there can be no assurance that the Internal Revenue Service could not successfully challenge our conclusion. In addition, there are circumstances beyond our control, such as the purchase of our stock by investors who are existing 5% shareholders or become 5% shareholders as a result of such purchase, which could result in an ownership change with respect to our stock. Nevertheless, we expect to use a large portion of our available 50% ownership shift limitation in connection with the sale of our stock, and we may not be able to engage in significant transactions that would create a further shift in ownership within the meaning of section 382 within the subsequent three-year period without triggering an ownership change. Thus, while it is our general intention to maximize utilization of our NOL carryforwards by avoiding the triggering of an ownership change, there can be no assurance that our future actions or future actions by our stockholders will not result in the occurrence of an ownership change, which will result in utilization of the NOL and negatively affect our cash flows. IF WE ARE REQUIRED TO CLASSIFY THE PREFERRED STOCK AS DEBT IN THE FUTURE, OUR BALANCE SHEET WILL BE ADVERSELY AFFECTED. Upon issuance, the preferred stock will be classified as equity on our balance sheet in accordance with Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity," or SFAS 150, since the preferred stock contains a substantive conversion feature. Under SFAS 150, the preferred stock will remain classified as equity until and unless it becomes certain that the conversion feature will not be exercised by the holders. If it were to become certain that the holders of the preferred stock will not exercise their conversion rights, we would be required to reclassify the preferred stock as a liability in our balance sheet. Additionally, in adopting SFAS 150, the Financial Accounting Standards Board indicated that it is considering changes to the accounting treatment for certain instruments with both liability and equity characteristics. As a result, we cannot assume that the preferred stock will continue to be classified as equity in future periods. However, any such reclassification of the preferred stock would not, in any material respect, affect our compliance with the indenture governing the new notes or our senior secured credit facility. RISKS RELATED TO THE NEW NOTES AND THIS OFFERING THE NEW NOTES ARE UNSECURED AND EFFECTIVELY SUBORDINATED TO OUR SECURED INDEBTEDNESS. Our senior credit facilities will be secured by substantially all of our and our guarantors' assets. Secured indebtedness effectively ranks senior to the new notes to the extent of the value of the assets securing such indebtedness. If we default on the new notes, become bankrupt, liquidate, restructure or reorganize, it would result 22 in a default under our senior credit facilities and our secured creditors could use the collateral to satisfy the secured debt before you will receive any payment on the new notes. If the value of the collateral is insufficient to pay all of the secured indebtedness, our secured creditors would share equally in the value of our other assets, if any, with you and any other creditors. OUR ABILITY TO PAY PRINCIPAL AND INTEREST ON THE NEW NOTES DEPENDS ON OUR RECEIPT OF DIVIDENDS OR OTHER INTERCOMPANY TRANSFERS FROM OUR SUBSIDIARIES. CLAIMS OF CREDITORS OF OUR SUBSIDIARIES THAT DO NOT GUARANTEE THE NEW NOTES WILL HAVE PRIORITY OVER YOUR CLAIMS WITH RESPECT TO THE ASSETS AND EARNINGS OF THOSE SUBSIDIARIES. We are a holding company and substantially all of our properties and assets are owned by, and all our operations are conducted through, our subsidiaries. As a result, we are dependent upon cash dividends and distributions or other transfers from our subsidiaries to meet our debt service obligations, including payment of the interest on and principal of the new notes when due, and other obligations. The ability of our subsidiaries to pay dividends and make other payments to us may be restricted by, among other things, applicable corporate, tax and other laws and regulations in the U.S. and abroad and agreements of our subsidiaries. Although the indenture will limit the ability of our restricted subsidiaries to enter into consensual restrictions on their ability to pay dividends and make other payments to us, these limitations will have a number of significant qualifications and exceptions. For more details, see "Description of the New Notes--Certain Covenants--Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries." In addition, claims of creditors, including trade creditors, of our subsidiaries will generally have priority with respect to the assets and earnings of such subsidiaries over the claims of our creditors, except to the extent the claims of our creditors are guaranteed by these subsidiaries. Only certain of our subsidiaries will be guarantors of the new notes. In the event of our dissolution, bankruptcy, liquidation or reorganization, the holders of the new notes will not receive any amounts from our non-guarantor subsidiaries with respect to the new notes until after the payment in full of the claims of the creditors of these subsidiaries. Our non-guarantor subsidiaries generated 30% of our consolidated net sales, 80% of our consolidated operating income and 6% of our consolidated cash flow from operating activities for the nine months ended September 30, 2003. As of September 30, 2003, assuming that the refinancing transactions had occurred on that date, those subsidiaries had outstanding $3.7 million of indebtedness and $77 million outstanding under our European accounts payable arrangements. In addition, we are currently seeking to obtain a new (euro)30 million to (euro)50 million-credit facility for certain of our European subsidiaries, none of which will be guarantors of the new notes. THE INDENTURE GOVERNING THE NEW NOTES AND OUR SENIOR CREDIT FACILITIES CONTAIN COVENANTS THAT SIGNIFICANTLY RESTRICT OUR OPERATIONS. The indenture governing the new notes, our senior credit facilities and any other future debt agreement will contain numerous covenants imposing financial and operating restrictions on our business. These restrictions may affect our ability to operate our business, may limit our ability to take advantage of potential business opportunities as they arise and may adversely affect the conduct of our current business. These covenants will place restrictions on our ability to, among other things: - pay dividends on, redeem or repurchase our capital stock; - incur additional indebtedness; - make investments; - create liens; - sell assets; - engage in transactions with affiliates; - create or designate unrestricted subsidiaries; and 23 - consolidate, merge or transfer all or substantially all assets. In addition, our senior credit facilities require us to maintain financial ratios. Our ability to meet these ratios and tests and to comply with other provisions governing our indebtedness may be affected by changes in economic or business conditions or other events beyond our control. Our failure to comply with our debt-related obligations could result in an event of default which, if not cured or waived, could result in an acceleration of our indebtedness. FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER CERTAIN CIRCUMSTANCES, TO VOID CERTAIN OBLIGATIONS; AS A RESULT, A COURT COULD VOID OUR SUBSIDIARIES' GUARANTEES OF THE NEW NOTES UNDER FRAUDULENT TRANSFER LAWS. Fraudulent conveyance laws permit a court to avoid or nullify the guarantees of the new notes by our subsidiaries if the court determines that such guarantees were made by a fraudulent conveyance. Generally, if a court were to find that - the debtor incurred the challenged obligation with the actual intent of hindering, delaying or defrauding present or future creditors; or - the debtor (1) received less than reasonably equivalent value or fair consideration for incurring the challenged obligation and (2) (A) was insolvent or was rendered insolvent by reason of incurring the challenged obligation, (B) was engaged or about to engage in a business or transaction for which its assets constituted unreasonably small capital, or (C) intended to incur, or believed that it would incur, debts beyond its ability to pay as such debts matured; the court could, subject to applicable statutes of limitations, avoid the challenged obligation in whole or in part. The court could also subordinate claims with respect to the challenged obligation to all other debts of the debtor. The court's determination as to whether the above is true at any relevant time will vary depending upon the factual findings and law applied in any such proceeding. Generally, a debtor will be considered insolvent if: - the sum of its debts was greater than the fair saleable value of all of its assets at a fair valuation; or - if the present fair saleable value of its assets is less than the amount that would be required to pay its probable liability on its existing debts as they become fixed in amount and nature. Also, a debtor generally will be considered to have been left with unreasonably small capital if its remaining capital, including its reasonably projected cash flow, was reasonably likely to be insufficient for its foreseeable needs, taking into account its foreseeable business operations and reasonably foreseeable economic conditions. A court could void our subsidiaries' guarantees of the new notes under state fraudulent transfer laws. Although the guarantees provide you with a direct claim against the assets of our subsidiaries under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, the guarantee could be voided, or claims with respect to a guarantee could be subordinated to all other debts of that guarantor. In addition, a court could void any payments by that guarantor pursuant to its guarantee and require that such payments be returned to the guarantor or to a fund for the benefit of the other creditors of the guarantor. If a court voided the guarantee of the new notes by a subsidiary as a result of a fraudulent conveyance, or held the guarantee unenforceable for any other reason, as a holder of new notes, you would no longer have a claim as a creditor against the assets of that subsidiary. Any fraudulent transfer challenges, even if ultimately unsuccessful, could lead to a disruption of our business and an alteration in the manner in which that business is managed. As a result, our ability to meet our obligations under the notes or in connection with our other debt may be adversely affected. 24 WE MAY NOT BE ABLE TO PAY THE PURCHASE PRICE OF THE NEW NOTES UPON A CHANGE OF CONTROL IF THE HOLDERS EXERCISE THEIR RIGHT TO REQUIRE US TO PURCHASE SUCH NOTES. If we undergo a change of control, under certain circumstances, we will be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount of the new notes plus accrued and unpaid interest. The occurrence of certain of the events that would constitute a change of control would, however, constitute a default under our senior credit facilities. In addition, future credit agreements and other indebtedness we may incur could also prohibit certain events that would constitute a change of control or require such indebtedness to be repaid or repurchased upon such a change of control. Moreover, the exercise by the holders of the new notes of their right to require us to purchase their new notes could cause a default under such indebtedness, even if the change of control itself does not, including a default due to the financial effect of such purchase on us. Finally, our ability to pay cash to such holders upon a purchase may be limited by our then existing financial resources. We cannot assure you that sufficient funds will be available when necessary to make any required purchases. Our failure to make or consummate a change of control offer as required by the indenture governing the new notes or pay the related change of control purchase price when due would result in an event of default under the indenture. IF YOU DO NOT EXCHANGE YOUR OLD NOTES FOR NEW NOTES, YOUR ABILITY TO SELL OR OTHERWISE TRANSFER THE OLD NOTES WILL REMAIN RESTRICTED, WHICH COULD REDUCE THEIR VALUE. The old notes were not registered under the Securities Act or under the securities laws of any state. Therefore, they may not be resold, offered for resale, or otherwise transferred unless they are subsequently registered or resold pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. If you do not exchange your old notes for new notes pursuant to the exchange offer, you will not be able to resell, offer to resell, or otherwise transfer the old notes unless they are registered under the Securities Act or unless you resell them, offer to resell them or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act. In addition, we will no longer be required under the registration rights agreement to register the old notes under the Securities Act except under limited circumstances. ILLIQUIDITY AND AN ABSENCE OF A PUBLIC MARKET FOR THE NEW NOTES COULD CAUSE RECIPIENTS OF THE NEW NOTES TO BE UNABLE TO RESELL THE NEW NOTES FOR AN EXTENDED PERIOD OF TIME. The new notes constitute a new issue of securities for which there is no established trading market. An active trading market for the new notes may not develop or, if such market develops, it could be very illiquid. Holders of the new notes may experience difficulty in reselling, or an inability to sell, the new notes. If a market for the new notes develops, any such market may be discontinued at anytime. If a trading market develops for the new notes, future trading prices of the new notes will depend on many factors, including, among other things, prevailing interest rates, our operating results, liquidity of the issue, the market for similar securities and other factors, including our financial condition and prospects and the financial condition and prospects for companies in our industry. To the extent that old notes are tendered and accepted in the exchange offer, the trading market for old notes which are not tendered and for tendered-but-unaccepted old notes could be adversely affected due to the limited aggregate principal amount of old notes that we expect to remain outstanding following the completion of the exchange offer. Generally, when there are fewer outstanding securities of an issue, there is less demand to purchase that security, which results in a lower price for that security. Conversely, if many old notes are not tendered, or are tendered but unaccepted, the trading market for the few new notes issued could be adversely affected. 25 USE OF PROCEEDS This exchange offer is intended to satisfy certain of our obligations under the Registration Rights Agreement, dated as of November 24, 2003. We will not receive any proceeds from the issuance of the new notes and have agreed to pay the expenses of the exchange offer. In consideration for issuing the new notes as contemplated in the registration statement of which this prospectus is a part, we will receive, in exchange, old notes in like principal amount. The form and terms of the new notes are substantially the same as the form and terms of the old notes, except as otherwise described herein under "The Exchange Offer--Terms of the Exchange Offer." The old notes surrendered in exchange for the new notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the new notes will not result in any increase in our outstanding debt. The net proceeds from the issuance of the old notes were used to repay a portion of our then existing senior secured revolving credit facility, senior secured term loans, accounts receivable asset-backed securitization facility and for other general corporate purposes. 26 CAPITALIZATION The following table sets forth our capitalization as of September 30, 2003: - on an actual basis; and - as adjusted to reflect the refinancing transactions that occurred on November 24, 2003 described under the caption, "Prospectus Summary--The Refinancing", and the application of the proceeds therefrom, as if these transactions had occurred on September 30, 2003. This table should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this prospectus.
AS OF SEPTEMBER 30, 2003 ----------------------- AS ACTUAL ADJUSTED ------- -------- (IN MILLIONS) Cash and cash equivalents $ 24.2 $ 24.2 ======= ======= Debt(1): Existing senior secured revolving credit facility(2).................... $ 64.9 $ -- Existing senior secured term loan A..................................... 56.4 -- Existing senior secured term loan B..................................... 270.0 -- New senior secured revolving credit facility(3)......................... -- 50.1 9.5% Senior Notes due 2010.............................................. -- 285.0 Other debt.............................................................. 12.7 12.7 ------- ------- Total debt............................................................ $ 404.0 $ 347.8 ======= ======= Shareholders' equity: Series A redeemable convertible preferred stock............................. $ -- $ 103.5 Common stock................................................................ 0.4 0.4 Additional paid-in capital.............................................. 100.2 140.7 Treasury stock.......................................................... (50.4) (50.4) Retained earnings....................................................... 65.1 54.5 Accumulated other comprehensive loss.................................... (28.4) (26.1) Other shareholders' equity.............................................. (3.3) (3.3) ------- ------- Total shareholders' equity............................................ 83.6 219.3 ------- ------- Total capitalization................................................ $ 487.6 $ 567.1 ======= =======
- -------------------- (1) Debt does not include $72.8 million of borrowings under our off-balance sheet accounts receivable asset-backed securitization facility, which was terminated in connection with the refinancing transactions. (2) Borrowings outstanding as of October 24, 2003 were $21.9 million higher as a result of working capital changes since September 30, 2003. (3) Excludes $38.4 million of letters of credit outstanding under our senior secured revolving credit facility. Our senior secured revolving credit facility provides for aggregate borrowings of up to $240.0 million, subject to borrowing base limitations. 27 SELECTED HISTORICAL FINANCIAL INFORMATION The selected financial data for the years ended and as of December 31, 1998, 1999, 2000, 2001 and 2002 were derived from our audited consolidated financial statements. The selected financial data set forth in the following table for the nine months ended September 30, 2002 and 2003 and as of September 30, 2003 were derived from unaudited consolidated financial statements which, in the opinion of our management, include all adjustments necessary for a fair presentation of the results for the unaudited interim periods. The following selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes thereto. Certain reclassifications have been made to conform to the current year's presentation. During 1999, we acquired the worldwide energy cable and cable systems businesses of Balfour Beatty plc, formerly known as BICC plc, with operations in the United States, Canada, Europe, Africa, the Middle East and Asia Pacific. This acquisition was completed in three phases during 1999. The financial data presented below include the results of operations of the acquired businesses after the respective closing dates in 1999. In August 2000, we sold certain businesses acquired from BICC plc consisting primarily of the operations in the United Kingdom, Italy and Africa and a joint venture interest in Malaysia to Pirelli Cavie Sistemi S.p.A. The financial data presented below contain those operations sold to Pirelli during 2000 up through the date of sale. In September 2000, we acquired Telmag S.A. de C.V., a Mexico-based manufacturer of telecommunications cables. The financial data presented below include the results of operations of this business after the closing date. In March 2001, we sold our Pyrotenax business unit to Raychem HTS Canada, Inc. The results of operations of this business are included in the financial data presented below for the periods prior to the closing date. In September 2001, we announced our decision to exit the consumer cordsets business. In October 2001, we sold substantially all of the manufacturing assets and inventory of our building wire business to Southwire Company. The results of operations of these businesses are included in the financial data presented below for the periods prior to the closing date. Beginning in the third quarter of 2001, we have reported the building wire and cordsets segment as discontinued operations for financial reporting purposes. Administrative expenses formerly allocated to this segment are now reported in the continuing operations segments. Prior periods have been restated to reflect this change. 28
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------------------------------------------- --------------------- 1998 1999 2000(1) 2001(1) 2002 2002 2003 ------- -------- -------- -------- -------- -------- -------- (IN MILLIONS, EXCEPT RATIO AND METAL PRICE DATA) STATEMENT OF OPERATIONS DATA: Net sales: Energy................................ $ -- $ 505.3 $ 733.6 $ 521.8 $ 516.0 $ 389.0 $ 413.5 Industrial & specialty................ 200.0 579.8 796.7 537.6 499.4 383.1 395.1 Communications........................ 460.1 520.2 631.8 592.0 438.5 330.4 324.5 ------- -------- -------- -------- -------- -------- -------- Total net sales............................ 660.1 1,605.3 2,162.1 1,651.4 1,453.9 1,102.5 1,133.1 Cost of sales.............................. 519.9 1,312.8 1,870.4 1,410.7 1,287.3 972.1 998.7 Asset impairment charge.................... -- 24.5 -- -- -- -- -- ------- -------- -------- -------- -------- -------- -------- Gross profit............................... 140.2 268.0 291.7 240.7 166.6 130.4 134.4 Selling, general and administrative expenses................................ 62.2 174.7 257.6 136.4 150.9 116.2 93.6 ------- -------- -------- -------- -------- -------- -------- Operating income........................... 78.0 93.3 34.1 104.3 15.7 14.2 40.8 Other income............................... -- -- -- 8.1 -- -- -- Interest expense, net...................... (9.6) (38.0) (59.8) (43.9) (42.6) (31.1) (32.8) Other financial costs...................... -- -- (3.3) (10.4) (1.1) -- -- ------- -------- -------- -------- -------- -------- -------- Income (loss) before taxes................. 68.4 55.3 (29.0) 58.1 (28.0) (16.9) 8.0 Income tax benefit (provision)............. (25.7) (19.6) 10.3 (20.6) 9.9 6.0 (2.8) ------- -------- -------- -------- -------- -------- -------- Income (loss) from continuing operations... 42.7 35.7 (18.7) 37.5 (18.1) (10.9) 5.2 Income (loss) from discontinued operations. 28.5 (1.5) (7.7) (6.8) -- -- -- Loss on disposal of discontinued operations.............................. -- -- -- (32.7) (5.9) (3.9) -- ------- -------- -------- -------- -------- -------- -------- Net income (loss).......................... $ 71.2 $ 34.2 $ (26.4) $ (2.0) $ (24.0) $ (14.8) $ 5.2 ======= ======== ======== ======== ======== ======== ======== OTHER DATA: Depreciation and amortization.............. $ 18.5 $32.4 $ 56.0 $ 35.0 $ 30.6 $ 22.8 $ 23.2 Capital expenditures....................... (75.5) (97.6) (56.0) (54.9) (31.4) (22.8) (11.8) Ratio of earnings to fixed charges(2)...... 6.5x 2.3x -- 2.1x -- -- 1.2x Average daily COMEX price per pound of copper cathode........................ $ 0.75 $ 0.72 $ 0.84 $ 0.73 $ 0.72 $ 0.72 $ 0.77 Average daily selling price per pound of aluminum rod.......................... $ 0.66 $ 0.66 $ 0.75 $ 0.69 $ 0.65 $ 0.65 $ 0.67
DECEMBER 31, ---------------------------------------------------------- SEPTEMBER 30, 1998 1999 2000 2001 2002 2003 ------ -------- -------- --------- ------ ------------- BALANCE SHEET DATA: Cash and cash equivalents............... $ 3.4 $ 38.0 $ 21.2 $ 16.6 $ 29.1 $ 24.2 Working capital(3)...................... 233.8 468.2 375.3 169.9 150.8 133.4 Property, plant and equipment, net...... 210.8 438.7 379.4 320.9 323.3 326.8 Total assets............................ 651.0 1,568.3 1,319.2 1,005.3 973.3 977.9 Total debt(4)........................... 246.8 765.2 642.6 460.4 451.9 404.0 Net debt(4)(5).......................... 243.4 727.2 621.4 443.8 422.8 379.8 Shareholders' equity.................... 177.2 177.3 128.5 104.9 60.9 83.6
- ------------- 29 (1) As of January 1, 2001, we changed our accounting method for non-North American metal inventories from the FIFO method to the LIFO method. The impact of the change was an increase in operating income of $4.1 million, or $0.08 of earnings per share, on both a basic and a diluted basis during 2001. As of January 1, 2000, we changed our accounting method for our North American non-metal inventories from the FIFO method to the LIFO method. The impact of the change was an increase in operating income of $6.4 million, or $0.12 of earnings per share on both a basic and diluted basis, during 2000. (2) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations before income taxes and fixed charges. Fixed charges include: (i) interest expense, whether expensed or capitalized; (ii) amortization of debt issuance cost; (iii) the portion of rental expense representative of the interest factor; and (iv) the amount of pretax earnings required to cover preferred stock dividends and any accretion in the carrying value of the preferred stock. For the years ended December 31, 2000 and 2002 and the nine months ended September 30, 2002, earnings were insufficient to cover fixed charge by $28.9 million, $27.6 million and $16.5 million, respectively. Our historical ratio of earnings to fixed charges and preferred stock dividends is the same as our historical ratio of earnings to fixed charges because we did not pay or accrue any preferred stock dividends during the periods presented. (3) Working capital means current assets less current liabilities. (4) Excludes off-balance sheet borrowings of $67.8 million at December 31, 2001, $48.5 million at December 31, 2002 and $72.8 million at September 30, 2003. There were no off-balance sheet borrowings as of December 31, 1998, 1999 and 2000. (5) Net debt means our total debt less cash and cash equivalents. 30 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL We are a leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial & specialty and communications markets. Energy cables include low-, medium- and high-voltage power distribution and power transmission products. Industrial & specialty wire and cable products conduct electrical current for industrial and commercial power and control applications. Communications wire and cable products transmit low-voltage signals for voice, data, video and control applications. We operate our businesses in three main geographic regions: 1) North America, 2) Europe and 3) Oceania. The following table sets forth net sales and operating income by geographic region for the periods presented, in millions of dollars:
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30, --------------------------------------------------- ---------------------------------- 2000 2001 2002 2002 2003 -------------- -------------- ---------------- ---------------- --------------- AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % -------- --- -------- --- --------- --- --------- --- -------- --- NET SALES: North America............ $1,399.8 79% $1,267.7 77% $ 1,077.2 74% $ 825.9 75% $ 793.3 70% Europe................... 323.9 18% 322.2 19% 314.7 22% 232.0 21% 277.9 25% Oceania.................. 55.0 3% 61.5 4% 62.0 4% 44.6 4% 61.9 5% -------- --- -------- --- --------- --- --------- --- -------- --- Subtotal................ 1,778.7 100% 1,651.4 100% 1,453.9 100% 1,102.5 100% 1,133.1 100% === === === === === Divested businesses...... 383.4 -- -- -- -- -------- -------- --------- --------- -------- Total net sales......... $2,162.1 $1,651.4 $ 1,453.9 $ 1,102.5 $1,133.1 ======== ======== ========= ========= ======== OPERATING INCOME: North America............ $ 100.5 78% $71.7 66% $ 15.0 31% $ 18.1 42% $ 8.1 19% Europe................... 24.1 18% 29.6 27% 27.7 56% 20.4 48% 27.6 65% Oceania.................. 5.8 4% 6.8 6% 6.4 13% 4.4 10% 6.8 16% -------- --- -------- --- --------- --- --------- --- -------- --- Subtotal................ 130.4 100% 108.1 100% 49.1 100% 42.9 100% 42.5 100% === === === === === Divested businesses...... (96.3) -- -- -- -- Corporate charges........ -- (3.8) (33.4) (28.7) (1.7) -------- -------- --------- --------- -------- Total operating income.. $ 34.1 $ 104.3 $ 15.7 $ 14.2 $ 40.8 ======== ======== ========= ========= ========
Cash flow from operations in North America accounted for 80%, 76%, 83% and 94% of our total cash flow from operations for the years ended December 31, 2001 and 2002 and nine months ended September 30, 2002 and 2003. Aggregate cash flow from operations in Europe and Oceania accounted for 20%, 24%, 17% and 6% of our total cash flow from operations for the years ended December 31, 2001 and 2002 and nine months ended September 30, 2002 and 2003. For the year ended December 31, 2000, we generated $60.1 million in cash flow from operations in North America and used $44.0 million in cash flow from operations outside North America. Approximately 90% of net sales in Europe and Oceania are derived from energy and industrial & specialty cable sales. As a result, these businesses have not been significantly impacted by the global telecommunications spending downturn and the European business specifically is currently benefiting from medium voltage energy cable capacity shortage in Europe and a shift towards environmentally friendly cables. Our reported net sales are directly influenced by the price of copper and to a lesser extent aluminum. The price of copper and aluminum has historically been subject to considerable volatility, with the daily selling price of copper cathode on the COMEX averaging $0.77 per pound in the first nine months of 2003, $0.72 per pound in 2002, $0.73 per pound in 2001 and $0.84 per pound in 2000 and the daily selling price of aluminum rod averaging $0.67 per pound in the first nine months of 2003, $0.65 per pound in 2002, $0.69 per pound in 2001 and $0.75 per 31 pound in 2000. We generally pass changes in copper and aluminum prices along to our customers, although there are timing delays of varying lengths depending upon the type of product, competitive conditions and particular customer arrangements. As a result of this and a number of other practices intended to match copper and aluminum purchases with sales, our profitability has generally not been significantly affected by changes in copper and aluminum prices. We do not engage in speculative metals trading or other speculative activities. Also, we do not engage in activities to hedge the underlying value of our copper and aluminum inventory. We generally experience certain seasonal trends in sales and cash flow. Larger amounts of cash are generally required during the first and second quarters of the year to build inventories in anticipation of higher demand during the spring and summer months, when construction activity increases. In general, receivables related to higher sales activity during the spring and summer months are collected during the fourth quarter of the year. CURRENT BUSINESS ENVIRONMENT AND OUTLOOK We are operating in a difficult business environment. The wire and cable industry is competitive, mature and cost driven. In many business segments, there is little differentiation among industry participants from a manufacturing or technology standpoint. In addition to these general industry conditions, in the industrial & specialty segment, industrial construction spending in North America, which influences industrial cable demand, is significantly less than the past ten-year peak level. However, this segment is also experiencing stable demand for cables utilized in industrial repairs and maintenance and for the ignition wire sets sold to the automotive aftermarket. The communications segment has experienced a significant decline from historical spending levels for outside plant telecommunications products and a weak market for switching/local area networking cables. We believe sales for communications wire and cable products will increase over time because current levels of spending by our communication wire and cable customers are insufficient to maintain their network infrastructures. In addition, the 2003 power outages in the U.S., Canada and Europe emphasized a need to upgrade the power transmission infrastructure used by electric utilities, which may over time cause an increase in demand for our products. For more details, see "Business-Industry and Market Overview" for additional information relating to our markets. We believe our investment in Lean Six Sigma training, coupled with effectively utilized manufacturing assets, provides a cost advantage compared to many of our competitors and generates costs savings which help offset rising raw material prices and other general economic cost increases. In addition, our customer and supplier integration capabilities, one-stop selling, and geographic and product balance are sources of competitive advantage. As a result, we believe we are well positioned, relative to our competitors, in the current difficult business environment. As part of our ongoing efforts to reduce our total operating costs, we continuously evaluate our ability to more efficiently utilize our existing manufacturing capacity. Such evaluation includes the costs associated with and benefits to be derived from the combination of existing manufacturing assets into fewer plant locations and the possible outsourcing of certain manufacturing processes. During the first quarter of 2001, we closed one of our communication cable plants and incurred a pre-tax charge of approximately $4.8 million in that quarter. In the second quarter of 2002, we incurred a pre-tax charge of $19.7 million in conjunction with the closure of two additional communication cable plants. We are in the process of closing one of our North American manufacturing facilities, which we expect will result in approximately $7 million of costs, of which approximately $4 million will be cash costs. We are also in the process of significantly reducing operations at another facility which will result in approximately $16.0 million of costs, of which approximately $6.6 million will be cash costs. In addition, we are currently evaluating the closure of one additional facility. We plan to announce the result of our evaluation early in 2004. The cost to rationalize this facility could approximate $4 million, with cash costs of approximately $1.5 million. Our expectations related to future financial results are forward-looking statements within the meaning of the securities laws and must be viewed in light of the discussion under the heading "Forward-looking Statements." We caution you not to place undue reliance on these expectations, which are speculative in nature. Our actual results may differ materially from these expectations due to various risks including, without limitation, decreases in our customers' capital spending from their current levels in the U.S. and other markets in which we operate; reductions or delays in customer orders for our products; increases in the price of, or decreases in availability of, our supply of 32 raw materials we use in our manufacturing process; changes in our expectations relating to inventory reductions and other risks identified under "Forward-looking Statements" and "Risk Factors." ACQUISITIONS AND DIVESTITURES We actively seek to identify key trends in the industry to migrate our business to capitalize on expanding markets and new niche markets or exit declining or non-strategic markets in order to achieve better returns. We also set aggressive performance targets for our business and intend to refocus or divest those activities which fail to meet our targets or do not fit our long-term strategies. During 1999, we acquired the worldwide energy cable and cable systems businesses of Balfour Beatty plc, formerly known as BICC plc, with operations in the United States, Canada, Europe, Africa, the Middle East and Asia Pacific. This acquisition was completed in three phases during 1999 for a total payment of $385.8 million. The acquisition was accounted for as a purchase, and accordingly, the results of operations of the acquired businesses are included in the consolidated financial statements for periods after the respective closing dates. In December 1999, we decided to sell certain business units due to their deteriorating operating performance. On February 9, 2000, we signed a definitive agreement with Pirelli Cavie Sistemi S.p.A., of Milan, Italy, for the sale of the stock of these businesses for proceeds of $216 million, subject to closing adjustments. The closing adjustments included changes in net assets of the businesses sold since November 30, 1999, resulting from operating losses and other adjustments as defined in the sale agreement. The businesses sold were acquired from BICC plc during 1999 and consisted primarily of the operations in the United Kingdom, Italy and Africa and a joint venture interest in Malaysia. Gross proceeds of $180 million were received during the third quarter of 2000 as a down payment against the final post-closing adjusted purchase price. During the third quarter of 2001, the final post-closing adjusted purchase price was agreed as $164 million resulting in the payment of $16 million to Pirelli. We provided for a larger settlement amount in the third quarter of 2000, and therefore, $7 million of income was recognized in the third quarter of 2001. Proceeds from the transaction have been used to reduce our outstanding debt. In September 2000, we acquired Telmag S.A. de C.V., a Mexico-based manufacturer of telecommunications cables for $23 million. The acquisition brought us additional outside plant telecommunications cable capacity as well as provided available capacity for a broad range of other telecommunications cables. In March 2001, we sold the shares of our Pyrotenax business unit to Raychem HTS Canada, Inc., a business unit of Tyco International, Ltd., for $60 million, subject to closing adjustments. The business unit, with operations in Canada and the United Kingdom, principally produced mineral insulated high-temperature cables. During the second quarter of 2002, the final post-closing adjusted purchase price was agreed and resulted in a payment to Tyco International, Ltd. of approximately $2 million during the third quarter of 2002. The proceeds from the transaction were used to reduce our debt. In September 2001, we announced our decision to exit the consumer cordsets business. As a result of this decision, we closed our Montoursville, Pennsylvania plant. This facility manufactured cordset products including indoor and outdoor extension cords, temporary lighting and extension cord accessories. In October 2001, we sold substantially all of the manufacturing assets and inventory of our building wire business to Southwire Company for $82 million of cash proceeds and the transfer to us of certain data communication cable manufacturing equipment. Under the building wire sale agreement, Southwire purchased the inventory and substantially all of the property, plant and equipment located at our Watkinsville, Georgia and Kingman, Arizona facilities and the wire and cable manufacturing equipment at our Plano, Texas facility. We retained and continue to operate the copper rod mill in Plano, however we have closed the Plano wire mill. The assets sold were used in manufacturing building wire products principally for the retail and electrical distribution markets. During the second quarter of 2002, the final purchase price for this transaction was agreed resulting in a de minimis cash payment to Southwire. Proceeds from the transaction have been used to reduce our outstanding debt. 33 Beginning in the third quarter of 2001, we have reported the building wire and cordsets segment as discontinued operations for financial reporting purposes. Administrative expenses formerly allocated to this segment are now reported in the continuing operations segments. Prior periods have been restated to reflect this change. During the second quarter of 2002, we formed a joint venture company to manufacture and market fiber optic cables. We contributed assets, primarily inventory and machinery and equipment, to a subsidiary company which was then contributed to the joint venture in exchange for a $10.2 million note receivable which resulted in a $5.6 million deferred gain on the transaction. We will recognize the gain as the note is repaid. At December 31, 2002 and September 30, 2003, other non-current assets included an investment in the joint venture of $3.8 million. The December 31, 2002 and September 30, 2003 balance sheets included a $10.2 million note receivable from the joint venture in other non-current assets and a deferred gain from the initial joint venture formation of $5.6 million in other liabilities. Growth through acquisition has been, and is expected to continue to be, a significant part of our strategy. We regularly evaluate possible acquisition candidates. We cannot assure you that we will be successful in identifying, financing and closing acquisitions at favorable prices and terms. For more details, see "Risk Factors--Other Risks Relating to Our Business--We may not be able to successfully identify, finance or integrate acquisitions." SIGNIFICANT ACCOUNTING POLICIES Management's Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. A summary of significant accounting policies is provided in Note 2 to Notes to Audited Consolidated Financial Statements. The application of these policies requires management to make estimates and judgments that affect the amounts reflected in the financial statements. Management based its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The critical judgments impacting the financial statements include determinations with respect to inventory valuation, pension accounting and valuation allowances for deferred income taxes. We utilize the LIFO method of inventory accounting for our metals inventory. Our use of the LIFO method results in our income statement reflecting the current costs of metals, while metals inventories in the balance sheet are valued at historical costs as the LIFO layers were created. As a result of declining copper prices, the historic LIFO cost of our copper inventory exceeded its replacement cost by approximately $16 million at December 31, 2002 and $5 million at September 30, 2003. If we were not able to recover the LIFO value of our inventory at a profit in some future period when replacement costs were lower than the LIFO value of the inventory, we would be required to take a charge to recognize in our income statement all or a portion of the higher LIFO value of the inventory. Additionally, if LIFO inventory quantities are reduced in a period when replacement costs are lower than the LIFO value of the inventory, we would experience a decline in reported earnings. In 2002, we recorded a $2.5 million charge ($1.4 million in the third quarter and $1.1 million in the fourth quarter of 2002) for the liquidation of LIFO inventory in North America as we significantly reduced our inventory levels. We have further reduced inventory quantities during the third quarter of 2003 and as a result have recorded a $0.8 million charge. Pension expense for the defined benefit pension plans sponsored by us is determined based upon a number of actuarial assumptions, including an expected long-term rate of return on assets of 9.0%. This assumption was based on input from our actuaries, including their review of historical 10 year, 20 year, and 25-year rates of inflation and real rates of return on various broad equity and bond indices in conjunction with the diversification of the asset portfolio. The expected long-term rate of return on assets is based on an asset allocation assumption of 65% allocated to equity investments, with an expected real rate of return of 7%, and 35% with fixed-income investments, with an expected real rate of return of 3%, and an assumed long-term rate of inflation of 3.5%. Because of market 34 fluctuations, the actual asset allocation as of December 31, 2002 and September 30, 2003 were 78% and 76%, respectively, of equity investments and 22% and 24%, respectively, of fixed-income investments. The determination of pension expense for defined benefit pension plans is based on a market-related valuation of assets, which reduces year-to-year volatility. This market-related valuation recognizes investment gains or losses over a three-year period from the year in which they occur. Investment gains and losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market-related value of assets. Since the market-related value of assets recognizes gains or losses over a three-year period, the future value of assets will be impacted as previously deferred gains or losses are recorded. The determination of future pension obligations utilizes a discount rate based on a review of long-term bonds that receive one of the two highest ratings given by a recognized rating agency which are expected to be available during the period to maturity of the projected pension benefits obligations, and input from our actuaries. The discount rate used at December 31, 2002 was 6.5%. We evaluate our actuarial assumptions, at least annually, and adjust them as necessary. Due to the effect of the unrecognized actuarial losses based on an expected rate of return on plan assets of 9.0%, a discount rate of 6.5% and various other assumptions, our pension expense for our defined benefit plans will be approximately $8.4 million in 2003. In 2004, pension expense is expected to decrease $2.8 million from 2003 principally due to an increase during 2003 in the market value of the assets held. A 1% decrease in the assumed discount rate would increase pension expense by approximately $0.8 million. Future pension expense will depend on future investment performance, changes in future discount rates and various other factors related to the populations participating in the plans. In the event that actual results differ from the actuarial assumptions, the funded status of the defined benefit plans may change and any such deficiency could result in a charge to equity and an increase in future pension expense and cash contributions. We record a valuation allowance to reduce our deferred tax assets to the amount that we believe is more likely than not to be realized. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. Likewise, should we determine that we would be able to realize our deferred tax assets in the future in an amount that was in excess of our net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. At December 31, 2002 and 2001, the valuation allowance was $19.2 million and $5.6 million, respectively. At September 30, 2003, the valuation allowance was $19.2 million. RESULTS OF OPERATIONS The following tables set forth, for the periods indicated, statement of operations data in millions of dollars and as a percentage of net sales. For the year ended December 31, 2000 the results of operations are split between the ongoing businesses after the closing of the transaction with Pirelli and those that have been divested. Percentages may not add due to rounding. 35
ONGOING BUSINESSES YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30, --------------------------------------------------------- -------------------------------------- 2000 2001 2002 2002 2003 ----------------- ----------------- ----------------- ----------------- ----------------- AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % ---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- ----- Net sales..................... $ 1,778.7 100.0% $ 1,651.4 100.0% $ 1,453.9 100.0% $ 1,102.5 100.0% $ 1,133.1 100.0% Cost of sales................. 1,486.8 83.6 1,410.7 85.4 1,287.3 88.5 972.1 88.2 998.7 88.1 ---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- ----- Gross profit.................. 291.9 16.4 240.7 14.6 166.6 11.5 130.4 11.8 134.4 11.9 Selling, general and administrative expenses.. 161.5 9.1 136.4 8.3 150.9 10.4 116.2 10.5 93.6 8.3 ---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- ----- Operating income.............. 130.4 7.3 104.3 6.3 15.7 1.1 14.2 1.3 40.8 3.6 Other income.................. -- -- 8.1 0.5 -- -- -- -- -- -- Interest expense, net......... (45.8) (2.6) (43.9) (2.7) (42.6) (2.9) (31.1) (2.8) (32.8) (2.9) Other financial costs......... -- -- (10.4) (0.6) (1.1) (0.1) -- -- -- -- ---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- ----- Earnings (loss) from continuing operations before income taxes...... 84.6 4.8 58.1 3.5 (28.0) (1.9) (16.9) (1.5) 8.0 0.7 Income tax (provision) benefit.................. (30.1) (1.7) (20.6) (1.2) 9.9 0.7 6.0 0.5 (2.8) (0.2) ---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- ----- Income (loss) from continuing operations (net of tax).............. 54.5 3.1 37.5 2.3 (18.1) (1.2) (10.9) (1.0) 5.2 0.5 Loss from discontinued operations............... (7.7) (0.4) (6.8) (0.4) -- -- -- -- -- -- Loss on disposal of discontinued operations (net of tax)............. -- -- (32.7) (2.0) (5.9) (0.4) (3.9) (0.4) -- -- ---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- ----- Net income (loss)............. $ 46.8 2.6% $ (2.0) (0.1)% $ (24.0) (1.7)% $ (14.8) (1.4)% $ 5.2 (0.5)% ========== ===== ========== ===== ========== ===== ========== ===== ========== =====
DIVESTED BUSINESSES YEAR ENDED DECEMBER 31, 2000 ---------------------------- AMOUNT % ------- ------ Net sales..................... $ 383.4 100.0% Cost of sales................. 383.6 100.0 ------- ----- Gross profit (loss)........... (0.2) -- Selling, general and administrative expenses.. 96.1 25.1 ------- ----- Operating loss................ (96.3) (25.1) Interest expense, net......... (14.0) (3.7) Other financial costs......... (3.3) (0.9) ------- ----- Loss before income taxes...... (113.6) (29.6) Income tax benefit............ 40.4 10.5 -------- ----- Net loss...................... $ (73.2) (19.1)% ======== =====
36
TOTAL COMPANY YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------------------------------- ------------------------------------ 2000 2001 2002 2002 2003 ------------------ ----------------- ----------------- ----------------- ---------------- AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % --------- ----- -------- ----- -------- ----- -------- ----- -------- ----- Net sales..................... $2,162.1 100.0% $1,651.4 100.0% $1,453.9 100.0% $1,102.5 100.0% $1,133.1 100.0% Cost of sales................. 1,870.4 86.5 1,410.7 85.4 1,287.3 88.5 972.1 88.2 998.7 88.1 -------- ----- -------- ----- -------- ----- -------- ----- -------- ----- Gross profit.................. 291.7 13.5 240.7 14.6 166.6 11.5 130.4 11.8 134.4 11.9 Selling, general and administrative expenses.. 257.6 11.9 136.4 8.3 150.9 10.4 116.2 10.5 93.6 8.3 -------- ----- -------- ----- -------- ----- -------- ----- -------- ----- Operating income.............. 34.1 1.6 104.3 6.3 15.7 1.1 14.2 1.3 40.8 3.6 Other income.................. -- -- 8.1 0.5 -- -- -- -- -- -- Interest expense, net......... (59.8) (2.8) (43.9) (2.7) (42.6) (2.9) (31.1) (2.8) (32.8) (2.9) Other financial costs......... (3.3) (0.2) (10.4) (0.6) (1.1) (0.1) -- -- -- -- -------- ----- -------- ----- -------- ----- -------- ----- -------- ----- Earnings (loss) from continuing operations before income taxes...... (29.0) (1.3) 58.1 3.5 (28.0) (1.9) (16.9) (1.5) 8.0 0.7 Income tax (provision) benefit.................. 10.3 0.5 (20.6) (1.2) 9.9 0.7 6.0 0.5 (2.8) (0.2) -------- ----- -------- ----- -------- ----- -------- ----- -------- ----- Income (loss) from continuing operations (net of tax).. (18.7) (0.9) 37.5 2.3 (18.1) (1.2) (10.9) (1.0) 5.2 0.5 Loss from discontinued operations............... (7.7) (0.4) (6.8) (0.4) -- -- -- -- -- -- Loss on disposal of discontinued operations (net of tax)............. -- -- (32.7) (2.0) (5.9) (0.4) (3.9) (0.4) -- -- -------- ----- -------- ----- -------- ----- -------- ----- -------- ----- Net income (loss)............. ($ 26.4) 1.2% ($ 2.0) (0.1)% ($ 24.0) (1.7)% ($ 14.8) (1.4)% $ 5.2 (0.5)% ======== ===== ======== ===== ======== ===== ======== ===== ======== =====
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2002 Net income was $5.2 million, or $0.16 on a per diluted share basis in the first nine months of 2003 compared to a net loss of $(14.8) million, or $(0.45) per diluted share, in the first nine months of 2002. The net income for the first nine months of 2003 includes a pre-tax charge of $0.8 million for the liquidation of LIFO inventory quantities in North America and a pre-tax corporate charge of $1.7 million for severance related to our ongoing cost cutting efforts in Europe. The first nine months of 2002 net loss of $(14.8) million includes a pre-tax charge of $1.4 million for the liquidation of LIFO inventories and pre-tax corporate charges of $20.5 million to close two manufacturing plants in North America, $3.6 million to reduce to fair value certain assets contributed to our Fiber Optic joint venture created in the second quarter, a $2.9 million charge related to severance costs and $1.7 million related to the sale of our small non-strategic, United Kingdom based specialty cables business. The first nine months of 2002 net loss of $(14.8) million also includes a $6.0 million discontinued operations pre-tax charge principally related to an estimated lower net realizable value for real estate remaining from our former building wire business, a longer than anticipated holding period for three distribution centers with unexpired lease commitments and certain other costs. Net Sales The following table sets forth metal-adjusted net sales by segment in millions of dollars. Net sales for the first nine months of 2002 have been adjusted to reflect the first nine months of 2003 copper COMEX average price of $0.77 and the aluminum rod average price of $0.67 per pound. 37
METAL ADJUSTED NET SALES NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------ 2002 2003 --------------------- ----------------------- AMOUNT % AMOUNT % -------- --- --------- --- Energy.................................................... $ 396.8 35% $ 413.5 36% Industrial & specialty.................................... 388.8 35 395.1 35 Communications............................................ 335.0 30 324.5 29 -------- --- --------- --- Total metal-adjusted net sales....................... 1,120.6 100% 1,133.1 100% === === Metal adjustment.......................................... (18.1) -- -------- --------- Total net sales...................................... $1,102.5 $ 1,133.1 ======== =========
Net sales increased 3% to $1,133.1 million in the first nine months of 2003 from $1,102.5 million in the first nine months of 2002. The net sales increase included $62.4 million favorable impact of foreign currency exchange rate changes principally related to our European operations. After adjusting 2002 net sales to reflect the $0.05 increase in the average monthly COMEX price per pound of copper and the $0.02 increase in the average aluminum rod price per pound in the first nine months of 2003, net sales increased 1% to $1,133.1 million, up from $1,120.6 million in 2002. The increase in metal-adjusted net sales reflects a 4% increase in the energy segment, a 2% increase in the industrial & specialty segment and 3% decrease in the communications segment. The 4% increase in metal-adjusted net sales for the energy segment reflects a 24% increase in net sales in our international operations, partially offset by a 3% decrease in net sales in North America. Our international operations have benefited from increased sales resulting from new contract awards throughout Europe and a favorable impact from changes in foreign currency exchange rates. The North American net sales decrease reflects lower sales volume, however, during the third quarter of 2003, customer demand strengthened versus the same period in the prior year. We anticipate that sales volume for North American customers should continue to improve over time as utility customers address capital projects that were previously deferred. These capital projects include enhancements to the power transmission and distribution grid. However, in the first nine months of 2003 projects were not released as quickly as expected. Management believes the timing of these projects has slowed in anticipation of pending energy legislation in the United States. This legislation could provide future regulatory relief and allow North American utility companies to earn an adequate rate of return on their investment in upgrading the transmission grid infrastructure. The sales volume in the first quarter of 2003 was also negatively impacted by unseasonable weather in the Midwest and Northeast, which affected the ability of our customers to install cables. The 2% increase in metal-adjusted net sales in the industrial & specialty segment was principally due to a 17% increase in our international operations, growth in our domestic automotive aftermarket business and an increase in sales of industrial cables utilized in repairs and maintenance. The increase in net sales of our international operations includes a favorable impact from changes in foreign currency exchange rates and the introduction of environmentally friendly cables in Europe, an area in which our European operation is a leader. These increases were partially offset by a 20% decrease in net sales of the North American industrial business, the result of the continued weakness in demand for cables utilized in new industrial construction and other major infrastructure projects, which is expected to continue through 2003. The 3% decrease in the communications segment metal-adjusted net sales principally relates to a decrease in North American sales volume of telephone exchange cable and data communication cable. Metal-adjusted net sales of telephone exchange cable were off 5% for the first nine months of 2003 compared to the same period in 2002. However, during the third quarter of 2003, customer demand strengthened compared to the same period in the prior year. As a result of our position as a low cost producer, these products have historically been one of our most profitable business segments. The timing of the resumption of sales of telephone exchange cables to the telephone operating companies to more historic levels is unknown and represents a significant area of uncertainty with regard to our financial future performance. The sales volume decrease in data communication cables is the result of information technology infrastructure spending being constrained. Selling, General and Administrative Expense Selling, general and administrative expense decreased to $93.6 million in the first nine months of 2003 from $116.2 million in the first nine months of 2002. This decrease reflects the impact of actions taken to reduce 38 fixed SG&A expense and controllable spending. These actions were partially offset by increased medical and pension related costs experienced during 2003 and the impact of increased SG&A expense in our European operations as a result of foreign currency exchange rate changes. In addition, SG&A expense includes $1.7 million of severance costs related to our European operations in the first nine months of 2003 and $23.8 million of corporate charges, primarily relating to the closure of manufacturing plants and severance costs, for the same period in 2002. Operating Income The following table sets forth operating income by segment, in millions of dollars.
OPERATING INCOME NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------------------- 2002 2003 --------------------- ----------------------- AMOUNT % AMOUNT % -------- --- --------- --- Energy.................................................... $ 28.7 67% $ 29.4 69% Industrial & specialty.................................... 7.5 17 7.8 18 Communications............................................ 6.7 16 5.3 13 ------- --- --------- --- Subtotal excluding corporate charges................... 42.9 100% 42.5 100% === === Corporate charges......................................... (28.7) (1.7) ------- --------- Total operating income................................. $ 14.2 $ 40.8 ======= =========
Operating income of $40.8 million for the first nine months of 2003 increased from $14.2 million for the first nine months of 2002. This increase is primarily the result of reduced corporate charges in 2003, as discussed above. Operating income also increased due to our ongoing cost reduction initiatives in SG&A and manufacturing, strong performance from our European operations, the favorable impact of foreign currency exchange rate changes and a $0.6 million reduction in the LIFO liquidation charge incurred in 2003 compared to 2002. Offsetting these increases were reduced selling prices in the North American communications and, to a lesser extent, energy segments and reduced North American sales volume. Additionally, increased raw material costs (most notably polyethylene) which were not fully recovered during the 2003 nine-month period and higher pension and employee fringe benefit costs negatively impacted operating income. Interest Expense Net interest expense increased to $32.8 million in the first nine months of 2003 from $31.1 million in 2002. The increase in interest expense is primarily the result of a higher credit spread for our borrowings due to the October 2002 credit facility amendment and the amortization of bank fees related to the amendment, partially offset by lower average net borrowings and lower interest rates on the floating rate portion of our debt. Tax Rates Our effective tax rate for 2003 and 2002 was 35.5%. YEAR ENDED DECEMBER 31, 2002 COMPARED WITH YEAR ENDED DECEMBER 31, 2001 The net loss was $(24.0) million, or $(0.73) per diluted share, in 2002 compared to a net loss of $(2.0) million, or $(0.06) per diluted share, in 2001. The 2002 net loss of $(24.0) million includes a $2.5 million charge related to the liquidation of LIFO inventory quantities in North America and pre-tax corporate charges of $34.5 million, of which $5.6 million was recorded in cost of sales (see Note 4 to Notes to Audited Consolidated Financial Statements), $27.8 million was recorded in selling, general and administrative expense (see Note 4 to Notes to Audited Consolidated Financial Statements) and $1.1 million was recorded in other financial costs. These charges consisted of $21.2 million to close two manufacturing plants in North America, $6.9 million in severance and severance related costs worldwide, $3.6 million to reduce to fair value certain assets contributed to our fiber optic joint venture created in the second quarter, $1.7 million related to the sale of our non-strategic, United Kingdom based specialty cables business, and $1.1 million related to the write-off of unamortized bank fees as a result of the October 2002 amendment to our credit facility. The 2002 net loss of $(24.0) million also includes a $9.1 million discontinued operations pre-tax charge principally related to an estimated lower net realizable value for 39 real estate remaining from our former building wire business, a longer than anticipated holding period for three distribution centers with unexpired lease commitments and certain other costs. The 2001 net loss of $(2.0) million includes net pre-tax corporate charges of $56.8 million consisting of $6.1 million of net continuing operations charges and $50.7 million of charges related to the disposal of discontinued operations. The $6.1 million of 2001 pre-tax operating charges includes $7.0 million of charges recorded in cost of sales (see Note 4 to Notes to Audited Consolidated Financial Statements), a net of $3.2 million of income reported in selling, general and administrative expense (see Note 4 to Notes to Audited Consolidated Financial Statements), $8.1 million reported as other income and $10.4 million reported as other financial costs. The $6.1 million of 2001 pre-tax charges includes $8.1 million of income from a foreign exchange gain on the extinguishment of long-term debt in the United Kingdom, a net gain of $23.8 million related to the sale of the Pyrotenax business and $7.0 million in income from the settlement of the final purchase price of certain assets sold to Pirelli, all more than offset by $16.5 million in severance costs, $4.8 million in costs to close a manufacturing plant, a $5.5 million loss on the sale of our non-strategic business that designed and manufactured extrusion tooling and accessories, $10.4 million in costs associated with our accounts receivable asset-backed securitization program and a restructuring of our interest costs, $7.0 million in inventory disposal costs and $0.8 million of other costs. The $50.7 million of charges related to the disposal of discontinued operations consists of $21.4 million related to the sale of the building wire business, $16.6 million for the closure of our Montoursville, Pennsylvania plant, which manufactured retail cordsets, $10.6 million for the closure of four regional distribution centers and $2.1 million for other costs. Net Sales The following table sets forth metal-adjusted net sales by segment, in millions of dollars. Net sales for the year 2001 have been adjusted to the 2002 copper COMEX average of $0.72 per pound and the aluminum rod average of $0.65 per pound.
METAL ADJUSTED NET SALES YEAR ENDED DECEMBER 31, ---------------------------------------------- 2001 2002 --------------------- ---------------------- AMOUNT % AMOUNT % -------- --- --------- --- Energy..................................................... $ 511.2 31% $ 516.0 36% Industrial & specialty..................................... 534.9 33 499.4 34 Communications............................................. 589.4 36 438.5 30 -------- --- --------- --- Total metal-adjusted net sales........................ 1,635.5 100% 1,453.9 100% === === Metal adjustment........................................... 15.9 -- -------- --------- Total net sales....................................... $1,651.4 $ 1,453.9 ======== =========
Net sales decreased 12% to $1,453.9 million in 2002 from $1,651.4 million in 2001. The net sales decrease is net of a $21 million favorable impact of exchange rate changes from 2001 to 2002. After adjusting 2001 net sales to reflect the $0.01 decrease in the average monthly COMEX price per pound of copper and the $0.04 decrease in the average aluminum rod price per pound in 2002, net sales decreased 11% to $1,453.9 million, down from $1,635.5 million in 2001. The decrease in metal-adjusted net sales reflects a 1% increase in energy products, a 7% decrease in industrial & specialty products and 26% decrease in communication products. The 26% decrease in communication products metal-adjusted net sales principally relates to lower sales volume of outside plant telecommunications cable and to a lesser extent high bandwidth networking cables. Sales volume for outside plant telecommunications cable decreased year over year as many customers significantly reduced their capital spending in 2002. The increase of 1% in metal-adjusted net sales in the energy products segment is the result of higher volume in the North American market as we realize the effect of new contracts won during 2001 and higher sales in Europe as we continue to enjoy an increased presence with major European utilities. During the second half of 2002, we benefited from contract awards won earlier in the year, including a two-year supply agreement with Electricite de France, one of Europe's largest electric utility companies. This contract award for medium voltage energy cables commenced in June 2002 and is valued at the equivalent of approximately $30 million through 2004. We also 40 benefited from our expanded position in the Italian and United Kingdom energy cables markets. Partially offsetting these volume increases was lower pricing in the North American market. The 7% decrease in industrial & specialty products metal-adjusted net sales includes the negative impact of the March 2001 divestiture of the Pyrotenax business and the June 2001 divestiture of our extrusion tooling business. Excluding the impact of these businesses, industrial & specialty products metal-adjusted net sales decreased 5% from the prior year. This decrease is primarily the result of continued weak demand and pricing in many industrial sectors of the North American economy. This decrease is partially offset by a 4% increase in metal-adjusted net sales for our international operations. Selling, General and Administrative Expense Selling, general and administrative expense increased to $150.9 million in 2002 from $136.4 million in 2001. The 2002 and 2001 SG&A expense includes $27.8 million of corporate operating expenses and $3.2 million of corporate operating income, respectively (see Note 4 to Notes to Audited Consolidated Financial Statements). Excluding these expenses and income, SG&A expense on a consistent basis decreased 12%. The 12% reduction reflects the lower sales volumes and the impact of an aggressive program implemented since November 2001 to reduce fixed selling, general and administrative expense and controllable spending. The program included the elimination of salaried and hourly positions worldwide and other actions. Despite a 12% decrease in reported net sales year over year, selling, general and administrative expense, before corporate operating items, as a percent of net sales was flat compared to 2001 at 8.5%. Operating Income The following table sets forth operating income by segment, in millions of dollars.
OPERATING INCOME YEAR ENDED DECEMBER 31, ---------------------------------------------- 2001 2002 --------------------- ---------------------- AMOUNT % AMOUNT % -------- --- --------- --- Energy..................................................... $ 35.3 33% $ 36.9 75% Industrial & specialty..................................... 24.3 22 9.7 20 Communications............................................. 48.5 45 2.5 5 ------- --- ------- --- Subtotal excluding corporate charges.................. 108.1 100% 49.1 100% === === Corporate charges.......................................... (3.8) (33.4) ------- ------- Total operating income................................ $ 104.3 $ 15.7 ======= =======
As of January 1, 2001, we changed our accounting method related to our non-North American metals inventory from the FIFO method to the LIFO method, resulting in a $4.1 million increase in operating income in 2001. Operating income, including the corporate operating charges of $33.4 million in 2002 discussed above and the $3.8 million of corporate operating items in 2001 noted above, decreased 85% to $15.7 million in 2002 from $104.3 million in 2001. Excluding the corporate operating charges of $33.4 million in 2002 and $3.8 million in 2001, operating income decreased 55% to $49.1 million in 2002 from $108.1 million in 2001. Operating income decreased principally as a result of reduced sales volume in the Communications and Industrial & specialty segments and reduced selling prices in all three segments, partially offset by increased volume in the Energy segment as well as lower operating costs from our cost containment programs. Other Financial Costs In October 2002, we recorded other financial costs of $1.1 million related to the write-off of unamortized bank fees as a result of the October 2002 credit facility amendment. Of the $1.1 million, $0.6 million related to fees paid in April 2002 for a prior amendment, the terms of which were substantially amended by the October amendment and $0.5 million was due to a reduction in the borrowing capacity available under the revolving portion of the credit facility. 41 During 2001, we recorded other financial costs of $10.4 million as a result of recognizing $4.2 million of costs associated with the implementation of our accounts receivable asset-backed securitization program. We also wrote off $2.0 million in unamortized bank fees as a result of a reduction in the borrowing capacity of our credit facility due to the application of the Pyrotenax proceeds and the accounts receivable asset-backed securitization program proceeds against outstanding debt, and we recorded a loss of $4.2 million related to interest rate collars which were terminated. The collars were terminated in part due to the reduction of indebtedness associated with the Pyrotenax and Pirelli transactions, as well as to allow us to more fully benefit from the more favorable interest rate environment and future interest rate reductions. Interest Expense Net interest expense, excluding the other financial costs discussed above, was $42.6 million in 2002 compared to $43.9 million in 2001. The decrease reflects reduced debt levels due to the application of the proceeds from non-strategic business divestitures, interest savings from our accounts receivable asset-backed securitization program implemented in the second quarter of 2001 and lower base interest rates under the credit facility in 2002 partially offset by the amortization of bank fees and higher credit spreads related to our April 2002 and October 2002 credit facility amendments. Tax Rates Our effective tax rate for 2002 and 2001 was 35.5%. YEAR ENDED DECEMBER 31, 2001 COMPARED WITH YEAR ENDED DECEMBER 31, 2000 The total company comparison is a net loss of $(2.0) million and loss per diluted share of $(0.06) in 2001 compared to a loss of $(26.4) million or $(0.79) per share in 2000. As a result of the August 2000 sale to Pirelli, we recognized a $34.3 million charge in 2000. This charge was related to severance, transaction costs, warranty and other claims, the realization of the foreign exchange translation loss on the divested businesses that was previously charged directly to equity and $3.3 million related to the write-off of unamortized bank fees due to the prepayment of indebtedness which resulted in a reduction in the borrowing capacity of our credit facility. RESULTS OF ONGOING BUSINESSES The ongoing businesses comparison excludes from the 2000 results the losses incurred in the businesses which were divested during 2000 to Pirelli Cavie Sistemi, S.p.A. The net loss was $(2.0) million, or $(0.06) per diluted share, in 2001 compared to ongoing net income of $46.8 million, or $1.39 per diluted share, for the ongoing businesses in 2000. The 2001 net loss of $(2.0) million includes net pre-tax items of $56.8 million consisting of $6.1 million of net continuing operations charges and $50.7 million of charges related to the disposal of discontinued operations. The $6.1 million of 2001 pre-tax operating charges includes $7.0 million of charges recorded in cost of sales (see Note 4 to Notes to Audited Consolidated Financial Statements), a net of $3.2 million of income reported in selling, general and administrative expense (see Note 4 to Notes to Audited Consolidated Financial Statements), $8.1 million reported as other income and $10.4 million reported as other financial costs. The $6.1 million of 2001 pre-tax charges includes $8.1 million of income from a foreign exchange gain on the extinguishment of long-term debt in the United Kingdom, a net gain of $23.8 million related to the sale of the Pyrotenax business and $7.0 million in income from the settlement of the final purchase price of certain assets sold to Pirelli all more than offset by $16.5 million in severance costs, $4.8 million in costs to close a manufacturing plant, a $5.5 million loss on the sale of our non-strategic business which designed and manufactured extrusion tooling and accessories, $10.4 million in costs associated with our accounts receivable asset-backed securitization program and a restructuring of our interest costs, $7.0 million in inventory disposal costs and $0.8 million of other costs. The $50.7 million of charges related to the disposal of discontinued operations consists of $21.4 million related to the sale of the building wire business, $16.6 million for the closure of our Montoursville, Pennsylvania plant which manufactured retail cordsets, $10.6 million for the closure of four regional distribution centers and $2.1 million for other costs. 42 Net Sales The following table sets forth metal-adjusted net sales by segment, in millions of dollars. Net sales for the year 2000 have been adjusted to the 2001 copper COMEX average of $0.73 per pound and the aluminum rod average of $0.69 per pound.
METAL ADJUSTED NET SALES YEAR ENDED DECEMBER 31, ------------------------------------------- 2000 2001 --------------------- ------------------- AMOUNT % AMOUNT % -------- --- --------- --- Energy..................................................... $ 533.8 31% $ 521.8 32% Industrial & specialty..................................... 592.9 34 537.6 32 Communications............................................. 615.3 35 592.0 36 -------- --- -------- --- Total metal-adjusted net sales........................ 1,742.0 100% 1,651.4 100% === === Metal adjustment........................................... 36.7 -- -------- -------- Total net sales....................................... $1,778.7 $1,651.4 ======== ========
Net sales decreased 7% to $1,651.4 million in 2001 from $1,778.7 million for the ongoing businesses in 2000. After adjusting 2000 net sales to reflect the $0.11 decrease in the average monthly COMEX price per pound of copper in 2001 and adjusting for the $0.06 decrease in the average aluminum rod price per pound in 2001, net sales decreased 5% to $1,651.4 million, down from $1,742.0 million in 2000. The decrease in metal-adjusted net sales reflects a 2% decrease in energy products, a 9% decrease in industrial & specialty products and a 4% decrease in communication products. The 4% decrease in communication products metal-adjusted net sales principally relates to lower sales volume of high bandwidth networking cables and outside plant telecommunications cable. Sales volume for both of these products has decreased year over year with the largest decrease occurring in the second half of 2001 as key customers reduced their capital spending. These sales volume decreases were partially offset by improved selling prices during 2001 for outside plant telecommunications cable. Additionally, metal-adjusted net sales in our international operations increased over 70% from the prior year principally as a result of our entry into the Iberian communications market in 2001. The decrease of 2% in metal-adjusted net sales in the energy products segment is the result of lower selling prices for certain segments of the North American energy cable market. Sales volume in the North American energy market was flat compared to the 2000 sales volume. Metal-adjusted net sales in the international energy cable market were 5% greater than the prior year primarily due to sales volume increases. The 9% decrease in industrial & specialty products metal-adjusted net sales includes the negative impact of the March 2001 divestiture of the Pyrotenax business. Excluding the impact of the Pyrotenax divestiture, industrial & specialty products metal-adjusted net sales decreased 2% from the prior year. This decrease is primarily the result of continued weak demand in many industrial sectors of the North American economy. This decrease is partially offset by a 3% increase in metal-adjusted net sales for our international operations. Selling, General and Administrative Expense Selling, general and administrative expense decreased to $136.4 million in 2001 from $161.5 million for the ongoing businesses in 2000 reflecting the lower sales volume and a reduction in controllable spending in response to general economic conditions. Selling, general and administrative expense as a percent of metal-adjusted net sales decreased by approximately 80 basis points, from 9.3% in 2000 to 8.5% in 2001. 43 Operating Income The following table sets forth operating income by segment, in millions of dollars:
OPERATING INCOME YEAR ENDED DECEMBER 31, ------------------------------------------- 2000 2001 --------------------- ------------------- AMOUNT % AMOUNT % -------- --- -------- --- Energy..................................................... $ 40.0 31% $ 35.3 33% Industrial & specialty..................................... 30.6 23 24.3 22 Communications............................................. 59.8 46 48.5 45 ------- --- ------ --- Subtotal excluding corporate charges....................... 130.4 100% 108.1 100% === === Corporate charges.......................................... -- (3.8) ------- ------ Total operating income..................................... $ 130.4 $104.3 ======= ======
Operating income, excluding the corporate items of $3.8 million previously discussed, decreased 17% to $108.1 in 2001 from $130.4 million for the ongoing businesses in 2000. Operating income decreased principally as a result of reduced volumes in the communications segment, increased manufacturing costs in the industrial & specialty segment, primarily as a result of lower production volumes, and lower pricing in the energy segment. These reductions in operating income were partially offset by increased volume in European energy cables, favorable pricing in communications cables and manufacturing productivity particularly in the energy segment. Other Income Other income of $8.1 million in 2001 was principally comprised of a foreign exchange gain on the extinguishment of long-term debt in the United Kingdom. Interest Expense Net interest expense, excluding the other financial costs of $10.4 million previously discussed, was $43.9 million in 2001 compared to $45.8 million for the ongoing businesses in 2000. The decrease reflects lower interest rates under the credit facility in 2001 and interest savings from our accounts receivable asset-backed securitization program partially offset by increased borrowings during 2000 related to the funding of losses sustained during the prolonged European Union approval process for the business units divested in the third quarter 2000 Pirelli transaction, as well as higher credit spreads. Interest expense for the ongoing businesses for the year ended 2000 was computed as if the sale to Pirelli occurred on January 1, 2000 for $216.0 million. Other Financial Costs During 2001, we recorded other financial costs of $10.4 million as a result of recognizing $4.2 million of one-time costs associated with the implementation of our accounts receivable asset-backed securitization program. We also wrote off $2.0 million in unamortized bank fees as a result of a reduction in the borrowing capacity of our credit facility due to the application of the Pyrotenax proceeds and the accounts receivable asset-backed securitization program proceeds against outstanding debt, and we recorded a loss of $4.2 million related to interest rate collars which were terminated. The collars were terminated in part due to the reduction of indebtedness associated with the Pyrotenax and Pirelli transactions, as well as to allow us to more fully benefit from the more favorable interest rate environment and future interest rate reductions. Tax Rates Our effective tax rate for 2001 and 2000 was 35.5%. 44 RESULTS OF DIVESTED BUSINESSES The results for the divested businesses reflect the actual operating results of the businesses through the closing date of August 25, 2000, a $34.3 million charge related to the sale of the businesses and allocated interest costs incurred as if the sale to Pirelli occurred on January 1, 2000 for $216.0 million. The net loss from the divested businesses was $73.2 million or $2.18 per share. A significant portion of the net loss from the divested businesses resulted from the supertension and subsea cables operation. The supertension operation was severely impacted by low pricing levels as a result of excess capacity in the market and reduced project activity. Operations in Italy and at the distribution cables business in the United Kingdom also experienced significant losses in 2000. Operations in Italy experienced demand that was significantly below the prior year and selling prices that declined in response to changes in the competitive nature of the market resulting from the partial privatization of the principal Italian utility company. The distribution cables business experienced demand levels below historical levels primarily due to lower orders from European utilities. LIQUIDITY AND CAPITAL RESOURCES In general, we require cash for working capital, capital expenditures, debt repayment, interest and taxes. Our working capital requirements increase when we experience strong incremental demand for products and/or significant copper and aluminum price increases. Based upon historical experience and the expected availability of funds under our existing credit facility, we believe that our sources of liquidity will be sufficient to enable us to meet our cash requirements for working capital, capital expenditures, debt repayment, interest and taxes for at least the next twelve months. This belief is based on our current outlook, which is not dependent upon a recovery for the next twelve months in the communications or industrial markets which we serve. The offering of the old notes was part of our comprehensive plan to improve our capital structure and provide us with increased financial and operating flexibility to execute our business plan by reducing leverage and extending debt maturities. On November 24, 2003, the following refinancing transactions were consummated concurrently: (i) a $240 million senior secured revolving credit facility, (ii) a private offering of $285 million principal amount of the old notes, (iii) a private offering of $103.5 million of Series A redeemable convertible preferred stock and (iv) a public offering of approximately $47.6 million of common stock (including the exercise of an over-allotment option on December 2, 2003). In addition, on December 2, 2003, we also consummated a public offering of $6.2 million of common stock pursuant to an over-allotment option. We applied the net proceeds from these refinancing transactions to repay all amounts then outstanding under our then existing senior secured revolving credit facility, then existing senior secured term loans and outstanding borrowings under our then existing accounts receivable asset-backed securitization facility and to pay related fees and expenses. For more details, see "Description of Senior Credit Facility and Preferred Stock." We are a holding company with no operations of our own. All of our operations are conducted, and net sales are generated, by our subsidiaries and investments. Accordingly, our cash flow depends on the cash flows of our operations, in particular our North American operations upon which we have historically depended most. However, our ability to use cash flow from our European operations, if necessary, will likely be adversely affected by limitations on our ability to repatriate such earnings tax efficiently. Cash flow provided by operating activities in 2002 was $57.3 million. This reflects net income before depreciation and amortization, deferred income taxes and loss on sale of business of $22.7 million, a $61.5 million decrease in inventories, and a $15.1 million decrease in accounts receivable. The change in deferred income taxes reflects a $37.0 million income tax refund received during the second and third quarters of 2002. This income tax refund was attributable to a 2002 U.S. tax law change that enabled us to carryback our 2001 NOL, which was recorded as a deferred tax asset at December 31, 2001, to obtain a refund of taxes previously paid. Inventories were reduced during the year by $61.5 million through strong distribution logistics, improved plant schedule attainment and a rebalancing of our production loads including the furloughing of one plant for the entire fourth quarter. These cash flows were partially offset by a decrease in accounts payable, accrued and other liabilities of $34.0 million and an $8.0 million increase in other assets. Our subsidiaries that guarantee the new notes represented 80%, 76% and 45 94% of our total cash flow from operating activities for the years ended December 31, 2001 and 2002 and the nine months ended September 30, 2003. Cash flow provided by operating activities in the first nine months of 2003 was $58.2 million. This reflects net income before depreciation and amortization, deferred income taxes and a loss on sale of property of $23.0 million, a $10.4 million increase in accounts payable, accrued and other liabilities, a $19.5 million decrease in other assets which primarily reflects a $13.9 million refund of income taxes paid in previous years received in the first quarter of 2003 and a decrease in inventory of $22.2 million. Inventories were reduced through strong distribution logistics, improved plant schedule attainment and a rebalancing of our production loads with net sales results. These cash flows were partially offset by an increase in accounts receivable of $16.9 million due to the normal seasonality of our business reflecting increased construction activity in the spring and summer. In the comparable period in the prior year, we had a decrease in receivables, which primarily reflected the benefit from the collection of receivables from our former building wire business. Cash flow used by investing activities was $28.6 million in 2002, principally reflecting $31.4 million of capital expenditures. This level of capital spending is 43% below 2001 and reflects management's decision to limit capital spending given current general economic conditions. This cash outflow was partially offset by $1.7 million of proceeds received from the divestiture of a non strategic business during the second quarter of 2002 and $1.6 million of proceeds from the sale of properties, principally closed manufacturing locations. Cash flow used by investing activities was $10.2 million in the first nine months of 2003, principally reflecting $11.8 million of capital expenditures. This level of capital spending is approximately 50% below the first nine months of 2002 and reflects an intentional effort to limit capital spending given current general economic conditions. We anticipate capital spending to be approximately $8 million in the fourth quarter of 2003 and $30 million in 2004. Additionally, $1.9 million of proceeds were received from the sale of a former manufacturing facility and $1.0 million of cash was received in partial payment of loans plus interest from shareholders. Cash flow used by financing activities in 2002 was $16.2 million, primarily reflecting a reduction in long-term debt of $15.4 million, a net decrease in revolving credit borrowings of $2.2 million and $5.0 million of dividends paid to shareholders of common stock during 2002. The cash flow used was partially offset by proceeds from the exercise of stock options of $2.4 million and a net increase in other debt of $4.0 million. Cash flow used by financing activities in the first nine months of 2003 was $52.9 million, reflecting the repayment of long-term debt of $14.1 million, a net decrease in revolving credit borrowings of $13.3 million and a $25.5 million net decrease in other debt, principally related to our European operations short-term borrowings. Our previous credit facility was entered into in 1999 with one lead bank as administrative agent, and a syndicate of lenders. The facility, as amended and reduced by prepayments, consisted of: term loans in dollars in an aggregate amount up to $297.5 million, term loans in dollars and foreign currencies in an aggregate amount up to $28.9 million and revolving loans and letters of credit in dollars and foreign currencies in an aggregate amount up to $200.0 million. In April 2002, we amended the credit facility to permit increased financial flexibility through March 2003. Fees and expenses associated with the amendment were $2.0 million and were being amortized over the one-year period of the amendment. In October 2002, we further amended the credit facility through March 2004. As part of the amendment, we suspended our quarterly cash dividend of $0.05 per common share for the term of the amendment. Fees and expenses of approximately $4 million were incurred for the amendment and will be amortized over the life of the amendment. As a result of the completion of the October 2002 amendment, we recorded $1.1 million of other financial costs for the write-off of unamortized bank fees. Of the $1.1 million, $0.6 million related to fees paid in April 2002 for a prior amendment, the terms of which were substantially amended by the October amendment and $0.5 million was due to the reduction in borrowing capacity of the revolving portion of the credit facility. Borrowings under the credit facility were $415.6 million and $391.3 million at December 31, 2002 and September 30, 2003, respectively. Loans under the credit facility bore interest, at our option, at (i) a spread over LIBOR or (ii) a spread over the Alternate Base Rate, which is defined as the higher of (a) the agent's prime rate, (b) the secondary market rate for certificates of deposit (adjusted for reserve requirements) plus 1% or (c) the Federal Funds Effective Rate plus -1/2 of 1%. This facility was repaid and terminated in connection with the refinancing transactions. For a description of our current senior credit facility and our Series A redeemable convertible preferred stock, see "Description of Senior Credit Facility and Preferred Stock." 46 Our European operations participate in arrangements with several European financial institutions who provide extended accounts payable terms to us on an uncommitted basis. In general, the arrangements provide for accounts payable terms of up to 180 days. At December 31, 2002, the arrangements had a maximum availability limit of the equivalent of approximately $105 million, of which approximately $88 million was drawn. At September 30, 2003, the arrangements had a maximum availability limit of the equivalent of approximately $94 million, of which approximately $77 million was drawn. Should the availability under these arrangements be reduced or terminated, we would be required to negotiate longer payment terms or repay the outstanding obligations with our suppliers under this arrangement over 180 days and seek alternative financing arrangements which could increase our interest expense. There can be no assurance that we will be able to obtain such financing if needed. We also have an approximate $25 million uncommitted facility in Europe, which allows us to sell at a discount, with limited recourse, a portion of our accounts receivable to a financial institution. At September 30, 2003, this accounts receivable facility was not drawn upon. During the fourth quarter of 2002, as a result of declining returns in the investment portfolio of our defined benefit pension plan, we were required to record a minimum pension liability equal to the underfunded status of our plan. At December 31, 2002, we recorded an after-tax charge of $29.2 million to accumulated other comprehensive income in the equity section of our balance sheet. We will experience an increase in our future pension expense and in our cash contributions to our defined benefit pension plan. Pension expense is expected to increase by approximately $6.3 million in 2003 compared to 2002 and our required cash contributions are expected to increase by $2.9 million in 2003 from $3.0 million in 2002. In 2004, pension expense is expected to decrease $2.7 million from 2003 principally due to an increase during 2003 in the market value of the assets held and cash contributions are expected to increase an additional $6.6 million from 2003. Summarized information about our contractual obligations and commercial commitments as of September 30, 2003 is, after giving effect to this offering and the other refinancing transactions and the use of proceeds therefrom, as follows (in millions of dollars):
PAYMENTS DUE BY PERIOD ----------------------------------------------------------- LESS THAN 1 - 3 4 - 5 AFTER 5 TOTAL 1 YEAR YEARS YEARS YEARS ----- ------ ----- ----- ----- CONTRACTUAL OBLIGATIONS Long-term debt.............................. $365.4 $ 3.7 $ -- $ -- $361.7 Operating leases............................ 25.0 8.0 16.2 0.8 -- Commodity futures and forward pricing 47.7 47.1 0.6 -- -- agreements........................... Foreign currency contracts.................. 33.1 30.0 3.1 -- -- ====== ===== ===== ==== ====== Total...................................... $471.2 $88.8 $19.9 $0.8 $361.7 ====== ===== ===== ==== ======
We anticipate being able to meet our obligations as they come due. OFF BALANCE SHEET ASSETS AND OBLIGATIONS In May 2001, we completed an accounts receivable asset-backed securitization financing transaction. The securitization financing provided for certain domestic trade receivables to be sold to a wholly owned, special purpose, bankruptcy-remote subsidiary without recourse. This subsidiary in turn transferred the receivables to a trust which issued floating rate five-year certificates in an initial amount of $145 million. The proceeds from the initial transfer were utilized to reduce term debt. In addition, a variable certificate component of up to $45 million for seasonal borrowings was established as a part of the securitization financing. This variable certificate component fluctuated based on the amount of eligible receivables. Sales of receivables under this program resulted in a reduction of total accounts receivable reported on our consolidated balance sheet. Our retained interest in the receivables was carried at fair value, which was estimated as the net realizable value. The net realizable value considered the relatively short liquidation period and included an estimated provision for credit losses. The five-year certificates had a weighted average interest rate of 57 basis points over LIBOR. As a result of the building wire asset sale and the exit from the retail cordsets business, the securitization financing program was downsized in the first quarter of 2002, through the repayment of a portion of the outstanding 47 certificates, to $80 million. The repayment of the certificates was funded by the collection of the outstanding building wire and retail cordsets accounts receivable. The $45 million seasonal borrowing component was unaffected. At September 30, 2003 and December 31, 2002, the off balance sheet debt, net of cash held in the trust, was $72.8 million and $48.5 million, respectively. This off balance sheet debt was fully collateralized by accounts receivable and cash held in the trust. This securitization financing was terminated in connection with the refinancing transactions. ENVIRONMENTAL MATTERS Our expenditures for environmental compliance and remediation amounted to approximately $0.8 million for the nine months ended September 30, 2003 and $0.6 million, $0.9 million and $0.5 million for the years ended December 31, 2002, 2001 and 2000, respectively. In addition, certain of our subsidiaries have been named as potentially responsible parties in proceedings that involve environmental remediation. We had accrued $5.2 million at September 30, 2003 for all environmental liabilities. In the Wassall acquisition of General Cable from American Premier Underwriters, Inc., American Premier indemnified us against certain environmental liabilities arising out of our or our predecessors' ownership or operation of properties and assets, which were identified during the seven-year period ended June 2001. As part of the 1999 acquisition, BICC plc agreed to indemnify us against environmental liabilities existing at the date of the closing of the purchase of the business. We have agreed to indemnify Pirelli and Southwire Company against certain environmental liabilities arising out of the operation of the divested businesses prior to the sale. However, the indemnity we received from BICC plc related to the business sold to Pirelli terminated upon the sale of those businesses to Pirelli. While it is difficult to estimate future environmental liabilities, we do not currently anticipate any material adverse effect on our results of operations, cash flows or financial position as a result of compliance with federal, state, local or foreign environmental laws or regulations or remediation costs. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to various market risks, including changes in interest rates, foreign currency and commodity prices. To manage risk associated with the volatility of these natural business exposures, we enter into interest rate, commodity and foreign currency derivative agreements as well as copper and aluminum forward purchase agreements. We do not purchase or sell derivative instruments for trading purposes. We do not engage in trading activities involving commodity contracts for which a lack of marketplace quotations would necessitate the use of fair value estimation techniques. The notional amounts and fair values of these financial instruments at September 30, 2003 and December 31, 2002, are shown below (in millions). The carrying amount of the financial instruments was a liability of $(5.3) million at September 30, 2003 and $(6.8) million at December 31, 2002.
SEPTEMBER 30, 2003 DECEMBER 31, 2002 ------------------- ------------------- NOTIONAL FAIR NOTIONAL FAIR AMOUNT VALUE AMOUNT VALUE ------ ----- ------ ----- Interest rate swaps....................................... $209.0 $(4.4) $ 9.0 $(0.9) Forward starting interest rate swaps...................... -- -- 200.0 (6.5) Foreign currency forward exchange......................... 33.1 (0.6) 29.5 0.7 Commodity futures......................................... 11.4 (0.3) 9.2 (0.1) ----- ----- $(5.3) $(6.8) ===== =====
48 BUSINESS OUR COMPANY We are a FORTUNE 1000 company that is a leading global developer and manufacturer in the wire and cable industry, an industry which is estimated to have had $58 billion in sales in 2002. We have leading market positions in the segments in which we compete due to our product, geographic and customer diversity and our ability to operate as a low cost provider. We sell over 11,500 copper, aluminum and fiber optic wire and cable products, which we believe represent the most diversified product line of any U.S. manufacturer. As a result, we are able to offer our customers a single source for most of their wire and cable requirements. We manufacture our product lines in 28 facilities and sell our products worldwide through our operations in North America, Europe and Oceania. Major customers for our products include leading utility companies such as Consolidated Edison and Arizona Public Service; leading distributors such as Graybar and Anixter; leading retailers such as The Home Depot and AutoZone; and leading original equipment manufacturers, or OEMs, such as GE Medical Systems; and leading telecommunications companies such as Qwest Communications, Verizon Communications and SBC/Ameritech. Technical expertise and implementation of Lean Six Sigma strategies have allowed us to maintain our position as a low cost provider. Our operations are divided into three main segments: energy, industrial & specialty and communications. Our energy cable products include low-, medium- and high-voltage power distribution and power transmission products for overhead and buried applications. Our industrial & specialty wire and cable products conduct electrical current for industrial, OEM, commercial and residential power and control applications. Our communications wire and cable products transmit low-voltage signals for voice, data, video and control applications. We believe we are the number one supplier of energy and industrial & specialty cable products and the number three supplier of communications products in North America and a top three supplier in the majority of the segments in which we compete in Oceania. We believe we are the largest supplier in the Iberian region and a strong regional wire and cable manufacturer in the rest of Europe. For the year ended December 31, 2002, we had net sales of $1.5 billion and a net loss of $(24.0) million. PRODUCTS AND MARKETS The net sales generated by each of our three main segments (as a percentage of our total company results) over the twelve-month period ended December 31, 2002 are summarized below: [Pie Chart Omitted]
Products and Markets Percentage - -------------------- ---------- Energy 36% Industrial & Specialty 34% Communications 30%
49 The principal products, markets, distribution channels and end-users of each of our product categories are summarized below:
PRODUCT CATEGORY PRINCIPAL PRODUCTS PRINCIPAL MARKETS PRINCIPAL END-USERS ---------------- ------------------ ----------------- ------------------- ENERGY Utility Low-Voltage, Power Utility Investor-Owned Utility Medium-Voltage Companies; State and Distribution; Bare Local Public Power Overhead Conductor; Companies; Rural High-Voltage Electric Associations; Transmission Cable Contractors INDUSTRIAL & SPECIALTY Instrumentation, Power, Rubber and Plastic- Industrial Power and Industrial Consumers; Control and Specialty Jacketed Wire and Cable; Control; Utility/Marine/ Contractors; OEMs; Power and Industrial Cable; Transit; Military; Military Customers; Instrumentation and Mining; Oil and Gas Telecommunications Control Cable Industrial; Power System Operators Generation; Infrastructure; Residential Construction Automotive Ignition Wire Sets; Automotive Aftermarket Consumers; OEMs Booster Cables COMMUNICATIONS Outside Voice and Data Outside Plant Telecom Local Loop Telecommunications (Telecommunications) Telecommunications Systems Operators Exchange Cable; Outside Service Wire Data Communications Multi-Conductor/Multi-Pair; Computer Networking Contractors; OEMs; Fiber Optic; Shipboard; and Multimedia Systems Integrators; Military Fiber Cable Applications Systems Operators; Military Customers Electronics Multi-Conductor; Building Management; Contractors; Consumers; Coaxial; Sound, Entertainment; Industrial Security/Fire Alarm Cable Equipment Control Assemblies Cable Harnesses; Telecommunications; Communications and Connector Cable Industrial Equipment; Industrial Equipment Medical Equipment Manufacturers
We operate our business globally, with 74% of net sales in 2002 generated from North America, 22% from Europe and 4% from Oceania. We estimate that we sold our products and services to customers in more than 70 countries in 2002. 50 STRATEGIC INITIATIVES Due to a decrease in net sales resulting from the global economic downturn in 2001 and 2002 and its impact particularly in the telecommunications markets globally and the industrial & specialty market in North America, we have implemented various management initiatives to improve productivity and maximize cash flow. These initiatives include the following: - Consolidating our North American manufacturing and distribution facilities, including closing three of seven plants that manufacture communications products and four of six distribution centers. - Reducing head count by 1,700 persons, or 22% of our work force employed in our continuing operations since September 30, 2000. - Reducing outstanding aggregate indebtedness, and borrowings under an off-balance sheet facility, by approximately 42%, or $347.8 million, from June 30, 2000 (our historical peak borrowing level) to September 30, 2003. As a result of the refinancing transactions, we further reduced our outstanding aggregate indebtedness. - Reducing inventory levels related to continuing operations from $296.4 million at September 30, 2000 to $247.0 million at September 30, 2003, a 17% decrease; this decrease is net of a $17.3 million impact from foreign exchange rate fluctuations on our reported inventory international levels. On a consistent foreign exchange basis, the decrease in inventory levels was $66.7 million, or 23%. - Reducing capital expenditures from continuing operations from $35.8 million in 2000 to $31.4 million in 2002 and further to $20.4 million in the twelve months ended September 30, 2003. - Exiting less profitable, non-core businesses, such as building wire and consumer cordsets. - Focusing on non-capital based productivity, such as Lean Six Sigma and reduction of manufacturing cycle time. In addition, in connection with reinforcing our position as a low-cost provider, we have announced the closure of one of and the reduced operation at another of our North American manufacturing facilities for our industrial & specialty segment. We also have initiated a study at another one of our other North American industrial & specialty manufacturing facilities to determine the feasibility of continuing manufacturing operations at that location. We believe that many of our markets have begun to stabilize as end users begin to increase their spending on infrastructure maintenance and new construction. Furthermore, the 2003 power outages in the U.S., Canada and Europe emphasize the need to upgrade the power transmission infrastructure used by electric utilities, which may over time cause an increase in demand for our products. As a result of our strategic initiatives and adequate manufacturing capacity in all our businesses, we believe that we are well positioned to capitalize on any upturn in our markets without significant additional capital expenditures. COMPETITIVE STRENGTHS We have adopted a "One Company" approach for our dealings with customers and vendors. This approach is becoming increasingly important as the electrical, industrial, data communications and electronic distribution industries continue to consolidate into a smaller number of larger regional and national participants with broader product lines. As part of our One Company approach, we have established cross-functional business teams, which seek opportunities to increase sales to existing customers and to new customers inside and outside of traditional market channels. Our One Company approach better integrates us with our major customers, thereby allowing us to become their leading source for wire and cable products. We believe this approach also provides us with purchasing leverage as we coordinate our North American sourcing requirements. Our competitive strengths include: 51 Leading Market Positions. We have achieved leading market positions in many of our business segments. For example, we believe that in 2002: - In the energy segment, we were the number one producer in North America, the number three producer in Oceania and a strong regional producer in Europe; - In the industrial & specialty segment, we were the number one producer in North America and the number three producer in Oceania; and - In the communications segment, we were the number three producer in North America and Oceania. Product, Geographic and Customer Diversity. We sell over 11,500 products under well-established brand names, including General Cable(R), Anaconda(R), BICC(R) and Carol(R), which we believe represent the most diversified product line of any U.S. wire and cable manufacturer. The breadth of our product line has enhanced our market share and operating performance by enabling us to offer a diversified product line to customers who previously purchased wire and cable from multiple vendors but prefer to deal with a smaller number of broader-based suppliers. We believe that the breadth of our products gives us the opportunity to expand our product offerings to existing customers. We distribute our products to over 3,000 customers through our operations in North America, Europe and Oceania. Our customers include utility companies, telecommunications systems operators, contractors, OEMs, system integrators, military customers, consumers and municipalities. The following summarizes sales as a percentage of our 2002 domestic net sales by each category of customers: [Pie Chart Omitted]
2002 Domestic Net Sales by Each Category of Customers Percentage - --------------------------- ---------- Electric Utility 32% OEMs & Electrical/Industrial Distributors 21% Telco Utility 17% Communication Distributors 15% Automotive Retail 8% Electrical Retail 6% Other 1%
We strive to develop supply relationships with leading customers who have a favorable combination of volume, product mix, business strategy and industry position. Our customers are some of the largest consumers of wire and cable products in their respective markets and include the following companies: Consolidated Edison, an electric utility company serving the New York City metropolitan area; Arizona Public Service, Arizona's largest electricity utility; Graybar, one of the largest electrical and communications distributors in the United States; Anixter, one of the largest domestic distributors of wire, cable and communications connectivity products; The Home Depot, a leading home center retail chain; AutoZone, the largest retailer of automotive aftermarket parts in the United States; GE Medical Systems, a global leader in medical imaging, interventional procedures, healthcare services and information technology; Verizon Communications, a leading provider of communications services in the Northeastern United States; and Qwest Communications and SBC/Ameritech, former regional bell operating companies. Our top 20 customers in 2002 accounted for 44% of our net sales, and no one customer accounted for more than 5% of our net sales. We believe that our diversity mitigates the risks associated with an excess concentration of sales in any one market or geographic region or to any one customer. Low Cost Provider. We are a low cost provider primarily because of our focus on lean manufacturing, centralized sourcing and distribution and logistics. We continuously focus on maintaining and optimizing our manufacturing infrastructure by promoting an organization-wide "lean" mentality in order to improve efficiencies. This enables us to maintain a low manufacturing cost structure, reduce waste, inventory levels and cycle time, as well as retain a high level of customer service. We have made a significant investment in Lean Six Sigma training 52 and have established a formal training program for employees supporting this. We also facilitate the sharing of manufacturing techniques through the exchange of best practices among design and manufacturing engineers across our global business units. We believe that these initiatives have enabled us to achieve a high degree of non-capital based productivity which will allow us to achieve further productivity improvements. Experienced and Proven Management Team. Our senior management team has, on average, over 15 years of experience in the wire and cable industry and 11 years with our company, and has successfully created a corporate-wide culture that focuses on our One Company approach and continuous improvement in all aspects of our operations. In addition, our senior management team has successfully reduced overhead and operating costs, improved productivity and increased working capital efficiency. For example, our SG&A expenses excluding corporate items have declined from $226.6 million, or 10.5% of net sales, in 2000 to $123.1 million, or 8.5% of net sales, in 2002. We believe that the level of our SG&A expenses as a percentage of our net sales is one of the lowest in the wire and cable industry. Additionally, our senior management team has restructured our business portfolio to eliminate less profitable, non-core businesses and capitalize on market opportunities by anticipating market trends and risks. BUSINESS STRATEGY We seek to distinguish ourselves from other wire and cable manufacturers through the following business strategies: Improving Operating Efficiency and Productivity. Our operations benefit from management's ongoing evaluations of operating efficiency. These evaluations have resulted in cost-saving initiatives designed to improve our profitability and productivity across all areas of our operations. Recent initiatives include rationalization of manufacturing facilities and product lines, consolidation of distribution locations, product redesign, improvement in materials procurement and usage, product quality and waste elimination and other non-capital based productivity initiatives. We also expect that continued successful execution of our One Company approach will provide more efficient purchasing, manufacturing, marketing and distribution for our products. Focus on Establishing and Expanding Long-Term Customer Relationships. Each of our top 20 customers has been our customer for at least five years. Our customer relationship strategy is focused on being the "wire provider of choice" for the most demanding customers by providing a diverse product line coupled with a high level of service. We place great emphasis on customer service and provide technical resources to solve customer problems and maintain inventory levels of critical products that are sufficient to meet fluctuating demands for such products. We have implemented a number of service and support programs, including Electronic Data Interchange ("EDI") transactions, web-based product catalogues, ordering and order tracking capabilities and Vendor Managed Inventory ("VMI") systems. VMI is an inventory management system integrated into certain of our customers' internal systems which tracks inventory turnover and places orders with us for wire and cable on an automated basis. These technologies create high supplier integration with these customers and position us to be their leading source for wire and cable products. Actively Pursue Strategic Initiatives. We believe that our management has the ability to identify key trends in the industry, which allows us to migrate our business to capitalize on expanding markets and new niche markets and exit declining or non-strategic markets in order to achieve better returns. For example, we exited the North American building wire business in late 2001. This business had historically been highly cyclical, very price competitive and had low barriers to entry. We also set aggressive performance targets for our businesses and intend to refocus, turn around or divest those activities that fail to meet our targets or do not fit our long-term strategies. We regularly consider selective acquisitions and joint ventures to strengthen our existing business lines. We believe there are strategic opportunities in many international markets, including South America and Asia, as countries in these markets continue to look to upgrade their power transmission and generation infrastructure and invest in new communications networks in order to participate in high-speed, global communications. We are seeing increased opportunities in the European Union for our European manufacturing operations. For more details, see "Risk Factors -- Other Risks Relating to Our Business -- We may not be able to successfully identify, finance or integrate acquisitions." 53 Reduce Leverage. We intend to reduce our leverage in the near to intermediate term. As a result of our well-diversified business portfolio and recent operating initiatives, we believe we can improve our existing operating margin, which will allow us to generate increased cash flows. In order to achieve this goal of debt reduction, we currently expect to use a substantial portion of cash flow from operations and the net proceeds from any sale of non-strategic assets to strengthen our balance sheet. In pursuit of this strategy, we have reduced outstanding aggregate indebtedness, and borrowings under an off-balance sheet facility, by $347.8 million, or 42%, from June 30, 2000 to September 30, 2003 through a combination of cash flow from operations and strategic divestitures. We have adequate manufacturing capacity in all of our businesses and are well positioned to capitalize on any upturns in our markets without significant additional capital expenditures. THE REFINANCING On November 24, 2003, we issued $285 million aggregate principal amount of the old notes. The old notes bear interest at a rate 9.5% per annum, payable semi-annually on May 15 and November 15 of each year, beginning May 15, 2004, and will mature on November 15, 2010. The offering of the old notes was part of our comprehensive plan to improve our capital structure and provide us with increased financial and operating flexibility to execute our business plan by reducing leverage and extending debt maturities. This plan consisted of the following transactions which we refer to as the "refinancing transactions," which were consummated concurrently: (i) a $240 million senior secured revolving credit facility, (ii) the private offering of the old notes, (iii) a private offering of $103.5 million of Series A redeemable convertible preferred stock and (iv) a public offering of approximately $47.6 million of common stock (including the exercise of an over-allotment option on December 2, 2003). We applied the net proceeds from these refinancing transactions to repay all borrowings outstanding under our then existing senior secured revolving credit facility, then existing senior secured term loans and outstanding amounts under our then existing accounts receivable asset-backed securitization facility and to pay related fees and expenses. INDUSTRY AND MARKET OVERVIEW The global wire and cable market was estimated to have had $58 billion in sales in 2002 by CRU International Limited. This marks a 12% and 19% decline from the $66 billion and $72 billion in sales in 2001 and 2000, respectively. The decline in the North American and European markets was even greater. The decline in the wire and cable market is directly related to the global economic slowdown in 2001 and 2002 which has resulted in reduced spending by customers in all wire and cable markets as well as price erosion caused in part by excess inventory sell off. The wire and cable industry is competitive, mature and cost driven. Wire and cable is relatively low value added, higher weight (and therefore relatively expensive to transport) and often subject to regional or country specifications. In many business segments there is little differentiation among participants from a manufacturing standpoint. The industry is highly fragmented with many participants in both the United States and worldwide. However, the 20 largest companies control approximately 47% of the overall global market. Since the 1990's, the industry has been undergoing consolidation. Additionally, over the past few years, some large market participants have been willing to divest businesses that are underperforming or not perceived as good growth opportunities. The wire and cable industry is raw materials intensive with copper and aluminum comprising the major cost component for cable products. Changes in the cost of copper and aluminum are generally passed through to the customer, although there can be timing delays of varying lengths depending on the type of product, competitive conditions and particular customer arrangements. PRODUCT MARKETS As a result of asset sales and divestitures, we have repositioned our operations into three main lines or segments: energy, industrial & specialty, and communications businesses. We distribute our products to over 3,000 customers from our operations in North America, Europe and Oceania. Our customers include: utility companies, telecommunications systems operators, contractors, OEMs, system integrators, military customers, consumers and municipalities. 54 Beginning in the third quarter of 2001, we have reported the building wire and cordsets segment as discontinued operations for financial reporting purposes. The prior periods have been restated to reflect this change. For year 2000, the financial information has been shown for the total company on an as reported basis and for the ongoing businesses after the closing of the sale of certain businesses to Pirelli on a pro forma basis. The pro forma presentation is provided as it provides the reader of our financial statements with a consistent basis of presentation when comparing our results in 2000 to the results for 2001, 2002 and 2003. The following table sets forth summarized financial information by reportable segment for the years ended December 31, 2000, 2001 and 2002 and the nine months ended September 30, 2002 and 2003 (in millions of dollars).
PRO FORMA TOTAL ONGOING NINE MONTHS ENDED COMPANY BUSINESSES SEPTEMBER 30, -------- ---------- ---------------------- 2000 2000 2001 2002 2002 2003 -------- -------- -------- -------- -------- -------- Net Sales: Energy........................... $ 733.6 $ 544.9 $ 521.8 $ 516.0 $ 389.0 $ 413.5 Industrial & specialty........... 796.7 602.0 537.6 499.4 383.1 395.1 Communications................... 631.8 631.8 592.0 438.5 330.4 324.5 -------- -------- -------- -------- -------- -------- $2,162.1 $1,778.7 $1,651.4 $1,453.9 $1,102.5 $1,133.1 ======== ======== ======== ======== ======== ======== Operating Income: Energy........................... $ (24.4) $ 40.0 $ 35.3 $ 36.9 $ 28.7 $ 29.4 Industrial & specialty........... 29.7 30.6 24.3 9.7 6.7 7.8 Communications................... 59.8 59.8 48.5 2.5 7.5 5.3 -------- -------- -------- -------- -------- -------- 65.1 130.4 108.1 49.1 42.9 42.5 Corporate and other operating items................ (31.0) -- (3.8) (33.4) (28.7) (1.7) -------- -------- -------- -------- -------- -------- $ 34.1 $ 130.4 $ 104.3 $ 15.7 $ 14.2 $ 40.8 ======== ======== ======== ======== ======== ========
Energy Market The energy market consists of low-, medium- and high-voltage power distribution and power transmission products for overhead and buried applications. The global market for power cables experienced a slight increase in sales in 2002 of 2% to $14.6 billion from $14.3 billion in 2001. Growth in this market will be largely dependent on investment policy of electric utilities and infrastructure improvement. We believe that the increase in electricity consumption in North America has outpaced the rate of utility investment in power cables. As a result, we believe the average age of power transmission cables has increased, the current electric transmission infrastructure needs to be upgraded and the transmission grid is near capacity. In addition, the 2003 power outages in the U.S., Canada and Europe emphasize the need for upgrading the power transmission infrastructure used by electric utilities that may, over time, cause an increase in demand for our products. The net sales in North America decreased as a result of lower sales volume. We anticipate that sales volume for North American customers should improve over time as utility customers address capital projects that were previously deferred, including enhancements to the power transmission and distribution grid. In the first half of 2003, projects were not released as quickly as expected which management believes is partially due to pending energy legislation in the United States which would provide future regulatory relief and allow North American utility companies to earn an adequate rate of return on their investment in upgrading the transmission grid infrastructure. In addition, certain other proposed legislation in the United States, if passed, will permit accelerated depreciation on transmission grids, certain tax credits and bonus depreciation on new equipment which could create an increased demand for our products. In addition, a majority of our North America energy market customers have entered into written agreements with us for the purchase of wire and cable products. These agreements typically have 2-4 year terms and provide metal adjustments to selling prices to reflect fluctuations in the price of copper and aluminum. Historically, approximately 70% of our North America energy business is contracted for prior to the start of each year. 55 We believe that we are the largest participant in North America in the energy wire and cable market and the third largest participant in this market in each of Europe and Oceania. We believe that we have approximately 29%, 6% and 8% market shares in the energy markets in North America, Europe and Oceania. Sales of energy products accounted for approximately 36% of our net sales in 2002. Our utility cables business is the leader in the supply of energy cables to the North America electric utility industry. The business manufactures low- and medium-voltage aluminum and copper cable, bare overhead aluminum conductor and high-voltage transmission cable. Bare transmission cables are utilized by the utilities in the transmission grid to provide electric power from the power generating stations to the distribution sub-stations. Medium-voltage energy cables are utilized in the primary distribution infrastructure to bring the power from the distribution sub-stations to the transformers. Low-voltage energy cables are utilized in the secondary distribution infrastructure to take the power from the transformers to the end-user's meter. Our North American utility cables business has strategic alliances in the United States and Canada with a number of major customers and is strengthening its position through these agreements. This business utilizes a network of direct sales and authorized distributors to supply low- and medium-voltage and bare overhead cable products. This market is represented by approximately 3,500 utility companies. Our European utility cables business is headquartered in Barcelona, Spain and is a strong regional wire and cable manufacturer in Europe behind Pirelli and Nexans. The business utilizes its broad product offering and its low cost manufacturing platform to gain market share as evidenced by its recent award of business with utilities in France, Italy and the United Kingdom. The business has also benefited from its competitors ongoing withdrawal of medium-voltage cable manufacturing capacity from the European market and from the trend in Europe to install power cables underground, which requires more highly engineered cables. Industrial & Specialty Market The industrial & specialty market consists of wire and cable products for use in a wide variety of capital goods and consumer uses. The principal product categories in this market are portable cord, industrial cables and automotive products. The global market for industrial & specialty cable products has many niche markets and is difficult to quantify. Sales have declined as the result of the substantial decline in industrial construction spending from mid-1990 peak levels and in electric and wire cable spending from peaks in 1997. Growth in the industrial & specialty markets is responsive to general growth in the economy and will be largely dependent upon new industrial construction, investment in capital equipment and vehicle after-market maintenance spending. We believe that we are the largest participant in this highly fragmented segment in North America and Oceania and the third largest in Europe. We believe that we have a top three market share in most of the segments in which we compete, including power, cord, mining, industrial flex, specialty control and instrumentation, and automotive aftermarket. Sales of products in the market accounted for approximately 34% of our net sales in 2002. The North America market for the industrial & specialty cable products for which we compete was approximately $3.0 billion in 2002. Many industrial and commercial environments require cables with exterior armor and/or jacketing materials that can endure exposure to chemicals, extreme temperatures and outside elements. We offer products that are specifically designed for these applications. Portable Cord and Specialty Cables. We manufacture and sell a wide variety of rubber and plastic insulated portable cord products for power and control applications serving industrial, mining, entertainment, OEM, farming and other markets. Portable cord products are used for the distribution of electrical power, but are designed and constructed to be used in dynamic and severe environmental conditions where a flexible but durable power supply is required. Portable cord products include both standard commercial cord and cord products designed to customer specifications. Portable rubber-jacketed power cord, our largest selling cord product line, is typically manufactured without a connection device at either end and is sold in standard and customer-specified lengths. 56 Portable cord is also sold to OEMs for use as power cords on their products and in other applications, in which case the cord is made to the OEMs' specifications. We also manufacture portable cord for use with moveable heavy equipment and machinery. Our portable cord products are sold primarily through electrical distributors and electrical retailers to industrial customers, OEMs, contractors and consumers. Our portable cords are used in the installation of new industrial equipment and the maintenance of existing equipment, and to supply electrical power at temporary venues such as festivals, sporting events, concerts and construction sites. We expect demand for portable cord to be influenced by general economic activity. Our industrial & specialty products sold under the "Brand Rex" name include low-voltage and data transmission cables, rail and mass transit cables, shipboard cables, off-shore cables, other industrial cables and cables for low-smoke, zero-halogen systems. Primary uses for these products include various applications within power generating stations, marine, oil and gas, transit/locomotive, OEMs, machine builders, medical imaging, shipboard, aerospace industries, space flight and aircraft markets. Shipboard cables sold by us hold a leading position with the U.S. Navy. Our "Polyrad XT" marine wire and cable products also provide superior properties and performance levels that are necessary for heavy-duty industrial applications to both onshore and offshore platforms, ships and oil rigs. Industrial cable products include medium and low voltage power, control and instrumentation cable, armored power cable, flexible control cables, festoon cables, robotic cables and industrial data communications cables. These products have various applications in generating stations and substations, process control, mining, material handling, machine tool and robotics markets. Automotive Products. Our principal automotive products are ignition wire sets and booster cables for sale to the automotive aftermarket. Booster cable sales are affected by the severity of weather conditions and related promotional activity by retailers. As a result, a majority of booster cable sales occur between September and January. We sell our automotive ignition wire sets and booster cables primarily to automotive parts retailers and distributors, hardware and home center retail chains and hardware distributors. Our automotive products are also sold on a private label basis to retailers and other automotive parts manufacturers. Communications Market The communications market consists of: - outside voice and data products -- wire and cable products for voice, data and video transmission applications; - data communication products -- high-bandwith twisted copper and fiber optic cables and multiconductor cables for customer premises, local area networks and telephone company central offices; - electronics -- specialty products for use in machinery and instrumentation interconnection, audio, computer, security and other applications; and - OEM products -- harnesses and assemblies for telecommunication, industrial and medical equipment manufacturers. Sales of communications wire and cable products in the global market were $18.1 billion in 2002, a decline of 32% from the 2001 market of $26.7 billion. This sales decline is the result of a significant decline in historic spending levels for outside plant telecommunications cables and switching and local area network cables, particularly for fiber optic cables (which has seen as much as a 50% decline from 1990s average spending). Growth in this market will be largely dependent upon capital spending by the region bell operating companies, or RBOCs, on maintenance, repair and expansion of their infrastructure and the level of information technology spending on 57 network infrastructure. We believe this decline has reached its bottom and sales for communications wire and cable products will increase over time because current levels of spending by our communications wire and cable customers are insufficient to maintain their network infrastructures over time as surplus field inventories have been liquidated by the RBOCs. For example, capital spending by our four largest RBOC customers in 2003 is estimated to be between 12% - 17% of their net sales, a substantial decline from 21% - 47% of their net sales in the 2000 and 2001 period. This reduction in capital spending by these RBOCs has resulted in a 50% reduction in their spending for exchange cables compared to 1990s averages. We believe that we are the third largest participant in the North America and Oceania communications market for copper wire and cable products. We believe that we have approximately 17% and 18% market shares in the communications market for copper wire and cable products in North America and Oceania, respectively. Outside Voice and Data Products. Our principal outside voice and data products are outside plant telecommunications exchange cable and service wire. Outside plant telecommunications exchange cable is short haul trunk, feeder or distribution cable from a telephone company's central office to the subscriber premises. It consists of multiple paired conductors (ranging from 2 pairs to 4,200 pairs) and various types of sheathing, water-proofing, foil wraps and metal jacketing. Service wire is used to connect telephone subscriber premises to curbside distribution cable. During 2000, we expanded our manufacturing capacity of telecommunications cable through the acquisition of Telmag, S.A. de C.V. Sales of these products accounted for approximately 21% of our net sales in 2002. We sell our outside voice and data products primarily to telecommunications system operators through our direct sales force under supply contracts of varying lengths, and also to telecommunications distributors. The agreements do not guarantee a minimum level of sales. Product prices are generally subject to periodic adjustment based upon changes in the cost of copper and other factors. Data Communications Products. Our data communications products are high-bandwidth twisted pair copper and fiber optic cable for the customer premise, local area networks, central office and OEM telecommunications equipment markets. Customer premise products are used for wiring at subscriber premises, and include computer, riser rated and plenum rated wire and cable. Riser cable runs between floors and plenum cable runs in air spaces, primarily above ceilings in non-residential structures. Local area network cables run between computers along horizontal raceways and in backbones between servers. Central office products interconnect components within central office switching systems and public branch exchanges. Sales of data communications products accounted for approximately 8% of our net sales in 2002. We sell data communications products primarily through distributors and agents. The fiber optic cable sold by us is manufactured by a joint venture company we formed during 2002. The joint venture manufactures all of our fiber optic cable products. The market for data communications products has been adversely effected by a decrease in information technology spending. However, this decrease has been partially offset by continued spending in this market on maintenance and repair. Electronics. Our electronics products include multi-conductor, multi-pair, coaxial, hook-up, audio and microphone cables, speaker and television lead wire, and high temperature and shielded electronic wire. Primary uses for these products are various applications within the commercial, industrial instrumentation and control, and residential markets. These markets require a broad range of multi-conductor products for applications involving programmable controllers, robotics, process control and computer integrated manufacturing, sensors and test equipment, as well as cable for fire alarm, smoke detection, sprinkler control, entertainment and security systems. OEM Products. Assemblies are used in communications switching systems and industrial control applications as well as medical equipment applications. These assemblies are used in such products as data processing equipment; telecommunications network switches, diagnostic imaging equipment, office machines and industrial machinery. Our industrial instrumentation and control products are sold primarily through distributors and agents. 58 GEOGRAPHIC SEGMENTS Revenues for our North American business represented approximately 70%, 74% and 77% of our total consolidated net sales for the nine months ended September 30, 2003 and for the years ended December 31, 2002 and 2001, respectively. Net sales for our European business represented approximately 25%, 22% and 19% of our total consolidated net sales for the nine months ended September 30, 2003 and for the years ended December 31, 2002 and 2001, respectively. Net sales for our Oceania business represented approximately 5%, 4% and 4% of our total consolidated net sales for the nine months ended September 30, 2003 and for the years ended December 31, 2002 and 2001, respectively. North America Sales in the North American wire and cable market were approximately $14.3 billion in 2002 or approximately 25% of the global market. Sales in the North American market experienced a 20% decline in 2002 from $18.0 billion in 2001, representing the sharpest decline worldwide. We believe that we are the largest participant in the North American market. Other large competitors in this market are Southwire, Superior Telecom, Belden and Avaya. Europe Sales in the European wire and cable market were approximately $14.4 billion in 2002 or approximately 25% of the global market. Sales in Europe declined 12% in 2002 from $16.2 billion in 2001. Our European business is headquartered in Barcelona, Spain, and has three manufacturing facilities in the Barcelona area and a manufacturing facility near Lisbon, Portugal, all of which are supported by centralized marketing, sales and production planning. The main markets served are Spain, Portugal, France, United Kingdom, Norway, Belgium and Brazil, with approximately 75% of sales generated in the European market and the remaining 25% representing export sales. Over 90% of net sales in Europe are derived from energy and industrial and specialty cable sales. We believe that we are one of many strong regional wire and cable manufacturers in Europe. Oceania We believe that we are the third largest participant in the market in Oceania, behind Pirelli and Olex. Our Oceania business consists of a regional headquarters and manufacturing facility in Christchurch, New Zealand, a joint venture manufacturing facility in Fiji and sales offices in New Zealand and Australia. The business offers a broad product range in the energy, communications and electrical markets principally serving New Zealand, Australia, Fiji and the Pacific Islands with certain products also sold into Asia. COMPETITION The markets for all of our products are highly competitive, and we experience competition from several competitors within each market. We believe that we have developed strong customer relations as a result of our ability to supply customer needs across a broad range of products, our commitment to quality control and continuous improvement, our continuing investment in information technology, our emphasis on customer service, and our substantial product and distribution resources. Although the primary competitive factors for our products vary somewhat across the different product categories, the principal factors influencing competition are generally breadth of product line, inventory availability and delivery time, price, quality and customer service. Many of our products are made to industry specifications and are therefore essentially functionally interchangeable with those of competitors. However, we believe that significant opportunities exist to differentiate all of our products on the basis of quality, consistent availability, conformance to manufacturer's specifications and customer service. Within some markets such as specialty and 59 LAN cables, conformance to manufacturer's specifications and technological superiority are also important competitive factors. Brand recognition is also a primary differentiating factor in the portable cord market and, to a lesser extent, in our other product groups. Our key competitors include other wire and cable manufacturers, such as Pirelli, Southwire, Nexans, Okonite, Marmon and Alcan in energy products; Leviton, Coleman Cable, Belden, Nexans, Pirelli, Marmon and Okonite for instrumentation, power control and specialty cable products; American Insulated Wire Corporation for cord products; Prestolite for automotive products; Superior Telecom and Belden for outside voice & data products; and Belden, Nexans, Cable Design Technologies, CommScope and Avaya for data communications products. RAW MATERIALS The principal raw material used by us in the manufacture of our wire and cable products is copper. We purchase copper in either cathode, rod or wire form from a number of major domestic and foreign producers, generally through annual supply contracts. Copper is available from many sources, and we believe that we are not dependent on any single supplier of copper. In 2002, our two largest suppliers of copper each accounted for approximately 18% of our North American copper purchases. For the nine months ended September 30, 2003, our two largest suppliers of copper accounted for approximately 36% and 34% of our North America copper purchases. We have centralized our copper purchasing in North America to capitalize on economies of scale and to facilitate the negotiation of favorable purchase terms from suppliers. The cost of copper has been subject to considerable volatility over the past several years. However, as a result of a number of practices intended to match copper purchases with sales, our profitability has generally not been significantly affected by changes in copper prices. We generally pass changes in copper prices along to our customers, although there are timing delays of varying lengths depending upon the type of product, competitive conditions and particular customer arrangements. We do not engage in speculative metals trading or other speculative activities, nor do we engage in activities to hedge the underlying value of our copper inventory. Other raw materials utilized by us include aluminum, nylon, polyethylene resin and compounds and plasticizers, fluoropolymer compounds, fiber and a variety of filling, binding and sheathing materials. For our North American operations, we produced approximately 64% and 59% of our bare wire strand and PVC compound requirements for 2002 and 63% and 64% of our bare wire strand and PVC compound requirements for the first nine months of 2003. We believe that all of these materials are available in sufficient quantities through purchases in the open market. PATENTS AND TRADEMARKS We believe that the success of our business depends more on the technical competence, creativity and marketing abilities of our employees than on any individual patent, trademark or copyright. Nevertheless, we have a policy of seeking patents when appropriate on inventions concerning new products and product improvements as part of our ongoing research, development and manufacturing activities. We own a number of U.S. and foreign patents and have patent applications pending in the U.S. and abroad. We also own a number of U.S. and foreign registered trademarks and have many applications for new registrations pending. Although in the aggregate these patents and trademarks are of considerable importance to the manufacturing and marketing of many of our products, we do not consider any single patent or trademark or group of patents or trademarks to be material to our business as a whole. While we occasionally obtain patent licenses from third parties, none are deemed to be material. Trademarks which are considered to be generally important are General Cable(R), Anaconda(R), BICC(R) and Carol(R), and our triad symbol. We believe that our products bearing these trademarks have achieved significant brand recognition within the industry. We also rely on trade secret protection for our confidential and proprietary information. We routinely enter into confidentiality agreements with our employees. There can be no assurance, however, that others will not 60 independently obtain similar information and techniques or otherwise gain access to our trade secrets or that we will be able to effectively protect our trade secrets. ENVIRONMENTAL MATTERS We are subject to a variety of federal, state, local and foreign laws and regulations covering the storage, handling, emission and discharge of materials into the environment, including CERCLA, the Clean Water Act, the Clean Air Act (including the 1990 amendments) and the Resource Conservation and Recovery Act. Our subsidiaries in the United States have been identified as potentially responsible parties with respect to several sites designated for cleanup under CERCLA or similar state laws, which impose liability for cleanup of certain waste sites and for related natural resource damages without regard to fault or the legality of waste generation or disposal. Persons liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although CERCLA imposes joint and several liability on all potentially responsible parties, in application, the potentially responsible parties typically allocate the investigation and cleanup costs based, among other things, upon the volume of waste contributed by each potentially responsible party. Settlements can often be achieved through negotiations with the appropriate environmental agency or the other potentially responsible parties. Potentially responsible parties that contributed small amounts of waste (typically less than 1% of the waste) are often given the opportunity to settle as "de minimis" parties, resolving their liability for a particular site. We do not own or operate any of the waste sites with respect to which we have been named as a potentially responsible party by the government. Based on our review and other factors, we believe that costs to us relating to environmental clean-up at these sites will not have a material adverse effect on our results of operations, cash flows or financial position. In the transaction with Wassall PLC in 1994, American Premier Underwriters, Inc. agreed to indemnify us against liabilities (including all environmental liabilities) arising out of our or our predecessors' ownership or operation of the Indiana Steel & Wire Company and Marathon Manufacturing Holdings, Inc. businesses (which were divested), without limitation as to time or amount. American Premier also agreed to indemnify us against 66 2/3% of all other environmental liabilities arising out of our or our predecessors' ownership or operation of other properties and assets in excess of $10 million but not in excess of $33 million, which were identified during the seven-year period ended June 2001. Indemnifiable environmental liabilities through June 2001 were substantially below that threshold. In addition, we also have claims against third parties with respect to some of these liabilities. During 1999, we acquired the worldwide energy cable and cable systems business of Balfour Beatty plc, previously known as BICC plc. As part of this acquisition, the seller agreed to indemnify us against environmental liabilities existing at the date of the closing of the purchase of the business. The indemnity is for an eight-year period ending in 2007, while we operate the businesses, subject to certain sharing of losses (with BICC plc covering 95% of losses in the first three years, 80% in years four and five and 60% in the remaining three years). The indemnity is also subject to the overall indemnity limit of $150 million, which applies to all warranty and indemnity claims in the transaction. In addition, BICC plc assumed responsibility for cleanup of certain specific conditions at various sites operated by us and cleanup is mostly complete at these sites. In the sale of the European businesses to Pirelli in August 2000, we generally indemnified Pirelli against any environmental liabilities on the same basis as BICC plc indemnified us in the earlier acquisition. However, the indemnity we received from BICC plc relating to the European businesses sold to Pirelli terminated upon the sale of those businesses to Pirelli. In addition, we generally indemnified Pirelli against other claims relating to the prior operation of the business. Pirelli has asserted claims under this indemnification. We are continuing to investigate these claims and believe that the reserves established at the time of the transaction are adequate to cover any obligations we may have. We have also agreed to indemnify Southwire Company against certain environmental liabilities arising out of the operation of the business we sold to Southwire prior to its sale in 2001, including remediation of our former site in Watkinsville, Georgia. While it is difficult to estimate future environmental liabilities accurately, we do not currently anticipate any material adverse effect on our results of operations, financial condition or cash flows as a result of compliance 61 with federal, state, local or foreign environmental laws or regulations or cleanup costs of the sites discussed above. As of September 30, 2003, we had an accrued liability of approximately $5.2 million for various environmental-related liabilities of which we are aware. However, there can be no guarantee that discovery of previously unknown conditions, future changes in environmental laws and requirements or their enforcement, or inability to enforce environmental indemnification agreements will not result in material costs in excess of our reserve. PROPERTIES Our principal properties are listed below. We believe that our properties are generally well maintained and are adequate for our current level of operations.
SQUARE USE/PRODUCT OWNED LOCATION FEET LINE(S) OR LEASED - -------- ---- ------- --------- NORTH AMERICA MANUFACTURING FACILITIES: Marion, IN(1) 745,000 Industrial & Specialty Cables Owned Marshall, TX 692,000 Aluminum Low-Voltage Energy Cables Owned Willimantic, CT 686,000 Industrial & Specialty Cables Owned Manchester, NH 550,000 Electronic Products Owned Lawrenceburg, KY 383,000 Outside Voice and Data Products and Data Owned Communications Products Bonham, TX 364,000 Outside Voice and Data Products Owned Lincoln, RI 350,000 Industrial & Specialty Cables and Automotive Owned Products Malvern, AR 338,000 Aluminum Medium-Voltage Energy Cables Owned DuQuoin, IL 279,000 Medium-Voltage Energy Cables Owned Tetla, Mexico 218,000 Outside Voice and Data Products Owned Altoona, PA 193,000 Automotive Products Owned Jackson, TN 182,000 Data Communications Cables Owned South Hadley, MA(2) 150,000 Bare Wire Fabricating Owned Taunton, MA(3) 131,000 Bare Wire Fabricating Leased LaMalbaie, Canada 120,000 Low-and Medium-Voltage Energy Cables Owned St. Jerome, Canada 110,000 Low-and Medium-Voltage Energy Cables Owned DISTRIBUTION AND OTHER FACILITIES: Lebanon, IN 198,000 Distribution Center Leased Chino, CA 189,000 Distribution Center Leased Highland Heights, KY 166,000 World Headquarters, Technology Center and Learning Owned Center Plano, TX 60,000 Rod Mill Owned EUROPE AND OCEANIA Barcelona, Spain(4) 1,080,000 Power Transmission and Distribution, Industrial & Owned Specialty Cables New Zealand(4) 314,000 Power Distribution, Industrial & Specialty and Owned Communications Cables Lisbon, Portugal 255,000 Power Distribution, Industrial & Specialty and Owned Communications Cables
- ---------------------- (1) We are in the process of significantly reducing operations at this facility. (2) We have initiated a feasibility study to determine whether to continue operations at this facility or move the product lines to other facilities. 62 (3) We are in the process of closing this facility. (4) Certain locations represent a collection of facilities in the local area. LEGAL PROCEEDINGS We are subject to numerous federal, state, local and foreign laws and regulations relating to the storage, handling, emission and discharge of materials into the environment, including CERCLA, the Clean Water Act, the Clean Air Act (including the 1990 amendments) and the Resource Conservation and Recovery Act. Our subsidiaries have been identified as potentially responsible parties with respect to several sites designated for cleanup under CERCLA or similar state laws, which impose liability for cleanup of certain waste sites and for related natural resource damages without regard to fault or the legality of waste generation or disposal. We do not own or operate any of the waste sites with respect to which we have been named as a potentially responsible party by the government. Based on our review and other factors, management believes that our costs relating to environmental clean-up at these sites will not have a material adverse effect on our results of operations, cash flows or financial position. As of December 31, 2002 and September 30, 2003, we had an accrued liability of approximately $4.6 million and $5.2 million, respectively, for various environmental-related liabilities of which we are aware. American Premier Underwriters, Inc., in connection with the 1994 Wassall PLC transaction, agreed to indemnify us against liabilities (including all environmental liabilities) arising out of our or our predecessors' ownership or operation of the Indiana Steel & Wire Company and Marathon Manufacturing Holdings, Inc. businesses (which were divested by the predecessor prior to the 1994 Wassall transaction), without limitation as to time or amount. American Premier also agreed to indemnify us against 66 2/3% of all other environmental liabilities arising out of our or our predecessors' ownership or operation of other properties and assets in excess of $10 million but not in excess of $33 million, which were identified during the seven-year period ended June 2001. Indemnifiable environmental liabilities through June 2001 were substantially below that threshold. In addition, we also have claims against third parties with respect to some of these liabilities. While it is difficult to estimate future environmental liabilities accurately, we do not currently anticipate any material adverse effect on our results of operations, financial condition or cash flows as a result of compliance with federal, state, local or foreign environmental laws or regulations or cleanup costs of the sites discussed above. As part of the BICC plc acquisition, BICC agreed to indemnify us against environmental liabilities existing at the date of the closing of the purchase of the business. The indemnity is for an eight-year period ending in 2007 while we operate the businesses subject to certain sharing of losses (with BICC plc covering 95% of losses in the first three years, 80% in years four and five and 60% in the remaining three years). The indemnity is also subject to the overall indemnity limit of $150 million, which applies to all warranty and indemnity claims in the transaction. In addition, BICC plc assumed responsibility for cleanup of certain specific conditions at several sites operated by us and cleanup is mostly complete at those sites. In the sale of the European businesses to Pirelli in August 2000, we generally indemnified Pirelli against any environmental liabilities on the same basis as BICC plc indemnified us in the earlier acquisition. However, the indemnity we received from BICC plc related to the European businesses sold to Pirelli terminated upon the sale of those businesses to Pirelli. At this time, there are no claims outstanding under the general indemnity provided by BICC plc. We have also agreed to indemnify Southwire Company against certain environmental liabilities arising out of the operation of the business we sold to Southwire prior to our sale. There are approximately 15,300 pending non-maritime asbestos cases involving our subsidiaries. The majority of these cases involve plaintiffs alleging exposure to asbestos-containing shipboard cable manufactured by our predecessors. In addition to our subsidiaries, numerous other wire and cable manufacturers have been named as defendants in these cases. In addition, our subsidiaries have been named, along with numerous other product manufacturers as defendants in approximately 33,000 suits in which plaintiffs' alleged that they suffered an asbestos-related injury while working in the maritime industry. These cases are referred to as MARDOC cases and are currently managed under the supervision of the U.S. District Court for the Eastern District of Pennsylvania. On May 1, 1996, the District Court ordered that all pending MARDOC cases be dismissed without prejudice for failure 63 to plead sufficient facts. Under that order of dismissal, all future MARDOC cases filed by the plaintiff's attorney are required to be accompanied by a filing fee for each new complaint. These cases can only be removed from the inactive docket if the plaintiff is able to prove an asbestos-related injury, and show specific product identification as to each defendant against whom the plaintiff chooses to proceed. Based upon our experience to date, we do not believe that the outcome of the pending non-maritime and/or MARDOC asbestos cases will have a material adverse effect on our results of operation, cash flows or financial position. At September 30, 2003, we had an accrued liability of approximately $1.3 million for these lawsuits. During 2002, costs of defense, judgments and settlements of asbestos litigation (before contribution from insurers) was $0.1 million. In January 1994, we entered into a settlement agreement with certain principal primary insurers concerning liability for the costs of defense, judgments and settlements, if any, in all of the asbestos litigation described above. Subject to the terms and conditions of the settlement agreement, the insurers are responsible for a substantial portion of the costs and expenses incurred in the defense or resolution of this litigation. However, recently one of the insurers participating in the settlement that was responsible for a significant portion of the contribution under the settlement agreement entered into insurance liquidation proceedings. As a result, the contribution of the insurers has been reduced and we may ultimately have to bear a larger portion of the costs relating to these lawsuits. Based on (1) the terms of the insurance settlement agreement; (2) the relative costs and expenses incurred in the disposition of past asbestos cases; (3) reserves established on our books which are believed to be reasonable; and (4) defenses available to us in the litigation, we believe that the resolution of the present asbestos litigation will not have a material adverse effect on our financial results, cash flows or financial position. However, we cannot assure you that any judgments or settlements of the pending non-maritime and/or MARDOC asbestos cases or any cases which may be filed in the future will not have a material adverse effect on our financial results, cash flows or financial position. Liabilities incurred in connection with asbestos litigation are not covered by the American Premier indemnification. We are also involved in various routine legal proceedings and administrative actions. In the opinion of our management, these proceedings and actions should not, individually or in the aggregate, have a material adverse effect on the results of our operations, cash flows or financial position. EMPLOYEES At September 30, 2003, approximately 6,000 persons were employed by us, and collective bargaining agreements covered approximately 3,900 employees at various locations around the world. During the last five years, we have experienced one strike in Oceania which was settled on satisfactory terms. There have been no other major strikes at any of our facilities during the last five years. In North America, union contracts will expire at eight facilities in 2004. In Europe and Oceania, labor agreements are generally negotiated on an annual or bi-annual basis. We believe that our relationships with our employees are good. 64 MANAGEMENT EXECUTIVE OFFICERS AND DIRECTORS Our amended and restated by-laws provide that our board of directors is divided into three classes (Class I, Class II and Class III). At each annual meeting of the shareholders, directors constituting one class are elected for a three-year term. Each of the directors will be elected to serve until a successor is elected and qualified or until such director's earlier resignation or removal. The following table sets forth certain information concerning our directors and executive officers as of the date hereof.
NAME AGE POSITION - ---- --- -------- Gregory B. Kenny 51 President, Chief Executive Officer and Class II Director Christopher F. Virgulak 48 Executive Vice President, Chief Financial Officer and Treasurer Robert J. Siverd 55 Executive Vice President, General Counsel and Secretary John E. Welsh, III 52 Class I Director; Chairman of the Board Jeffrey Noddle 57 Class I Director Robert L. Smialek 59 Class II Director Gregory E. Lawton 52 Class III Director
MR. KENNY has been one of our directors since 1997 and has been our President and Chief Executive Officer since August 2001. He served as President and Chief Operating Officer from May 1999 to August 2001. He served as Executive Vice President and Chief Operating Officer of General Cable from March 1997 to May 1999. From June 1994 to March 1997, he was Executive Vice President of General Cable's immediate predecessor. He is also a director of IDEX Corporation (NYSE: IEX), a manufacturer of highly engineered process and flow control products. MR. VIRGULAK has been our Executive Vice President, Chief Financial Officer and Treasurer since October 2002. From June 2000 to October 2002, he was Executive Vice President and Chief Financial Officer. He served as Executive Vice President, Chief Financial Officer and Treasurer from March 1997 to June 2000. From October 1994 until March 1997, he was Executive Vice President, Chief Financial Officer and Treasurer of the predecessor company. MR. SIVERD has served as our Executive Vice President, General Counsel and Secretary of General Cable since March 1997. From July 1994 until March 1997, he was Executive Vice President, General Counsel and Secretary of the predecessor company. MR. WELSH has been one of our directors since 1997 and is Non-executive Chairman of the board and a member of our Audit Committee, Compensation Committee and Corporate Governance Committee. He is currently President of Avalon Capital Partners, LLC, an investment firm focused on private equity and venture capital investments. From October 2000 to December 2002, he was a Managing Director of CIP Management LLC, the management company for Continuation Investments Group Inc. (Mr. Welsh continues to manage several portfolio investments on behalf of CIP Management LLC). From November 1992 to December 1999, he served as Managing Director and Vice-Chairman of the board of directors of SkyTel Communications, Inc. and as a Director of SkyTel from September 1992 until December 1999. Prior to 1992, Mr. Welsh was a Managing Director in the Investment Banking Division of Prudential Securities, Inc. MR. NODDLE has been one of our directors since 1998 and is Chairman of our Compensation Committee and a member of our Audit Committee and the Compensation Committee. He has been Chairman of the board of Minneapolis-based Supervalu Inc. (NYSE: SVU) since May 2002. He was elected Chief Executive Officer in June 2001. Prior to that, he served as President and Chief Operating Officer from June 2000 to June 2001. From February 1995 to May 2000 he was President and Chief Operating Officer of its Wholesale Food Companies. Supervalu is the largest food wholesaler in the United States. Mr. Noddle has held various marketing and merchandising positions with Supervalu since 1976. He is also a director of Donaldson Company, Inc. (NYSE: DCI), a leading worldwide provider of filtration systems and replacement parts. 65 MR. SMIALEK has been one of our directors since 1998 and is Chairman of our Audit Committee and a member of our Compensation Committee and Corporate Governance Committee. He was formerly President and Chief Executive Officer of Applied Innovation, Inc. (NASDAQ: AINN) from July 2000 until August 2002. From May 1993 until June 1999, he was the Chairman, President and Chief Executive Officer of Insilco Corporation (The Pink Sheets: INSL), a diversified manufacturing company based in Dublin, Ohio. He has been a director of Coors Tek, Inc. since December 1999. MR. LAWTON has been one of our directors since 1998. He is Chairman of the Corporate Governance Committee and member of the Audit Committee and Compensation Committee. Since October 2000, Mr. Lawton has been President and Chief Executive Officer of Johnson Diversey, Inc., a supplier of cleaning and hygiene solutions. From January 1999 until September 2000, he was President and Chief Operating Officer of Johnson Wax Professional. Prior to joining Johnson Wax, Mr. Lawton was President of NuTone Inc., a subsidiary of Williams plc based in Cincinnati, Ohio, from 1994 to 1998. From 1989 to 1994, Mr. Lawton served with Procter & Gamble (NYSE: PG) where he was Vice President and General Manager of several consumer product groups. Mr. Lawton is a director of Johnson Outdoor Inc. (NASDAQ: JOUT). BOARD COMMITTEES AND MEETINGS Our board of directors meets regularly during the year as do its standing committees, which are the audit committee, the compensation committee and the corporate governance committee. In 2002, each director attended at least 75% of the total number of meetings of the board of directors and of the committees on which he served. In 2002, the board of directors held six regular meetings and two special meetings. Audit Committee The audit committee consists of Robert L. Smialek (Chairman), Gregory E. Lawton, Jeffrey Noddle and John E. Welsh, III. This committee generally reviews and makes recommendations to the board of directors on our auditing, financial reporting and internal control functions. This committee also determines the firm that we should retain as our independent auditors. None of the members are officers or employees of our company. Compensation Committee This compensation committee consists of Jeffrey Noddle (Chairman), Gregory E. Lawton, Robert L. Smialek and John E. Welsh, III. The committee reviews and acts on our executive compensation and employee benefit plans and programs, including their establishment, modification and administration. It also determines the compensation of the Chief Executive Officer and other executive officers. None of the members are officers or employees of our company. Corporate Governance Committee The corporate governance committee consists of Gregory E. Lawton (Chairman), Jeffrey Noddle, Robert L. Smialek and John E. Welsh, III. This committee considers and recommends nominees for election as directors, appropriate director compensation, and the membership and responsibilities of board committees. It also conducts, in conjunction with the compensation committee, an annual performance evaluation of the Chief Executive Officer and sets performance objectives for the CEO. This committee also reviews management development and succession policies and practices. None of the members are officers or employees of our company. 66 OWNERSHIP OF CAPITAL STOCK The following table summarizes, as of September 30, 2003, the number and percentage of outstanding shares of our common stock beneficially owned by the following: - each person or group management knows to beneficially own more than 5% of such stock; - each of our directors and executive officers; and - all directors and executive officers as a group.
SHARES BENEFICIALLY OWNED(1) ----------------------------- NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT (2) --------------- ----------- Pzena Investment Management........................................................ 3,922,175(3) 11.8% 830 Third Avenue New York, NY 10022 Fidelity Management & Research Co.................................................. 3,412,500(4) 10.3% 82 Devonshire Street Boston, MA 02109 Cannell Capital LLC................................................................ 3,388,800(5) 10.2% 150 California Street San Francisco, CA 94111 Putnam Investments, Inc............................................................ 3,042,234(6) 9.2% Putnam Investment Management, Inc. The Putnam Advisory Company, Inc. One Post Office Square Boston, MA 02109 Zesiger Capital.................................................................... 2,735,500(7) 8.3% 320 Park Avenue New York, NY 10022 Barclays Bank PLC.................................................................. 2,171,638(8) 6.6% 12 East 49th Street New York, NY 10017 Fuller & Thaler Asset Management Inc............................................... 1,931,600(9) 5.8% 411 Borel Avenue - Suite 402 San Mateo, CA 94402 Gregory B. Kenny................................................................... 350,942(10)(17) 1.0% Gregory E. Lawton.................................................................. 10,877(11)(17) * Jeffrey Noddle..................................................................... 10,877(12)(17) * Robert J. Siverd................................................................... 191,587(13)(17) * Robert L. Smialek.................................................................. 13,877(14)(17) * Christopher F. Virgulak............................................................ 136,510(15)(17) * John E. Welsh, III................................................................. 67,561(16)(17) * All directors and executive officers as a group (7 persons)......................................................... 782,231 2.3%
- ----------- * Less than 1% (1) Beneficial ownership is determined under the rules of the SEC and includes voting or investment power with respect to the shares. (2) The percentages shown are calculated based on the total number of shares of our common stock outstanding on September 30, 2003 (33,083,028 shares). (3) These shares of common stock are owned by Pzena Investment Management. Pzena has sole voting power with respect to 3,544,800 shares and sole dispositive power with respect to 3,922,175 shares. 67 (4) These shares of our common stock are owned by FMR Corp. as a parent holding company, Fidelity Management and Research Company, Fidelity Management Trust Company and Edward C. Johnson 3d and members of his family. Fidelity Management and Research Company beneficially owns 3,301,000 shares of our common stock by reason of its acting as investment advisor to various registered investment companies. Edward C. Johnson 3d, FMR Corp., through its control of Fidelity Management and Research Company, has sole power to dispose of 3,301,000 shares of our common stock and Edward C. Johnson 3d and FMR Corp. each has sole disposition power over 111,500 shares. Members of the Johnson family are the predominant owners of Class B shares of FMR Corp. common stock representing about 49% of the voting power of FMR Corp. (5) These shares of our common stock are owned as follows: (i) 868,000 shares by The Anegada Fund Limited, (ii) 871,700 shares by the Cuttyhunk Fund Limited, (iii) 1,239,300 shares by Tonga Partners, L.P., (iv) 229,300 shares by GS Cannell Portfolio, LLC and (v) 180,500 shares by Pleiadas Investment Partners, L.P. Cannell Capital LLC is an investment advisor and has discretionary authority to buy, well and vote these shares for its investment advisory clients. J. Carlo Cannell is the managing member of Cannell Capital LLC. (6) These shares of our common stock are owned by a variety of investment advisory clients of Putnam Investment Management, LLC and The Putnam Advisory Company, LLC, both of which are wholly-owned subsidiaries of Putnam Investments, LLC. No client of either investment adviser is known to beneficially own more than 5% of the outstanding shares of our common stock. Putnam Investments, LLC has shared voting power with respect to 1,335,636 shares and shared dispostive power with respect to 3,042,234 shares. The Putnam Advisory Company, LLC has shared voting power with respect to 1,335,636 shares and shared dispositive power with respect to 2,802,334 shares. Putnam Investment Management, LLC is the investment adviser to the Putnam family of mutual funds, and the funds' trustees have voting power over the shares held by each fund. Putnam Investment Management, LLC has no voting power and shared dispositive power with respect to 239,900 shares. (7) These shares of our common stock are owned by a variety of investment advisory clients of Zesiger Capital Corporation LLC. Zesiger Capital Corporation, LLC has sole voting power with respect to 1,769,000 shares and sole dispositive power with respect to 2,735,500 shares. (8) These shares of our common stock are owned by Barclays Bank PLC and affiliated members of its group, including Barclays Global Fund Advisors, Barclays Global Investors, Ltd., Barclays Trust and Banking Company (Japan) Limited, Barclays Life Assurance Company Limited, Barclays Capital Securities Limited, Barclays Capital Investments, Barclays Private Bank & Trust (Isle of Man) Limited, Barclays Private Bank and Trust (Jersey) Limited, and Barclays Private Bank and Trust Limited (Sussie). Barclays Global Investors, Ltd. has sole voting and dispositive power with respect to 1,965,979 shares. Barclays Private Bank and Trust Limited (Sussie) has sole voting power with respect to 2,171,638 shares and sole dispositive power with respect to 2,171,678 shares of our common stock. (9) These shares of our common stock are owned by Fuller & Thaler Asset Management, Inc., an investment advisor and Russell J. Fuller, President of Fuller & Thaler. Fuller & Thaler Asset Management, Inc. has sole voting power and sole dispositive power with respect to 1,931,600 shares of our common stock. Russell Fuller has sole voting power with respect to 1,436,400 shares and sole dispositive power with respect to 1,931,600 shares. (10) Includes 2,100 shares held by Mr. Kenny as custodian for his children and 1,167 shares of restricted stock awarded to Mr. Kenny under the General Cable 1997 Stock Incentive Plan as to which he has voting power; and 323,000 shares covered by options in common stock which may be exercised within sixty (60) days of September 30, 2003. Excludes 248,576 shares of restricted and unrestricted common stock deferred under the General Cable Deferred Compensation Plan. (11) Includes 9,000 shares covered by stock options which may be exercised by Mr. Lawton within sixty days of September 30, 2003. Excludes 17,769 shares of common stock deferred under the General Cable Deferred Compensation Plan. 68 (12) Includes 9,000 shares covered by stock options which may be exercised by Mr. Noddle within sixty days of September 30, 2003. Excludes 17,769 shares of common stock deferred under the General Cable Deferred Compensation Plan. (13) Includes 133,000 shares covered by stock options, which may be exercised by Mr. Siverd within sixty days of September 30, 2003. Excludes 32,935 shares of restricted and unrestricted common stock deferred under the General Cable Deferred Compensation Plan. (14) Includes 9,000 shares covered by stock options, which may be exercised by Mr. Smialek within sixty days of September 30, 2003. Excludes 17,769 shares of common stock deferred under the General Cable Deferred Compensation Plan. (15) Includes 135,000 shares covered by stock options, which may be exercised by Mr. Virgulak within sixty days of September 30, 2003. Excludes 78,675 shares of restricted and unrestricted common stock deferred under the General Cable Deferred Compensation Plan. (16) Includes 27,001 shares covered by stock options which may be exercised by Mr. Welsh within sixty days of September 30, 2003. Excludes 45,537 shares of common stock deferred under the General Cable Deferred Compensation Plan. (17) The address of our directors and executive officers is c/o General Cable Corporation, 4 Tesseneer Drive, Highland Heights, Kentucky 41076-9753. 69 THE EXCHANGE OFFER PURPOSE AND EFFECT The old notes were sold by us on November 24, 2003, and in connection with such offering, we, and certain of our subsidiaries, as guarantors, entered into a Registration Rights Agreement, dated as of November 24, 2003. The Registration Rights Agreement requires us to file a registration statement under the Securities Act with respect to the new notes and, upon the effectiveness of that registration statement, offer to the holders of the old notes the opportunity to exchange their old notes for a like principal amount of new notes, which will be issued without a restrictive legend and may be reoffered and resold by the holder without registration under the Securities Act. The Registration Rights Agreement further provides that we must use our reasonable best efforts to cause the registration statement with respect to the exchange offer to be declared effective on or before May 21, 2004. Except as provided below, upon the completion of the exchange offer, our obligations with respect to the registration of the old notes and the new notes will terminate. Copies of the Registration Rights Agreement have been filed as an exhibit to the registration statement of which this prospectus is a part and, although we believe that the summary herein of certain provisions thereof describes all material elements of the Registration Rights Agreement, this summary may not be complete and is subject to, and is qualified in its entirety, by the Registration Rights Agreement. As a result of the filing and the effectiveness of the registration statement, certain liquidated damages provided for in the Registration Rights Agreement will not become payable by us. In order to participate in the exchange offer, a holder must represent to us, among other things, that: - the new notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the person receiving such new notes; - neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such new notes; - neither the holder nor any such other person is an "affiliate," as defined under Rule 405 promulgated under the Securities Act, of us or any guarantor; and - if such holder or other person is an affiliate, that it will comply with the registration and prospectus delivery requirements under the Securities Act to the extent applicable. Pursuant to the Registration Rights Agreement, we are required to file a "shelf" registration statement for a continuous offering pursuant to Rule 415 under the Securities Act in respect of the old notes if: - because of any change in law or applicable interpretations of the staff of the SEC, we are not permitted to effect the exchange offer; - for any other reason the registration statement for the exchange offer is not declared effective by May 21, 2004 or the exchange offer is not consummated by June 21, 2004; - upon the request of any of the initial purchasers; - any holder notifies us within 20 business days after the commencement of the exchange offer that (i) due to a change in applicable law or Commission policy it is not entitled to participate in the exchange offer, or it may not resell the new notes to the public without delivering a prospectus and the prospectus that forms part of the registration statement is not appropriate or available for such resales or (ii) it is a broker-dealer and owns old notes acquired directly from us or an affiliate of ours; or - any holder of old notes participates in the exchange offer and does not receive freely transferable new notes in exchange for old notes. In the event that we are obligated to file a "shelf" registration statement, we will be required to keep such "shelf" registration statement effective for up to two years. 70 Other than as set forth in this paragraph, no holder will have the right to participate in the "shelf" registration statement nor otherwise to require that we register such holder's shares of old notes under the Securities Act. See " -- Procedures for Tendering." Based on an interpretation by the SEC's staff set forth in no-action letters issued to third-parties unrelated to us, we believe that new notes issued pursuant to the exchange offer in exchange for old notes may be offered for resale, sold and otherwise transferred by any person receiving such new notes, whether or not such person is the holder, other than any such holder or such other person which is an "affiliate" of General Cable Corporation or any of the guarantors within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: - the new notes are acquired in the ordinary course of business of that holder or such other person; - neither the holder nor such other person is engaging in or intends to engage in a distribution of the new notes; and - neither the holder nor such other person has an arrangement or understanding with any person to participate in the distribution of the new notes. Any holder who tenders in an exchange offer for the purpose of participating in a distribution of new notes cannot rely on this interpretation by the SEC's staff and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Each broker-dealer that receives new notes for its own account in exchange for old notes, whether the old notes were acquired by that broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. See "Plan of Distribution." CONSEQUENCE OF FAILURE TO EXCHANGE Following the completion of the exchange offer, except as set forth in the third paragraph under " -- Purpose and Effect" above, holders of old notes not tendered will not have any further registration rights and those old notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for a holder's old notes could be adversely affected upon completion of the exchange offer if the holder does not participate in the exchange offer. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of old notes accepted in the exchange offer. Holders may tender some or all of their old notes pursuant to the exchange offer. However, old notes may be tendered only in integral multiples of $1,000 in principal amount. The form and terms of the new notes will be substantially the same as the form and terms of the old notes except that: - interest on the new notes will accrue from the date of the issuance of the old notes or the date of the last periodic payment of interest on such old notes, whichever is later; and - the new notes have been registered under the Securities Act and will not bear legends restricting their transfer. The new notes will evidence the same debt as the old notes and will be issued pursuant to, and entitled to the benefits of, the indenture governing the old notes. As of the date of this prospectus, old notes representing $285,000,000 aggregate principal amount were outstanding. This prospectus, together with the letter of transmittal, is being sent to registered holders and to others 71 believed to have beneficial interests in the old notes. Holders of old notes do not have any appraisal or dissenters' rights under the General Corporation Law of the State of Delaware or the indenture governing the notes in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder. We shall be deemed to have accepted validly tendered old notes when, as, and if we have given oral or written notice thereof, to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the new notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted old notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the expiration date. Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes pursuant to the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the exchange offer. See " -- Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "expiration date" shall mean, with respect to the exchange offer, 5:00 p.m., New York City time, on , 2004, unless we, in our discretion, extend the exchange offer, in which case the term "expiration date" shall mean the latest date and time to which the exchange offer is extended. In any event, the exchange offer will be held open for at least thirty days. In order to extend the exchange offer, we will issue a notice of any extension by press release or other public announcement prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We reserve the right, in our discretion: - to delay accepting any old notes, to extend the exchange offer, or, if any of the conditions set forth under "The Exchange Offer -- Conditions to the Exchange Offer" shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of such delay, extension or termination to the exchange agent, as the case may be; or - to amend the terms of the exchange offer in any manner. PROCEDURES FOR TENDERING Only a holder of old notes may tender the old notes in an exchange offer. Except as set forth under " -- Book Entry Transfer," to tender in an exchange offer a holder must complete, sign and date the letter of transmittal applicable to the exchange offer, or a copy thereof, have the signature thereon guaranteed if required by such letter of transmittal, and mail or otherwise deliver such letter of transmittal or copy to the exchange agent for the exchange offer prior to the expiration date for such exchange offer. In addition, either: - certificates for such old notes must be received by the exchange agent for such exchange offer along with the letter of transmittal applicable to such exchange offer; or - a timely confirmation of a book-entry transfer of such old notes, if that procedure is available, into the account of the exchange agent for such exchange offer at DTC pursuant to the procedure for book-entry transfer described below, must be received by such exchange agent prior to the expiration date; or - the holder must comply with the guaranteed delivery procedures described below. To be tendered effectively, a letter of transmittal and other required documents must be received by the exchange agent at its address set forth under " -- Exchange Agent" prior to the expiration date. The tender by a holder that is not withdrawn before the expiration date will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal to the exchange offer. 72 THE METHOD OF DELIVERY OF OLD NOTES, A LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO US. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR NOMINEES TO EFFECT THESE TRANSACTIONS FOR THEM. Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on the beneficial owner's behalf. If the beneficial owner wishes to tender on the owner's own behalf, the owner must, prior to completing and executing a letter of transmittal and delivering the owner's old notes, either make appropriate arrangements to register ownership of the old notes in the beneficial owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an eligible institution listed below unless old notes tendered pursuant thereto are tendered: - by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on such letter of transmittal; or - for the account of an eligible institution. If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by any eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act. If a letter of transmittal is signed by a person other than the registered holder of any old notes listed therein, the old notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as that registered holder's name appears on the old notes. If a letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and evidence satisfactory to us of their authority to so act must be submitted with such letter of transmittal unless waived by us. All questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered old notes will be determined by us in our discretion, which determination will be final and binding. We reserve the right to reject any and all old notes not properly tendered or any old notes the acceptance of which would, in the opinion of counsel, be unlawful. We also reserve the right to waive any defects, irregularities, or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in a letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent, nor any other person shall incur any liability for failure to give such notification. Tenders of old notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal accompanying such old notes, as soon as practicable following the expiration date. In addition, we reserve the right in our sole discretion to purchase or make offers for any old notes that remain outstanding after the expiration date or, as set forth under " -- Conditions to the Exchange Offer," to terminate the exchange offer and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions, or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer. 73 By tendering, each holder will represent that, among other things: - the new notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the person receiving such new notes; - neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such new notes; - neither the holder nor any such other person is an "affiliate," as defined under Rule 405 promulgated under the Securities Act, of General Cable Corporation or any guarantor; and - if such holder or other person is an affiliate, that it will comply with the registration and prospectus delivery requirements under the Securities Act to the extent applicable. In all cases, issuance of new notes for old notes that are accepted for exchange pursuant to an exchange offer will be made only after timely receipt by the exchange agent for such exchange offer of certificates for such old notes or a timely book-entry confirmation of such old notes into such exchange agent's account at DTC, a properly completed and duly executed letter of transmittal or, with respect to DTC and its participants, electronic instructions in which the tendering holder acknowledges its receipt of and agreement to be bound by the letter of transmittal for the exchange offer, and all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer for such old notes or if old notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering holder thereof or, in the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC pursuant to the book-entry transfer procedures described below, such non-exchanged old notes will be credited to an account maintained with DTC, as promptly as practicable after the expiration or termination of the exchange offer for such old notes. BOOK-ENTRY TRANSFER The exchange agent will make requests to establish accounts with respect to the old notes at DTC for purposes of the exchange offer after the date of this prospectus, and any financial institution that is a participant in DTC's systems may make book-entry delivery of old notes being tendered by causing DTC to transfer such old notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at DTC, a letter of transmittal or copy thereof, with any required signature guarantees and any other required documents, must, in any case other than as set forth in the following paragraph, be transmitted to and received by the exchange agent at its address set forth under " -- Exchange Agent" on or prior to the expiration date or the guaranteed delivery below must be complied with. DTC's Automated Tender Offer Program or "ATOP" is the only method of processing exchange offers through DTC. To accept an exchange offer through ATOP, participants in DTC must send electronic instructions to DTC through DTC's communication system in place of sending a signed, hard copy letter of transmittal. DTC is obligated to communicate those electronic instructions to the exchange agent. To tender old notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the exchange agent must contain the participant's acknowledgment of its receipt of and agreement to be bound by the letter of transmittal for such old notes. GUARANTEED DELIVERY PROCEDURES If a registered holder of old notes desires to tender the old notes and the old notes are not immediately available, or time will not permit the holder's old notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if: - the tender is made through an eligible institution; 74 - prior to the expiration date, the exchange agent received from such eligible institution a properly completed and duly executed letter of transmittal or a facsimile thereof and notice of guaranteed delivery, substantially in the form provided by us tendered by telegram, telex, facsimile transmission, mail or hand delivery, setting forth the name and address of the holder of such old notes and the amount of old notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the applicable letter of transmittal will be deposited by the eligible institution with the exchange agent; and - the certificates for all physically tendered old notes, in proper form for transfer, or a book entry confirmation, as the case may be, and all other documents required by the applicable letter of transmittal, are received by such exchange agent within three NYSE trading days after the date of execution of the notice of delivery. WITHDRAWAL RIGHTS Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal of a tender of old notes to be effective, a written or, for a DTC participant, electronic ATOP transmission, notice of withdrawal must be received by the exchange agent at its address set forth in this prospectus prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must: - specify the name of the person having deposited the old notes to be withdrawn; - identify the old notes to be withdrawn, including the certificate number or numbers and principal mount of such old notes; - be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee of such old notes register the transfer of such old notes into the name of the person withdrawing the tender; and - specify the name in which any such old notes are to be registered, if different from that of the holder who tendered such old notes. All questions as to the validity, form, and eligibility, including time of receipt, of such notices will be determined by us subject to such notice, whose determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer relating to such old notes. Properly withdrawn old notes may be retendered by following one of the procedures under " -- Procedures for Tendering" at any time on or prior to the expiration date. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provision of the exchange offer, we shall not be required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time before the acceptance of such old notes for exchange or the exchange of the new notes for such old notes, we determine that the exchange offer violates applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction. The foregoing conditions are for the sole benefit of us and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in our sole discretion. The failure by us at any time to exercise any of the foregoing rights shall not be 75 deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. In addition, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture relating to the old notes under the Trust Indenture Act of 1939, as amended. In any such event we are required to use every reasonable effort to obtain the withdrawal of any stop order at the earliest possible time. EXCHANGE AGENT All executed letters of transmittal should be directed to the exchange agent. U.S. Bank National Association has been appointed as exchange agent for the new notes. Questions, requests for assistance and requests for additional copies of this prospectus or the letter of transmittal and requests for a copy of the Notice of Guaranteed Delivery should be directed to the exchange agent addressed as follows: To: U.S. BANK NATIONAL ASSOCIATION By Mail or Hand/Overnight Delivery: By Facsimile: U.S. Bank National Association (651) 495-8158 60 Livingston Ave. Confirm by Telephone: Attn: Specialized Finance (800) 934-6802 St. Paul, MN 55107 U.S. Bank National Association also serves as Trustee, Registrar and Paying Agent under the indenture. FEES AND EXPENSES We will not make any payments to brokers, dealers, or other soliciting acceptances of the exchange offer. The principal solicitation is being made by mail; however, additional solicitations may be made in person or by telephone by officers and employees of us. The estimated cash expenses to be incurred in connection with the exchange offer will be paid by us and are estimated in the aggregate to be $150,000, which includes fees and expenses of the trustee for the old notes, accounting, legal, printing, and related fees and expenses. TRANSFER TAXES Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection with the exchange except that holders who instruct us to register new notes in the name of, or request that old notes not tendered or not accepted in an exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax thereon. 76 DESCRIPTION OF SENIOR CREDIT FACILITY AND PREFERRED STOCK DESCRIPTION OF SENIOR SECURED REVOLVING CREDIT FACILITY As part of the refinancing transactions described under the caption "Prospectus Summary -- The Refinancing", our wholly owned subsidiary, General Cable Industries, Inc., a Delaware corporation ("Borrower"), entered into a senior secured revolving credit facility with a syndicate of financial institutions, including UBS Securities LLC, as a Joint Lead Arranger, UBS AG, Stamford Branch, as Administrative Agent and Issuing Bank, UBS Loan Finance LLC, as a Lender and Swingline Lender, and Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., as Collateral Agent, a Joint Lead Arranger and a Lender. Set forth below is a summary of the terms of the senior secured revolving credit facility. The senior secured revolving credit facility provides for up to $240.0 million in borrowings, including a $50.0 million sublimit for the issuance of commercial and standby letters of credit and a $10.0 million sublimit for swingline loans. Advances under the senior secured revolving credit facility are limited to a borrowing base based upon advance rates for eligible accounts receivables, inventory, equipment and owned real estate properties. The fixed asset component of the borrowing base is subject to scheduled reductions. Actual advance rates and details of eligibility criteria, as well as the levels of collateral that may be included in the borrowing base are to be determined after the collateral audit is completed and shall be subject to reserves and further revision, from time to time, by the Collateral Agent. Under limited circumstances, the facility may permit advances in excess of the borrowing base. All borrowings under the senior secured revolving credit facility are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. Proceeds of the revolving loan, together with the proceeds from the other refinancing transactions, were used as described under the heading "Prospectus Summary -- The Refinancing." Availability for cash advances under the senior secured revolving credit facility will be reduced by an aggregate of up to $50.0 million of letters of credit which could be outstanding under the senior secured revolving credit facility at any time. Proceeds of the senior secured revolving credit facility will be used to provide financing for general corporate and working capital purposes. Collateral and Guarantors Indebtedness under the senior secured revolving credit facility is guaranteed by us and all of our current direct and indirect material subsidiaries organized in North America (except Borrower) and material future subsidiaries organized in North America and is secured by a first priority security interest in substantially all of our and the guarantors' existing and future tangible and intangible property and assets, wherever located, including accounts receivable, inventory, equipment, general intangibles, insurance policies, intercompany notes, intellectual property, investment property, other personal property, owned real property, cash and cash proceeds of the foregoing, including a first priority pledge of all of the equity interests of the guarantors and 100% (or if a pledge of 100% would result in an adverse material tax impact, then 65%) of the equity interests of our first-tier foreign subsidiaries, whether now owned or hereafter acquired. Except for our Canadian and Mexican operating subsidiaries, no foreign subsidiary is required to guarantee or pledge its assets to secure the senior secured revolving credit facility. Interest and Fees The interest rates per annum applicable to loans under the senior secured revolving credit facility are, at Borrower's option, equal to either an alternate base rate or an adjusted LIBOR rate plus an applicable margin percentage. The applicable margin percentage is initially a percentage per annum equal to (1) 1.50% for alternate base rate revolving loans and (2) 2.75% for adjusted LIBOR rate revolving loans. Beginning approximately May 2004, the applicable margin percentage under the senior secured revolving credit facility will be subject to adjustments based upon consolidated fixed charge coverage ratio. 77 On the last day of each calendar month, Borrower will be required to pay each lender a 0.50% per annum commitment fee in respect of any unused commitments of such lender under the senior secured revolving credit facility. Prepayments Subject to exceptions, the senior secured revolving credit facility requires mandatory prepayments of the loans in amounts equal to: - 100% of the insurance or condemnation proceeds received in connection with a casualty event, condemnation or other loss, - 100% of the net proceeds from issuance of debt securities, and - 100% of the net cash proceeds of asset sales or other dispositions. Under certain circumstances, such mandatory prepayments will be applied to reduce the commitments under the senior secured revolving credit facility. Voluntary prepayments of loans under the senior secured revolving credit facility and voluntary reductions of secured revolving loan commitments will be permitted, in whole or in part, with prior notice but without premium or penalty (except LIBOR breakage costs) in minimum amounts as set forth in the credit agreement. Restrictive Covenants and Other Matters The senior secured revolving credit facility requires that Borrower comply on a quarterly basis with certain financial covenants, including a minimum fixed charge coverage ratio test and a maximum capital expenditures level. In addition, the senior secured revolving credit facility includes negative covenants which, among other things, limit: - dispositions of assets, - changes of business and ownership, - mergers and acquisitions and other business combinations, subject to permitted acquisitions, - dividends and restricted payments, - indebtedness (including guarantees and other contingent obligations), - sale and leaseback transactions, - loans and investments, - liens and further negative pledges, - transaction with affiliates, and - other matters customarily restricted in such agreements. Such covenants apply to us, certain of our subsidiaries, Borrower and Borrower's parent. Such negative covenants are subject to exceptions. We will be permitted to declare and pay dividends or distributions on our Series A redeemable convertible preferred stock so long as there is no default under the senior secured revolving credit facility and we meet certain financial conditions. There are no limitations on dividend payments by the Borrower to us to fund interest payments on the old and new notes. 78 The senior secured revolving credit facility contains certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy and insolvency, certain events under ERISA, judgments in excess of specified amounts, actual or asserted failure of any guaranty or security document supporting the senior secured revolving credit facility to be in full force and effect and change of control. If such an event of default occurs, the lenders under the senior secured revolving credit facility would be entitled to take various actions, including the acceleration of amounts outstanding under the senior secured revolving credit facility and all actions permitted to be taken by a secured creditor. The representations and warranties and affirmative covenants apply to us, certain of our subsidiaries, Borrower and Borrower's parent. DESCRIPTION OF SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK As part of the refinancing transactions described under the caption "Prospectus Summary -- The Refinancing", we have sold 2,070,000 shares of 5.75% Series A redeemable convertible preferred stock in a private placement. Each share has a liquidation preference of $50.00 per share. Dividends accrue on the convertible preferred stock at the rate of 5.75% per annum and are payable quarterly in arrears on February 24, May 24, August 24 and November 24 of each year, starting on February 24, 2004. Dividends are payable in cash, shares of our common stock or a combination. Holders of the convertible preferred stock are entitled to convert any or all of their shares of convertible preferred stock into shares of our common stock, at an initial conversion price of $10.004 per share. The conversion price is subject to adjustments under certain circumstances. We are be obligated to redeem all outstanding shares of convertible preferred stock on November 24, 2013 at par. We may, at our option, elect to pay the redemption price in cash or in shares of our common stock valued at a discount of 5% from its market price, or any combination thereof. We have the option to redeem some or all of the outstanding shares of convertible preferred stock in cash beginning on the fifth anniversary of the issue date. The redemption premium initially equals one-half the dividend rate on the convertible preferred stock and declines ratably to par on the date of mandatory redemption. In the event of a change of control as defined in the certificate of designations for the convertible preferred stock, under certain circumstances, we will be required to offer to purchase all of the convertible preferred stock at par. This right of holders is subject to our obligation to repay or repurchase any indebtedness required in connection with a change of control and to any contractual restrictions then contained in our indebtedness. Our senior secured revolving credit facility prohibits us from paying, and the indenture governing the old and new notes restricts our ability to pay, the purchase price of the convertible preferred stock in cash. This is a summary of the terms of the convertible preferred stock. We have filed with the SEC the certificate of designations of Series A redeemable convertible preferred stock which contains all of the terms. 79 DESCRIPTION OF THE NEW NOTES The old notes were, and the new notes will be, issued under an Indenture (the "Indenture") dated as of November 24, 2003 between the Company, the Guarantors and U.S. Bank National Association, as trustee (the "Trustee"). The terms of the Notes include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act of 1939. The terms of the new notes are identical in all material respects to the terms of the old notes, except that the transfer restrictions, registration rights and additional interest provisions relating to the old notes do not apply to the new notes. The old notes and the new notes will be considered collectively to be a single class for all purposes under the Indenture, including, without limitation, waivers and amendments. The following is a summary of the material provisions of the Indenture and does not purport to be complete. A copy of the Indenture has been filed as an exhibit to the Registration Statement of which this prospectus is a part. For definitions of capitalized terms used in the following summary, see " -- Certain Definitions." For purposes of this section, the term "Company" means General Cable Corporation only, and does not include any of its Subsidiaries. BRIEF DESCRIPTION OF THE NOTES THE NOTES The Notes will be: - general unsecured obligations of the Company; - equal in right of payment to all existing and future unsubordinated Indebtedness of the Company; - effectively subordinated to all secured Indebtedness of the Company to the extent of the value of the assets securing such Indebtedness; and - senior in right of payment to any future Indebtedness of the Company that is expressly subordinated to the Notes. THE GUARANTEES The Notes will be unconditionally guaranteed by each of the Company's Restricted Subsidiaries that is a borrower or a guarantor under any U.S. Credit Facility. The Guarantee by each Guarantor will be: - a general unsecured obligation of such Guarantor; - equal in right of payment to all existing and future unsubordinated Indebtedness of such Guarantor; - effectively subordinated to all secured Indebtedness of such Guarantor to the extent of the value of the assets securing such Indebtedness; and - senior in right of payment to any future Indebtedness of such Guarantor that is expressly subordinated to the Guarantee of such Guarantor. Not all of our Subsidiaries will guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, these non-guarantor Subsidiaries will pay their debt and other obligations (including trade payables) before they will be able to distribute any of their assets to us. Our non- 80 guarantor Subsidiaries generated approximately 30% of our consolidated net sales, 80% of our consolidated operating income and 6% of our consolidated cash flow from operating activities for the nine months ended September 30, 2003 and held approximately 36% of our total consolidated assets as of September 30, 2003. As of September 30, 2003, after giving effect to the refinancing transactions, those Subsidiaries would have had outstanding $3.7 million of indebtedness and $77 million outstanding under European accounts payable arrangements. The Notes will be issued only in registered form, without interest coupons, in denominations of $1,000 and integral multiples of $1,000. The Company will appoint the Trustee to serve as registrar and paying agent under the Indenture at its offices at 100 Wall Street, Suite 1600, New York, NY 10005. No service charge will be made for any registration of transfer or exchange of the Notes, except for any tax or other governmental charge that may be imposed in connection therewith. MATURITY, INTEREST AND PRINCIPAL OF THE NOTES The Notes will initially be issued in an aggregate principal amount of $285.0 million (the "Initial Notes") and will mature on November 15, 2010. Additional Notes may be issued in one or more series from time to time (the "Additional Notes"), subject to compliance with the covenant described under " - -- Certain Covenants -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock." Any Additional Notes subsequently issued under the Indenture will be treated as a single class with the Initial Notes issued in this offering for all purposes under the Indenture, including, without limitation, for purposes of waivers, amendments, redemptions, Change of Control Offers and Net Proceeds Offers. Cash interest on the Notes will accrue at a rate of 9.5% per annum and will be payable semi-annually in arrears on each May 15 and November 15, commencing May 15, 2004, to the Holders of record of Notes at the close of business on May 1 and November 1, respectively, immediately preceding such interest payment date. Cash interest will accrue from the most recent interest payment date to which interest has been paid or, if no interest has been paid, from November 24, 2003. Interest will be computed on the basis of a 360-day year of twelve 30-day months. GUARANTEES The Guarantors will, jointly and severally, unconditionally guarantee the Company's obligations under the Notes. The obligations of each Guarantor under its Guarantee will be limited as necessary, after giving effect to all other liabilities of such Guarantors (including without limitation, any obligations under a U.S. Credit Facility permitted under clause (3) of " -- Certain Covenants -- Limitations on Indebtedness and Issuances of Disqualified Capital Stock") and after giving effect to the amount of any contribution received from any other Guarantor pursuant to the contribution obligations in the Indenture, to prevent that Guarantee from constituting a fraudulent conveyance under applicable law. For more details, see "Risk Factors -- Federal and state statutes allow courts, under certain circumstances, to void certain obligations; as a result, a court could void our subsidiaries' guarantees of the notes under fraudulent transfer laws." The Guarantee of a Guarantor will be released under the circumstances described under " -- Certain Covenants -- Subsidiary Guarantees." OPTIONAL REDEMPTION The Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after November 15, 2007, at the redemption prices (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on November 15 of the years indicated below: 81
REDEMPTION YEAR PRICE - ---- ----- 2007..................................................... 104.750% 2008..................................................... 102.375% 2009 and thereafter...................................... 100.000%
In addition, at any time and from time to time on or prior to November 15, 2006, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to the original issuance of Additional Notes, if any) with the net cash proceeds from one or more Public Equity Offerings, at a redemption price in cash equal to 109.5% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original aggregate principal amount of the Notes (calculated after giving effect to the issuance of Additional Notes, if any) must remain outstanding immediately after giving effect to each such redemption (excluding any Notes held by the Company or any of its Affiliates). Notice of any such redemption must be given within 60 days after the date of the closing of the relevant Public Equity Offering. SELECTION AND NOTICE OF REDEMPTION. In the event that less than all of the Notes are to be redeemed at any time pursuant to an optional redemption, selection of such Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not then listed on a national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that no Notes of a principal amount of $1,000 or less shall be redeemed in part; provided, further, however, that if a partial redemption is made with the net cash proceeds of a Public Equity Offering, selection of the Notes or portions thereof for redemption shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the procedures of The Depository Trust Company), unless such method is otherwise prohibited. Notice of redemption shall be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption as long as the Company has deposited with the paying agent for the Notes funds in satisfaction of the applicable redemption price pursuant to the Indenture. REPURCHASE AT THE OPTION OF THE HOLDERS CHANGE OF CONTROL. In the event of the occurrence of a Change of Control (the date of such occurrence being the "Change of Control Date"), the Company shall, within 30 days after the occurrence of such Change of Control, make an offer (the "Change of Control Offer") to all Holders to purchase all outstanding Notes properly tendered pursuant to such offer, and within 60 days after the occurrence of the Change of Control, all Notes properly tendered pursuant to such offer shall be accepted for purchase (the date of such purchase, the "Change of Control Purchase Date") for a cash price equal to 101% of the principal amount thereof as of the Change of Control Purchase Date, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase. In order to effect the Change of Control Offer, the Company shall mail a notice to each Holder with a copy to the Trustee stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder's Notes at a purchase price (the "Change of Control Purchase Price") in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase; (2) the purchase date, which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed; 82 (3) that, unless the Company defaults in the payment of the purchase price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Purchase Date; and (4) the procedures determined by the Company, consistent with the Indenture, that a Holder must follow in order to have its Notes purchased. Alternatively, the Company will not be required to make a Change of Control Offer as provided above, if, in connection with or in contemplation of any Change of Control, the Company has made an offer to purchase (an "Alternate Offer") any and all Notes validly tendered at a cash price equal to or higher than the Change of Control Purchase Price and has purchased all Notes properly tendered in accordance with the terms of such Alternate Offer so long as the terms and conditions of such contemplated Change of Control are described in reasonable detail to the Holders in the notice delivered in connection with such Alternate Offer. The occurrence of certain of the events that would constitute a Change of Control would constitute a default under the U.S. Credit Agreement. Future Credit Facilities and other Indebtedness of the Company and its Subsidiaries may also contain prohibitions of certain events that would constitute a Change of Control or require such Indebtedness to be repaid or repurchased upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Company to purchase the Notes could cause a default under such Indebtedness, even if the Change of Control itself does not, including a default due to the financial effect of such purchase on the Company. Finally, the Company's ability to pay cash to the Holders upon a purchase may be limited by the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required purchases. The failure of the Company to make or consummate the Change of Control Offer or pay the Change of Control Purchase Price when due would result in an Event of Default and would give the Trustee and the Holders of the Notes the rights described under " -- Events of Default." The definition of "Change of Control" includes, among other transactions, a disposition of all or substantially all of the assets of the Company and its Subsidiaries. With respect to the disposition of assets, the phrase "all or substantially all" as used in the Indenture varies according to the facts and circumstances of the subject transaction, has no clearly established quantitative meaning under New York law (which is the choice of law under the Indenture) and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the assets of a Person, and therefore it may be unclear as to whether a Change of Control has occurred and whether the Company is required to make an offer to purchase the Notes as described above. The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in a manner, at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by the Company or makes an Alternate Offer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or Alternate Offer. If the Company makes a Change of Control Offer or Alternate Offer, the Company will comply with all applicable tender offer laws and regulations, including, to the extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any other applicable federal or state securities laws and regulations and any applicable requirements of any securities exchange on which the Notes are listed, and any violation of the provisions of the Indenture relating to such Change of Control Offer occurring as a result of such compliance shall not be deemed a Default or an Event of Default. The existence of a Holder's right to require the Company to purchase such Holder's Notes upon a Change of Control may deter a third party from acquiring the Company in a transaction that constitutes a Change of Control. The definition of "Change of Control" in the Indenture is limited in scope. The provisions of the Indenture may not afford Holders the right to require the Company to purchase such Notes in the event of a highly leveraged transaction or certain transactions with the Company's management or its Affiliates, including a reorganization, restructuring, merger or similar transaction involving the Company (including, in certain circumstances, an acquisition of the Company by management or its Affiliates) that may adversely affect Holders, if such transaction is not a transaction defined as a Change of Control. A transaction involving the Company's management or its 83 Affiliates, or a transaction involving a recapitalization of the Company, would result in a Change of Control if it is the type of transaction specified by such definition. ASSET SALES. The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, make any Asset Sale, unless: (1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of, and (2) at least 75% of such consideration received by the Company or such Restricted Subsidiary consists of (A) cash or Cash Equivalents, (B) assets (other than securities) to be used in a Related Business, (C) the Capital Stock of any Person engaged in a Related Business that is, or as a result of or in connection with the acquisition of such Capital Stock by the Company or such Restricted Subsidiary becomes, a Restricted Subsidiary or (D) a combination of cash, Cash Equivalents, such assets and such Capital Stock. The amount of any (A) Indebtedness (other than any Subordinated Indebtedness) of the Company or any Restricted Subsidiary that is actually assumed by the transferee in such Asset Sale and from which the Company and the Restricted Subsidiaries are fully and unconditionally released shall be deemed to be cash for purposes of determining the percentage of the consideration received by the Company or the Restricted Subsidiaries in cash or Cash Equivalents and (B) notes or other obligations received by the Company or the Restricted Subsidiaries from such transferee that are converted, sold or exchanged within 90 days of the related Asset Sale by the Company or the Restricted Subsidiaries into cash or Cash Equivalents shall be deemed to be cash, in an amount equal to the net cash proceeds or the Fair Market Value of the Cash Equivalents realized upon such conversion, sale or exchange for purposes of determining the percentage of the consideration received by the Company or the Restricted Subsidiaries in cash or Cash Equivalents. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with the provisions of this covenant. The Company or such Restricted Subsidiary, as the case may be, may apply an amount equal to the Net Cash Proceeds of any Asset Sale within 360 days of receipt thereof to: (1) repay Indebtedness outstanding under any Credit Facility or any other secured Indebtedness of the Company or any Restricted Subsidiary (and to cause a corresponding permanent reduction in commitments if such repaid Indebtedness was outstanding under the revolving portion of a Credit Facility); or (2) make an investment in or expenditures for assets (other than securities) to be used in a Related Business or acquire the Capital Stock of any Person engaged in a Related Business that is, or as a result of or in connection with such Investment becomes, a Restricted Subsidiary. Pending the final application of any such Net Cash Proceeds, the Company or such Restricted Subsidiary may temporarily reduce revolving credit borrowings to the extent not prohibited by the Indenture. To the extent all or part of the Net Cash Proceeds of any Asset Sale are not applied or committed within 360 days of such Asset Sale as described in clause (1) or (2) (such Net Cash Proceeds, the "Unutilized Net Cash Proceeds"), the Company shall, within 20 days after such 360th day, make an offer to purchase (a "Net Proceeds Offer") all outstanding Notes and other Indebtedness that is not, by its terms, expressly subordinated in right of payment to the Notes and the terms of which require an offer to purchase such other Indebtedness to be made with the proceeds from the sale of assets ("Pari Passu Debt") on a pro rata basis up to an aggregate maximum principal amount of Notes and such Pari Passu Debt equal to such Unutilized Net Cash Proceeds, at a purchase price in cash equal, in the case of the Notes, to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the purchase date thereof and, in the case of such other Indebtedness, the purchase price specified by the terms thereof; provided, however, that the Net Proceeds Offer may be deferred until there are aggregate Unutilized Net Cash Proceeds equal to or in excess of $10.0 million, at which time the entire amount of such Unutilized 84 Net Cash Proceeds, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this paragraph. With respect to any Net Proceeds Offer effected pursuant to this covenant, among the Notes and the Pari Passu Debt that is subject to provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem such Pari Passu Debt with the proceeds from the sale of assets, to the extent the aggregate principal amount of Notes and such Pari Passu Debt tendered pursuant to such Net Proceeds Offer exceeds the Unutilized Net Cash Proceeds to be applied to the repurchase thereof, such Notes and such Pari Passu Debt shall be purchased pro rata based on the aggregate principal amount of such Notes and such Pari Passu Debt tendered by each holder thereof. To the extent the Unutilized Net Cash Proceeds exceed the aggregate amount of Notes and Pari Passu Debt tendered by the holders thereof pursuant to such Net Proceeds Offer (such excess constituting an "Excess"), the Company may retain and utilize such Excess for any general corporate purposes. Upon the completion of a Net Proceeds Offer, the amount of Unutilized Net Cash Proceeds shall be reset to zero. If the Company makes a Net Proceeds Offer, the Company will comply with all applicable tender offer laws and regulations, including, to the extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any other applicable federal or state securities laws and regulations and any applicable requirements of any securities exchange on which the Notes are listed, and any violation of the provisions of the Indenture relating to such Net Proceeds Offer occurring as a result of such compliance shall not be deemed a Default or an Event of Default. CERTAIN COVENANTS The Indenture contains, among other things, the following covenants: LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly: (1) declare or pay any dividend or any other distribution on any Capital Stock of the Company or any Restricted Subsidiary or make any payment or distribution to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company or any Restricted Subsidiary (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in the form of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company, any Restricted Subsidiary or any of their Affiliates (other than any such Capital Stock owned by the Company or any Restricted Subsidiary); (3) purchase, redeem, defease or retire for value, or make any principal payment on, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness (other than any Subordinated Indebtedness held by the Company or any Restricted Subsidiary); or (4) make any Investment in any Person (other than Permitted Investments) (any such payment or other action (other than any exception thereto) described in clause (1), (2), (3) or (4) above, a "Restricted Payment"), unless at the time the Company or such Restricted Subsidiary makes such Restricted Payment: (A) no Default or Event of Default shall have occurred and be continuing at the time or immediately after giving effect to such Restricted Payment; (B) immediately after giving effect to such Restricted Payment, the Company would be able to Incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under " -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" below; and 85 (C) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after the Issue Date does not exceed an amount equal to the sum of: (i) 50% of cumulative Consolidated Net Income determined for the period (taken as one period) from the beginning of the first fiscal quarter beginning on or after the Issue Date and ending on the last day of the most recent fiscal quarter immediately preceding the date of such Restricted Payment for which consolidated financial information of the Company is available (or if such cumulative Consolidated Net Income shall be a loss, minus 100% of such loss), plus (ii) the aggregate net cash proceeds received after the Issue Date by the Company either (x) as capital contributions to the Company or (y) from the issue and sale (other than to a Subsidiary) of its Qualified Capital Stock (except, in each case, to the extent such proceeds are used to purchase, redeem, retire, defease or otherwise acquire Capital Stock or Subordinated Indebtedness as set forth in clause (2) or (3) of paragraph (b) below and excluding the net proceeds from any issuance and sale of (I) Qualified Capital Stock financed, directly or indirectly, using funds borrowed from the Company or any Subsidiary until and to the extent such borrowing is repaid, (II) Redeemable Convertible Preferred Stock pursuant to an option granted to the initial purchasers of the Redeemable Convertible Preferred Stock issued and sold on the Issue Date or (III) common stock of the Company pursuant to the overallotment option granted to the underwriters of the common stock sold and issued on the Issue Date), plus (iii) the principal amount (or accreted amount, determined in accordance with GAAP, if less) of any Indebtedness of the Company or any Restricted Subsidiary Incurred after the Issue Date which has been converted into or exchanged for Qualified Capital Stock of the Company (except, in each case, to the extent such proceeds are used to purchase, redeem, retire, defease or otherwise acquire Subordinated Indebtedness as set forth in clause (3) of paragraph (b) below), plus (iv) in the case of the disposition or repayment of any Investment or the release of a guarantee constituting a Restricted Payment made after the Issue Date, an amount (to the extent not included in the computation of Consolidated Net Income) equal to the lesser of (x) the return of capital with respect to such Investment and (y) the amount of such Investment which was treated as a Restricted Payment, in either case, less the cost of the disposition of such Investment and net of taxes, and, in the case of guarantees, less any amounts paid under such guarantee, plus (v) so long as the Designation thereof was treated as a Restricted Payment made after the Issue Date, with respect to any Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary after the Issue Date in accordance with the covenant described under " -- Designation of Unrestricted Subsidiaries" below, the Company's proportionate interest in an amount equal to the excess of (x) the Total Assets of such Subsidiary, valued on an aggregate basis at Fair Market Value, over (y) the total liabilities of such Subsidiary, determined in accordance with GAAP (and provided that such amount shall not in any case exceed the Designation Amount with respect to such Restricted Subsidiary upon its Designation). (b) The foregoing provisions will not prevent: (1) the payment of any dividend or distribution on, or redemption of, Capital Stock within 60 days after the date of declaration of such dividend or distribution or the giving of formal notice of such redemption, if at the date of such declaration or giving of such formal notice such payment or redemption would comply with the provisions of the Indenture; (2) the purchase, redemption, retirement or other acquisition of any Capital Stock of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent issue and sale (other than to a Subsidiary) of, other Capital Stock of the Company (other than Disqualified Capital Stock in the case of any such purchase, redemption, retirement or other acquisition of Qualified Capital Stock); provided, however, that any such net cash proceeds and the value of any Qualified Capital Stock issued in exchange for such retired Capital Stock are excluded from clause (C)(ii) of paragraph (a) above (and were not included therein at any time); (3) the purchase, redemption, retirement, defeasance or other acquisition of Subordinated Indebtedness, or any other payment thereon, made in exchange for, or out of the net cash proceeds of, a substantially concurrent issue and sale (other than to a Subsidiary) of: 86 (A) Qualified Capital Stock of the Company; provided, however, that any such net cash proceeds and the value of any Qualified Capital Stock issued in exchange for Subordinated Indebtedness are excluded from clauses (C)(ii) and (C)(iii) of paragraph (a) above (and were not included therein at any time) or (B) Disqualified Capital Stock of the Company or other Subordinated Indebtedness having no stated maturity for the payment of any portion of principal thereof prior to the final stated maturity of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired and having a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired; (4) Restricted Payments not to exceed $10.0 million in the aggregate since the Issue Date; (5) on or prior to the second anniversary of the Issue Date, payments of regular cash dividends on the Redeemable Convertible Preferred Stock, payable quarterly in arrears, at the rate per annum set forth in the certificate of designations relating to the Redeemable Convertible Preferred Stock, as in effect on the Issue Date; (6) the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any Restricted Subsidiary held by any director, officer or employee of the Company or any Subsidiary; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Capital Stock shall not exceed $2.0 million in any twelve-month period; (7) repurchases of Capital Stock of the Company deemed to occur upon the exercise of stock options if such Capital Stock represents a portion of the exercise price thereof, and repurchases of Capital Stock of the Company deemed to occur upon the withholding of a portion of the Capital Stock issued, granted or awarded to any director, officer or employee of the Company to pay for the taxes payable by such director, officer or employee upon such issuance, grant or award in order to satisfy, in whole or in part, withholding tax requirements in connection with the exercise of such options, in accordance with the provisions of an option or rights plan or program of the Company; and (8) the repurchase of any subordinated Indebtedness at a purchase price not greater than 101% or 100% of the principal amount of such subordinated Indebtedness in connection with a change of control offer pursuant to a provision similar to the requirements set forth under " -- Repurchase at the Option of the Holders -- Change of Control" covenant, or an asset sale offer pursuant to a provision similar to the requirement set forth under " -- Repurchase at the Option of the Holders -- Asset Sales," respectively; provided that prior to any such repurchase the Company has made the Change of Control Offer or the Net Proceeds Offer, as applicable, required by the terms of the Indenture and repurchased all Notes validly tendered for repayment in connection with such Change of Control Offer or Net Proceeds Offer, as applicable; provided, however, that in the case of each of clauses (2), (3), (4), (5), (6) and (8), no Default or Event of Default shall have occurred and be continuing or would arise therefrom. In determining the amount of Restricted Payments permissible under clause (C) of paragraph (a) of this covenant, amounts expended pursuant to clauses (1) and (5) of the immediately preceding paragraph shall be included as Restricted Payments and amounts expended pursuant to clauses (2), (3), (4), (6), (7) and (8) shall be excluded. The amount of any non-cash Restricted Payment shall be deemed to be equal to the Fair Market Value thereof at the date of the making of such Restricted Payment. LIMITATION ON INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED CAPITAL STOCK. The Company shall not, directly or indirectly, Incur any Indebtedness (including any Acquired Indebtedness) or issue any Disqualified Capital Stock, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness (including any Acquired Indebtedness) or issue any Preferred Capital Stock, except in each case for Permitted Indebtedness; provided, however, that the Company and any Guarantor may Incur Indebtedness, and the Company may issue Disqualified Capital Stock, if, in any such case, at the time of and immediately after giving pro forma effect to such Incurrence of Indebtedness or issuance of Disqualified Capital Stock and the application of the proceeds therefrom, no Default or Event of Default shall have occurred and be continuing and the Consolidated Coverage Ratio of the Company would be greater than 2.0 to 1.0. 87 The foregoing limitations will not apply to the Incurrence or issuance of any of the following (collectively, "Permitted Indebtedness"), each of which shall be given independent effect: (1) Indebtedness under the Notes issued on the Issue Date, the Guarantees and the Indenture with respect to obligations resulting from the Notes issued on the Issue Date and the Guarantees; (2) Existing Indebtedness; (3) Indebtedness of the Company and the Restricted Subsidiaries under any Credit Facility in an aggregate principal amount at any one time outstanding not to exceed the greater of (x) $240.0 million, less the amount of any scheduled amortization of principal payments made thereunder and the amount by which the commitments thereunder are from time to time permanently reduced, and (y) the sum of (i) 85% of the book value of accounts receivable of the Company and the Restricted Subsidiaries, determined in accordance with GAAP, (ii) 60% of the book value of inventory of the Company and the Restricted Subsidiaries, determined in accordance with GAAP, and (iii) $40.0 million; provided that in no event shall the aggregate principal amount at any one time outstanding under European Credit Facilities under this clause (3) exceed (euro)50 million; (4) Indebtedness of any Restricted Subsidiary owed to and held by the Company or any other Restricted Subsidiary and Indebtedness of the Company owed to and held by any Restricted Subsidiary or Disqualified Capital Stock of the Company or any Restricted Subsidiary held by the Company or any Restricted Subsidiary; provided, however, that (i) any such Indebtedness owed by the Company or any Guarantor shall be unsecured and expressly subordinated in right of payment to the payment and performance of the Company's or such Guarantor's obligations under the Indenture, the Notes and the Guarantees, as applicable, and (ii) an Incurrence of Indebtedness and issuance of Disqualified Capital Stock that is not permitted by this clause (4) shall be deemed to have occurred upon (x) any sale or other disposition of any Indebtedness or Disqualified Capital Stock of the Company or any Restricted Subsidiary referred to in this clause (4) to a Person other than the Company or any Restricted Subsidiary, and (y) the designation of a Restricted Subsidiary which holds Indebtedness or Disqualified Capital Stock of the Company or any other Restricted Subsidiary as an Unrestricted Subsidiary; (5) guarantees by the Company or any Guarantor of Indebtedness permitted to be Incurred under this covenant; (6) Hedging Obligations of the Company and the Restricted Subsidiaries; provided, however, that such Hedging Obligations are entered into in the ordinary course of business for genuine business purposes and not for speculative purposes to protect the Company and/or Restricted Subsidiaries against interest rate, currency exchange rate, commodity prices or similar fluctuations; provided, further, that (i) in the case of Hedging Agreements which relate to Indebtedness, such Hedging Agreements do not increase the Indebtedness of the Company and the Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder and (ii) in the case of Hedging Agreements relating to interest rates, the foregoing shall not prohibit the swap of fixed to floating rates for genuine business purposes; (7) Indebtedness of the Company or any Restricted Subsidiary consisting of Purchase Money Indebtedness and Capital Lease Obligations, and refinancings thereof, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (7), does not exceed 3.5% of Consolidated Tangible Assets at the time of such Incurrence; (8) Indebtedness of the Company or any Restricted Subsidiary consisting of indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, Capital Stock; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the Restricted Subsidiaries in connection with such disposition; (9) Acquired Indebtedness of any Restricted Subsidiary that is not a Guarantor, other than Indebtedness Incurred in connection with, or in contemplation of, such transaction; provided, however, that at the time of 88 acquisition of such Restricted Subsidiary, the Company on a pro forma basis could Incur $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant; (10) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness in connection with letters of credit (including, without limitation, letters of credit in respect of workers' compensation claims or self-insurance) with respect to reimbursement type obligations, regarding workers' compensation claims, escrow agreements, bankers' acceptances and surety and performance bonds (in each case to the extent that such Incurrence does not result in the Incurrence of any obligation to repay any obligation relating to borrowed money), all in the ordinary course of business; (11) Indebtedness or Disqualified Capital Stock of the Company or a Restricted Subsidiary to the extent representing a replacement, renewal, refinancing or extension (collectively, a "refinancing") of outstanding Indebtedness Incurred or Disqualified Capital Stock issued in compliance with the proviso of the first paragraph of this covenant or any of clause (1), (2) or (9) of this covenant; provided, however, that: (A) any such refinancing shall not exceed the sum of the principal amount (or accreted amount (determined in accordance with GAAP), if less) or liquidation preference, as applicable, of the Indebtedness or Disqualified Capital Stock being refinanced, plus the amount of accrued interest or dividends thereon, plus the amount of any reasonably determined prepayment premium necessary to accomplish and actually paid in connection with such refinancing and reasonable fees and expenses incurred in connection therewith, (B) the refinancing Indebtedness or Disqualified Capital Stock shall have a final maturity not earlier than, and a Weighted Average Life to Maturity not less than the Weighted Average Life to Maturity of, the Indebtedness or Disqualified Capital Stock, as applicable, being refinanced; (C) Subordinated Indebtedness may be refinanced only with Subordinated Indebtedness or Disqualified Capital Stock, and Disqualified Capital Stock may be refinanced only with other Disqualified Capital Stock; and (D) refinancing Indebtedness Incurred by a Restricted Subsidiary that is not a Guarantor may be used to refinance Indebtedness only of a Restricted Subsidiary that is not a Guarantor; and (12) in addition to the items referred to in clauses (1) through (11) above, Indebtedness of the Company or any Restricted Subsidiary (including any Indebtedness under any Credit Facility that utilizes this clause (12)) having an aggregate principal amount not to exceed $15.0 million at any time outstanding. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (12) above (other than Indebtedness under the U.S. Credit Agreement outstanding on the Issue Date, which will be deemed to have been Incurred under clause (3)) or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Company may, in its sole discretion, classify such item of Indebtedness in any manner that results in compliance with this covenant. Any increase in the U.S. dollar equivalent of outstanding Indebtedness of the Company or any of the Restricted Subsidiaries denominated in a currency other than U.S. dollars resulting from fluctuations in the exchange values of currencies will not be considered to be an Incurrence of Indebtedness for purposes of this covenant; provided that the amount of Indebtedness outstanding at any time will be the U.S. dollar equivalent of such Indebtedness outstanding at such time. None of the Company or any Guarantor shall, directly or indirectly, Incur any Indebtedness that by its terms (or by the terms of any agreement governing such Indebtedness) would be expressly subordinate or junior in right of payment in any respect to any other Indebtedness unless such Indebtedness is also by its terms (or by terms of any agreement governing such Indebtedness) subordinate or junior in right of payment to the Notes or the Guarantees, as applicable, at least to the same extent such Indebtedness is subordinated or junior in right of payment to such other Indebtedness. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES. The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of 89 any Restricted Subsidiary to: (A) pay dividends or make any other distributions to the Company or any other Restricted Subsidiary on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any other Restricted Subsidiary, (B) make loans or advances to, or guarantee any Indebtedness or other obligations of, the Company or any other Restricted Subsidiary or (C) transfer any of its assets to the Company or any other Restricted Subsidiary, except for such encumbrances or restrictions existing under or by reason of: (1) the U.S. Credit Agreement, or any other agreement of the Company or any of the Restricted Subsidiaries outstanding on the Issue Date, in each case as in effect on the Issue Date, and any amendments, restatements, renewals, replacements or refinancings thereof, and any other Credit Facility; provided, however, that any such amendment, restatement, renewal, replacement or refinancing or other such Credit Facility is no more restrictive in the aggregate in any material respect with respect to such encumbrances or restrictions than those contained in the agreement being amended, restated, renewed, replaced or refinanced or the U.S. Credit Agreement in effect on the Issue Date, as the case may be; (2) any applicable law or any rule, regulation or order of any governmental authority; (3) any instrument of an Acquired Person acquired by the Company or any Restricted Subsidiary after the Issue Date as in effect at the time of such acquisition and not entered into by such Acquired Person in connection with, as a result of or in contemplation of such acquisition; provided, however, that such encumbrances and restrictions are not applicable to the Company or any Restricted Subsidiary or the assets of the Company or any Restricted Subsidiary other than the Acquired Person or the assets of the Acquired Person; (4) customary non-assignment provisions in leases, licenses or contracts; (5) Purchase Money Indebtedness and Capital Lease Obligations for assets acquired in the ordinary course of business that impose encumbrances and restrictions only on the assets so acquired; (6) any agreement for the sale or disposition of the Capital Stock or assets of any Restricted Subsidiary; provided, however, that such encumbrances and restrictions described in this clause (6) are applicable only to such Restricted Subsidiary or assets, as applicable, and any such sale or disposition is made in compliance with "Repurchase at the Option of the Holders -- Asset Sales" to the extent applicable thereto; (7) refinancing Indebtedness permitted under clause (11) of the second paragraph of " -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" above; provided, however, that such encumbrances and restrictions contained in the agreements governing such Indebtedness are no more restrictive in the aggregate in any material respect than those contained in the agreements governing the Indebtedness being refinanced immediately prior to such refinancing; (8) the Indenture; (9) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired; (10) restrictions on the transfer of assets subject to any Lien permitted under the Indenture imposed by the holder of such Lien; (11) customary restrictions imposed by the terms of shareholders', partnership or joint venture agreements entered into in the ordinary course of business; provided, however, that such restrictions do not apply to any Restricted Subsidiary other than the applicable company, partnership or joint venture; (12) restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business; and 90 (13) Indebtedness of Foreign Subsidiaries permitted to be Incurred under the Indenture; provided that any such encumbrances or restrictions are ordinary and customary with respect to the type of Indebtedness being Incurred under the relevant circumstances and do not, in the good faith judgment of the Board of Directors of the Company, materially impair the Company's ability to make payments on the Notes when due. DESIGNATION OF UNRESTRICTED SUBSIDIARIES. The Company may designate after the Issue Date any Subsidiary of the Company as an "Unrestricted Subsidiary" under the Indenture (a "Designation") only if: (1) no Default or Event of Default shall have occurred and be continuing or shall result after giving effect to such Designation; (2) at the time of and after giving effect to such Designation, the Company could Incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under " -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" above; (3) the Company would be permitted to make an Investment at the time of Designation in an amount of the Designation Amount; and (4) such Unrestricted Subsidiary is not a party to any agreement, contract, arrangement or understanding at such time with the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company or, in the event such condition is not satisfied, the value of such agreement, contract, arrangement or understanding to such Unrestricted Subsidiary shall be deemed a Restricted Payment. Neither the Company nor any Restricted Subsidiary shall at any time (A) provide credit support for, subject any of its assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness), (B) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (C) be directly or indirectly liable for any Indebtedness which provides that the holder thereof may (upon notice, lapse of time or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity upon the occurrence of a default with respect to any Indebtedness of any Unrestricted Subsidiary, except for any guarantee given solely to support the pledge by the Company or any Restricted Subsidiary of the Capital Stock of any Unrestricted Subsidiary, which guarantee is not recourse to the Company or any Restricted Subsidiary. All Subsidiaries of Unrestricted Subsidiaries shall be automatically deemed to be Unrestricted Subsidiaries. The Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a "Revocation") if: (1) no Default or Event of Default shall have occurred and be continuing or shall result after giving effect to such Revocation; (2) at the time of and after giving effect to such Revocation, the Company could Incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under " -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" above; and (3) all Liens of such Unrestricted Subsidiary outstanding immediately following such Revocation would be permitted to be outstanding under the Indenture. All Designations and Revocations must be evidenced by filing by the Company with the Trustee of Board Resolutions and an Officers' Certificate certifying compliance with the foregoing provisions. LIMITATION ON LIENS. The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist any Liens (other than Permitted Liens) against or upon any of their 91 respective assets now owned or hereafter acquired, or any proceeds therefrom or any income or profits therefrom, in each case to secure any Indebtedness unless contemporaneously therewith: (1) in the case of any Lien securing an obligation that ranks pari passu with the Notes or a Guarantee, effective provision is made to secure the Notes or such Guarantee, as the case may be, at least equally and ratably with or prior to such obligation with a Lien on the same collateral; and (2) in the case of any Lien securing an obligation that is subordinated in right of payment to the Notes or a Guarantee, effective provision is made to secure the Notes or such Guarantee, as the case may be, with a Lien on the same collateral that is prior to the Lien securing such subordinated obligation, in each case, for so long as such obligation is secured by such Lien. TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, conduct any business or enter into, renew, amend or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any assets or the rendering of any service) with or for the benefit of any of their respective Affiliates (each, an "Affiliate Transaction"), unless: (1) such Affiliate Transaction, taken as a whole, is on terms which are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than would be available in a comparable transaction on an arm's-length basis with an unaffiliated third party; (2) if such Affiliate Transaction or series of related Affiliate Transactions involves aggregate payments or other consideration having a Fair Market Value in excess of $2.0 million, such Affiliate Transaction is in writing and a majority of the disinterested members of the Board of Directors of the Company shall have approved such Affiliate Transaction and determined that such Affiliate Transaction complies with the foregoing provisions, or, in the event that there are no disinterested directors, the Trustee has received a written opinion from an Independent Financial Advisor stating that the terms of such Affiliate Transaction are fair, from a financial point of view, to the Company or the Restricted Subsidiary involved in such Affiliate Transaction, as the case may be; and (3) if such Affiliate Transaction or series of related Affiliate Transactions involves aggregate payments or other consideration having a Fair Market Value in excess of $5.0 million, such Affiliate Transaction is in writing and the Trustee has received a written opinion from an Independent Financial Advisor stating that the terms of such Affiliate Transaction are fair, from a financial point of view, to the Company or the Restricted Subsidiary involved in such Affiliate Transaction, as the case may be. Notwithstanding the foregoing, the restrictions set forth in this covenant shall not apply to: (a) transactions with or among the Company and any Restricted Subsidiary or between or among Restricted Subsidiaries (so long as no Person (other than a Restricted Subsidiary) that is an Affiliate of the Company has any direct or indirect interest in such Restricted Subsidiary); (b) any Restricted Payment of the type described in clause (1), (2) or (3) of the definition thereof permitted to be made pursuant to the covenant described under " -- Limitation on Restricted Payments" above; (c) any reasonable and customary issuance of securities, or other payments, awards or grants in cash, securities or otherwise, pursuant to employment arrangements, or any stock options and stock ownership plans for the benefit of employees, officers and directors, consultants and advisors approved by the Board of Directors of the Company; (d) the payment of customary directors' fees, indemnification and similar arrangements, consulting fees, employee salaries, bonuses or employment agreements, compensation or employee benefit arrangements and incentive arrangements with any officer, director or employee of the Company or any Restricted Subsidiary entered into in the ordinary course of business (including customary benefits thereunder) and payments under any indemnification arrangements permitted by applicable law; 92 (e) any transactions undertaken pursuant to any contractual obligations in existence on the Issue Date, as such obligations are in effect on the Issue Date or as thereafter amended, restated or amended and restated in any manner not materially adverse to the Holders of Notes; (f) transactions with distributors, suppliers or other purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture; (g) the issue and sale by the Company of its Qualified Capital Stock; (h) any transaction with an Affiliate where the only consideration paid by the Company or any Restricted Subsidiary is Qualified Capital Stock; (i) the pledge of Capital Stock of Unrestricted Subsidiaries to support the Indebtedness thereof; (j) customary shareholders' and registration rights agreements among the Company or any Subsidiary thereof and the shareholders thereof; and (k) commercial transactions entered into in the ordinary course of business with any joint venture to which the Company or any Restricted Subsidiary is a party (so long as no Person (other than a Restricted Subsidiary) that is an Affiliate of the Company has any direct or indirect interest in such joint venture). LIMITATION ON CAPITAL STOCK OF RESTRICTED SUBSIDIARIES. The Company will not permit any Restricted Subsidiary to issue any Capital Stock to any Person (other than to the Company or a Wholly Owned Subsidiary of the Company) or permit any Person (other than the Company or a Wholly Owned Subsidiary of the Company) to own any Capital Stock of a Restricted Subsidiary of the Company, if in either case as a result thereof such Restricted Subsidiary would no longer be a Restricted Subsidiary of the Company unless the Company's remaining ownership interest in such Person after such sale would be permitted by the covenant as described under " -- Limitation on Restricted Payments"; provided, however, that this provision shall not prohibit (x) the Company or any of the Restricted Subsidiaries from selling, transferring or otherwise disposing of all of the Capital Stock of any Restricted Subsidiary or (y) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with the Indenture. SUBSIDIARY GUARANTEES. If any Restricted Subsidiary (including any Restricted Subsidiary formed or acquired after the Issue Date) shall become a borrower or guarantor under any U.S. Credit Facility, then such Restricted Subsidiary shall (i) execute and deliver to the Trustee a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall unconditionally Guarantee all of the Company's obligations under the Notes and the Indenture on the terms set forth in the Indenture and (ii) deliver to the Trustee an opinion of counsel that such supplemental indenture has been duly authorized, executed and delivered by such Restricted Subsidiary and constitutes a legal, valid, binding and enforceable obligation of such Subsidiary. Notwithstanding the foregoing, any Guarantee by a Restricted Subsidiary may provide by its terms that it shall be automatically and unconditionally released and discharged: (1) upon any sale or other disposition of all or substantially all of the assets of such Restricted Subsidiary (including by way of merger or consolidation or any sale of all of the Capital Stock of that Restricted Subsidiary) to a Person that is not the Company or a Subsidiary of the Company; provided that the Company shall, if applicable, apply the Net Cash Proceeds of that sale or other disposition in accordance with the applicable provisions of the Indenture; (2) if the Company designates such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the Indenture; or (3) if such Restricted Subsidiary ceases to be a borrower or guarantor under any U.S. Credit Facility (other than by reason of a payment under a guarantee by any Restricted Subsidiary). 93 LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale/Leaseback Transaction with respect to any assets unless: (1) the Company or such Restricted Subsidiary could have Incurred Indebtedness in the amount of the Attributable Indebtedness with respect to such Sale/Leaseback Transaction pursuant to the covenant described under " -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" above; (2) the Company or such Restricted Subsidiary could have incurred a Lien on such assets securing such Attributable Indebtedness with respect to such Sale/Leaseback Transaction without equally and ratably securing the Notes or the Guarantees pursuant to the covenant described under " -- Limitation on Liens" above; (3) the net proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the Fair Market Value of the related assets; and (4) the Company applies the proceeds of such transaction in compliance with the covenant described under "Repurchase at the Option of the Holders -- Asset Sales." PROVISION OF FINANCIAL INFORMATION. Whether or not required by the SEC, so long as any Notes are outstanding, the Company will furnish to the Holders within the time periods specified in the SEC's rules and regulations for reporting companies under Section 13 or 15(d) of the Exchange Act: (1) all annual and quarterly financial information that would be required to be contained in a filing with the SEC on Forms 10-K and 10-Q if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's independent public accountants; and (2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include or be accompanied by a reasonably detailed presentation of the financial condition and results of operations of the Company and the Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company. In addition, whether or not required by the SEC, the Company shall file a copy of all of the information and reports referred to in the second preceding paragraph with the SEC for public availability (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. The Company shall also furnish to Holders, securities analysts and prospective investors upon request the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act. The Company shall also comply with the other provisions of Section 314(a) of the Trust Indenture Act of 1939. MERGER, SALE OF ASSETS, ETC. The Company shall not consolidate with or merge with or into (whether or not the Company is the Surviving Person) any other entity and the Company shall not, and shall not cause or permit any Restricted Subsidiary to, sell, convey, assign, transfer, lease or otherwise dispose of all or substantially all of the Company's and the Restricted Subsidiaries' assets (determined on a consolidated basis for the Company and the Restricted Subsidiaries) to any Person in a single transaction or series of related transactions, unless: (1) either (A) the Company shall be the Surviving Person or (B) the Surviving Person (if other than the Company) shall be a corporation or limited liability company organized and validly existing under the laws of the United States of America or any State thereof or the District of Columbia, and shall, in any such case, expressly assume by a supplemental indenture, the due and punctual payment of the principal of, premium, if any, and interest 94 on all the Notes and the performance and observance of every covenant of the Indenture and the Registration Rights Agreement to be performed or observed on the part of the Company; (2) immediately thereafter, on a pro forma basis after giving effect to such transaction (and treating any Indebtedness not previously an obligation of the Company or any Restricted Subsidiary in connection with or as a result of such transaction as having been Incurred at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and (3) immediately after giving effect to any such transaction including the Incurrence by the Company or any Restricted Subsidiary, directly or indirectly, of additional Indebtedness (and treating any Indebtedness not previously an obligation of the Company or any Restricted Subsidiary in connection with or as a result of such transaction as having been Incurred at the time of such transaction), the Surviving Person could Incur, on a pro forma basis after giving effect to such transaction, at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) under "Certain Covenants -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" above. Notwithstanding the provisions of clause (3) of the immediately preceding paragraph, any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its assets to the Company or another Restricted Subsidiary. For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all the assets of one or more Restricted Subsidiaries the Capital Stock of which constitute all or substantially all the assets of the Company shall be deemed to be the transfer of all or substantially all the assets of the Company. A Guarantor may not sell, convey, assign, transfer, lease or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the Surviving Person), another Person unless: (1) immediately after giving effect to that transaction, no Default or Event of Default exists; and (2) either: (a) in the case of a sale, conveyance, assignment, transfer, lease or other disposition of all or substantially all of such Guarantor's assets, the Net Cash Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture; or (b) in the case of a consolidation with or merger into another Person, either (i) such Guarantor shall be the Surviving Person or (ii) the Surviving Person (if other than such Guarantor) shall be a corporation, partnership, company or trust organized and validly existing under the laws of the United States of America or any State thereof or the District of Columbia, and shall, in any such case, expressly assume by a supplemental indenture reasonably satisfactory to the Trustee all obligations of such Guarantor under its Guarantee and the performance and observance of every covenant of the Indenture and the Registration Rights Agreement to be performed or observed on the part of such Guarantor. In connection with any consolidation, merger, transfer, lease or other disposition contemplated hereby, the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer, lease or other disposition and the supplemental indenture in respect thereof comply with the requirements under the Indenture. In addition, each Guarantor, in the case of a transaction described in the first paragraph hereunder, unless it is the other party to the transaction or unless its Guarantee will be released and discharged in accordance with its terms as a result of the transaction, will be required to confirm, by supplemental indenture, that its Guarantee will continue to apply to the obligations of the Company or the Surviving Person under the Indenture. Upon any consolidation or merger of the Company or any Guarantor or any transfer of all or substantially all of the assets of the Company in accordance with the foregoing in which the Company or a Guarantor is not the 95 Surviving Person, the Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture, the Notes and the Registration Rights Agreement or such Guarantor under the Indenture, the Guarantee of such Guarantor and the Registration Rights Agreement, as the case may be, with the same effect as if such successor corporation had been named as the Company or such Guarantor, as the case may be, therein; and thereafter except in the case of a lease, the Company shall be discharged from all obligations and covenants under the Indenture, the Notes and the Registration Rights Agreement and such Guarantor shall be discharged from all obligations and covenants under the Indenture, the Registration Rights Agreement and the Guarantee of such Guarantor, as the case may be. For all purposes of the Indenture and the Notes (including the provision of this covenant and the covenants described under "Certain Covenants - -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock," "Certain Covenants -- Limitation on Restricted Payments" and "Certain Covenants - -- Limitation on Liens"), Subsidiaries of any Surviving Person shall, upon such transaction or series of related transactions, become Restricted Subsidiaries unless and until designated as Unrestricted Subsidiaries pursuant to and in accordance with the terms of the Indenture and all Indebtedness, and all Liens on assets, of the Company and the Restricted Subsidiaries in existence immediately prior to such transaction or series of related transactions will be deemed to have been Incurred upon such transaction or series of related transactions. EVENTS OF DEFAULT The occurrence of any of the following will be defined as an "Event of Default" under the Indenture: (1) failure to pay principal of (or premium, if any, on) any Note when due and payable, whether at its Stated Maturity, upon optional redemption, upon required purchase, upon acceleration or otherwise; (2) failure to pay any interest on any Note when due and payable, and such failure continues for 60 days or more; (3) failure to perform or comply with any of the provisions described under "Repurchase at the Option of the Holders -- Change of Control," "Repurchase at the Option of the Holders -- Asset Sales" or "Merger, Sale of Assets, etc." above; (4) failure to perform any other covenant, warranty or agreement of the Company or a Guarantor under the Indenture, in the Notes or in a Guarantee (other than those defaults specified in clause (1), (2) or (3) above) continued for 60 days or more after written notice to the Company by the Trustee or to the Trustee and the Company by Holders of at least 25% in aggregate principal amount of the then outstanding Notes; (5) a default or defaults under the terms of one or more instruments evidencing or securing Indebtedness of the Company or any of the Restricted Subsidiaries having an outstanding principal amount of greater than $10.0 million individually or in the aggregate, which default (A) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period, (B) results in the acceleration of such Indebtedness prior to its express final maturity or (C) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or applicable security documents to take ownership of, the assets securing such Indebtedness; (6) the rendering of a final judgment or judgments (not subject to appeal) against the Company or any of the Restricted Subsidiaries in an amount of greater than $10.0 million which remain undischarged or unstayed for a period of 60 days after the date on which the right to appeal has expired; (7) a Guarantee ceases to be in full force and effect or is declared to be null and void and unenforceable or a Guarantee is found to be invalid or a Guarantor denies its liability under its Guarantee or gives notice to that effect (other than by reason of release of the Guarantor in accordance with the terms of the Indenture); or (8) certain events of bankruptcy, insolvency or reorganization affecting the Company or any of its Significant Subsidiaries. 96 Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default shall occur and be continuing, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders of Notes, unless such Holders shall have offered to the Trustee reasonable indemnity. Subject to such provisions for the indemnification of the Trustee, the Holders of a majority in aggregate principal amount of the outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on such Trustee. If an Event of Default with respect to the Notes (other than an Event of Default with respect to the Company or any Guarantor that is a Significant Subsidiary described in clause (8) of the first paragraph of this section) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Notes, by notice in writing to the Trustee and the Company, may declare the unpaid principal of (and premium, if any) and accrued interest to the date of acceleration on all the outstanding Notes to be due and payable immediately. If an Event or Default specified in clause (8) of the first paragraph of this section with respect to the Company or any Guarantor that is a Significant Subsidiary occurs under the Indenture, the Notes will automatically become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of the Notes. Any such declaration with respect to the Notes may be rescinded or annulled by the Holders of a majority in aggregate principal amount of the outstanding Notes if all Defaults and Events of Default, other than the nonpayment of accelerated principal and interest, have been cured or waived as provided in the Indenture, and certain other conditions specified in the Indenture are satisfied. The Indenture will provide that the Trustee shall, within 30 days after the occurrence of any Default or Event of Default with respect to the Notes outstanding, give the Holders of the Notes thereof notice of all uncured Defaults or Events of Default thereunder known to it. Except in the case of a Default or an Event of Default in payment with respect to the Notes or a Default or Event of Default in complying with "Merger, Sale of Assets, etc." above, the Trustee may withhold such notice if and so long as a committee of its trust officers in good faith determines that the withholding of such notice is in the interest of the Holders of the Notes. No Holder of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default thereunder and unless the Holders of at least 25% of the aggregate principal amount of the outstanding Notes shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as the Trustee, and the Trustee shall have not have received from the Holders of a majority in aggregate principal amount of such outstanding Notes a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. However, such limitations do not apply to a suit instituted by a Holder of such a Note for enforcement of payment of the principal of and premium, if any, or interest on such Note on or after the respective due dates expressed in such Note. The Company will be required to furnish to the Trustee annually a statement as to the performance by it of certain of its obligations under the Indenture and as to any default in such performance. The Company is also required to notify the Trustee within 30 days of becoming aware of a Default. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATOR AND STOCKHOLDERS No director, officer, employee, incorporator or stockholder of the Company or any of its Affiliates, as such, shall have any liability for any obligations of the Company or any of its Affiliates under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE The Indenture will be discharged and the Company's substantive obligations in respect of the Notes will cease when: 97 (1) either (A) all Notes theretofore authenticated and delivered have been delivered to the Trustee for cancellation or (B) all Notes not previously delivered to the Trustee for cancellation (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense of, the Company; (2) the Company has deposited or caused to be deposited with the Trustee, in trust for the benefit of the Holders of the Notes, all sums payable by it on account of principal of, premium, if any, and interest on all Notes (except lost, stolen or destroyed Notes which have been replaced or paid) or otherwise, together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof at the Stated Maturity or redemption date, as the case may be; and (3) the Company complies with certain other requirements set forth in the Indenture. In addition to the foregoing, provided that no Default or Event of Default has occurred and is continuing or would arise therefrom (or, with respect to a Default or Event of Default specified in clause (8) of "Events of Default" above, occurs at any time on or prior to the 91st calendar day after the date the Company deposits with the Trustee all sums payable by it on account of principal of, premium, if any, and interest on all Notes or otherwise (it being understood that this condition shall not be deemed satisfied until after such 91st day)) under the Indenture and provided that no default under any other Indebtedness of the Company would result therefrom, the Company may terminate its substantive covenant obligations in respect of the Notes (except for its obligations to pay the principal of (and premium, if any, on) and the interest on the Notes) by: (1) depositing with the Trustee, under the terms of an irrevocable trust agreement, money or United States Government Obligations sufficient (without reinvestment) to pay all remaining Indebtedness on such Notes; (2) delivering to the Trustee either an Opinion of Counsel or a ruling directed to the Trustee from the Internal Revenue Service to the effect that the Holders of the Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and termination of obligations; and (3) complying with certain other requirements set forth in the Indenture. GOVERNING LAW AND SUBMISSION TO JURISDICTION The Indenture, the Notes and the Guarantees will be governed by and construed in accordance with the laws of the State of New York. MODIFICATION AND WAIVER The Indenture may be amended by the Company, the Guarantors and the Trustee, without the consent of any Holder, to, among other things: (1) cure any ambiguity, defect or inconsistency in the Indenture; (2) evidence the obligations of a new Guarantor to comply with the provisions described under "Certain Covenants -- Subsidiary Guarantees" or to evidence the succession of another Person to the Company or a Guarantor and the assumption by any such successor of the applicable obligations under the Indenture in accordance with "Merger, Sale of Assets, etc."; (3) comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act; (4) evidence and provide for the acceptance of appointment by a successor Trustee; (5) provide for uncertificated Notes in addition to certificated Notes; or 98 (6) make any other change that would provide any additional benefit or rights to the Holders or that does not materially adversely affect the rights of any Holder. Modifications and amendments of the Indenture may be made by the Company, the Guarantors and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes); provided, however, that no such modification or amendment to the Indenture may, without the consent of the Holder of each Note affected thereby: (1) change the maturity of the principal of any such Note; (2) reduce the principal amount of (or the premium on) any such Note; (3) reduce the rate of or extend the time for payment of interest on any such Note; (4) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under "Optional Redemption" above; (5) change the currency of payment of principal of (or premium on) or interest on any such Note; (6) impair the right of the Holders of Notes to receive payment of principal of and interest on such Holder's Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to any such Note; (7) reduce the percentage of the principal amount of outstanding Notes necessary for amendment to or waiver of compliance with any provision of the Indenture or the Notes or for waiver of any Default or Event of Default in respect thereof; (8) waive a default in the payment of principal of, interest on, or redemption payment with respect to, the Notes (except a rescission of acceleration of the Notes by the Holders thereof as provided in the Indenture and a waiver of the payment default that resulted from such acceleration); (9) cause the Notes or the Guarantees to become subordinate in right of payment to any other Indebtedness; (10) following an event or circumstance which may give rise to the requirement to make a Change of Control Offer or Net Proceeds Offer, modify the provisions of any covenant (or the related definitions) in the Indenture requiring the Company to make a Change of Control Offer or Net Proceeds Offer in a manner materially adverse to the Holders of Notes affected thereby; (11) release any Guarantor from any of its obligations under its Guarantee or the Indenture otherwise than in accordance with the terms of the Indenture; or (12) make any change in the amendment or waiver provisions of the Indenture. The Holders of a majority in aggregate principal amount of the outstanding Notes, on behalf of all Holders of Notes, may waive compliance by the Company with certain restrictive provisions of the Indenture. Subject to certain rights of the Trustee, as provided in the Indenture, the Holders of a majority in aggregate principal amount of the Notes, on behalf of all Holders, may waive any past default under the Indenture (including any such waiver obtained in connection with a tender offer or exchange offer for the Notes), except a default in the payment of principal, premium or interest or a default arising from failure to purchase any Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer, or a default in respect of a provision that under the Indenture cannot be modified or amended without the consent of the Holder of each Note that is affected. 99 THE TRUSTEE Except during the continuance of a Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of a Default, the Trustee will exercise such rights and powers vested in it under the Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. The Indenture contains limitations on the rights of the Trustee, should it become a creditor of the Company, or any other obligor upon the Notes, to obtain payment of claims in certain cases or to realize on certain assets received by it in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions with the Company or an Affiliate of the Company; provided, however, that if it acquires any conflicting interest, it must eliminate such conflict or resign. CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. The Indenture contains a full definition of all such terms, as well as any other capitalized terms used herein for which no definition is provided. "Acquired Indebtedness" means Indebtedness of a Person (1) assumed in connection with an Acquisition of such Person or (2) existing at the time such Person becomes a Restricted Subsidiary or is consolidated with or merged into the Company or any Restricted Subsidiary, whether or not such Indebtedness was Incurred in connection with, or in contemplation of, such transaction. "Acquired Person" means, with respect to any specified Person, any other Person which merges with or into or becomes a Subsidiary of such specified Person. "Acquisition" means (1) any capital contribution (by means of transfers of cash or other assets to others or payments for assets or services for the account or use of others, or otherwise) by the Company or any Restricted Subsidiary to any other Person, or any acquisition or purchase of Capital Stock of any other Person by the Company or any Restricted Subsidiary, in either case pursuant to which such Person shall become a Restricted Subsidiary or shall be consolidated or amalgamated with or merged into the Company or any Restricted Subsidiary or (2) any acquisition by the Company or any Restricted Subsidiary of the assets of any Person which constitute substantially all of an operating unit or line of business of such Person or which is otherwise outside of the ordinary course of business. "Additional Interest" has the meaning provided in the Registration Rights Agreement. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. "Affiliate Transaction" has the meaning set forth under "Certain Covenants -- Transactions with Affiliates" above. "Alternate Offer" has the meaning set forth under "Repurchase at the Option of the Holders -- Change of Control" above. "Asset Sale" means any direct or indirect sale, conveyance, transfer, lease (that has the effect of a disposition) or other disposition (including, without limitation, any merger, consolidation or Sale/Leaseback Transaction or upon any condemnation, eminent domain or similar proceedings) to any Person other than the Company or a Restricted Subsidiary, in one transaction or a series of related transactions, of: (1) any Capital Stock of any Subsidiary (other than directors' qualifying shares); 100 (2) any assets of the Company or any Restricted Subsidiary which constitute substantially all of an operating unit or line of business of the Company or any Restricted Subsidiary; or (3) any other assets (including without limitation intellectual property) or asset of the Company or any Restricted Subsidiary outside of the ordinary course of business. For the purposes of this definition, the term "Asset Sale" shall not include: (A) any transaction consummated in compliance with "Merger, Sale of Assets, etc." above and the creation of and foreclosure on any Lien not prohibited by "Certain Covenants -- Limitation on Liens" above; (B) sales of property or equipment that, in the reasonable determination of the Company, has become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Company or any Restricted Subsidiary; (C) any Permitted Investment or any Restricted Payment not prohibited by "Certain Covenants -- Limitation on Restricted Payments" above; (D) any transaction or series of related transactions involving assets with a Fair Market Value not in excess of $2.0 million; (E) any operating lease or sublease; (F) the surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind; (G) the licensing or sublicensing of intellectual property or other general intangibles; (H) sales or other dispositions of Cash Equivalents, inventory, receivables and other current assets in the ordinary course of business; and (I) any transaction between or among the Company and/or one or more Restricted Subsidiaries. "Attributable Indebtedness" in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). "Board of Directors" means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any partnership, the Board of Directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing. "Board Resolution" means, with respect to any Person, a duly adopted resolution of the Board of Directors of such Person or a duly authorized committee thereof, as applicable. "Business Day" means a day that is not a Saturday, a Sunday or a day on which (i) commercial banking institutions in New York, New York are authorized or required by law to be closed or (ii) the New York Stock Exchange is not open for trading. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a lease that would at such time be required to be capitalized on a balance sheet prepared in accordance with GAAP. "Capital Stock" in any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) corporate stock or other equity 101 participations, including partnership interests, whether general or limited, in such Person, including any Preferred Capital Stock and any right or interest which is classified as equity in accordance with GAAP. "Cash Equivalents" means (1) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency or instrumentality thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (2) marketable direct obligations issued by any state of the United States of America or by the District of Columbia maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's; (3) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or a rating of at least P-1 from Moody's; (4) investments in time deposit accounts, term deposit accounts, money market deposit accounts, certificates of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia having at the date of acquisition thereof combined capital and surplus of not less than $500.0 million; (5) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with any bank meeting the qualifications specified in clause (4) above; and (6) investments in money market funds which invest substantially all their assets in securities of the types described in any of clauses (1) through (5) above. "Change of Control" means the occurrence of any of the following events (whether or not approved by the Board of Directors of the Company): (1) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock representing 50% or more of the total voting power of all outstanding Voting Stock of the Company; or (2) the Company consolidates with, or merges with or into, another Person (other than a Wholly Owned Restricted Subsidiary) or the Company and/or one or more the Restricted Subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the assets of the Company and the Restricted Subsidiaries (determined on a consolidated basis) to any Person (other than the Company or a Wholly Owned Restricted Subsidiary), other than any such transaction where immediately after such transaction the Person or Persons that "beneficially owned" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) immediately prior to such transaction, directly or indirectly, Voting Stock representing a majority of the total voting power of all outstanding Voting Stock of the Company, "beneficially own or owns" (as so determined), directly or indirectly, Voting Stock representing a majority of the total voting power of the outstanding Voting Stock of the surviving or transferee Person; or (3) during any consecutive two-year period, the Continuing Directors cease for any reason to constitute a majority of the Board of Directors of the Company; or (4) the adoption of a plan of liquidation or dissolution of the Company. "Change of Control Date" has the meaning set forth under "Repurchase at the Option of the Holders -- Change of Control" above. 102 "Change of Control Offer" has the meaning set forth under "Repurchase at the Option of the Holders -- Change of Control" above. "Change of Control Purchase Date" has the meaning set forth under "Repurchase at the Option of the Holders -- Change of Control" above. "Change of Control Purchase Price" has the meaning set forth under "Repurchase at the Option of the Holders -- Change of Control" above. "Consolidated Coverage Ratio" as of any date of determination means the ratio of (i) the aggregate amount of Consolidated EBITDA for the latest four-quarter period for which financial statements are available ending prior to the date of such determination (the "Four-Quarter Period") to (ii) Consolidated Interest Expense for such Four-Quarter Period; provided, however, that: (1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness or issued any Disqualified Capital Stock since the beginning of such Four-Quarter Period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves an Incurrence of Indebtedness or an issuance of Disqualified Capital Stock, Consolidated EBITDA and Consolidated Interest Expense for such Four-Quarter Period shall be calculated after giving effect on a pro forma basis to such Indebtedness or such Disqualified Capital Stock as if such Indebtedness or such Disqualified Capital Stock had been Incurred on the first day of such Four-Quarter Period, (2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased, retired or otherwise discharged (a "Discharge") any Indebtedness or Disqualified Capital Stock since the beginning of such Four-Quarter Period that no longer remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness or Disqualified Capital Stock, Consolidated EBITDA and Consolidated Interest Expense for such Four-Quarter Period shall be calculated after giving effect on a pro forma basis to such Discharge of Indebtedness or Disqualified Capital Stock, including with the proceeds of any new Indebtedness, as if such Discharge (and Incurrence of new Indebtedness or Disqualified Capital Stock, if any) had occurred on the first day of such Four-Quarter Period, (3) if since the beginning of such Four-Quarter Period the Company or any Restricted Subsidiary shall have effected any asset sale, Consolidated EBITDA for such Four-Quarter Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) directly attributable to the assets that are the subject of such asset sale for such Four-Quarter Period or increased by an amount equal to the Consolidated EBITDA (if negative) directly attributable thereto for such Four-Quarter Period, and Consolidated Interest Expense for such Four-Quarter Period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such asset sale for such Four-Quarter Period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such Four-Quarter Period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale), (4) if since the beginning of such Four-Quarter Period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an Acquisition, including any Acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, Consolidated EBITDA and Consolidated Interest Expense for such Four-Quarter Period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such Four-Quarter Period and (5) if since the beginning of such Four-Quarter Period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such Four-Quarter Period) shall have made any asset sale or any Investment or Acquisition that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such Four-Quarter Period, Consolidated EBITDA and Consolidated Interest Expense for such Four-Quarter Period shall be calculated after giving pro forma effect thereto as if such Asset Sale, Investment or Acquisition occurred on, with 103 respect to any Investment or Acquisition, the first day of such Four-Quarter Period and, with respect to any asset sale, the first day of such Four-Quarter Period. For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in accordance with Regulation S-X under the Securities Act. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any agreement under which Hedging Obligations relating to interest are outstanding applicable to such Indebtedness if such agreement under which such Hedging Obligations are outstanding has a remaining term as at the date of determination in excess of 12 months). "Consolidated EBITDA" means, for any period, the Consolidated Net Income for such period, minus any non-cash item increasing Consolidated Net Income during such period, (A) plus the following, to the extent deducted in calculating such Consolidated Net Income: (1) Consolidated Income Tax Expense for such period; (2) Consolidated Interest Expense for such period; (3) depreciation expense for such period; (4) amortization expense for such period; (5) all other non-cash items reducing Consolidated Net Income for such period (other than any non-cash item requiring an accrual or a reserve for cash disbursements in any future period); and (6) severance and other unusual charges for such period, to the extent recorded prior to the first anniversary of the Issue Date and relating to plant closures of the Company or any Restricted Subsidiary; minus (B) all non-cash items increasing Consolidated Net Income for such period. "Consolidated Income Tax Expense" means, with respect to the Company for any period, the provision for federal, provincial, state, local and foreign income taxes payable by the Company and the Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" means, with respect to the Company for any period, without duplication, the sum of: (1) the interest expense of the Company and the Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, including, without limitation, (a) the net cost under Hedging Obligations relating to interest (including any amortizations of discounts, but excluding any mark-to-market adjustments), (b) the interest portion of any deferred payment obligation, (c) all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (d) all capitalized interest and all accrued interest and (e) the accretion of any original issue discount on any Indebtedness; (2) the interest component of Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by the Company and the Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP; (3) the product of (x) the amount of dividends and distributions paid or accrued in respect of Disqualified Capital Stock of the Company or Preferred Capital Stock of any Restricted Subsidiary (other than dividends or distributions consisting solely of Qualified Capital Stock) during such period as determined on a consolidated basis in accordance with GAAP and (y) a fraction, the numerator of which is one and the denominator of which is one 104 minus the then current effective consolidated federal, provincial, state and local tax rate of the Company, expressed as a decimal; and (4) all interest on any Indebtedness described in clause (7) or (8) of the definition of "Indebtedness"; excluding, however, (i) any premiums, fees and expenses (and any amortization thereof), including the costs to terminate interest rate swaps, incurred in connection with the refinancing transactions described in this prospectus to occur on the Issue Date and entering into of the European Credit Facility described in this prospectus and (ii) the portion of interest expense at non-Wholly Owned Restricted Subsidiaries equal to the percentage of outstanding Voting Stock of such Restricted Subsidiary held by Persons other than the Company, any Subsidiary of the Company or Affiliates of the Company or any of its Subsidiaries. Notwithstanding anything to the contrary, in the event that the Redeemable Convertible Preferred Stock is reclassified as indebtedness pursuant to SFAS 150 or otherwise in accordance with GAAP and dividends thereon are deemed to constitute interest under GAAP, such dividends shall be excluded from the calculation of Consolidated Interest Expense. "Consolidated Net Income" means, for any period, the consolidated net income (loss) of the Company and the Restricted Subsidiaries (which, for the avoidance of doubt, shall be after deduction of minority interests in Restricted Subsidiaries held by third parties) for such period determined in accordance with GAAP; provided, however, that there shall not be included in calculating such Consolidated Net Income: (1) any net income (loss) of any Person other than the Company or a Restricted Subsidiary, except to the extent of the amount of cash actually distributed by such Person during such period to the Company or (subject to the limitation in clause (2) below) a Restricted Subsidiary as a dividend or other distribution; (2) for purposes of the covenant described under "Certain Covenants -- Limitation on Restricted Payments," any net income (but not loss) of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, precluding the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company to the extent of such limitations or restrictions; (3) any gain or loss realized upon the sale or other disposition of any asset of the Company or any Restricted Subsidiary (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person; (4) any extraordinary gain or loss; (5) the cumulative effect of a change in accounting principles; and (6) unrealized gains or losses in respect of Hedging Obligations permitted by clause (6) of the "Certain Covenants -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" covenant as recorded on the statement of operations in accordance with GAAP; provided, however, that in the case of clauses (3), (4) and (6) such amount or charge shall be net of any tax or tax benefit to the Company (less all fees and expenses relating to such transaction) or any Restricted Subsidiary resulting therefrom. "Consolidated Tangible Assets" means, at any date, the total assets (less accumulated depreciation and valuation reserves and other reserves and items deductible from gross book value of specific asset accounts under GAAP) of the Company and the Restricted Subsidiaries, after deducting therefrom all goodwill, trade names, trademarks, patents, unamortized debt discount, organization expenses and other like intangibles of the Company and the Restricted Subsidiaries, all calculated in accordance with GAAP. "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who was (1) a member of such Board of Directors on the Issue Date or (2) nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such board at the time of such nomination or election. 105 "Credit Facilities" means one or more of U.S. Credit Facilities and/or European Credit Facilities. "Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default. "Designation" has the meaning set forth under "Certain Covenants -- Designation of Unrestricted Subsidiaries" above. "Designation Amount" has the meaning set forth in the definition of "Investment." "Disposition" means, with respect to any Person, any merger, consolidation, amalgamation or other business combination involving such Person (whether or not such Person is the Surviving Person) or the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of such Person's assets. "Disqualified Capital Stock" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable, at the option of the holder thereof, in whole or in part, or exchangeable into Indebtedness on or prior to the date which is 91 days after the Stated Maturity of the principal of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof the right to require the issuer to purchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the maturity date of the Notes shall not constitute Disqualified Capital Stock if (1) the "asset sale" or "change of control" provisions applicable to such Capital Stock are not more favorable in any material respect to the holders of such Capital Stock than the terms applicable to the Notes and described under the captions "Repurchase at the Option of the Holders -- Change of Control" and "Repurchase at the Option of the Holders -- Asset Sales" and (2) any such requirement becomes operative only after compliance with such terms applicable to the Notes, including the prior completion of any offer to purchase Notes pursuant to a Change of Control Offer or a Net Proceeds Offer. "Domestic Subsidiary" means a Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia. "European Credit Facility" means one or more debt facilities providing for senior revolving credit loans, senior term loans and/or letters of credit to one or more Foreign Subsidiaries, as borrower or borrowers and guarantors thereunder, including any notes, guarantees, collateral and security documents, instruments and agreements executed in connection therewith (including Hedging Obligations related to the Indebtedness incurred thereunder), as amended, amended and restated, supplemented, modified, refinanced, replaced or otherwise restructured, in whole or in part from time to time, including increasing the amount of available borrowings thereunder or adding other Foreign Subsidiaries as additional borrowers or guarantors thereunder, with respect to all or any portion of the Indebtedness under such facilities or any successor or replacement facilities and whether with the same or any other agent, lender or group of lenders. "Excess" has the meaning set forth under "Repurchase at the Option of the Holders -- Asset Sales." "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC thereunder. "Existing Indebtedness" means (i) any Indebtedness of the Company and the Restricted Subsidiaries in existence on the Issue Date (after giving effect to the use of proceeds of the offering of the Notes and the other financing transactions on the Issue Date) until such amounts are repaid and (ii) up to (euro)20.0 million of Indebtedness which may, from time to time, be borrowed under the Company's European accounts receivable facility existing as of the Issue Date. "Fair Market Value" means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction; 106 provided, however, that the Fair Market Value of any such asset or assets in excess of $1.0 million shall be determined conclusively by the Board of Directors of the Company (or a duly authorized committee thereof) acting in good faith, and shall be evidenced by a Board Resolution delivered to the Trustee. "Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary. "Four-Quarter Period" has the meaning set forth in the definition of "Consolidated Coverage Ratio" above. "GAAP" means, at any date of determination, generally accepted accounting principles in effect in the United States at such time and which are consistently applied. "guarantee" means, as applied to any obligation, (1) a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part or all of such obligation and (2) an agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance) of all or any part of such obligation, including, without limiting the foregoing, the payment of amounts drawn down by letters of credit. A guarantee shall include, without limitation, any agreement to maintain or preserve any other Person's financial condition or to cause any other Person to achieve certain levels of operating results. "Guarantee" means the senior guarantee by each Guarantor of the Company's payment obligations under the Indenture and the Notes, executed pursuant to the Indenture. "Guarantors" means each of: (1) Diversified Contractors, Inc., a Delaware corporation; Genca Corporation, a Delaware corporation; General Cable Canada, Ltd. (Ontario), an Ontario corporation; General Cable Company, a Nova Scotia corporation; General Cable de Mexico del Norte, S.A. de C.V., a Mexico corporation; General Cable de Latinoamerica, S.A. de C.V., a Mexico corporation; General Cable Industries, Inc., a Delaware corporation; General Cable Industries, LLC, a Delaware limited liability company; General Cable Management LLC, a Delaware limited liability company; General Cable Overseas Holdings, Inc., a Delaware corporation; General Cable Technologies Corporation, a Delaware corporation; General Cable Texas Operations, L.P., a Delaware limited partnership; GK Technologies, Incorporated, a New Jersey corporation; Marathon Steel Company, an Arizona corporation; Marathon Manufacturing Holdings, Inc., a Delaware corporation; and MLTC Company, a Delaware corporation; and (2) any other Subsidiary that executes a Guarantee in accordance with the provisions of the Indenture; and their respective successors and assigns, in each case, until such Person is released from its Guarantee in accordance with the terms of the Indenture. "Hedging Obligations" means, with respect to any Person, the Obligations of such Person under (1) interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and similar agreements or arrangements and (2) foreign currency or commodity hedge, swap, exchange and similar agreements (agreements referred to in this definition being referred to herein as "Hedging Agreements"). "Holder" means the registered holder of any Note. "Incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (including by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such 107 Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings correlative to the foregoing). Indebtedness of any Acquired Person or any of its Subsidiaries existing at the time such Acquired Person becomes a Restricted Subsidiary (or is merged into or consolidated with the Company or any Restricted Subsidiary), whether or not such Indebtedness was Incurred in connection with, as a result of, or in contemplation of, such Acquired Person becoming a Restricted Subsidiary (or being merged into or consolidated or amalgamated with the Company or any Restricted Subsidiary), shall be deemed Incurred at the time any such Acquired Person becomes a Restricted Subsidiary or merges into or consolidates or amalgamates with the Company or any Restricted Subsidiary. The accrual of interest and the accretion or amortization of original issue discount will not be deemed to be an Incurrence of Indebtedness; provided, however, in each such case, that the amount thereof is included in Consolidated Interest Expense as accrued. For the avoidance of doubt, the reclassification of the Redeemable Convertible Preferred Stock pursuant to SFAS 150 or otherwise in accordance with GAAP shall not be an Incurrence of Indebtedness under the Indenture. "Indebtedness" means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent: (1) every obligation of such Person for money borrowed; (2) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of assets or businesses by such Person; (3) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (4) every obligation of such Person issued or assumed as the deferred purchase price of assets or services (but excluding (A) earnout or other similar obligations until such time as the amount of such obligation is capable of being determined and its payment is probable, (B) trade accounts payable incurred in the ordinary course of business and payable in accordance with industry practices (including, so long as not treated as Indebtedness in accordance with GAAP, trade payables subject to the payables extension facility described in this prospectus under "Management's discussion and analysis of financial condition -- Liquidity and capital resources"), or (C) other accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith); (5) every Capital Lease Obligation of such Person, including, without limitation, from Sale/Leaseback Transactions; (6) every net obligation payable under Hedging Agreements of such Person; (7) every obligation of the type referred to in clauses (1) through (6) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor, guarantor or otherwise, the amount of such obligation being the maximum amount covered by such guarantee or for which such Person is otherwise liable; and (8) every obligation of the type referred to in clauses (1) through (7) above of another Person the payment of which is secured by the assets of that Person, the amount of such obligation being deemed to be the lesser of (i) the Fair Market Value of such asset or (ii) the amount of the obligation so secured. Indebtedness: (A) shall never be calculated taking into account any cash and cash equivalents held by such Person; (B) shall not include obligations of any Person (1) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business, provided that such obligations are extinguished within 5 Business Days of their Incurrence, (2) resulting from the endorsement of negotiable instruments for collection in the ordinary course of business and 108 consistent with past business practices and (3) under standby letters of credit to the extent collateralized by cash or Cash Equivalents; (C) shall include the liquidation preference and any mandatory redemption payment obligations in respect of any Disqualified Capital Stock of the Company or any Preferred Capital Stock of any Restricted Subsidiary; (D) shall not include any liability for federal, provincial, state, local or other taxes; and (E) shall not include obligations under performance bonds, performance guarantees, surety bonds and appeal bonds, letters of credit or similar obligations, incurred in the ordinary course of business. "Independent Financial Advisor" means a nationally recognized accounting, appraisal or investment banking firm or consultant in the United States that is, in the judgment of the Company's Board of Directors, qualified to perform the task for which it has been engaged (1) which does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company and (2) which, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged. "interest" means, with respect to the Notes, the sum of any cash interest and any Additional Interest on the Notes. "Investment" means, with respect to any Person, any direct or indirect loan, advance, guarantee or other extension of credit (in each case other than in connection with an acquisition of property or assets that does not otherwise constitute an Investment) or capital contribution to (by means of transfers of cash or other property or assets to others or payments for property or services for the account or use of others, or otherwise), or purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. The amount of any Investment shall be the original cost of such Investment, plus the cost of all additions thereto, and minus the amount of any portion of such Investment repaid to such Person in cash as a repayment of principal or a return of capital, as the case may be, but without any other adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. In determining the amount of any Investment involving a transfer of any property or asset other than cash, such property shall be valued at its Fair Market Value at the time of such transfer. For purposes of the covenant described under "Certain Covenants - -- Limitation on Restricted Payments" above, an Investment shall be deemed to be made upon any Designation in an amount (the "Designation Amount") equal to the greater of (1) the net book value of the Company's interest in the applicable Subsidiary calculated in accordance with GAAP and (2) the Fair Market Value of the Company's interest in the applicable Subsidiary as determined in good faith by the Board of Directors of the Company (or a duly authorized committee thereof) and evidenced by a Board Resolution, whose determination shall be conclusive. If the Company or any Restricted Subsidiary sells or otherwise disposes of any Capital Stock of any Restricted Subsidiary such that, after giving effect to such sale or disposition, such Person ceases to be a Restricted Subsidiary, the Company will be deemed to have made an Investment on the date of such sale or disposition equal to the Fair Market Value of the Capital Stock of such Restricted Subsidiary that after giving effect to such sale or disposition is owned, directly or indirectly, by the Company. "Issue Date" means the original issue date of the Initial Notes. "Lien" means any lien, mortgage, charge, security interest, hypothecation, assignment for security or encumbrance of any kind (including any conditional sale or capital lease or other title retention agreement, and any agreement to give any security interest but excluding any lease which does not secure Indebtedness). "Maturity Date" means November 15, 2010. "Net Cash Proceeds" means the aggregate proceeds in the form of cash or Cash Equivalents received by the Company or any Restricted Subsidiary in respect of any Asset Sale, including all cash or Cash Equivalents received upon any sale, liquidation or other exchange of proceeds of Asset Sales received in a form other than cash or Cash Equivalents, net of: 109 (1) the direct costs relating to such Asset Sale (including, without limitation, reasonable legal, accounting and investment banking fees, brokerage fees and sales commissions) and any relocation expenses incurred as a result thereof; (2) taxes paid or payable directly as a result thereof; (3) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale; and (4) amounts deemed, in good faith, appropriate by the Board of Directors of the Company (or a duly authorized committee thereof) to be provided as a reserve, in accordance with GAAP, against any liabilities associated with such assets which are the subject of such Asset Sale (provided that the amount of any such reserves shall be deemed to constitute Net Cash Proceeds at the time such reserves shall have been released or are not otherwise required to be retained as a reserve). "Net Proceeds Offer" has the meaning set forth under "Repurchase at the Option of the Holders -- Asset Sales" above. "Notes" means, collectively, the Initial Notes and the Additional Notes, if any. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursement obligations, damages and other liabilities payable under the documentation governing any Indebtedness. "Officer" means the Chairman, any Vice Chairman, the President, any Vice President, the Chief Financial Officer, the Treasurer or the Secretary of the Company. "Officers' Certificate" means a certificate signed by two Officers or by one Officer and any Assistant Treasurer or Assistant Secretary of the Company and which complies with the provisions of the Indenture. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee; such counsel may be an employee of or counsel to the Company or the Trustee. "Pari Passu Debt" has the meaning set forth under "Repurchase at the Option of the Holders -- Asset Sales" above. "Permitted Indebtedness" has the meaning set forth in the second paragraph of "Certain Covenants -- Limitation on Indebtedness and Issuance of Disqualified Capital Stock" above. "Permitted Investments" means: (1) Investments in cash in (a) euros or dollars and Cash Equivalents or, to the extent determined by the Company or a Foreign Subsidiary in good faith to be necessary for local working capital requirements and operational requirements of the Foreign Subsidiaries, other cash and cash equivalents denominated in the currency of any jurisdiction which are, as determined in good faith by the Company or such Foreign Subsidiary, necessary or desirable for reasonable business purposes and, in the case of cash equivalents, are otherwise substantially similar to the items specified in the definition of "Cash Equivalents," and (b) cash and Cash Equivalents denominated in the currency of the jurisdiction of organization or place of business of a Foreign Subsidiary that are otherwise substantially similar to items specified in the definition of "Cash Equivalents," except that if such jurisdiction prohibits the repatriation of working capital to the United States, any specific rating required in the definition of "Cash Equivalents" shall be deemed to be satisfied if such Investments have, at the time of the acquisition, the highest rating from any rating agency of any Investments available to be issued in such currency; (2) Investments in the Company, any Guarantor or any Wholly Owned Restricted Subsidiary or any Person that, as a result of or in connection with such Investment, (a) becomes a Guarantor or a Wholly Owned Restricted Subsidiary or (b) is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company, any Guarantor or any Wholly Owned Restricted Subsidiary; 110 (3) Investments in the Notes; (4) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers' compensation, performance and other similar deposits made in the ordinary course of business consistent with past practices; (5) Hedging Obligations permitted by clause (6) of the definition of "Permitted Indebtedness"; (6) any Investment to the extent that the consideration therefor consists of Qualified Capital Stock of the Company; (7) accounts receivable acquired in the ordinary course of business or Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (8) loans and advances to employees who are not directors or executive officers made in the ordinary course of business not to exceed $2.0 million in the aggregate at any one time outstanding; (9) any non-cash consideration received as a result of Asset Sales in compliance with "Repurchase at the Option of Holders -- Asset Sales" above; (10) Investments in joint ventures engaged in a Related Business in an aggregate amount outstanding not to exceed 2.5% of Consolidated Tangible Assets at the time of such Investment is made; and (11) in addition to the Investments described in clauses (1) through (10) above, other Investments not to exceed $25.0 million at any time outstanding. The amount of Investments outstanding at any time pursuant to clause (11) above shall be deemed to be reduced: (a) upon the disposition or repayment of or return on any Investment made pursuant to clause (11) above, by an amount equal to the return of capital with respect to such Investment to the Company or any Restricted Subsidiary (to the extent not included in the computation of Consolidated Net Income), less the cost of the disposition of such Investment and net of taxes; and (b) upon a redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the lesser of (x) the Fair Market Value of the Company's proportionate interest in such Subsidiary immediately following such redesignation, and (y) the aggregate amount of Investments in such Subsidiary that increased (and did not previously decrease) the amount of Investments outstanding pursuant to clause (11) above. "Permitted Liens" means: (1) Liens on property of a Person existing at the time such Person is merged or consolidated with or into the Company or any Restricted Subsidiary; provided, however, that such Liens were in existence prior to the contemplation of such merger or consolidation and do not attach to any property or assets of the Company or any Restricted Subsidiary other than the property or assets subject to the Liens prior to such merger or consolidation and the proceeds thereof; (2) Liens securing the Credit Facilities; (3) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue Date; (4) Liens securing all of the Obligations under the Indenture; (5) Liens in favor of the Company or any Restricted Subsidiary; 111 (6) Liens securing Hedging Obligations incurred pursuant to clause (6) of the definition of "Permitted Indebtedness"; (7) Liens securing Capital Lease Obligations and Purchase Money Indebtedness, provided such Indebtedness shall not be secured by any asset other than the specified asset being financed and additions and improvements thereto; (8) Liens securing Indebtedness of Foreign Subsidiaries; (9) Liens to secure any refinancings, renewals, extensions, modifications or replacements (collectively, "refinancing") (or successive refinancings), in whole or in part, of any Indebtedness secured by Liens referred to in clauses (1), (2), (3), (4) or (7) above so long as such Lien does not extend to any other property (other than improvements thereto); (10) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or any Restricted Subsidiary shall have set aside on its books such reserves as may be required pursuant to GAAP; (11) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law Incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof; (12) Liens Incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (13) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; (14) judgment Liens not giving rise to a Default so long as such Liens are adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which the proceedings may be initiated has not expired; (15) easements, rights-of-way, zoning restrictions and other similar charges, restrictions or encumbrances in respect of real property or immaterial imperfections of title which do not, in the aggregate, impair in any material respect the ordinary conduct of the business of the Company and the Restricted Subsidiaries taken as a whole; (16) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof; (17) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Company or any Restricted Subsidiary, including rights of offset and setoff; (18) bankers' Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the Company or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness; (19) leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company or any Restricted Subsidiary; 112 (20) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (21) Liens securing Acquired Indebtedness permitted to be Incurred under the Indenture; provided that the Liens do not extend to assets not subject to such Liens at the time of acquisition (other than improvements thereon) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the Incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary; (22) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (23) Liens on and pledges of the Capital Stock of any Unrestricted Subsidiary securing any Indebtedness of such Unrestricted Subsidiary; and (24) additional Liens securing obligations and Attributable Indebtedness Incurred pursuant to the covenant described under "Certain Covenants -- Limitation on Sale/Leaseback Transactions" in an aggregate amount outstanding not to exceed 3.0% of Consolidated Tangible Assets at the time of such Incurrence. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, limited liability limited partnership, trust, unincorporated organization or government or any agency or political subdivision thereof. "Preferred Capital Stock," in any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over Capital Stock of any other class in such Person. "Public Equity Offering" means an underwritten public offering of Qualified Capital Stock of the Company with gross cash proceeds to the Company of at least $25.0 million pursuant to a registration statement that has been declared effective by the SEC pursuant to the Securities Act (other than a registration statement on Form S-4 (or any successor form covering substantially the same transactions), Form S-8 (or any successor form covering substantially the same transactions) or otherwise relating to equity securities issuable under any employee benefit plan of the Company), other than the concurrent offering of the Company's common stock as described in this prospectus. "Purchase Money Indebtedness" means Indebtedness of the Company or any Restricted Subsidiary Incurred for the purpose of financing all or any part of the purchase price or the cost of construction or improvement of any property; provided, however, that (i) the aggregate principal amount of such Indebtedness does not exceed the lesser of the Fair Market Value of such property or such purchase price or cost, including any refinancing of such Indebtedness that does not increase the aggregate principal amount (or accreted amount, if less) thereof as of the date of refinancing, and (ii) such Indebtedness shall be Incurred within 180 days after such acquisition of such asset by the Company or such Restricted Subsidiary or completion of such construction or improvement. "Qualified Capital Stock" in any Person means any Capital Stock in such Person other than any Disqualified Capital Stock. "Redeemable Convertible Preferred Stock" means the Company's 5.75% Series A redeemable convertible preferred stock issued on the date of the Indenture. "Redemption Date" has the meaning set forth in the third paragraph of "Optional Redemption" above. "Registration Rights Agreement" means the Registration Rights Agreement dated as of the Issue Date by and among the Company, the Guarantors, Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC. 113 "Related Business" means those businesses in which the Company or any of the Restricted Subsidiaries is engaged on the Issue Date, or that are reasonably related, ancillary, incidental or complementary thereto, as determined by the Company's Board of Directors. "Restricted Subsidiary" means any Subsidiary of the Company other than any Subsidiary of the Company that has been designated by the Board of Directors of the Company, by a Board Resolution delivered to the Trustee, as an Unrestricted Subsidiary pursuant to "Certain Covenants -- Designation of Unrestricted Subsidiaries" above. Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary may be revoked by a Board Resolution delivered to the Trustee, subject to the provisions of "Certain Covenants -- Designation of Unrestricted Subsidiaries" above. "Revocation" has the meaning set forth under "Certain Covenants -- Designation of Unrestricted Subsidiaries" above. "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Subsidiary leases it from such Person. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, or any successor statute, and the rules and regulations promulgated by the SEC thereunder. "Significant Subsidiary" means (1) any Restricted Subsidiary that would be a "significant subsidiary" as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Issue Date and (2) any Restricted Subsidiary that, when aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as to which any event described in clause (8) under "Events of Default" has occurred and is continuing, would constitute a Significant Subsidiary under clause (1) of this definition. "Stated Maturity," when used with respect to any Note or any installment of interest thereon, means the date specified in such Note as the fixed date on which the principal of such Note or such installment of interest is due and payable. "Subordinated Indebtedness" means any Indebtedness of the Company or a Guarantor that is expressly subordinated in right of payment to the Notes or the Guarantee of such Guarantor. "Subsidiary" with respect to any Person means (1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of all outstanding Voting Stock entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof). Unless otherwise specified, "Subsidiary" refers to a Subsidiary of the Company. "Surviving Person" means, with respect to any Person involved in or that makes any Disposition, the Person formed by or surviving such Disposition or the Person to which such Disposition is made. "Total Assets" means, with respect to any Person, as of any date, the consolidated total assets of such Person, as determined in accordance with GAAP. "United States Government Obligations" means direct non-callable obligations of the United States of America for the payment of which the full faith and credit of the United States is pledged. "Unrestricted Subsidiary" means any Subsidiary of the Company designated as such pursuant to and in compliance with "Certain Covenants -- Designation of Unrestricted Subsidiaries" above, in each case until such time 114 as any such designation may be revoked by a Board Resolution delivered to the Trustee, subject to the provisions of such covenant. "Unutilized Net Cash Proceeds" has the meaning set forth in the fifth paragraph under "Repurchase at the Option of the Holders -- Asset Sales" above. "U.S. Credit Agreement" means the credit agreement dated on or about the Issue Date by and among General Cable Industries, Inc., as borrower, the Company and certain other Subsidiaries, as guarantors and/or additional borrowers, the lenders party thereto from time to time, UBS Securities LLC, as joint lead arranger, UBS AG, Stamford Branch, as administrative agent and issuing bank and Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services, Inc., as collateral agent and joint lead arranger, including any notes, guarantees, collateral and security documents, instruments and agreements executed in connection therewith (including Hedging Obligations related to the Indebtedness incurred thereunder), as amended, amended and restated, supplemented or otherwise modified from time or time. "U.S. Credit Facility" means one or more debt facilities providing for senior revolving credit loans, senior term loans and/or letters of credit to the Company and/or one or more Domestic Subsidiaries, as borrower or borrowers and guarantors thereunder (including, without limitation, the U.S. Credit Agreement), as amended, amended and restated, supplemented, modified, refinanced, replaced or otherwise restructured, in whole or in part from time to time, including increasing the amount of available borrowings thereunder or adding other Domestic Subsidiaries as additional borrowers and/or guarantors thereunder, with respect to all or any portion of the Indebtedness under such facilities or any successor or replacement facilities and whether with the same or any other agent, lender or group of lenders; provided, that no such debt facility that otherwise complies with the definition shall cease to be a U.S. Credit Facility solely as a result of a Foreign Subsidiary becoming a borrower or guarantor thereunder. "Voting Stock" means Capital Stock in a corporation or other Person with voting power under ordinary circumstances entitling the holders thereof to elect the Board of Directors or other comparable governing body of such corporation or Person. "Weighted Average Life to Maturity" means, when applied to any Indebtedness (including Disqualified Capital Stock) at any date, the number of years obtained by dividing (1) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required scheduled payment of principal or dividends including payment at final maturity, in respect thereof, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (2) the then outstanding aggregate principal amount of such Indebtedness (including Disqualified Capital Stock). "Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary all of the voting power of outstanding Voting Stock (other than directors' qualifying shares) of which is owned, directly or indirectly, by the Company. 115 BOOK-ENTRY; DELIVERY AND FORM Except as described in the next paragraph, the new notes initially will be represented by one or more permanent global certificates in definitive, duly registered form. The global notes will be deposited on their date of issue with, or on behalf of, U.S. Bank National Association or "DTC" and registered in the name of a nominee of DTC. GLOBAL NOTES The Company expects that pursuant to procedures established by DTC: - upon the issuance of the global notes, DTC or its custodian will credit, on its internal system, the principal amount of new notes of the individual beneficial interests represented by such global notes to the respective accounts of persons who have accounts with such depositary; and - ownership of beneficial interests in the global notes will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee, with respect to interests of participants, and the records of participants, with respect to interests of persons other than participants. Ownership of beneficial interests in the global notes will be limited to persons who have accounts with DTC or "participants" or persons who hold interests through participants. So long as DTC, or its nominee, is the registered owner or holder of the new notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the new notes represented by such global notes for all purposes under the indenture. No beneficial owner of any interest in the global notes will be able to transfer that interest except in accordance with DTC's procedures. Payments of the principal of, premium, if any, and interest on, the global notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the Company, the trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest. The Company expects that DTC or its nominee, upon receipt of any payment of principal, premium, if any, and interest on the global notes, will credit participants' accounts with payments in amounts proportionate to their beneficial interests in the principal amount of the global notes as shown on the records of DTC or its nominee. The Company also expects that payments by participants to owners of beneficial owners in the global notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants. Transfers between participants in DTC will be effected in the ordinary way through DTC's same-day funds system in accordance with DTC rules and will be settled in same-day funds. If a holder requires physical delivery of a certificated note for any reason, including to sell notes to persons in states which require physical delivery of the notes, or to pledge such securities, such holder must transfer its interest in a global note, in accordance with the normal procedures of DTC. DTC has advised the Company that it will take any action permitted to be taken by a holder of notes, including the presentation of new notes for exchange as described below, only at the direction of one or more participants to whose account the DTC interests in the global notes are credited and only in respect of such portion of the aggregate principal amount of new notes as to which such participant or participants has or have given such direction. DTC has advised the Company as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include 116 securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the global notes among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither the Company nor the trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. CERTIFICATED NOTES If DTC is at any time unwilling or unable to continue as a depositary for the global notes and a successor depositary is not appointed by the Company, certificated notes will be issued in exchange for the global notes. 117 PLAN OF DISTRIBUTION Each broker-dealer that receives new notes for its own account in exchange for old notes acquired by the broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus in connection with any resale of those new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer in connection with resales of new notes received in exchange for such old notes. For a period of up to 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any such broker-dealer that requests copies of this prospectus in the letter of transmittal for use in connection with any such resale. We will not receive any proceeds from any sale of new notes by broker-dealers or any other persons. New notes received by participating broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions or through the writing of options on the new notes, or a combination of these methods of resale, at market prices prevailing at the time of resale or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such participating broker-dealer that resells the new notes that were received by it for its own account pursuant to the exchange offer. Any broker or dealer that participates in a distribution of new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of new notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration date, the Company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the applicable letter of transmittal. The Company has agreed to pay all expenses incident to the exchange offer each holder other than underwriting discounts, commissions and transfer taxes, if any, relating to the sale or disposition of the old notes. In addition, the Company will indemnify holders of the old notes, including any broker-dealers, against certain liabilities under the Securities Act. 118 MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES The following discussion is a summary of material federal income tax considerations relevant to the exchange of old notes for new notes, but does not purport to be a complete analysis of all potential tax effects. The discussion is based upon the Internal Revenue Code of 1986, as amended, Treasury regulations, Internal Revenue Service rulings and pronouncements, and judicial decisions now in effect, all of which are subject to change at any time by legislative, judicial or administrative action. Any such changes may be applied retroactively in a manner that could adversely affect a holder of the new notes. The description does not consider the effect of any applicable foreign, state, local or other tax laws or estate or gift tax considerations. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO IT OF EXCHANGING OLD NOTES FOR NEW NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS. EXCHANGE OF OLD NOTES FOR NEW NOTES The exchange of old notes for new notes pursuant to the exchange offer should not constitute a sale or an exchange for federal income tax purposes. Accordingly, such exchange should have no federal income tax consequences to holders of old notes. LEGAL MATTERS The validity of the notes and the guarantees offered hereby will be passed upon by Blank Rome LLP, Philadelphia, Pennsylvania. EXPERTS The consolidated financial statements as of December 31, 2002 and 2001 and for the three years in the period ended December 31, 2002, included herein have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to a change in our accounting for certain inventories), and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 119 INDEX TO FINANCIAL STATEMENTS
Page ---- Independent Auditors' Report F-2 Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000 F-3 Consolidated Balance Sheets at December 31, 2002 and 2001 F-4 Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000 F-5 Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, F-6 2002, 2001 and 2000 Notes to Audited Consolidated Financial Statements F-7 Consolidated Statements of Operations for the Three Months Ended and Nine Months Ended F-39 September 30, 2003 and 2002 Consolidated Balance Sheets at September 30, 2003 and December 31, 2002 F-40 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002 F-41 Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended F-42 September 30, 2002 and 2003 Notes to Unaudited Consolidated Financial Statements F-43
F-1 REPORT OF INDEPENDENT ACCOUNTANTS GENERAL CABLE CORPORATION: We have audited the accompanying consolidated balance sheets of General Cable Corporation and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of operations, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2002. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 General Cable Corporation and subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 2 to the financial statements, the Company changed its method of accounting for its non-North American metals inventory from the first-in first-out (FIFO) method to the last-in first-out method (LIFO) effective January 1, 2001. Also as discussed in Note 2 to the financial statements, the Company changed its accounting for its North American non-metals inventory from the first-in, first-out (FIFO) method to the last-in, first-out (LIFO) method effective January 1, 2000. /s/ Deloitte & Touche DELOITTE & TOUCHE LLP Cincinnati, Ohio January 29, 2003 (November 4, 2003 as to Note 25) F-2 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN MILLIONS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, ---------------------------------- 2002 2001 2000 -------- -------- -------- Net sales ...................................................... $1,453.9 $1,651.4 $2,162.1 Cost of sales .................................................. 1,287.3 1,410.7 1,870.4 -------- -------- -------- Gross profit ................................................... 166.6 240.7 291.7 Selling, general and administrative expenses ................... 150.9 136.4 257.6 -------- -------- -------- Operating income ............................................... 15.7 104.3 34.1 Other income ................................................... -- 8.1 -- Interest income (expense): Interest expense .............................................. (43.5) (45.6) (62.3) Interest income ............................................... 0.9 1.7 2.5 Other financial costs ......................................... (1.1) (10.4) (3.3) -------- -------- -------- (43.7) (54.3) (63.1) -------- -------- -------- Income (loss) from continuing operations before income taxes.... (28.0) 58.1 (29.0) Income tax (provision) benefit ................................. 9.9 (20.6) 10.3 -------- -------- -------- Income (loss) from continuing operations ....................... (18.1) 37.5 (18.7) Loss from operations of discontinued operations (net of tax).... -- (6.8) (7.7) Loss on disposal of discontinued operations (net of tax) ....... (5.9) (32.7) -- -------- -------- -------- Net loss ..................................................... $ (24.0) $ (2.0) $ (26.4) ======== ======== ======== EPS of Continuing Operations - ---------------------------- Earnings (loss) per common share ............................... $ (0.55) $ 1.14 $ (0.56) ======== ======== ======== Weighted average common shares ................................. 33. 0 32.8 33.6 ======== ======== ======== Earnings (loss) per common share-assuming dilution ............. $ (0.55) $ 1.13 $ (0.56) ======== ======== ======== Weighted average common shares-assuming dilution ............... 33.0 33.1 33.6 ======== ======== ======== EPS of Discontinued Operations - ------------------------------ Loss per common share .......................................... $ (0.18) $ (1.20) $ (0.23) ======== ======== ======== Loss per common share-assuming dilution ........................ $ (0.18) $ (1.19) $ (0.23) ======== ======== ======== EPS of Total Company - -------------------- Loss per common share .......................................... $ (0.73) $ (0.06) $ (0.79) ======== ======== ======== Loss per common share-assuming dilution ........................ $ (0.73) $ (0.06) $ (0.79) ======== ======== ========
See accompanying Notes to Consolidated Financial Statements. F-3 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN MILLIONS, EXCEPT SHARE DATA)
DECEMBER 31, ---------------------- 2002 2001 -------- ---------- ASSETS Current Assets: Cash .................................................................................. $ 29.1 $ 16.6 Receivables, net of allowances of $11.6 million in 2002 and $11.4 million in 2001...... 105.9 105.8 Retained interest in accounts receivable .............................................. 84.8 83.1 Inventories ........................................................................... 258.3 315.4 Deferred income taxes ................................................................. 12.2 27.5 Prepaid expenses and other ............................................................ 42.6 23.9 -------- ---------- Total current assets ................................................................ 532.9 572.3 Property, plant and equipment, net ....................................................... 323.3 320.9 Deferred income taxes .................................................................... 68.3 65.0 Other non-current assets ................................................................. 48.8 47.1 -------- ---------- Total assets ........................................................................ $ 973.3 $ 1,005.3 ======== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable ........................................................................ $ 242.1 $ 249.4 Accrued liabilities ..................................................................... 99.2 113.6 Current portion of long-term debt ....................................................... 40.8 39.4 -------- ---------- Total current liabilities ........................................................... 382.1 402.4 Long-term debt ........................................................................... 411.1 421.0 Deferred income taxes .................................................................... 2.1 2.9 Other liabilities ........................................................................ 117.1 74.1 -------- ---------- Total liabilities ................................................................... 912.4 900.4 -------- ---------- Shareholders' Equity: Common stock, $0.01 par value: Issued and outstanding shares: 2002 - 33,135,002 (net of 4,754,425 treasury shares) 2001 - 32,838,227 (net of 4,745,425 treasury shares) .............................. 0.4 0.4 Additional paid-in capital .......................................................... 100.0 96.4 Treasury stock ...................................................................... (50.0) (50.0) Retained earnings ................................................................... 59.9 88.9 Accumulated other comprehensive loss ................................................ (44.6) (25.7) Other shareholders' equity .......................................................... (4.8) (5.1) -------- ---------- Total shareholders' equity ........................................................ 60.9 104.9 -------- ---------- Total liabilities and shareholders' equity ..................................... $ 973.3 $ 1,005.3 ======== ==========
See accompanying Notes to Consolidated Financial Statements. F-4 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN MILLIONS)
YEAR ENDED DECEMBER 31, ------------------------------- 2002 2001 2000 ------- -------- -------- Cash flows of operating activities: Net loss ...................................................................... $ (24.0) $ (2.0) $ (26.4) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization ............................................. 30.6 35.0 56.0 Foreign currency translation adjustment ................................... -- (8.5) -- Deferred income taxes ..................................................... 14.4 (16.7) (0.8) (Gain) loss on sale of businesses ......................................... 1.7 (18.3) -- Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: Sale of receivables, net of transaction costs paid at closing ........... -- 145.0 -- (Increase) decrease in receivables ...................................... 15.1 16.6 (34.0) (Increase) decrease in inventories ...................................... 61.5 37.3 (52.1) (Increase) decrease in other assets ..................................... (8.0) 3.9 (0.3) Increase (decrease) in accounts payable, accrued and other liabilities .. (34.0) (109.1) 73.7 ------- -------- -------- Net cash flows of operating activities ................................ 57.3 83.2 16.1 ------- -------- -------- Cash flows of investing activities: Capital expenditures ...................................................... (31.4) (54.9) (56.0) Acquisitions, net of cash acquired ........................................ -- -- (19.0) Proceeds from sale of businesses, net of cash sold ........................ 1.7 141.8 158.1 Proceeds from properties sold ............................................. 1.6 6.7 0.8 Other, net ................................................................ (0.5) (1.7) (1.0) ------- -------- -------- Net cash flows of investing activities .................................. (28.6) 91.9 82.9 ------- -------- -------- Cash flows of financing activities: Dividends paid ............................................................ (5.0) (6.6) (6.7) Net change in revolving credit borrowings ................................. (2.2) 33.2 47.2 Net change in other debt .................................................. 4.0 3.2 (14.1) Issuance of long-term debt ................................................ -- -- 7.4 Repayment of long-term debt ............................................... (15.4) (209.4) (139.5) Acquisition of treasury stock ............................................. -- (2.2) (10.1) Proceeds from exercise of stock options ................................... 2.4 2.1 -- ------- -------- -------- Net cash flows of financing activities .................................. (16.2) (179.7) (115.8) ------- -------- -------- Increase (decrease) in cash .................................................... 12.5 (4.6) (16.8) Cash - beginning of period ..................................................... 16.6 21.2 38.0 ------- -------- -------- Cash - end of period ........................................................... $ 29.1 $ 16.6 $ 21.2 ======= ======== ======== SUPPLEMENTAL INFORMATION Income taxes paid, net of (refunds) .......................................... $ (27.0) $ 6.2 $ 7.8 ======= ======== ======== Interest paid ................................................................ $ 44.1 $ 58.3 $ 70.7 ======= ======== ========
See accompanying Notes to Consolidated Financial Statements. F-5 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (IN MILLIONS, EXCEPT SHARE AMOUNTS)
ACCUMULATED COMMON STOCK ADDITIONAL OTHER OTHER ------------------ PAID-IN TREASURY RETAINED COMPREHENSIVE SHAREHOLDERS' SHARES AMOUNT CAPITAL STOCK EARNINGS INCOME (LOSS) EQUITY TOTAL ---------- ------ ---------- -------- -------- ------------- ------------- ------- Balance, December 31, 1999 ........ 33,999,633 $0.4 $ 90.5 $(37.7) $130.6 $ 1.6 $(8.1) $ 177.3 Comprehensive loss: Net loss ...................... (26.4) (26.4) Foreign currency translation adjustment ................. (9.0) (9.0) ------- Comprehensive loss .............. (35.4) Dividends ....................... (6.7) (6.7) Purchase of treasury shares ..... (1,370,225) (10.1) (10.1) Issuance of restricted stock .... 9,257 0.1 (0.1) -- Amortization of restricted stock and other .................... 1.1 2.0 3.1 Other ........................... 10,634 (0.3) 0.6 0.3 ---------- ---- ------ ------ ------ ------ ----- ------- Balance, December 31, 2000 ........ 32,649,299 0.4 91.4 (47.8) 97.5 (7.4) (5.6) 128.5 Comprehensive loss: Net loss ...................... (2.0) (2.0) Foreign currency translation .. (12.9) (12.9) adjustment ................. Loss on change in fair value of financial instruments, net of tax ................. (3.7) (3.7) Pension adjustments, net of tax (1.4) (1.4) Unrealized investment losses .. (0.3) (0.3) ------- Comprehensive loss .............. (20.3) Dividends ....................... (6.6) (6.6) Purchase of treasury shares ..... (354,800) (2.2) (2.2) Issuance of restricted stock .... 357,500 2.7 (2.7) -- Amortization of restricted stock and other .................... 0.2 2.1 2.3 Exercise of stock options ....... 183,876 2.1 2.1 Other ........................... 2,352 1.1 1.1 ---------- ---- ------ ------ ------ ------ ----- ------- Balance, December 31, 2001 ........ 32,838,227 0.4 96.4 (50.0) 88.9 (25.7) (5.1) 104.9 Comprehensive loss: Net loss ...................... (24.0) (24.0) Foreign currency translation adjustment ................. 11.2 11.2 Loss on change in fair value of financial instruments, net of tax ................. (0.5) (0.5) Pension adjustments, net of tax (29.2) (29.2) Unrealized investment losses .. (0.4) (0.4) ------- Comprehensive loss .............. (42.9) Dividends ....................... (5.0) (5.0) Amortization of restricted stock and other .................... 0.9 0.1 1.0 Exercise of stock options ....... 265,359 2.4 2.4 Other ........................... 31,416 0.3 0.2 0.5 ---------- ---- ------ ------ ------ ------ ----- ------- Balance, December 31, 2002 ........ 33,135,002 $0.4 $100.0 $(50.0) $ 59.9 $(44.6) $(4.8) $ 60.9 ========== ==== ====== ====== ====== ====== ===== =======
See accompanying Notes to Consolidated Financial Statements. F-6 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL General Cable Corporation and subsidiaries (General Cable), are engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial and specialty and communications markets. As of December 31, 2002, General Cable operated 28 manufacturing facilities in eight countries and two regional distribution centers in North America in addition to the corporate headquarters in Highland Heights, Kentucky. 2. SUMMARY OF ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of General Cable Corporation and its wholly-owned subsidiaries. Investments in 50% or less owned joint ventures are accounted for under the equity method of accounting. Other non-current assets included an investment in a joint venture of $3.8 million at December 31, 2002. All transactions and balances among the consolidated companies have been eliminated. Certain reclassifications have been made to the prior year to conform to the current year's presentation. REVENUE RECOGNITION Revenue is recognized when goods are shipped and title passes to the customer. EARNINGS (LOSS) PER SHARE Earnings (loss) per common share and earnings (loss) per common share-assuming dilution are computed based on the weighted average number of common shares outstanding. Earnings per common share-assuming dilution are computed based on the weighted average number of common shares outstanding and the dilutive effect of stock options and restricted stock units outstanding. INVENTORIES Inventories are stated at the lower of cost or market value. The Company determines whether a lower of cost or market provision is required on a quarterly basis by computing whether inventory on hand, on a last-in first-out (LIFO) basis, can be sold at a profit based upon current selling prices less variable selling costs. No provision was required in 2002 or 2001. In the event that a provision is required in some future period, the Company will determine the amount of the provision by writing down the value of the inventory to the level where its sales, using current selling prices less variable selling costs, will result in a profit. General Cable values all its North American inventories and its non-North American metal inventories using the LIFO method and all remaining inventories using the first-in first-out (FIFO) method. As of January 1, 2001, General Cable changed its accounting method for its non-North American metal inventories from the FIFO method to the LIFO method. The impact of the change was an increase in operating income of $4.1 million, or $0.08 of earnings per share, on both a basic and a diluted basis during 2001. The Company believes that the change to the LIFO accounting method for its non-North American metal inventories more accurately reflects the impact of volatile raw material prices and conforms the accounting for all metal inventories. Because the December 31, 2000 non-North American metal inventories valued at FIFO is the opening LIFO inventory, there is neither a cumulative effect to January 1, 2001 nor proforma amounts of retroactively applying the change to LIFO. As of January 1, 2000, General Cable changed its accounting method for its North American non-metal inventories from the FIFO method to the LIFO method. The impact of the change was an increase in operating income of $6.4 million, or $0.12 of earnings per share on both a basic and diluted basis, during 2000. Because the December 31, 1999 North American non-metal inventories valued at FIFO is the opening LIFO inventory, there is neither a cumulative effect to January 1, 2000 nor proforma amounts of retroactively applying the change to LIFO. Previously General Cable had valued only the copper and aluminum components of its North American inventories using LIFO. The Company believes that the change to the LIFO accounting method for its North American non-metal inventories more accurately reflects the impact of both volatile raw material prices and ongoing cost productivity initiatives, conforms the accounting for all North American inventories and provides a more comparable basis of accounting with direct competitors in North America who are on LIFO for the majority of their inventories. F-7 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 2. SUMMARY OF ACCOUNTING POLICIES - (CONTINUED) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Costs assigned to property, plant and equipment relating to acquisitions are based on estimated fair values at that date. Depreciation is provided using the straight-line method over the estimated useful lives of the assets: new buildings, from 15 to 50 years; and machinery, equipment and office furnishings, from 3 to 15 years. Leasehold improvements are depreciated over the life of the lease. FAIR VALUE OF FINANCIAL INSTRUMENTS Financial instruments are defined as cash or contracts relating to the receipt, delivery or exchange of financial instruments. Except as otherwise noted, fair value approximates the carrying value of such instruments. FORWARD PRICING AGREEMENTS FOR PURCHASES OF COPPER AND ALUMINUM In the normal course of business, General Cable enters into forward pricing agreements for purchases of copper and aluminum to match certain sales transactions. At December 31, 2002 and 2001, General Cable had $89.9 million and $40.1 million, respectively, of future copper and aluminum purchases that were under forward pricing agreements. The fair market value of the forward pricing agreements was $87.1 million and $38.7 million at December 31, 2002 and 2001, respectively. General Cable expects to recover the cost of copper and aluminum under these agreements as a result of firm sales price commitments with customers. USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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. CONCENTRATION OF CREDIT RISK General Cable sells a broad range of products throughout primarily the United States, Canada, Europe and the Asia Pacific region. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers, including members of buying groups, composing General Cable's customer base. Ongoing credit evaluations of customers' financial condition are performed, and generally, no collateral is required. General Cable maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management's estimates. Certain subsidiaries also maintain credit insurance for certain customer balances. DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments are utilized to manage interest rate, commodity and foreign currency risk. General Cable does not hold or issue derivative financial instruments for trading purposes. Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting For Derivative Instruments and Hedging Activities," as amended, requires that all derivatives be recorded on the balance sheet at fair value. The accounting for changes in the fair value of the derivative depends on the intended use of the derivative and whether it qualifies for hedge accounting. SFAS No. 133, as applied to General Cable's risk management strategies, may increase or decrease reported net income, and stockholders' equity, or both, prospectively depending on changes in interest rates and other variables affecting the fair value of derivative instruments and hedged items, but will have no effect on cash flows or economic risk. See further discussion in Note 13. General Cable has entered into interest rate swap and collar agreements designed to hedge underlying debt obligations. During the first quarter of 2001, the Company incurred a cost of $4.2 million related to interest rate collars, which were terminated. F-8 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 2. SUMMARY OF ACCOUNTING POLICIES - (CONTINUED) Foreign currency and commodity contracts are used to hedge future sales and purchase commitments. Unrealized gains and losses on such contracts are recorded in other comprehensive income until the underlying transaction occurs and is recorded in the income statement at which point such amounts included in other comprehensive income are recorded into income which generally will occur over periods less than one year. ACCOUNTS RECEIVABLE SECURITIZATION The Company accounts for the securitization of accounts receivable in accordance with SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125." At the time the receivables are sold, the balances are removed from the Consolidated Balance Sheet. Costs associated with the transaction, primarily related to the discount and the one-time program implementation costs that were incurred in the second quarter of 2001, are included in interest income (expense) in the Consolidated Statement of Operations. This statement, which became effective for the Company during the second quarter of 2001, modifies certain standards for the accounting of transfers of financial assets and also requires expanded financial statement disclosures related to securitization activities. See further discussion in Note 7. STOCK-BASED COMPENSATION SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value. General Cable has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of the grant over the amount an employee must pay to acquire the stock. No compensation cost for stock options is reflected in net income, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.
YEAR ENDED DECEMBER 31, ------------------------------- 2002 2001 2000 ------ ------ ------ Net loss, as reported........................................................... $(24.0) $ (2.0) $(26.4) Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects.... (2.4) (5.7) (4.9) ------ ------ ------ Pro forma net loss.............................................................. $(26.4) $ (7.7) $(31.3) ====== ====== ====== Loss per share: Basic -- as reported......................................................... $(0.73) $(0.06) $(0.79) Basic -- pro forma........................................................... $(0.80) $(0.23) $(0.93) Diluted -- as reported....................................................... $(0.73) $(0.06) $(0.79) Diluted -- pro forma......................................................... $(0.80) $(0.23) $(0.93)
F-9 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 2. SUMMARY OF ACCOUNTING POLICIES - (CONTINUED) NEW STANDARDS In June 2001, the Financial Accounting Standards Board issued SFAS No. 141 "Business Combinations", SFAS No. 142 "Goodwill and Other Intangible Assets" and SFAS No. 143 "Accounting for Asset Retirement Obligations". SFAS No. 141 requires that all business combinations be accounted for under the purchase accounting method and that certain acquired intangible assets in a business combination be recognized as assets apart from goodwill. SFAS No. 142 requires that ratable amortization of goodwill be replaced with periodic tests of the goodwill's carrying value and that intangible assets other than goodwill should be amortized over their useful lives. SFAS No. 143 requires entities to establish liabilities for legal obligations associated with the retirement of tangible long-lived assets. In August 2001, SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" was issued. SFAS No. 144 addresses financial accounting and reporting for impairment of long-lived assets to be held and used, and of long-lived assets and components of an entity to be disposed of. The Company adopted SFAS 141, SFAS No. 142 and SFAS No. 144 as of January 1, 2002, as required. Additionally, SFAS No. 143 was adopted as of January 1, 2002, although it was not required until fiscal 2003. The adoption of these standards did not have a material impact on the consolidated financial condition, results of operations or cash flows of General Cable. In April 2002, SFAS No. 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections" was issued. SFAS No. 145 addresses financial accounting and reporting for the extinguishment of debt and accounting for leases. In June 2002, SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" was issued. SFAS No. 146 requires that costs associated with exit or disposal activities be recognized when the costs are incurred, rather than at a date of commitment to an exit or disposal plan. Implementation of SFAS No. 145 and SFAS No. 146 is required for fiscal 2003. Management does not believe the impact of adopting SFAS No. 145 and SFAS No. 146 will have a material impact on the consolidated financial condition, results of operations or cash flows of General Cable. In December of 2002, SFAS No. 148 "Accounting for Stock-Based Compensation -- Transition and Disclosure -- an amendment of FASB No. 123" was issued. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also requires additional disclosure about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. General Cable has elected to not implement the voluntary change to the fair value based method of accounting for stock-based employee compensation, however, the disclosure requirements have been implemented as required. In November 2002, FASB Interpretation (FIN) No. 45 "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" was issued. FIN 45 requires that as a company issues a guarantee, it must recognize a liability for the fair value of the obligations it assumes under that guarantee. Application of FIN 45 is required for guarantees issued or modified after December 31, 2002. The Company does not believe that the adoption of FIN 45 will have a material affect on its financial position, results of operations or cash flows. In January 2003, FIN No. 46 "Consolidation of Variable Interest Entities" was issued. FIN 46 is intended to achieve more consistent application of consolidation policies to variable interest entities. FIN 46 applies to all variable interest entities created after January 31, 2003 and it applies in the first fiscal period beginning after June 15, 2003 to variable interest entities acquired or created before February 1, 2003. The Company does not believe that the adoption of FIN 46 will have a material affect on its financial position, results of operations or cash flows. 3. ACQUISITIONS AND DIVESTITURES During 1999, the Company acquired the worldwide energy cable and cable systems businesses of Balfour Beatty plc, previously known as BICC plc, with operations in the United Sates, Canada, Europe, Africa, the Middle East and Asia Pacific (the Acquisition). The Acquisition was completed in three phases during 1999 for a total payment of $385.8 million. The Acquisition was accounted for as a purchase, and accordingly, the results of operations of the acquired businesses are included in the consolidated financial statements for periods after the respective closing dates. In December 1999, the Company decided to sell certain businesses due to their deteriorating operating performance. On February 9, 2000, the Company signed a definitive agreement with Pirelli Cavi e Sistemi, S.p.A., F-10 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 3. ACQUISITIONS AND DIVESTITURES - (CONTINUED) of Milan, Italy (Pirelli) for the sale of the stock of these businesses for a purchase price of $216.0 million, subject to closing adjustments. The closing adjustments included changes in net assets of the businesses sold since November 30, 1999, resulting from operating losses and other adjustments as defined in the sale agreement. The businesses sold were acquired from BICC plc during 1999 and consisted primarily of the operations in the United Kingdom, Italy and Africa and a joint venture interest in Malaysia. The businesses sold reported net sales of $383.4 million and a net loss of $73.2 million for 2000. Gross proceeds of $180.0 million were received during the third quarter of 2000 as a down payment against the final post-closing adjusted purchase price. Proceeds from the transaction were used to reduce the Company's outstanding debt. As a result of the sale to Pirelli, the Company recognized a $34.3 million charge in the third quarter of 2000. This charge was related to severance, transaction costs, warranty and other claims, the realization of the foreign exchange translation loss on the divested businesses that was previously charged directly to equity and $3.3 million write-off of unamortized bank fees due to the prepayment of indebtedness. During the third quarter of 2001, the final post-closing adjusted purchase price was agreed as $164.0 million resulting in the payment of $16.0 million to Pirelli. The Company had provided for a larger settlement amount and therefore $7.0 million of income was recorded in the third quarter of 2001. In September 2000, the Company acquired Telmag S.A. de C.V., a Mexico-based manufacturer of telecommunications cables, for $23.0 million. The acquisition brought in-house additional outside plant telecommunications cable capacity as well as provided available capacity for a broad range of telecommunications cables. In March 2001, the Company sold the shares of its Pyrotenax business unit to Raychem HTS Canada, Inc., a business unit of Tyco International, Ltd., for $60 million, subject to closing adjustments. The business unit, with operations in Canada and the United Kingdom, principally produced mineral insulated high-temperature cables. During the second quarter of 2002, the final post-closing adjusted purchase price was agreed and resulted in a payment to Tyco International, Ltd. of approximately $2 million during the third quarter of 2002. This payment plus other costs associated with settling the final purchase price was equal to the amount provided for in the Company's balance sheet. The proceeds from the transaction were used to reduce the Company's debt. In September 2001, the Company announced its decision to exit the retail cordsets business. As a result of this decision, the Company closed its Montoursville, Pennsylvania plant. This facility manufactured cordset products including indoor and outdoor extension cords, temporary lighting and extension cord accessories. In October 2001, the Company sold substantially all of the manufacturing assets and inventory of its building wire business to Southwire Company for $82 million of cash proceeds and the transfer to the Company of certain datacommunication cable manufacturing equipment. Under the building wire sale agreement, Southwire purchased the inventory and substantially all of the property, plant and equipment located at the Company's Watkinsville, Georgia and Kingman, Arizona facilities and the wire and cable manufacturing equipment at its Plano, Texas facility. General Cable retained and continues to operate its copper rod mill in Plano and closed its Plano wire mill. The assets sold were used in manufacturing building wire principally for the retail and electrical distribution markets. During the second quarter of 2002, the final purchase price for this transaction was agreed resulting in a deminimis cash payment to Southwire. Proceeds from the transaction have been used to reduce the Company's outstanding debt. Beginning in the third quarter of 2001, the Company has reported the Building Wire and Cordsets segment as discontinued operations for financial reporting purposes. Administrative expenses formerly allocated to this segment are now reported in continuing operations segments. Quarterly historical data for the first six months of 2001 has been restated to reflect this change. During the second quarter of 2002, General Cable formed a joint venture company to manufacture and market fiber optic cables. General Cable contributed assets, primarily inventory and machinery and equipment, to a subsidiary company, which was then contributed to the joint venture in exchange for a $10.2 million note receivable, which resulted in a $5.6 million, deferred gain on the transaction. The Company will recognize the gain as the note is repaid. At December 2002, other non-current assets included an investment in the joint venture of $3.9 million and a $10.2 million note receivable from the joint venture and other liabilities included a deferred gain from the initial joint venture formation of $5.6 million. F-11 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 4. CORPORATE OPERATING ITEMS Cost of sales and selling, general and administrative expense in the consolidated statement of operations included the following (in millions):
YEAR ENDED DECEMBER 31, ----------------------------------- 2002 2001 2000 -------- -------- -------- Cost of sales, excluding corporate items................................... $1,281.7 $1,403.7 $1,870.4 Closure of manufacturing plants........................................... 2.0 -- -- Disposal of inventory..................................................... -- 7.0 -- Charge related to assets contributed to joint venture..................... 3.6 -- -- -------- -------- -------- Corporate items........................................................... 5.6 7.0 -- -------- -------- -------- Cost of sales............................................................ $1,287.3 $1,410.7 $1,870.4 ======== ======== ======== Selling, general and administrative expenses, excluding corporate items.... $ 123.1 $ 139.6 $ 226.6 Loss (income) related to the divestiture to Pirelli....................... -- (7.0) 31.0 Gain from sale of Pyrotenax business...................................... -- (23.8) -- Closure of manufacturing plants........................................... 19.2 4.8 -- Divestiture of non-strategic business..................................... 1.7 5.5 -- Severance and severance related costs..................................... 6.9 16.5 -- Provision for other costs................................................. -- 0.8 -- -------- -------- -------- Corporate items........................................................... 27.8 (3.2) 31.0 -------- -------- -------- Selling, general and administrative expenses............................... $ 150.9 $ 136.4 $ 257.6 ======== ======== ======== Total Corporate Operating Items............................................ $ 33.4 $ 3.8 $ 31.0 ======== ======== ========
During 2002, the Company incurred $33.4 million of corporate charges, $5.6 million in cost of sales and $27.8 million in selling, general and administrative expense. These corporate charges included $21.2 million ($2.0 million in cost of sales and $19.2 million in selling, general and administrative expense) related to the closure of two of its seven North American plants that manufactured communications cables. In addition, $6.9 million was incurred for severance and related costs resulting from worldwide headcount reductions, $3.6 million was incurred to reduce to fair value certain assets contributed to the Company's fiber optic joint venture, and a $1.7 million loss was incurred on the sale of a non-strategic United Kingdom-based specialty cables business. During 2001, the Company incurred $3.8 million of corporate charges ($7.0 million in cost of sales and $3.2 million of income in selling, general and administrative expense). During the third quarter of 2001, the Company agreed with Pirelli on the final post-closing adjusted purchase price of the business sold in the third quarter of 2000. As a result of the final settlement, the Company recognized a $7.0 million pre-tax gain for the difference in the actual settlement and the amount provided for in the Company's balance sheet. The Company also completed the sale of its Pyrotenax business to Raychem HTS Canada, Inc., a business unit of Tyco International, Ltd. for proceeds of $60 million, subject to closing adjustments. After adjusting for the net cost of the assets sold and for the expenses associated with the transaction, the Company realized a pre-tax gain of $23.8 million. The Company also incurred charges for the closure of a manufacturing plant ($4.8 million), charges for severance and related costs resulting from a plan to reduce headcount throughout its worldwide operations ($16.5 million), a loss related to the sale of a non-strategic business which designs and manufactures extrusion tooling and accessories ($5.5 million), a charge related to the disposal of inventory as part of the Company's optimization of its distribution network ($7.0 million recorded in cost of sales) and a charge to provide for certain other costs ($0.8 million). During 2000, as a result of the sale of certain businesses to Pirelli, the Company recognized a $31.0 million charge. This charge was related to severance, transaction costs, warranty and other claims and the realization of the foreign exchange translation loss on the divested businesses that was previously charged directly to equity. F-12 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 5. OTHER INCOME During the second quarter of 2001, the Company recognized a non-recurring pre-tax gain of $8.6 million related to a foreign exchange gain on the extinguishment of long-term debt in the United Kingdom partially offset by costs of $0.5 million to close out foreign exchange contracts at one of the Company's international subsidiaries. 6. DISCONTINUED OPERATIONS On September 5, 2001, the Company announced its decision to sell its building wire business and to exit its retail cordsets business, the results of which have been reported as discontinued operations. Operating results of the discontinued operations were as follows (in millions):
YEAR ENDED DECEMBER 31, ------------------------------ 2002 2001 2000 ------ ------ ------ Net sales..................................................................... $ -- $352.9 $526.5 ====== ====== ====== Pre-tax loss from discontinued operations..................................... $ -- $(10.7) $(11.9) Income tax benefit............................................................ -- 3.9 4.2 Pre-tax loss on disposal of discontinued operations........................... (9.1) (50.6) -- Income tax benefit............................................................ 3.2 17.9 -- ------ ------ ------ Loss from discontinued operations...................................... $ (5.9) $(39.5) $ (7.7) ====== ====== ======
Administrative expenses formerly allocated to these businesses for segment reporting purposes have been reallocated to continuing operations. A portion of the Company's overall interest expense has been allocated to these businesses based upon the outstanding debt balance attributable to those operations. Taxes have been allocated using the same overall rate incurred by the Company in each of the periods presented. During the third quarter of 2001, the Company recorded a $50.6 million loss on disposal of discontinued operations. The components of this charge include $21.4 million related to the sale of the building wire business, $16.6 million for the closure of the Company's Montoursville, Pennsylvania facility, which manufactured retail cordsets, $10.6 million for the closure of four regional distribution centers and $2.0 million for other costs. During 2002, the Company recorded an additional $9.1 million pre-tax loss on disposal of discontinued operations. The components of this charge principally related to an estimated lower net realizable value for real estate remaining from the Company's former building wire business unit, a longer than anticipated holding period for three distribution centers with unexpired lease commitments and certain other costs. 7. ACCOUNTS RECEIVABLE ASSET-BACKED SECURITIZATION In May 2001, the Company completed an Accounts Receivable Asset-backed Securitization Financing transaction ("Securitization Financing"). The Securitization Financing provides for certain domestic trade receivables to be transferred to a wholly-owned, special purpose bankruptcy-remote subsidiary without recourse. This subsidiary in turn transferred the receivables to a trust, which issued, via private placement, floating rate five-year certificates in an initial amount of $145 million. In addition, a variable certificate component of up to $45 million for seasonal borrowings was also established as a part of the Securitization Financing. This variable certificate component will fluctuate based on the amount of eligible receivables. As a result of the building wire asset sale and the exit from the retail cordsets business, the Securitization Financing program was downsized to $80 million in the first quarter of 2002, through the repayment of a portion of the outstanding certificates. The repayment of the certificates was funded by the collection of the outstanding building wire and retail cordsets accounts receivable. The $45 million seasonal borrowing component was unaffected. Transfers of receivables under this program are treated as a sale and result in a reduction of total accounts receivable reported on the Company's consolidated balance sheet. In conjunction with the initial transaction, the Company incurred one-time charges of $4.2 million in the second quarter of 2001. The Company continues to service the transferred receivables and receives annual servicing fees from the special purpose subsidiary of approximately 1% of the average receivable balance. The market cost of servicing the receivables offset the servicing fee income and results in a servicing asset equal to zero. The Company's retained interest in the F-13 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 7. ACCOUNTS RECEIVABLE ASSET-BACKED SECURITIZATION - (CONTINUED) receivables are carried at their fair value, which is estimated as the net realizable value. The net realizable value considers the relatively short liquidation period and an estimated provision for credit losses. The provision for credit losses is determined based on specific identification of uncollectible accounts and the application of historical collection percentages by aging category. The receivables are not subject to prepayment risk. The key assumptions used in measuring the fair value of retained interests at the time of securitization were receivables days sales outstanding of 54 and interest rates on LIBOR based on borrowings of 4.92%. At December 31, 2002 and 2001, key assumptions and the sensitivity of the current fair value of the retained interest are as follows:
KEY IMPACT ON FAIR VALUE OF IMPACT ON FAIR VALUE OF ASSUMPTIONS 20% ADVERSE CHANGE 50% ADVERSE CHANGE ----------- ----------------------- ----------------------- December 31, 2002: Days sales outstanding................ 49 days $0.3 million $0.3 million Interest rate......................... 2.0% $0.3 million $0.3 million December 31, 2001: Days sales outstanding................ 51 days $0.1 million $0.3 million Interest rate......................... 2.5% $0.1 million $0.3 million
These sensitivities are hypothetical and should be used with caution. Changes in fair value based on a 20% and 50% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another, which might magnify or counteract sensitivities. At December 31, 2002 and 2001, the Company's retained interest in accounts receivable and off balance sheet financing, net of cash held in the trust, was $84.8 million and $48.5 million; and $83.1 million and $67.8 million, respectively. The effective interest rate in the Securitization Financing was approximately 2.0% and 2.5% at December 31, 2002 and 2001, respectively. In 2002, proceeds from new sales totaled $1,067.6 million and cash collections reinvested totaled $1,030.8 million. In 2001, proceeds from new sales totaled $1,258.6 million and cash collections reinvested totaled $1,044.4 million. The portfolio of accounts receivable that the Company services totaled approximately $130 million and $150 million at December 31, 2002 and 2001, respectively. 8. INVENTORIES Inventories consisted of the following (in millions):
DECEMBER 31, ------------------- 2002 2001 ------ ------ Raw materials..................................................................... $ 26.1 $ 36.7 Work in process................................................................... 33.2 41.9 Finished goods.................................................................... 199.0 236.8 ------ ------ $258.3 $315.4 ====== ======
At December 31, 2002 and December 31, 2001, $214.3 million and $274.1 million, respectively, of inventories were valued using the LIFO method. Approximate replacement costs of inventories valued using the LIFO method totaled $198.1 million at December 31, 2002 and $248.7 million at December 31, 2001. If in some future period, the Company was not able to recover the LIFO value of its inventory at a profit when replacement costs were lower than the LIFO value of the inventory, the Company would be required to take a charge to recognize in its income statement all or a portion of the higher LIFO value of the inventory. During 2002, the Company reduced its inventory by approximately $62 million resulting in a $2.5 million LIFO charge since LIFO inventory quantities were reduced in a period when replacement costs were lower than the LIFO value of inventory. F-14 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 9. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in millions):
DECEMBER 31, ------------------- 2002 2001 -------- -------- Land ......................................... $ 25.1 $ 22.8 Buildings and leasehold improvements ......... 53.2 53.4 Machinery, equipment and office furnishings .. 348.5 302.7 Construction in progress ..................... 32.5 49.6 -------- -------- 459.3 428.5 Less accumulated depreciation and amortization (136.0) (107.6) -------- -------- $ 323.3 $ 320.9 ======== ========
Depreciation expense totaled $28.1 million, $31.7 million and $52.0 million for the years ended December 31, 2002, 2001 and 2000, respectively. 10. ACCRUED LIABILITIES Accrued liabilities consisted of the following (in millions):
DECEMBER 31, ------------------ 2002 2001 -------- -------- Payroll related accruals ................ $ 16.7 $ 22.3 Accrued restructuring costs ............. 15.2 13.3 Customers' deposits and prepayments ..... 10.1 11.4 Customer rebates ........................ 6.6 8.5 Insurance claims and related expenses.... 8.0 8.4 Current deferred tax liability .......... 1.8 1.8 Other accrued liabilities ............... 40.8 47.9 -------- -------- $ 99.2 $ 113.6 ======== ========
11. RESTRUCTURING CHARGES Changes in accrued restructuring costs were as follows (in millions):
SEVERANCE FACILITY AND RELATED CLOSING COSTS COSTS TOTAL ----------- -------- ------- Original provisions ............... $ 29.8 $ 42.9 $ 72.7 Utilization ....................... (27.2) (32.2) (59.4) ------- ------- ------- Balance, December 31, 2001 ........ 2.6 10.7 13.3 Provisions ........................ 14.0 10.0 24.0 Utilization ....................... (12.2) (9.9) (22.1) ------- ------- ------- Balance, December 31, 2002 ........ $ 4.4 $ 10.8 $ 15.2 ======= ======= =======
F-15 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 11. RESTRUCTURING CHARGES - (CONTINUED) During 2001, provisions were recorded for $72.7 million of restructuring activities ($22.1 million in continuing operations and $50.6 million in discontinued operations). The $22.1 million continuing operations charge included $4.8 million for the closure of a manufacturing facility, which included $3.1 million for severance costs. The closed facility, located in Cass City, Michigan, employed approximately 175 associates and utilized approximately 100,000 square feet in the production of data communication products. The continuing operations charge also included $16.5 million for severance and related costs resulting from the worldwide headcount reduction of approximately 100 employees and $0.8 million for certain other costs. The $50.6 million discontinued operations charge related to the sale of the building wire business ($21.4 million), closure of a manufacturing facility that produced retail cordset products ($16.6 million), the elimination of four regional distribution centers ($10.6 million) and certain other costs ($2.0 million). During 2002, an additional $24.0 million of provisions were recorded ($14.9 million in continuing operations and $9.1 million in discontinued operations). The $9.1 million discontinued operations pre-tax charge principally related to an estimated lower net realizable value for real estate remaining from the Company's former building wire business, a longer than anticipated holding period for three distribution centers with unexpired lease commitments and certain other costs. The $14.9 million continuing operations charge included $6.9 million for severance and related costs resulting from worldwide headcount reductions of approximately 140 employees and $8.0 million related to costs to close two manufacturing facilities. The $8.0 million charge for the closure of manufacturing facilities included $5.6 million for severance and related costs. The closed manufacturing facilities, located in Monticello, Illinois and Sanger, California, employed approximately 200 associates and utilized more than 350,000 square feet in the production of service wire sold to the telecommunications industry and certain data communications cables. 12. LONG-TERM DEBT Long-term debt consisted of the following (in millions):
DECEMBER 31, --------------------- 2002 2001 -------- -------- Term loans ........................................ $ 337.4 $ 348.6 Revolving loans ................................... 78.2 80.4 Other ............................................. 36.3 31.4 -------- -------- 451.9 460.4 Less current maturities ........................... 40.8 39.4 -------- -------- $ 411.1 $ 421.0 ======== ======== Weighted average interest rates were as follows: Term loans ........................................ 6.5% 5.1% Revolving loans ................................... 6.3% 4.9% Other ............................................. 6.0% 6.0%
The estimated fair value of the Company's long-term debt at December 31, 2002 and 2001 was approximately equal to the carrying value at those dates because the majority of the Company's debt has variable interest rates. The Company's current credit facility was entered into in 1999 with one lead bank as administrative agent, and a syndicate of lenders. The facility, as amended and reduced by prepayments, consists of: 1) term loans in Dollars in an aggregate amount up to $307.3 million, 2) term loans in Dollars and foreign currencies in an aggregate amount up to $30.1 million and 3) revolving loans and letters of credit in Dollars and foreign currencies in an aggregate amount up to $200.0 million. Borrowings are secured by assets of the Company's North American operations and a portion of the stock of its non-North American subsidiaries and are also guaranteed by the Company's principal operating subsidiaries. The credit facility, as amended, restricts certain corporate acts and contains required financial ratios and other covenants. During 2001, the Company had repaid $208.8 million of term loans in advance of their scheduled repayment date. This amount includes the proceeds from the Building Wire sale, the Company's Securitization Financing and the Pyrotenax sale received during 2001. In conjunction with these F-16 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. LONG-TERM DEBT - (CONTINUED) reductions in the borrowing capacity of the facility, the Company recorded a $2.4 million charge to write-off a portion of its unamortized bank fees during 2001. Loans under the credit facility bear interest, at the Company's option, at (i) a spread over LIBOR or (ii) a spread over the Alternate Base Rate, which is defined as the higher of (a) the agent's Prime Rate, (b) the secondary market rate for certificates of deposit (adjusted for reserve requirements) plus 1% or (c) the Federal Funds Effective Rate plus 1/2 of 1%. A commitment fee accrues on the unused portion of the credit facility. The commitment fee is 50 basis points per annum and the spread over LIBOR on all loans under the facility ranges between 450 and 500 basis points per annum. Both the commitment fee and the spread over LIBOR are fixed for the life of the facility as a result of the October 2002 amendment (discussed below). In April 2002, the Company amended the credit facility to permit increased financial flexibility through March 2003. As a result of the amendment, the Company's spread over LIBOR increased by 25 basis points across all levels of its leverage-based pricing grid and a new leverage level was added to the pricing grid. One time fees and expenses associated with the amendment were $2.0 million and were being amortized over the one-year period of the amendment. In October 2002, the Company further amended its credit facility through March 2004. The amendment substantially relaxed the Company's financial covenants primarily in response to the ongoing weakness in the Communications segment. Among other provisions, the amendment adjusted the size of the Company's revolving credit facility to $200 million from $250 million, added a new financial covenant tied to minimum quarterly earnings levels and established a contingent payment of approximately $5.5 million to lenders if the total facility commitments are not reduced by at least $100 million by December 15, 2003. As part of the amendment, the Company suspended its quarterly cash dividend of $0.05 per common share for the term of the amendment. One-time costs of approximately $4 million were incurred for the amendment and will be amortized over the life of the amendment. The Company will also incur incremental annualized interest costs of approximately $4 million during the amendment period as a result of increased credit spreads. Future compliance with financial covenants will be dependent upon a number of factors, including overall economic activity, future conditions in the Company's principal end markets and the Company's future borrowing requirements. As a result of the completion of the October 2002 amendment, the Company wrote-off the remaining unamortized fees ($1.1 million) associated with the April 2002 amendment in the fourth quarter of 2002. The Company also wrote-off $0.5 million of unamortized bank fees in the fourth quarter of 2002 as a result of the $50 million reduction in the size of the revolving credit facility. At December 31, 2002, maturities of long-term debt during each of the years 2003 through 2007 are $40.8 million, $32.9 million, $71.6 million, $134.4 million and $163.2 million, respectively, and $9.0 million thereafter. 13. FINANCIAL INSTRUMENTS General Cable is exposed to various market risks, including changes in interest rates, foreign currency and commodity prices. To manage risk associated with the volatility of these natural business exposures, General Cable enters into interest rate, commodity and foreign currency derivative agreements as well as copper and aluminum forward purchase agreements. General Cable does not purchase or sell derivative instruments for trading purposes. General Cable has utilized interest rate swaps and interest rate collars to manage its interest expense exposure by fixing its interest rate on a portion of the Company's floating rate debt. Under the swap agreements, General Cable will typically pay a fixed rate while the counterparty pays to General Cable the difference between the fixed rate and the three-month LIBOR rate. F-17 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 13. FINANCIAL INSTRUMENTS - (CONTINUED) During 1999, the Company entered into certain interest rate derivative contracts for hedging of the credit facility floating interest rate risk covering $375.0 million of the Company's debt. The net effect of the hedging program was to provide a collar between approximately 5.4% and 8.5% within which the Company's LIBOR rates on a portion of the credit facility could move and which was at no cost to the Company. The Company entered into these three-year agreements with members of the lending group. In March 2001, the Company incurred a cost of $4.2 million to terminate these interest rate collars. During 2001, the Company entered into several new interest rate swaps which effectively fixed interest rates for borrowings under the credit facility and other debt. At December 31, 2001, General Cable had interest rate swaps, which effectively fixed interest rates for $425.0 million of borrowings under the credit facility and $9.0 million of other debt. The swaps outstanding as of December 31, 2002 were as follows (dollars in millions):
NOTIONAL INTEREST INTEREST RATE DERIVATIVES PERIOD AMOUNTS RATE RANGE - ------------------------- ----------------------------- -------- ------------ Interest Rate Swap................................ December 2001 to October 2011 $ 9.0 4.49% Forward Starting Interest Rate Swaps.............. January 2003 to December 2004 $200.0 4.60 - 4.74%
The Company does not provide or receive any collateral specifically for these contracts. However, all counterparties are members of the lending group and as such participate in the collateral of the credit agreement and are significant financial institutions. The fair value of interest rate derivatives are based on quoted market prices and third-party provided calculations, which reflect the present values of the difference between estimated future variable-rate receipts and future fixed-rate payments. At December 31, 2002 and 2001, the carrying value was $7.4 million and $5.7 million, respectively. The Company enters into forward exchange contracts principally to hedge the currency fluctuations in certain transactions denominated in foreign currencies, thereby limiting the Company's risk that would otherwise result from changes in exchange rates. Principal transactions hedged during the year were firm sales and purchase commitments. The fair value of foreign currency contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. At December 31, 2002 and 2001, the net unrealized gain (loss) on the net foreign currency contracts was $0.7 million and $(0.2) million, respectively. However, since these contracts hedge forecasted foreign currency denominated transactions, and have been designated cash flow hedges, any change in the fair value of the contracts would be recorded in other comprehensive income until the hedged transaction was reflected in the income statement which is generally expected to occur in less than one year. Outside of North America, General Cable enters into commodity futures for purchase of copper and aluminum for delivery in a future month to match certain sales transactions. At December 31, 2002 and 2001, General Cable had an unrealized loss of $0.1 million and $0.2 million, respectively, on the commodity futures, which have been designated as cash flow hedges, and have been recorded in other comprehensive income until the hedged transaction is reflected in the income statement, which is generally expected to occur in less than one year. The notional amounts and fair values of these financial instruments at December 31, 2002 and 2001, are shown below (in millions). The carrying amount of the financial instruments was a liability of $(6.8) million at December 31, 2002 and $(6.1) million at December 31, 2001. F-18 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 13. FINANCIAL INSTRUMENTS - (CONTINUED)
2002 2001 ------------------ -------------------- NOTIONAL FAIR NOTIONAL FAIR AMOUNT VALUE AMOUNT VALUE -------- ----- -------- ----- Interest rate swaps............................................. $ 9.0 $(0.9) $ 284.0 $(5.7) Forward starting interest rate swaps............................ 200.0 (6.5) 625.0 -- Foreign currency contracts...................................... 29.5 0.7 28.5 (0.2) Commodity futures............................................... 9.2 (0.1) 8.0 (0.2) ----- ----- $(6.8) $(6.1) ===== =====
In the normal course of business, General Cable enters into forward pricing agreements for the purchase of copper and aluminum for delivery in a future month to match certain sales transactions. At December 31, 2002 and 2001, General Cable had an unrealized loss of $2.8 million and $1.4 million, respectively. General Cable expects to recover the unrealized loss under these agreements as a result of firm sales price commitments with customers. 14. INCOME TAXES The provision (benefit) for income taxes attributable to continuing operations consisted of the following (in millions):
YEAR ENDED DECEMBER 31, ----------------------------------- 2002 2001 2000 ------- ------ ------- Current tax expense (benefit): Federal.................................................................. $ (13.8) $ 4.1 $ (18.8) State.................................................................... 0.1 0.1 (1.1) Foreign.................................................................. 6.8 11.3 9.4 Deferred tax expense (benefit): Federal.................................................................. (6.9) 0.5 (6.0) State.................................................................... 2.9 1.0 (0.7) Foreign.................................................................. 1.0 3.6 6.9 ------- ------ ------- $ (9.9) $ 20.6 $ (10.3) ======= ====== =======
The income tax benefit attributable to the operations and disposal of discontinued operations was $3.2 million, $21.8 million, and $4.2 million for 2002, 2001 and 2000 respectively. The reconciliation of reported income tax expense (benefit) to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations is as follows (in millions):
YEAR ENDED DECEMBER 31, ---------------------------------- 2002 2001 2000 ------ ------ ------- Statutory federal income tax............................................... $ (9.8) $ 20.3 $ (10.1) State, foreign and Foreign Sales Corporation income tax differential....... 0.8 (0.3) (0.6) Other, net................................................................. (0.9) 0.6 0.4 ------ ------ ------- $ (9.9) $ 20.6 $ (10.3) ====== ====== =======
F-19 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 14. INCOME TAXES - (CONTINUED) The components of deferred tax assets and liabilities were as follows (in millions):
DECEMBER 31, ------------------- 2002 2001 ------ ------ Deferred tax assets: Net operating loss carryforwards......................................................... $ 74.7 $ 76.5 Pension and retiree benefits accruals................................................... 18.1 2.3 Asset and rationalization reserves...................................................... 5.1 5.1 Inventory reserves...................................................................... 4.0 5.1 Capital loss carryforwards.............................................................. 1.1 4.1 Tax credit carryforwards................................................................ 7.7 3.8 Other liabilities....................................................................... 14.4 19.9 Valuation allowance..................................................................... (19.2) (5.6) ------ ------ Total deferred tax assets............................................................. 105.9 111.2 Deferred tax liabilities: Inventory............................................................................... 6.1 1.5 Depreciation and fixed assets........................................................... 23.2 21.9 ------ ------ Net deferred tax assets................................................................... $ 76.6 $ 87.8 ====== ======
As of December 31, 2002, the Company has recorded a valuation allowance for its U.S. foreign tax credit and capital loss carryforwards, its state net operating loss carryforwards, and a portion of its foreign net operating loss carryforwards due to uncertainties regarding the ability to obtain future tax benefits for these tax attributes. The December 31, 2002 valuation allowance of $19.2 million increased $13.6 million from the prior year. The December 31, 2001 valuation allowance of $5.6 million decreased $4.7 million from December 31, 2000. A portion of the Company's 2002 U.S. net operating loss will be carried back to obtain a tax refund of $13.8 million in 2003. The $13.8 million tax refund is included within prepaid expenses and other in the December 31, 2002 consolidated balance sheet. The Company also generated U.S. net operating loss carryforwards of $55.2 million in 2000 and $57.9 million in 2002, which expire in 2020 and 2022, respectively. The 2001 U.S. net operating loss, which was reflected as a carryforward in the 2001 financial statements, was carried back instead to obtain a $37.0 million tax refund in 2002 as a result of a 2002 U.S. tax law change enabling a five year carryback of net operating losses. The Company also has other U.S. net operating loss carryforwards that are subject to an annual limitation under Internal Revenue Code Section 382. These Section 382 limited net operating loss carryforwards expire in varying amounts from 2006-2009. The total Section 382 limited net operating loss carryforward that may be utilized prior to expiration is estimated at $53.9 million. The Company also has approximately $22.3 million of net operating loss carryforwards in various foreign jurisdictions. A valuation allowance has been established against $20.7 million of these foreign net operating losses due to the uncertainty of utilization prior to expiration. The major component of the Company's $7.7 million of tax credit carryforwards is $6.5 million of U.S. alternative minimum tax credits, which have no expiration date. $3.1 million of these alternative minimum tax credit carryforwards are also subject to Section 382 limitations. Undistributed earnings of foreign subsidiaries that are considered to be reinvested indefinitely are approximately $77 million. F-20 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 15. PENSION PLANS General Cable provides retirement benefits through contributory and noncontributory pension plans for the majority of its regular full-time employees. Pension expense under the defined contribution plans sponsored by General Cable in the United States equaled four percent of each eligible employee's covered compensation. In addition, General Cable sponsors employee savings plans under which General Cable may match a specified portion of contributions made by eligible employees. Benefits provided under defined benefit pension plans sponsored by General Cable are generally based on years of service multiplied by a specific fixed dollar amount. Contributions to these pension plans are based on generally accepted actuarial methods, which may differ from the methods used to determine pension expense. The amounts funded for any plan year are neither less than the minimum required under federal law nor more than the maximum amount deductible for federal income tax purposes. Pension plan assets consist of various fixed-income investments and equity securities. Net pension expense included the following components (in millions):
YEAR ENDED DECEMBER 31, --------------------------------- 2002 2001 2000 ------ ------- ------ Service cost............................................................... $ 2.1 $ 2.6 $ 2.8 Interest cost.............................................................. 9.1 8.4 8.7 Expected return on plan assets............................................. (10.2) (10.9) (11.1) Net amortization and deferral.............................................. 1.0 0.7 0.8 ------ ------- ------ Net defined benefit pension expense...................................... 2.0 0.8 1.2 Net defined contribution pension expense................................... 5.7 7.2 6.9 ------ ------- ------ Total pension expense.................................................... $ 7.7 $ 8.0 $ 8.1 ====== ======= ======
The changes in the benefit obligation and plan assets, the funded status of the plan and the amounts recognized in the Consolidated Balance Sheets at December 31, 2002 and 2001 were as follows (in millions):
2002 2001 ------- ------- Changes in Benefit Obligation: Beginning benefit obligation........................................................... $ 124.1 $ 122.1 Acquisitions (divestitures)............................................................ 6.3 (2.4) Service cost........................................................................... 2.1 2.6 Interest cost.......................................................................... 9.1 8.4 Curtailment gain....................................................................... (1.9) (1.3) Special termination benefits........................................................... 0.1 1.1 Benefits paid.......................................................................... (12.3) (10.8) Amendments............................................................................. 0.1 2.3 Assumption change...................................................................... 10.3 4.8 Actuarial (gain) loss.................................................................. 3.1 (2.7) ------- ------- Ending benefit obligation............................................................. $ 141.0 $ 124.1 ======= ======= Changes in Plan Assets: Beginning fair value of plan assets.................................................... $ 111.9 $ 116.6 Acquisitions (divestitures)............................................................ 6.9 (2.4) Actual return (loss) on plan assets.................................................... (20.6) 5.9 Company contributions.................................................................. 3.0 2.6 Benefits paid.......................................................................... (12.3) (10.8) ------- ------- Ending fair value of plan assets...................................................... $ 88.9 $ 111.9 ======= =======
F-21 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 15. PENSION PLANS - (CONTINUED)
2002 2001 ------- ------- Reconciliation of Funded Status: Funded status of the plan.............................................................. $ (52.1) $ (12.2) Unrecognized net transition obligation................................................. 0.5 0.5 Unrecognized actuarial (gain) loss..................................................... 49.3 7.6 Unrecognized prior service cost........................................................ 10.1 11.3 ------- ------- Prepaid pension cost.................................................................. $ 7.8 $ 7.2 ======= ======= Amounts Recognized in Consolidated Balance Sheet: Prepaid pension cost................................................................... $ 0.6 $ 11.5 Accrued pension liability.............................................................. (44.6) (10.9) Intangible asset....................................................................... 5.1 4.3 Accumulated other comprehensive income................................................. 46.7 2.3 ------- ------- Net amount recognized................................................................. $ 7.8 $ 7.2 ======= =======
The curtailment gain and special termination benefits in 2002 and 2001 were the result of closing and selling certain manufacturing locations. The divestitures in 2001 are related to the sale of the Pyrotenax business to Tyco International, Ltd. In 2002, the acquisition amounts are related to the recording of pension obligations for individuals located in the United Kingdom. These pension obligations were expected to transfer to Tyco International, Ltd. after completion of the Pyrotenax sale, however, these individuals either retired during the pension obligation valuation period or elected to stay in the General Cable United Kingdom based defined benefit pension plan. The weighted average rate assumptions used in determining pension costs and the benefit obligations were:
2002 2001 2000 ---- ---- ---- Discount rate............................................................ 6.5% 7.25% 7.75% Expected rate of increase in future compensation levels.................. 4.0% 4.0% 4.5% Long-term rate of return on plan assets.................................. 9.0% 9.5% 9.5%
The projected benefit obligation and accumulated benefit obligation for the pension plans with accumulated benefit obligations in excess of plan assets were $136.5 million and $129.9 million at December 31, 2002, and $15.6 million and $11.9 million at December 31, 2001. 16. POST-RETIREMENT BENEFITS OTHER THAN PENSIONS General Cable has post-retirement benefit plans that provide medical and life insurance for certain retirees and eligible dependents. General Cable funds the plans as claims or insurance premiums are incurred. Net post-retirement benefit expense (income) included the following components (in millions):
YEAR ENDED DECEMBER 31, ------------------------------ 2002 2001 2000 ------ ------ ----- Service cost......................................................... $ 0.3 $ 0.3 $ 0.3 Interest cost........................................................ 0.7 0.7 0.7 Amortization of prior service cost................................... (0.7) (0.8) (0.8) Curtailment loss (gain).............................................. 0.2 (0.4) (1.2) ------ ------ ----- Net post-retirement benefit expense (income)....................... $ 0.5 $ (0.2) $(1.0) ====== ====== =====
The curtailment loss (gain) was the result of closing certain manufacturing locations in 2002 and 2001 and the result of the elimination of certain retiree benefits in 2000. F-22 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 16. POST-RETIREMENT BENEFITS OTHER THAN PENSIONS - (CONTINUED) The change in the accrued post-retirement benefit liability was as follows (in millions):
2002 2001 ------ ------ Beginning benefit obligation balance........................................ $ 11.4 $ 12.8 Divestiture................................................................. -- (0.4) Net periodic benefit expense (income)....................................... 0.5 (0.2) Benefits paid............................................................... (1.1) (0.8) ------ ------ Ending benefit obligation balance........................................... $ 10.8 $ 11.4 ====== ======
The discount rate used in determining the accumulated post-retirement benefit obligation was 6.5% for the year ended December 31, 2002, 7.25% for the year ended December 31, 2001 and 7.75% for the year ended December 31, 2000. The assumed health-care cost trend rate used in measuring the accumulated post-retirement benefit obligation was 9.0%, decreasing gradually to 4.75% in year 2008 and thereafter. Changing the assumed health-care cost trend rate by 1% would result in a change in the accumulated post-retirement benefit obligation of $0.7 million for 2002. The effect of this change would affect net post-retirement benefit expense by $0.1 million. 17. EQUITY COMPENSATION PLANS The following table sets forth information about General Cable's equity compensation plans as of December 31, 2002 (in thousands, except per share price):
NUMBER OF SECURITIES NUMBER OF REMAINING AVAILABLE FOR SECURITIES TO BE WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER ISSUED UPON EXERCISE EXERCISE PRICE EQUITY COMPENSATION PLANS OF OUTSTANDING OF OUTSTANDING (EXCLUDING SECURITIES OPTIONS OPTIONS REFLECTED IN FIRST COLUMN) -------------------- ---------------- -------------------------- Shareholder approved plans: 1997 Stock Incentive Plan (a)... 1,977 $ 14.76 1,107 Non-shareholder approved plans: 2000 Stock Option Plan.......... 766 10.45 676 ----- ------- ----- Total............................... 2,743 $ 13.55 1,783 ===== ======= =====
(a) Excludes matching restricted stock units (MRSU) and restricted stock of 214,707 and 1,024,000, respectively, awarded through December 31, 2002. The 1997 Stock Incentive Plan authorizes a maximum of 4,725,000 shares, options or units of Common Stock to be granted. Stock options are granted to employees selected by the Compensation Committee of the Board or the Chief Executive Officer at prices, which are not less than the closing market price on the date of grant. The Compensation Committee (or Chief Executive Officer) has authority to set all the terms of each grant. The majority of the options granted under the plan expire in 10 years and become fully exercisable ratably over three years of continued employment or become fully exercisable after three years of continued employment. Restrictions on the majority of shares awarded to employees under the plan expire ratably over a three-year period or expire after six years from the date of grant. Restricted stock units were awarded to employees in November 1998 as part of a Stock Loan Incentive Plan. See further discussion in Note 19. The 2000 Stock Option Plan as amended authorizes a maximum of 1,500,000 non-incentive options to be granted. No other forms of award are authorized under this plan. Stock options are granted to employees selected by the Compensation Committee of the Board or the Chief Executive Officer at prices, which are not less than the closing market price on the date of grant. The Compensation Committee (or Chief Executive Officer) has authority to set all the terms of each grant. The majority of the options granted under the plan expire in 10 years and become fully exercisable ratably over three years of continued employment or become fully exercisable after three years of continued employment. F-23 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 18. STOCK OPTIONS General Cable applies Accounting Principles Board Opinion No. 25 and related Interpretations in accounting for stock options issued under its 1997 Stock Incentive Plan and its 2000 Stock Option Plan. Accordingly, no compensation cost has been recognized for stock option grants under the plans. If compensation cost for General Cable's stock option grants had been determined based on the fair value at the grant dates for awards under the plans consistent with the method of SFAS No. 123, the proforma net loss would have been as follows (in millions except per share amounts):
YEAR ENDED DECEMBER 31, ----------------------------------- 2002 2001 2000 ------ ------ ------ Net loss, as reported.................................................... $(24.0) $ (2.0) $(26.4) Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects... (2.4) (5.7) (4.9) ------ ------ ------ Pro forma net loss....................................................... $(26.4) $ (7.7) $(31.3) ====== ====== ====== Loss per share: Basic -- as reported.................................................. $(0.73) $(0.06) $(0.79) Basic -- pro forma.................................................... $(0.80) $(0.23) $(0.93) Diluted -- as reported................................................ $(0.73) $(0.06) $(0.79) Diluted -- pro forma.................................................. $(0.80) $(0.23) $(0.93)
These proforma amounts may not be representative of future disclosures because the estimated fair value of stock options is amortized to expense over the vesting period, and additional options may be granted in future years. In determining the proforma amounts above, the fair value of each option was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
2002 2001 2000 ------ ------ ------ Risk-free interest rate.................................................. 3.2% 5.1% 6.3% Expected dividend yield.................................................. 1.5% 3.0% 3.0% Expected option life..................................................... 6.5 years 6.5 years 6.5 years Expected stock price volatility.......................................... 95.7% 66.1% 69.5% Weighted average fair value of options granted........................... $9.58 $6.09 $4.92
A summary of option information for the years ended December 31, 2002, 2001 and 2000 follows (options in thousands):
WEIGHTED AVERAGE OPTIONS EXERCISE OUTSTANDING PRICE ----------- -------- Balance at December 31, 1999............................... 2,567 $ 16.75 Granted.................................................. 885 9.00 Forfeited................................................ (248) 15.03 ----- ------- Balance at December 31, 2000............................... 3,204 14.74 Granted.................................................. 623 7.83 Exercised................................................ (184) 11.34 Forfeited................................................ (419) 13.22 ----- ------- Balance at December 31, 2001............................... 3,224 13.75 Granted.................................................. 641 13.39 Exercised................................................ (265) 8.99 Forfeited................................................ (857) 15.47 ----- ------- Balance at December 31, 2002............................... 2,743 $ 13.55 ===== =======
F-24 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 18. STOCK OPTIONS - (CONTINUED) The following table summarizes information about stock options outstanding at December 31, 2002 (options in thousands):
WEIGHTED AVERAGE WEIGHTED REMAINING WEIGHTED RANGE OF OPTIONS AVERAGE CONTRACTUAL OPTIONS AVERAGE OPTION PRICES OUTSTANDING EXERCISE PRICE LIFE EXERCISABLE EXERCISE PRICE - ------------- ----------- -------------- ----------- ----------- -------------- $7 - $14 2,126 $11.50 6.9 1,020 $11.96 $14 - $21 175 $14.31 6.6 163 $14.17 $21 - $28 443 $23.11 5.6 429 $23.08
As of December 31, 2002, 2001 and 2000, there were 1,612,000, 2,120,000 and 1,706,000 exercisable stock options, respectively. 19. SHAREHOLDERS' EQUITY General Cable is authorized to issue 75 million shares of common stock and 25 million shares of preferred stock. The table below summarizes information about restricted stock awarded during the following years:
2001 2000 -------- ------ Number of shares awarded.......................................................... 357,500 9,257 Fair value of shares at date issued (in millions)................................. $ 2.7 $ 0.1
There was no restricted stock awarded during 2002. During the first quarter of 2001, 355,500 shares of restricted common stock with performance accelerated vesting features were awarded to certain senior executives under the Company's 1997 Stock Incentive Plan as amended (the "Plan"). Under the terms of the Plan, the Company can award restricted common stock to executives and key employees with such features. The restricted shares vest six years from the date of grant unless certain performance criteria are met. The performance measure used to determine vesting is the Company's stock price. The stock price targets must be sustained for 20 business days in order to trigger accelerated vesting. During the second quarter of 2001, as a result of the achievement of performance criteria, restrictions on 50% of the stock expired and the Company recognized accelerated amortization of $1.2 million. Restrictions on the majority of the shares issued during 2000 will expire ratably over a three-year period. Amortization of all outstanding restricted stock awards was $0.1 million, $2.1 million and $2.0 million during 2002, 2001 and 2000, respectively. In November 1998, General Cable entered into a Stock Loan Incentive Plan (SLIP) with executive officers and key employees. Under the SLIP, the Company loaned $6.0 million to facilitate open market purchases of General Cable Common Stock. The loans are evidenced by notes that bear interest at 5.12% and mature in November 2003. A matching restricted stock unit (MRSU) was issued for each share of stock purchased under the SLIP. The MRSUs generally vest after five years of continuous employment. If the vesting requirements are met, one share of General Cable Common Stock will be issued in exchange for each MRSU. The fair value of the MRSUs at the grant date of $6.0 million, adjusted for subsequent forfeitures, is being amortized to expense over the five-year vesting period. There are 214,707 MRSUs outstanding as of December 31, 2002. Amortization expense related to the MRSUs was $0.9 million, $0.2 million and $1.1 million during 2002, 2001 and 2000 respectively. F-25 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 19. SHAREHOLDERS' EQUITY - (CONTINUED) The components of accumulated other comprehensive income (loss) consisted of the following (in millions):
DECEMBER 31, ---------------------- 2002 2001 ------ ------ Foreign currency translation adjustment................................................. $ (9.5) $(20.7) Pension adjustments, net of tax......................................................... (30.6) (1.4) Change in fair value of derivatives, net of tax......................................... (4.2) (3.7) Unrealized investment (losses) gains.................................................... (0.3) 0.1 ------ ------ $(44.6) $(25.7) ====== ======
20. EARNINGS (LOSS) PER COMMON SHARE OF CONTINUING OPERATIONS A reconciliation of the numerator and denominator of earnings (loss) per common share of continuing operations to earnings (loss) per common share of continuing operations assuming dilution for the years ended December 31, is as follows (in millions):
2002 2001 2000 ------- ------ ------ Earnings (loss) from continuing operations per common share: Income (loss) from continuing operations(1)....................................... $(18.1) $ 37.5 $(18.7) Weighted average shares outstanding(2)............................................ 33.0 32.8 33.6 Earnings (loss) from continuing operations per common share........................ $(0.55) $ 1.14 $(0.56) Earnings (loss) from continuing operations per common share -- assuming dilution: Income (loss) from continuing operations(1)....................................... $(18.1) $ 37.5 $(18.7) Weighted average shares outstanding............................................... 33.0 32.8 33.6 Dilutive effect of stock options and restricted stock units....................... -- 0.3 -- ------- ------ ------ Total shares(2)................................................................... 33.0 33.1 33.6 Earnings (loss) from continuing operations per common share -- assuming dilution........................................................................ $(0.55) $ 1.13 $(0.56)
- --------------- (1) Numerator (2) Denominator The earnings (loss) per common share -- assuming dilution computation excludes the impact of 2.7 million, 3.0 million and 2.3 million stock options and restricted stock units in 2002, 2001 and 2000, respectively, because their impact was anti-dilutive. 21. SEGMENT INFORMATION General Cable has three reportable operating segments: the Energy Group, the Industrial & Specialty Group and the Communications Group. These segments are strategic business units organized around three product categories that follow management's internal organization structure. Beginning in the third quarter of 2001, the Company has reported the Building Wire and Cordsets segment as discontinued operations for financial reporting purposes. The Energy Group manufactures and sells wire and cable products that include low-, medium- and high-voltage power distribution and power transmission products. The Industrial & Specialty Group manufactures and sells wire and cable products that conduct electrical current for industrial and commercial power and control F-26 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 21. SEGMENT INFORMATION - (CONTINUED) applications. The Communications Group manufactures and sells wire and cable products that transmit low-voltage signals for voice, data, video and control applications. Segment net sales represent sales to external customers. Segment operating income represents profit from continuing operations before interest income, interest expense, other financial costs or income taxes. The operating loss included in corporate for 2002 consisted of $21.2 million related to the closure of two manufacturing plants, a $1.7 million loss on the sale of a non-strategic United Kingdom-based specialty cables business, a $3.6 million charge to reduce to fair value certain assets contributed to the Company's Fiber Optic joint venture, and $6.9 million for severance and related costs for headcount reductions of approximately 140 employees worldwide. The operating loss in corporate for 2001 consisted of a pre-tax gain of $7.0 million related to the divestiture of assets to Pirelli, a pre-tax gain of $23.8 million from the sale of the Pyrotenax business, $4.8 million for the closure of a manufacturing plant, $16.5 million in severance and related charges for a plan to reduce headcount throughout its worldwide operations by approximately 100 employees, $5.5 million loss related to the sale of a non-strategic business which designs and manufactures extrusion tooling and accessories, $7.0 million related to the disposal of inventory as part of the Company's optimization of its distribution network and $0.8 million for certain other costs. The corporate operating loss for 2000 represents the loss on the sale of certain businesses to Pirelli. See further discussion of corporate charges in Note 4. Depreciation on corporate property has been allocated to the operating segments. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies (see Note 2). The Company has recorded the operating items discussed in Note 4 in the Corporate Segment rather than reflect such items in the Energy, Industrial & Specialty or Communications Segments operating income. These items are reported in the Corporate Segment because they are not considered in the operating performance evaluation of the Energy, Industrial & Specialty or Communications Segment by the Company's chief operating decision-maker, its Chief Executive Officer. Corporate assets included cash, deferred income taxes, property, certain prepaid expenses and other current and non-current assets as well as the identifiable assets of the discontinued operations. Capital expenditures and depreciation expense included in the corporate column represent the discontinued operations. Summarized financial information for the Company's operating segments for the years ended December 31, is as follows (in millions). Certain reclassifications have been made to the prior year to conform to the current year segment presentation.
ENERGY INDUSTRIAL & COMMUNICATIONS GROUP SPECIALTY GROUP GROUP CORPORATE TOTAL -------- --------------- -------------- --------- -------- Net Sales: 2002 .............. $ 516.0 $ 499.4 $ 438.5 $ -- $1,453.9 2001 .............. 521.8 537.6 592.0 -- 1,651.4 2000 .............. 733.6 796.7 631.8 -- 2,162.1 Operating Income: 2002 .............. 36.9 9.7 2.5 (33.4) 15.7 2001 .............. 35.3 24.3 48.5 (3.8) 104.3 2000 .............. (24.4) 29.7 59.8 (31.0) 34.1 Identifiable Assets: 2002 .............. 229.1 289.9 318.3 136.0 973.3 2001 .............. 210.3 287.7 370.6 136.7 1,005.3 2000 .............. 183.6 374.4 340.1 421.1 1,319.2 Capital Expenditures: 2002 .............. 9.9 13.4 8.1 -- 31.4 2001 .............. 17.0 12.1 24.0 1.8 54.9 2000 .............. 27.3 12.0 13.0 3.7 56.0 Depreciation Expense: 2002 .............. 3.8 8.5 15.8 -- 28.1 2001 .............. 3.5 7.5 15.1 5.6 31.7 2000 .............. 17.7 9.4 17.1 7.8 52.0
F-27 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 21. SEGMENT INFORMATION - (CONTINUED) The following table presents revenues by geographic region based on the location of the use of the product or services for the years ended December 31 (in millions):
2002 2001 2000 -------- -------- -------- United States......................... $1,023.3 $1,146.9 $1,287.2 Europe................................ 314.7 321.2 615.4 Rest of World......................... 115.9 183.3 259.5 -------- -------- -------- $1,453.9 $1,651.4 $2,162.1 ======== ======== ========
The following table presents property, plant and equipment by geographic region based on the location of the asset as of December 31 (in millions):
2002 2001 2000 ------ ------ ------ United States...................... $220.3 $245.5 $279.9 Europe............................. 66.8 44.8 45.0 Rest of World...................... 36.2 30.6 54.5 ------ ------ ------ $323.3 $320.9 $379.4 ====== ====== ======
22. COMMITMENTS AND CONTINGENCIES Certain present and former operating sites, or portions thereof, currently or previously owned or leased by current or former operating units of General Cable are the subject of investigations, monitoring or remediation under the United States Federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund), the Federal Resource Conservation and Recovery Act or comparable state statutes or agreements with third parties. These proceedings are in various stages ranging from initial investigations to active settlement negotiations to implementation of the cleanup or remediation of sites. Certain present and former operating units of General Cable in the United States have been named as potentially responsible parties (PRPs) at several off-site disposal sites under CERCLA or comparable state statutes in federal court proceedings. In each of these matters, the operating unit of General Cable is working with the governmental agencies involved and other PRPs to address environmental claims in a responsible and appropriate manner. At December 31, 2002 and 2001, General Cable had an accrued liability of approximately $4.6 million and $4.8 million, respectively, for various environmental-related liabilities of which General Cable is aware. American Premier Underwriters Inc., a former parent of General Cable, agreed to indemnify General Cable against all environmental-related liabilities arising out of General Cable's or its predecessors' ownership or operation of the Indiana Steel & Wire Company and Marathon Manufacturing Holdings, Inc. businesses (which were divested by General Cable), without limitation as to time or amount. American Premier also agreed to indemnify General Cable against 66 2/3% of all other environmental-related liabilities arising out of General Cable's or its predecessors' ownership or operation of other properties and assets in excess of $10 million but not in excess of $33 million which were identified during the seven-year period ended June 2001. Indemnifiable environmental liabilities through June 2001 were substantially below that threshold. While it is difficult to estimate future environmental-related liabilities accurately, General Cable does not currently anticipate any material adverse impact on its results of operations, financial position or cash flows as a result of compliance with federal, state, local or foreign environmental laws or regulations or cleanup costs of the sites discussed above. As part of the Acquisition, BICC plc agreed to indemnify General Cable against environmental liabilities existing at the date of the closing of the purchase of the business. The indemnity is for an eight-year period ending in 2007 while General Cable operates the businesses subject to certain sharing of losses (with BICC plc covering 95% of losses in the first three years, 80% in years four and five and 60% in the remaining three years). The indemnity is also subject to the overall indemnity limit of $150 million, which applies to all warranty and indemnity claims in the transaction. In addition, BICC plc assumed responsibility for cleanup of certain specific conditions at several sites F-28 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 22. COMMITMENTS AND CONTINGENCIES - (CONTINUED) operated by General Cable and cleanup is mostly complete at those sites. In the sale of the European businesses to Pirelli in August 2000, the Company generally indemnified Pirelli against any environmental-related liabilities on the same basis as BICC plc indemnified the Company in the earlier Acquisition. However, the indemnity the Company received from BICC plc related to the European businesses sold to Pirelli terminated upon the sale of those businesses to Pirelli. At this time, there are no claims outstanding under the general indemnity provided by BICC plc. General Cable has also agreed to indemnify Southwire Company against certain environmental liabilities arising out of the operation of the business it sold to Southwire prior to its sale. In addition, Company subsidiaries have been named as defendants in lawsuits alleging exposure to asbestos in products manufactured by the Company. At December 31, 2002, there were approximately 11,400 non-maritime claims and 33,000 maritime asbestos claims outstanding. During 2002, some 300 new non-maritime claims and 550 maritime claims were filed; 35 non-maritime claims and no maritime claims were dismissed, settled or otherwise disposed of in that period. At December 31, 2002 and 2001, General Cable had accrued approximately $1.3 million and $1.2 million, respectively, for these lawsuits. The Company does not believe that the outcome of the litigation will have a material adverse effect on its results of operations, financial position or cash flows. General Cable is also involved in various routine legal proceedings and administrative actions. Such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on its result of operations, cash flows or financial position. As part of the October 2002 amendment to its credit facility, a contingent payment to the lenders was established of approximately $5.5 million if the total facility commitments are not reduced by at least $100 million by December 15, 2003. The Company is actively pursuing other financing arrangements in excess of the $100 million target in addition to generating cash from operations in 2003 and currently believes this contingent payment will not be required. General Cable has entered into various operating lease agreements related principally to certain administrative, manufacturing and distribution facilities and transportation equipment. Future minimum rental payments required under non-cancelable lease agreements at December 31, 2002 were as follows: 2003 - - $10.6 million, 2004 - $7.9 million, 2005 - $5.0 million, 2006 - $4.0 million and 2007 - $1.3 million. Rental expense recorded under operating leases was $10.3 million, $16.2 million and $9.2 million for the years ended December 31, 2002, 2001 and 2000, respectively. 23. RELATED PARTY TRANSACTIONS During the second quarter of 2002, General Cable formed a joint venture company to manufacture and market fiber optic cables. General Cable contributed assets, primarily inventory and machinery and equipment, to a subsidiary company, which was then contributed to the joint venture in exchange for a $10.2 million note receivable, which resulted in a $5.6 million, deferred gain on the transaction. The Company will recognize the gain as the note is repaid. General Cable owns 49% of the joint venture company. The joint venture company manufactures and sells to General Cable all of the fiber optic cable products that General Cable sells to its customers. During 2002, General Cable purchased approximately $12.2 million from the joint venture company. At December 31, 2002, General Cable had a $3.0 million payable to the joint venture company for these purchases. General Cable sells fiber, a primary raw material used by the joint venture Company, to the joint venture company. During 2002, General Cable sold approximately $6.8 million to the joint venture company. At December 31, 2002, General Cable had a receivable of $2.6 million from the joint venture company for these transactions. For the year ended December 31, 2002, the joint venture company had sales of $12.3 million and an operating loss and net loss of $(1.2) million. At December 31, 2002, the joint venture company had total assets of $12.9 million, total liabilities of $5.1 million and total equity of $7.8 million. F-29 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 24. QUARTERLY OPERATING RESULTS (UNAUDITED) The interim financial information is unaudited. In the opinion of management, the interim financial information reflects all adjustments necessary for a fair presentation of quarterly financial information. Quarterly results have been influenced by seasonal factors inherent in General Cable's businesses. The sum of the quarter's earnings (loss) per share amounts may not add to full year earnings per share because each quarter is calculated independently. Summarized historical quarterly financial data for 2002 and 2001 are set forth below (in millions, except per share data):
FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER ------- ------- ------- ------- 2002 - ---- Net sales................................................ $361.4 $ 393.7 $347.4 $ 351.4 Gross profit............................................. 48.1 44.7 37.6 36.2 Income (loss) from continuing operations................. 4.9 (11.8) (4.0) (7.2) Loss on disposal of discontinued operations (net of tax).................................................... -- (3.9) -- (2.0) Net income (loss)........................................ 4.9 (15.7) (4.0) (9.2) EPS of Continuing Operations - ---------------------------- Earning (loss) per common share.......................... $ 0.15 $ (0.36) $(0.12) $ (0.22) Earnings (loss) dilution per common share--assuming dilution.............................................. $ 0.15 $ (0.36) $(0.12) $ (0.22) EPS of Discontinued Operations - ------------------------------ Loss per common share.................................... -- $ (0.12) -- $ (0.06) Loss per common share--assuming dilution................. -- $ (0.12) -- $ (0.06) EPS of Total Company - -------------------- Earnings (loss) per common share......................... $ 0.15 $ (0.48) $(0.12) $ (0.28) Earnings (loss) per common share--assuming dilution...... $ 0.15 $ (0.48) $(0.12) $ (0.28) 2001 - ---- Net sales................................................ $451.7 $ 449.9 $389.5 $ 360.3 Gross profit............................................. 70.7 73.5 52.3 44.2 Other income............................................. -- 8.1 -- -- Income from continuing operations........................ 14.9 17.8 1.4 3.4 Loss from operations of discontinued businesses (net of tax)................................................. (3.4) (2.6) (0.8) -- Loss on disposal of discontinued operations (net of tax)................................................... -- -- (32.7) -- Net income (loss)........................................ 11.5 15.2 (32.1) 3.4 EPS of Continuing Operations - ---------------------------- Earnings per common share................................ $ 0.46 $ 0.55 $ 0.04 $ 0.10 Earnings dilution per common share--assuming dilution.... $ 0.46 $ 0.54 $ 0.04 $ 0.10 EPS of Discontinued Operations - ------------------------------ Loss per common share.................................... $(0.11) $ (0.08) $(1.02) -- Loss per common share--assuming dilution................. $(0.11) $ (0.08) $(1.02) -- EPS of Total Company - -------------------- Earnings (loss) per common share......................... $ 0.35 $ 0.47 $(0.98) $ 0.10 Earnings (loss) per common share--assuming dilution...... $ 0.35 $ 0.46 $(0.98) $ 0.10
F-30 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION General Cable Corporation (the Issuer) intends to issue and sell $275.0 million of Senior Notes due 2010. General Cable Corporation and its material North American wholly-owned subsidiaries will fully and unconditionally guarantee the notes on a joint and several basis. The Company has not presented separate financial statements and other disclosures concerning the guarantor subsidiaries because management has determined that such information will not be material to the holders of the Senior Notes. The following consolidating financial information presents information about the Issuer, guarantor subsidiaries and non-guarantor subsidiaries. Initially, all of the Company's subsidiaries will be "restricted subsidiaries" for purposes of the Senior Notes. Investments in subsidiaries are accounted for on the equity basis. Intercompany transactions are eliminated. SUPPLEMENTAL CONSOLIDATING STATEMENTS OF OPERATIONS (IN MILLIONS)
YEAR ENDED DECEMBER 31, 2002 ---------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------- ------------ ------------ ------------ ----- Net sales: Customers............................ $ -- $1,077.2 $ 376.7 $ -- $ 1,453.9 Intercompany......................... 25.6 -- -- (25.6) -- ------- --------- ------- ------- --------- 25.6 1,077.2 376.7 (25.6) 1,453.9 Cost of sales......................... -- 998.1 314.8 (25.6) 1,287.3 ------- --------- ------- ------- --------- Gross profit.......................... 25.6 79.1 61.9 -- 166.6 Selling, general and administrative expenses............................ 20.7 102.4 27.8 -- 150.9 ------- --------- ------- ------- --------- Operating income (loss)............... 4.9 (23.3) 34.1 -- 15.7 Interest income (expense): Interest expense..................... (37.4) (66.1) (5.9) 65.9 (43.5) Interest income...................... 44.4 20.8 1.6 (65.9) 0.9 Other financial costs................ (1.1) -- -- -- (1.1) ------- --------- ------- ------- --------- 5.9 (45.3) (4.3) -- (43.7) ------- --------- ------- ------- --------- Income (loss) from continuing operations before income taxes................. 10.8 (68.6) 29.8 -- (28.0) Income tax (provision) benefit........ (3.8) 24.3 (10.6) -- 9.9 ------- --------- ------- ------- --------- Income (loss) from continuing operations 7.0 (44.3) 19.2 -- (18.1) Loss on disposal of discontinued operations (net of tax)............. -- (5.9) -- -- (5.9) ------- --------- ------- ------- --------- Net income (loss)................ $ 7.0 $ (50.2) $ 19.2 $ -- $ (24.0) ======= ========= ======= ======= =========
F-31 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING STATEMENTS OF OPERATIONS (IN MILLIONS)
YEAR ENDED DECEMBER 31, 2001 --------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ -------- Net sales: Customers.................................... $ -- $ 1,245.3 $ 406.1 $ -- $1,651.4 Intercompany................................. 39.0 -- -- (39.0) -- ------ --------- ------- ----- -------- ............................................... 39.0 1,245.3 406.1 (39.0) 1,651.4 Cost of sales................................. -- 1,110.9 338.8 (39.0) 1,410.7 ------ --------- ------- ----- -------- Gross profit.................................. 39.0 134.4 67.3 -- 240.7 Selling, general and administrative expenses.................................. 35.4 67.1 33.9 -- 136.4 ------ --------- ------- ----- -------- Operating income (loss)....................... 3.6 67.3 33.4 -- 104.3 Other income.................................. -- -- 8.1 -- 8.1 Interest income (expense): Interest expense............................. (47.0) (53.8) (10.7) 65.9 (45.6) Interest income.............................. 59.3 7.4 0.9 (65.9) 1.7 Other financial costs........................ (6.2) (4.2) -- -- (10.4) ------ --------- ------- ----- -------- 6.1 (50.6) (9.8) -- (54.3) ------ --------- ------- ----- -------- Income (loss) from continuing operations before income taxes............ 9.7 16.7 31.7 -- 58.1 Income tax (provision) benefit................ (3.4) (5.9) (11.3) -- (20.6) ------ --------- ------- ----- -------- Income (loss) from continuing operations...... 6.3 10.8 20.4 -- 37.5 Loss on disposal of discontinued.............. -- (6.8) -- -- (6.8) operations (net of tax)................... -- (32.7) -- -- (32.7) ------ --------- ------- ----- -------- Net income (loss)....................... $ 6.3 $ (28.7) $ 20.4 $ -- $ (2.0) ====== ========= ======= ===== ========
F-32 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING STATEMENTS OF OPERATIONS (IN MILLIONS)
YEAR ENDED DECEMBER 31, 2000 ----------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ---------- Net Sales: Customers............................ $ -- $ 1,367.6 $ 794.5 $ -- $ 2,162.1 Intercompany......................... 39.9 -- 26.5 (66.4) -- ------ --------- ------- ----- ---------- 39.9 1,367.6 821.0 (66.4) 2,162.1 Cost of sales......................... -- 1,190.2 746.6 (66.4) 1,870.4 ------ --------- ------- ----- ---------- Gross profit.......................... 39.9 177.4 74.4 -- 291.7 Selling, general and administrative expenses.......................... 36.3 118.9 102.4 -- 257.6 ------ --------- ------- ----- ---------- Operating income...................... 3.6 58.5 (28.0) -- 34.1 Interest income (expense): Interest expense..................... (53.4) (71.7) (15.5) 78.3 (62.3) Interest income...................... 68.3 11.4 1.1 (78.3) 2.5 Other financial costs................ (3.3) -- -- -- (3.3) ------ --------- ------- ----- ---------- 11.6 (60.3) (14.4) -- (63.1) ------ --------- ------- ----- ---------- Income (loss) from continuing operations before income taxes.... 15.2 (1.8) (42.4) -- (29.0) Income tax (provision) benefit........ (5.4) 0.6 15.1 -- 10.3 ------ --------- ------- ----- ---------- Income (loss) from continuing operations 9.8 (1.2) (27.3) -- (18.7) Loss from operations of discontinued operations (net of tax)........... -- (7.7) -- -- (7.7) ------ --------- ------- ----- ---------- Net income (loss)............... $ 9.8 $ (8.9) $ (27.3) $ -- $ (26.4) ====== ========= ======= ===== ==========
F-33 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING BALANCE SHEETS (IN MILLIONS)
DECEMBER 31, 2002 -------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------ ------------ ------ ASSETS Current assets: Cash................................... $ -- $ 8.1 $ 21.0 $ -- $ 29.1 Receivables, net of allowances......... -- 7.4 98.5 -- 105.9 Retained interest in accounts receivable........................... -- 84.8 -- -- 84.8 Inventories............................ -- 149.5 108.8 -- 258.3 Deferred income taxes.................. -- 12.2 -- -- 12.2 Prepaid expenses and other............. 1.3 40.4 0.9 -- 42.6 ------ --------- ------- ------- ------ Total current assets................. 1.3 302.4 229.2 -- 532.9 Property, plant and equipment, net........ 0.5 249.9 72.9 -- 323.3 Deferred income taxes..................... (3.6) 78.1 (6.2) -- 68.3 Intercompany accounts..................... 451.8 -- 24.3 (476.1) -- Investment in subsidiaries................ 33.8 345.2 -- (379.0) -- Other non-current assets.................. 8.8 38.9 1.1 -- 48.8 ------ --------- ------- ------- ------ Total assets......................... $492.6 $ 1,014.5 $ 321.3 $(855.1) $973.3 ====== ========= ======= ======= ====== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable......................... $ -- $ 112.2 $ 129.9 $ -- $242.1 Accrued liabilities...................... 5.6 77.4 16.2 -- 99.2 Current portion of long-term debt........ -- 13.0 27.8 -- 40.8 ------ --------- ------- ------- ------ Total current liabilities............. 5.6 202.6 173.9 -- 382.1 Long-term debt............................ 304.1 77.4 29.6 -- 411.1 Deferred income taxes..................... -- 1.9 0.2 -- 2.1 Intercompany accounts..................... -- 476.1 -- (476.1) -- Other liabilities......................... 32.9 78.2 6.0 -- 117.1 Total liabilities..................... 342.6 836.2 209.7 (476.1) 912.4 Total shareholders' equity................ 150.0 178.3 111.6 (379.0) 60.9 ------ --------- ------- ------- ------ Total liability and shareholders' equity.. $492.6 $ 1,014.5 $ 321.3 $(855.1) $973.3 ====== ========= ======= ======= ======
F-34 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING BALANCE SHEETS (IN MILLIONS)
DECEMBER 31, 2001 ------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ --------- ------------ ------------ ------ ASSETS Current assets: Cash...................................... $ -- $ 6.8 $ 9.8 $ -- $ 16.6 Receivables, net of allowances............ -- 17.4 88.4 -- 105.8 Retained interest in accounts receivable............................... -- 83.1 -- -- 83.1 Inventories............................... -- 221.8 93.6 -- 315.4 Deferred income taxes..................... -- 27.5 -- -- 27.5 Prepaid expenses and other................ 3.2 20.0 0.7 -- 23.9 ------ --------- ------ ------- -------- Total current assets.................... 3.2 376.6 192.5 -- 572.3 Property, plant and equipment, net........... 0.4 277.1 43.4 -- 320.9 Deferred income taxes........................ (3.4) 71.0 (2.6) -- 65.0 Intercompany accounts........................ 444.9 -- 33.8 (478.7) -- Investment in subsidiaries................... 33.9 345.3 -- (379.2) -- Other non-current assets..................... 11.2 33.6 2.3 -- 47.1 ------ --------- ------ ------- -------- Total assets............................ $490.2 $ 1,103.6 $269.4 $(857.9) $1,005.3 ====== ========= ====== ======= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable............................ $ -- $ 137.5 $111.9 $ -- $ 249.4 Accrued liabilities......................... 7.5 96.2 9.9 -- 113.6 Current portion of long-term debt........... -- 17.9 21.5 -- 39.4 ------ --------- ------ ------- -------- Total current liabilities................ 7.5 251.6 143.3 -- 402.4 Long-term debt............................... 304.3 84.7 32.0 -- 421.0 Deferred income taxes........................ -- 0.7 2.2 -- 2.9 Intercompany accounts........................ -- 478.7 -- (478.7) -- Other liabilities............................ 32.9 30.5 10.7 -- 74.1 ------ --------- ------ ------- -------- Total liabilities........................ 344.7 846.2 188.2 (478.7) 900.4 Total shareholders' equity................... 145.5 257.4 81.2 (379.2) 104.9 ------ --------- ------ ------- -------- Total liability and shareholders' equity..... $490.2 $ 1,103.6 $269.4 $(857.9) $1,005.3 ====== ========= ====== ======= ========
F-35 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING CASH FLOWS (IN MILLIONS)
YEAR ENDED DECEMBER 31, 2002 --------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ------- Cash flows of operating activities: Net income (loss)................................ $ 7.0 $ (50.2) $19.2 $ -- $ (24.0) Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation and amortization.................. 1.1 29.0 0.5 -- 30.6 Deferred income taxes.......................... 0.2 12.7 1.5 -- 14.4 (Gain) loss on sale of business................ -- 1.7 -- -- 1.7 Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: (Increase) decrease in receivables............. -- 7.0 8.1 -- 15.1 (Increase) decrease in inventories............. -- 65.8 (4.3) -- 61.5 (Increase) decrease in other assets............ 4.4 (13.4) 1.0 -- (8.0) Increase (decrease) in accounts payable, accrued and other liabilities....... (2.8) (19.1) (12.1) -- (34.0) ------ ------- ----- ---- ------- Net cash flows of operating activities......... 9.9 33.5 13.9 -- 57.3 ------ ------- ----- ---- ------- Cash flows of investing activities: Capital expenditures............................. (0.2) (17.3) (13.9) -- (31.4) Proceeds from sale of businesses, net of cash sold...................................... -- 1.7 -- -- 1.7 Proceeds from properties sold.................... -- 1.2 0.4 -- 1.6 Other, net....................................... -- (0.5) -- -- (0.5) ------ ------- ----- ---- ------- Net cash flows of investing activities.................................... (0.2) (14.9) (13.5) -- (28.6) ------ ------- ----- ---- ------- Cash flows of financing activities: Dividends paid................................... (5.0) -- -- -- (5.0) Intercompany accounts............................ (6.9) (2.6) 9.5 -- -- Net changes in revolving credit borrowings....... 0.5 (2.7) -- -- (2.2) Net change in other debt......................... -- 3.5 0.5 -- 4.0 Repayment of long-term debt...................... (0.7) (15.5) 0.8 -- (15.4) Proceeds from exercise of stock options.......... 2.4 -- -- -- 2.4 ------ ------- ----- ---- ------- Net cash flows of financing activities......... (9.7) (17.3) 10.8 -- (16.2) ------ ------- ----- ---- ------- Increase (decrease) in cash........................ -- 1.3 11.2 -- 12.5 Cash - beginning of period......................... -- 6.8 9.8 -- 16.6 ------ ------- ----- ---- ------- Cash - end of period............................... $ -- $ 8.1 $21.0 $ -- $ 29.1 ====== ======= ===== ==== =======
F-36 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING CASH FLOWS (IN MILLIONS)
YEAR ENDED DECEMBER 31, 2001 ------------------------------------------------------------------------ GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ------- Cash flows of operating activities: Net income (loss).............................. $ 6.3 $ (28.7) $ 20.4 $ -- $ (2.0) Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation and amortization................ 2.4 32.2 0.4 -- 35.0 Foreign currency translation adjustment...... -- -- (8.5) -- (8.5) Deferred income taxes........................ (2.1) (42.3) 27.7 -- (16.7) (Gain) loss on sale of business.............. -- (18.3) -- -- (18.3) Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: Sale of receivables, net of transaction costs paid at closing.................... -- 145.0 -- -- 145.0 (Increase) decrease in receivables........... -- 16.9 (0.3) -- 16.6 (Increase) decrease in inventories........... -- 35.7 1.6 -- 37.3 (Increase) decrease in other assets.......... 4.3 (3.4) 3.0 -- 3.9 Increase (decrease) in accounts payable, accrued and other liabilities............ (11.7) (69.7) (27.7) -- (109.1) ------ ------- ------- -------- ------- Net cash flows of operating activities....... (0.8) 67.4 16.6 -- 83.2 ------ ------- ------- -------- ------- Cash flows of investing activities: Capital expenditures.......................... -- (41.3) (13.6) -- (54.9) Proceeds from sale of businesses, net of cash sold...................................... -- 141.8 -- -- 141.8 Proceeds from properties sold................. -- (0.2) 6.9 -- 6.7 Other, net.................................... -- (1.7) -- -- (1.7) ------ ------- ------- -------- ------- Net cash flows of investing activities ..... -- 98.6 (6.7) -- 91.9 ------ ------- ------- -------- ------- Cash flows of financing activities: Dividends paid.................................. (6.6) -- -- -- (6.6) Intercompany accounts........................... 43.8 (70.1) 26.3 -- -- Net changes in revolving credit borrowings...... 36.9 (3.7) -- -- 33.2 Net change in other debt........................ -- (0.3) 3.5 -- 3.2 Repayment of long-term debt..................... (73.2) (94.8) (41.4) -- (209.4) Acquisition of treasury stock................... (2.2) -- -- -- (2.2) Proceeds from exercise of stock options......... 2.1 -- -- 2.1 ------ ------- ------- -------- ------- Net cash flows of financing activities...... 0.8 (168.9) (11.6) -- (179.7) ------ ------- ------- -------- ------- Increase (decrease) in cash...................... -- (2.9) (1.7) -- (4.6) Cash - beginning of period....................... -- 9.7 11.5 -- 21.2 ------ ------- ------- -------- ------- Cash - end of period............................. $ -- $ 6.8 $ 9.8 $ -- $ 16.6 ====== ======= ======= ======== =======
F-37 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 25. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONDENSED CONSOLIDATING CASH FLOWS (IN MILLIONS)
YEAR ENDED DECEMBER 31, 2000 -------------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ------- Cash flows of operating activities: Net income (loss)............................. $ 9.8 $ (8.9) $ (27.3) $ -- $ (26.4) Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation and amortization............... 3.2 36.1 16.7 -- 56.0 Deferred income taxes....................... 5.4 3.4 (9.6) -- (0.8) Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: (Increase) decrease in receivables.......... -- (11.7) (22.3) -- (34.0) (Increase) decrease in inventories.......... -- (4.8) (47.3) -- (52.1) (Increase) decrease in other assets......... 4.9 11.1 (16.3) -- (0.3) Increase (decrease) in accounts payable, accrued and other liabilities........... 24.4 (12.8) 62.1 -- 73.7 ------ ------- ------- ----- ------- Net cash flows of operating activities...... 47.7 12.4 (44.0) -- 16.1 ------ ------- ------- ----- ------- Cash flows of investing activities: -- (26.6) (29.4) -- (56.0) Capital expenditures.......................... -- (19.0) -- -- (19.0) Proceeds from sale of businesses, net of cash sold................................. -- 158.1 -- -- 158.1 Proceeds from properties sold................. -- 0.6 0.2 -- 0.8 Other, net.................................... -- (1.0) -- -- (1.0) ------ ------- ------- ----- ------- Net cash flows of investing activities...... -- 112.1 (29.2) -- 82.9 ------ ------- ------- ----- ------- Cash flows of financing activities: Dividends paid................................. (6.7) -- -- (6.7) Intercompany accounts.......................... 1.1 (101.8) 100.7 -- -- Net changes in revolving credit borrowings..... 20.5 26.7 -- -- 47.2 Net change in other debt....................... -- (0.2) (13.9) -- (14.1) Issuance of long-term debt..................... -- 7.4 -- -- 7.4 Repayment of long-term debt.................... (69.4) (49.9) (20.2) -- (139.5) Acquisition of treasury stock.................. (10.1) -- -- -- (10.1) Proceeds from exercise of stock options........ -- -- -- -- -- ------ ------- ------- ----- ------- Net cash flows of financing activities...... (64.6) (117.8) 66.6 -- (115.8) ------ ------- ------- ----- ------- Increase (decrease) in cash..................... (16.9) 6.7 (6.6) -- (16.8) Cash - beginning of period...................... 16.9 3.0 18.1 -- 38.0 ------ ------- ------- ----- ------- Cash - end of period............................ $ -- $ 9.7 $ 11.5 $ -- $ 21.2 ====== ======= ======= ===== =======
F-38 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------- ---------------------- 2003 2002 2003 2002 ------ ------ -------- -------- Net sales............................................... $382.5 $347.4 $1,133.1 $1,102.5 Cost of sales........................................... 337.1 309.8 998.7 972.1 ------ ------ -------- -------- Gross profit............................................ 45.4 37.6 134.4 130.4 Selling, general and administrative expenses............ 31.9 33.5 93.6 116.2 ------ ------ -------- -------- Operating income........................................ 13.5 4.1 40.8 14.2 Interest income (expense): Interest expense..................................... (10.4) (10.5) (33.1) (31.9) Interest income...................................... 0.1 0.2 0.3 0.8 ------ ------ -------- -------- (10.3) (10.3) (32.8) (31.1) ------ ------ -------- -------- Income (loss) from continuing operations before income taxes......................................... 3.2 (6.2) 8.0 (16.9) Income tax (provision) benefit.......................... (1.1) 2.2 (2.8) 6.0 ------ ------ -------- -------- Income (loss) from continuing operations................ 2.1 (4.0) 5.2 (10.9) Loss on disposal of discontinued operations (net of tax) -- -- -- (3.9) ------ ------ -------- -------- Net income (loss)....................................... $ 2.1 $ (4.0) $ 5.2 $ (14.8) ====== ====== ======== ======== EPS of Continuing Operations - ---------------------------- Earnings (loss) per common share........................ $ 0.06 $(0.12) $ 0.16 $ (0.33) ====== ====== ======== ======== Weighted average common shares.......................... 33.1 33.1 33.1 33.0 ====== ====== ======== ======== Earnings (loss) per common share-assuming dilution...... $ 0.06 $(0.12) $ 0.16 $ (0.33) ====== ====== ======== ======== Weighted average common shares-assuming dilution........ 33.6 33.1 33.4 33.0 ====== ====== ======== ======== EPS of Discontinued Operations - ------------------------------ Loss per common share................................... $ -- $ -- $ -- $ (0.12) ====== ====== ======== ======== Loss per common share - assuming dilution............... $ -- $ -- $ -- $ (0.12) ====== ====== ======== ======== EPS of Total Company - -------------------- Earnings (loss) per common share........................ $ 0.06 $(0.12) $ 0.16 $ (0.45) ====== ====== ======== ======== Earnings (loss) per common share--assuming dilution..... $ 0.06 $(0.12) $ 0.16 $ (0.45) ====== ====== ======== ========
See accompanying Notes to Consolidated Financial Statements. F-39 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN MILLIONS, EXCEPT SHARE DATA)
SEPTEMBER 30, DECEMBER 31, 2003 2002 ------------- ------------ (UNAUDITED) ASSETS Current Assets: Cash ........................................................................ $ 24.2 $ 29.1 Receivables, net of allowances of $14.3 million at September 30, 2003 and $11.6 million at December 31, 2002 ................................... 141.4 105.9 Retained interest in accounts receivable .................................... 80.9 84.8 Inventories ................................................................. 247.0 258.3 Deferred income taxes ....................................................... 12.3 12.2 Prepaid expenses and other .................................................. 24.6 42.6 -------- -------- Total current assets .................................................... 530.4 532.9 Property, plant and equipment, net .............................................. 326.8 323.3 Deferred income taxes ........................................................... 74.7 68.3 Other non-current assets ........................................................ 46.0 48.8 -------- -------- Total assets ............................................................ $ 977.9 $ 973.3 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable ............................................................ $ 260.0 $ 242.1 Accrued liabilities ......................................................... 103.5 99.2 Current portion of long-term debt ........................................... 33.5 40.8 -------- -------- Total current liabilities ............................................... 397.0 382.1 Long-term debt .................................................................. 370.5 411.1 Deferred income taxes ........................................................... 2.7 2.1 Other liabilities ............................................................... 124.1 117.1 -------- -------- Total liabilities ....................................................... 894.3 912.4 -------- -------- Shareholders' Equity: Common stock, $0.01 par value: Issued and outstanding shares: September 30, 2003 - 33,083,028 (net of 4,828,225 treasury shares) December 31, 2002 - 33,135,002 (net of 4,754,425 treasury shares)... 0.4 0.4 Additional paid-in capital .................................................. 100.2 100.0 Treasury stock .............................................................. (50.4) (50.0) Retained earnings ........................................................... 65.1 59.9 Accumulated other comprehensive loss ........................................ (28.4) (44.6) Other shareholders' equity .................................................. (3.3) (4.8) -------- -------- Total shareholders' equity ......................................... 83.6 60.9 -------- -------- Total liabilities and shareholders' equity .................................. $ 977.9 $ 973.3 ======== ========
See accompanying Notes to Consolidated Financial Statements. F-40 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN MILLIONS, UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ------------------ 2003 2002 ------- ------- Cash flows of operating activities: Net income (loss) ............................................................. $ 5.2 $ (14.8) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization ............................................... 23.2 22.8 Deferred income taxes ....................................................... (5.8) 20.0 Loss on sale of property and business ....................................... 0.4 1.7 Changes in operating assets and liabilities: (Increase) decrease in receivables ...................................... (16.9) 17.8 Decrease in inventories ................................................. 22.2 28.3 Decrease in other assets ................................................ 19.5 3.4 Increase (decrease) in accounts payable, accrued and other liabilities... 10.4 (3.3) ------- ------- Net cash flows of operating activities .................................. 58.2 75.9 ------- ------- Cash flows of investing activities: Proceeds from properties sold ................................................. 1.9 0.5 Proceeds from sale of business, net of cash sold .............................. -- 1.7 Capital expenditures .......................................................... (11.8) (22.8) Repayment of loans from shareholders .......................................... 1.0 -- Other, net .................................................................... (1.3) (0.8) ------- ------- Net cash flows of investing activities .................................. (10.2) (21.4) ------- ------- Cash flows of financing activities: Dividends paid ................................................................ -- (5.0) Net change in revolving credit borrowings ..................................... (13.3) (36.1) Net change in other debt ...................................................... (25.5) (0.1) Repayment of long-term debt ................................................... (14.1) (9.0) Proceeds from exercise of stock options ....................................... -- 2.4 ------- ------- Net cash flows of financing activities .................................. (52.9) (47.8) ------- ------- Increase (decrease) in cash ....................................................... (4.9) 6.7 Cash-beginning of period .......................................................... 29.1 16.6 ------- ------- Cash-end of period ................................................................ $ 24.2 $ 23.3 ======= ======= SUPPLEMENTAL INFORMATION Cash paid (received) during the period for: Income tax refunds, net ....................................................... $ (13.3) $ (32.8) ======= ======= Interest paid ................................................................. $ 26.0 $ 30.5 ======= =======
See accompanying Notes to Consolidated Financial Statements. F-41 GENERAL CABLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (IN MILLIONS, EXCEPT SHARE AMOUNTS) (UNAUDITED)
ACCUMULATED COMMON STOCK ADDITIONAL OTHER OTHER ------------------ PAID-IN TREASURY RETAINED COMPREHENSIVE SHAREHOLDERS' SHARES AMOUNT CAPITAL STOCK EARNINGS INCOME (LOSS) EQUITY TOTAL ---------- ------ ---------- -------- -------- ------------- ------------- ------- Balance, December 31, 2001......... 32,838,227 $ 0.4 $ 96.4 $ (50.0) $ 88.9 $ (25.7) $( 5.1) $ 104.9 Comprehensive loss: Net loss....................... (14.8) (14.8) Foreign currency translation adjustment........ 5.0 5.0 Change in fair value of financial instruments, net of tax.................... (1.4) (1.4) ------- Comprehensive loss.............. (11.2) Dividends...................... (5.0) (5.0) Amortization of restricted stock and other............... 0.6 0.1 0.7 Exercise of stock options...... 265,359 2.4 2.4 Other.......................... 27,545 0.2 0.1 0.3 ---------- ------ --------- ------- ------- -------- ------ ------- Balance, September 30, 2002........ 33,131,131 $ 0.4 $ 99.6 $ (50.0) $ 69.1 $ (22.1) $ (4.9) $ 92.1 ========== ====== ========= ======= ======= ======== ====== ======= Balance, December 31, 2002......... 33,135,002 $ 0.4 $ 100.0 $ (50.0) $ 59.9 $ (44.6) $ (4.8) $ 60.9 Comprehensive income: Net income..................... 5.2 5.2 Foreign currency translation adjustment.................... 15.2 15.2 Change in fair value of financial instruments, net of tax........................ 1.0 1.0 ------- Comprehensive income............ 21.4 Amortization of restricted stock and other.............. 0.4 0.1 0.5 Repayment of loans from shareholders................. (74,177) (0.4) (0.4) 1.5 0.7 Other.......................... 22,203 0.2 (0.1) 0.1 ---------- ------ --------- ------- ------- -------- ------ ------- Balance, September 30, 2003........ 33,083,028 $ 0.4 $ 100.2 $ (50.4) $ 65.1 $ (28.4) $ (3.3) $ 83.6 ========== ====== ========= ======= ======= ======== ====== =======
See accompanying Notes to Consolidated Financial Statements. F-42 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of General Cable Corporation and its wholly-owned subsidiaries. Investments in 50% or less owned joint ventures are accounted for under the equity method of accounting. Other non-current assets included an investment in joint ventures of $3.8 million at September 30, 2003 and December 31, 2002. All transactions and balances among the consolidated companies have been eliminated. Certain reclassifications have been made to the prior year to conform to the current year's presentation. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of General Cable Corporation and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the three and nine months ended September 30, 2003 are not necessarily indicative of results that may be expected for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto in General Cable's 2002 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2003. REVENUE RECOGNITION Revenue is recognized when goods are shipped and title passes to the customer. EARNINGS PER SHARE Earnings per common share are computed based on the weighted average number of common shares outstanding. Earnings per common share-assuming dilution are computed based on the weighted average number of common shares outstanding and the dilutive effect of stock options and restricted stock units outstanding. INVENTORIES Inventories are stated at the lower of cost or market value. The Company determines whether a lower of cost or market provision is required on a quarterly basis by computing whether inventory on hand, on a last-in first-out (LIFO) basis, can be sold at a profit based upon current selling prices less variable selling costs. No provision was required for the first nine months of 2003 or 2002. In the event that a provision is required in some future period, the Company will determine the amount of the provision by writing down the value of the inventory to the level where its sales, using current selling prices less variable selling costs, will result in a profit. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Costs assigned to property, plant and equipment relating to acquisitions are based on estimated fair values at the date of acquisition. Depreciation is provided using the straight-line method over the estimated useful lives of the assets: new buildings, from 15 to 50 years; and machinery, equipment and office furnishings, from 3 to 15 years. Leasehold improvements are depreciated over the life of the lease. FAIR VALUE OF FINANCIAL INSTRUMENTS Financial instruments are defined as cash or contracts relating to the receipt, delivery or exchange of financial instruments. Except as otherwise noted, fair value approximates the carrying value of such instruments. F-43 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 1. SUMMARY OF ACCOUNTING POLICIES - (CONTINUED) FORWARD PRICING AGREEMENTS FOR PURCHASES OF COPPER AND ALUMINUM In the normal course of business, General Cable enters into forward pricing agreements for purchases of copper and aluminum to match certain sale transactions. General Cable expects to recover the cost of copper and aluminum under these agreements as a result of firm sales price commitments with customers. USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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. CONCENTRATION OF CREDIT RISK General Cable sells a broad range of products primarily throughout the United States, Canada, Europe and Asia Pacific. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers, including members of buying groups, composing General Cable's customer base. Ongoing credit evaluations of customers' financial condition are performed, and generally, no collateral is required. General Cable maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management's estimates. Certain subsidiaries also maintain credit insurance for certain customer balances. DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments are utilized to manage interest rates, commodity and foreign currency risk. General Cable does not hold or issue derivative financial instruments for trading purposes. Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting For Derivative Instruments and Hedging Activities," as amended, requires that all derivatives be recorded on the balance sheet at fair value. Accounting for changes in the fair value of the derivative depends on the intended use of the derivative and whether it qualifies for hedge accounting. SFAS No. 133, as applied to General Cable's risk management strategies, may increase or decrease reported net income and shareholders' equity prospectively depending on changes in interest rates and other variables affecting the fair value of derivative instruments and hedged items, but will have no effect on cash flows or economic risk. See further discussion in Note 8. Foreign currency and commodity contracts are used to hedge future sales and purchase commitments. Unrealized gains and losses on such contracts are recorded in other comprehensive income until the underlying transaction occurs and is recorded in the income statement at which point such amounts included in other comprehensive income are recorded into income which generally will occur over periods less than one year. ACCOUNTS RECEIVABLE SECURITIZATION The Company accounts for the securitization of accounts receivable in accordance with SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125." The securitization provides for certain domestic trade receivables to be sold to a wholly owned, special purpose, bankruptcy-remote subsidiary without recourse. This subsidiary in turn transfers the receivables to a trust which has issued floating rate five year certificates. At the time the receivables are sold, the balances are removed from the Consolidated Balance Sheet. Costs associated with the transaction, primarily related to the discount, are included in interest income (expense) in the Consolidated Statement of Operations. At September 30, 2003 and December 31, 2002 the Company's retained interest in accounts receivable and off balance sheet debt, net of cash held in the trust was $80.9 million and $72.8 million; and $84.8 million and $48.5 million, respectively. See further discussion in Note 4. F-44 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 1. SUMMARY OF ACCOUNTING POLICIES - (CONTINUED) STOCK-BASED COMPENSATION SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value. General Cable has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of the grant over the amount an employee must pay to acquire the stock. No compensation cost for stock options is reflected in net income, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ----------------- 2003 2002 2003 2002 ------ ------ ----- ------ Net income (loss) as reported......................................... $ 2.1 $ (4.0) $ 5.2 $(14.8) Deduct: Total stock-based employee compensation expense under fair value based method for all awards, net of related tax effects.... 0.5 0.5 1.2 1.3 ----- ------ ----- ------ Pro forma net income (loss)........................................... $ 1.6 $ (4.5) $ 4.0 $(16.1) ===== ====== ===== ====== Earnings (loss) per share: Basic -.as reported.................................................. $0.06 $(0.12) $0.16 $(0.45) Basic -.pro forma.................................................... $0.05 $(0.14) $0.12 $(0.49) Diluted.- as reported................................................ $0.06 $(0.12) $0.16 $(0.45) Diluted.- pro forma.................................................. $0.05 $(0.14) $0.12 $(0.49)
NEW STANDARDS In December 2002, SFAS No. 148 "Accounting for Stock-Based Compensation - - Transition and Disclosure - an amendment of FASB No. 123" was issued. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also requires additional disclosure about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. General Cable has elected to not implement the voluntary change to the fair value based method of accounting for stock-based employee compensation, however, the disclosure requirements have been implemented as required. In November 2002, FASB Interpretation (FIN) No. 45 "Guarantor's Accounting Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" was issued. FIN 45 requires that as a company issues a guarantee, it must recognize a liability for the fair value of the obligations it assumes under that guarantee. Application of FIN 45 is required for guarantees issued or modified after December 31, 2002. The adoption of FIN 45 has not had a material affect on the Company's financial position, results of operations or cash flows. In January 2003, FIN No. 46 "Consolidation of Variable Interest Entities" was issued. FIN 46 is intended to achieve more consistent application of consolidation policies to variable interest entities. FIN 46 applies immediately to all variable interest entities created after January 31, 2003. As directed by FASB Staff Position No. FIN 46-6, the effective date for variable interest entities acquired or created before February 1, 2003 is deferred until December 31, 2003. The adoption of FIN 46 is not expected to have a material affect on the Company's financial position, results of operations or cash flows. F-45 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 1. SUMMARY OF ACCOUNTING POLICIES - (CONTINUED) In April 2003, SFAS No. 149 "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" was issued. This statement amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under Statement 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS No. 149 has not had material affect on the Company's financial position, results of operations or cash flows. In May 2003, SFAS No. 150 "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" was issued. This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003. The adoption of SFAS No. 150 has not had a material affect on the Company's financial position, results of operations or cash flows. 2. ACQUISITIONS AND DIVESTITURES In March 2001, the Company sold the shares of its Pyrotenax business unit to Raychem HTS Canada, Inc., a business unit of Tyco International, Ltd., for $60 million, subject to closing adjustments. The business unit, with operations in Canada and the United Kingdom, principally produced mineral insulated high-temperature cables. During the second quarter of 2002, the final post-closing adjusted purchase price was agreed and resulted in a payment to Tyco International, Ltd. of approximately $2 million during the third quarter of 2002. This payment plus other costs associated with settling the final purchase price was equal to the amount provided for in the Company's balance sheet. The proceeds from the transaction were used to reduce the Company's debt. During the second quarter of 2002, General Cable formed a joint venture company to manufacture and market fiber optic cables. General Cable contributed assets, primarily inventory and machinery and equipment, to a subsidiary company which was then contributed to the joint venture in exchange for a $10.2 million note receivable which resulted in a $5.6 million deferred gain on the transaction. The Company will recognize the gain as the note is repaid. At September 30, 2003 and December 31, 2002, other non-current assets included an investment in the joint venture of $3.8 million. The September 30, 2003 and December 31, 2002 balance sheets included a $10.2 million note receivable from the joint venture in other non-current assets and a deferred gain from the initial joint venture formation of $5.6 million in other liabilities. 3. DISCONTINUED OPERATIONS During the second quarter of 2002, the Company recorded a $6.0 million pre-tax loss on disposal of discontinued operations. The components of this charge principally related to an estimated lower net realizable value for real estate remaining from the Company's former building wire business unit, a longer than anticipated holding period for three distribution centers with unexpired lease commitments and certain other costs. 4. ACCOUNTS RECEIVABLE ASSET BACKED SECURITIZATION In May 2001, the Company completed an Accounts Receivable Asset Backed Securitization Financing transaction ("Securitization Financing"). The Securitization Financing provides for certain domestic trade receivables to be transferred to a wholly-owned, special purpose bankruptcy-remote subsidiary without recourse. This subsidiary in turn transferred the receivables to a trust, which issued, via a private placement, floating rate five-year certificates in an initial amount of $145 million. In addition, a variable certificate component of up to $45 million for seasonal borrowings was also established as a part of the Securitization Financing. This variable certificate component will fluctuate based on the amount of eligible receivables. As a result of the building wire asset sale and the exit from the retail cordsets business, the Securitization Financing program was downsized to $80 million in the first quarter of 2002, through the repayment of a portion of the outstanding certificates. The repayment of the certificates was funded by the collection of the outstanding building wire and retail cordsets accounts receivable. The $45 million seasonal borrowing component was unaffected. Transfers of receivables under this program are treated as a sale and result in a reduction of total accounts receivable reported on the Company's consolidated balance sheet. The Company continues to service the transferred receivables and receives annual servicing fees from the special purpose subsidiary of approximately 1% of the average receivable balance. The market cost of servicing the receivables offsets the servicing fee income and results F-46 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 4. ACCOUNTS RECEIVABLE ASSET BACKED SECURITIZATION - (CONTINUED) in a servicing asset equal to zero. The Company's retained interest in the receivables are carried at their fair value which is estimated as the net realizable value. The net realizable value considers the relatively short liquidation period and an estimated provision for credit losses. The provision for credit losses is determined based on specific identification of uncollectible accounts and the application of historical collection percentages by aging category. The receivables are not subject to prepayment risk. The key assumptions used in measuring the fair value of retained interests at the time of securitization were receivables days sales outstanding of 54 and interest rates on LIBOR based borrowings of 4.92%. At September 30, 2003 and December 31, 2002, key assumptions were receivables days outstanding of 52 and 49, respectively, and interest rates on LIBOR based borrowings of 1.7% and 2.0%, respectively. At September 30, 2003 and December 31, 2002, the Company's retained interest in accounts receivable and off balance sheet financing, net of cash held in the trust, was $80.9 million and $72.8 million; and $84.8 million and $48.5 million, respectively. The effective interest rate in the Securitization Financing was approximately 1.7% at September 30, 2003 and 2.0% at December 31, 2002. 5. INVENTORIES Inventories consisted of the following (in millions):
SEPTEMBER 30, DECEMBER 31, 2003 2002 ------------- -------------- Raw materials................................................... $ 24.1 $ 26.1 Work in process................................................. 33.3 33.2 Finished goods.................................................. 189.6 199.0 -------- ---------- Total.......................................................... $ 247.0 $ 258.3 ======== ==========
At September 30, 2003 and December 31, 2002, $201.5 million and $214.3 million, respectively, of inventories were valued using the LIFO method. Approximate replacement cost of inventories valued using the LIFO method totaled $196.8 million at September 30, 2003 and $198.1 million at December 31, 2002. If in some future period, the Company were not able to recover the LIFO value of its inventory at a profit when replacement costs were lower than the LIFO value of the inventory, the Company would be required to take a charge to recognize in its income statement all or a portion of the higher LIFO value of the inventory. In 2002, the Company recorded a $2.5 million charge ($1.4 million in the third quarter and $1.1 million in the fourth quarter of 2002) for the liquidation of LIFO inventory in North America as the Company significantly reduced its inventory levels. The Company has further reduced inventory quantities during the third quarter of 2003 and as a result has recorded a $0.8 million charge. The Company expects to further reduce inventory quantities in the fourth quarter of 2003 which is expected to result in an additional LIFO liquidation charge. The LIFO liquidation charge will adversely affect margins, however, the amount of the charge to be incurred in the fourth quarter of 2003 will be dependent upon the quantity of the inventory reduction for the year and the market price of the metals during the period the inventory liquidation occurred. 6. RESTRUCTURING CHARGES During 2001 and 2002, provisions were recorded for various restructuring activities. These provisions related to costs for the closure of manufacturing facilities, worldwide headcount reductions, the elimination of regional distribution centers and certain other costs. The balance of these accrued restructuring costs were $15.2 million at December 31, 2002. During the first nine months of 2003 an additional $1.7 million provision for severance costs related to cost cutting efforts in Europe was recorded. Restructuring provisions of $7.8 million were utilized during the first nine months of 2003. F-47 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 6. RESTRUCTURING CHARGES - (CONTINUED) Changes in accrued restructuring costs were as follows (in millions):
SEVERANCE FACILITY AND RELATED CLOSING COSTS COSTS TOTAL ----------- -------- ----- Balance - December 31, 2002.................... $ 4.4 $10.8 $15.2 Provision..................................... 1.7 -- 1.7 Utilization................................... (3.1) (4.7) (7.8) ----- ----- ----- Balance - September 30, 2003................... $ 3.0 $ 6.1 $ 9.1 ===== ===== =====
7. LONG-TERM DEBT Long-term debt consisted of the following (in millions):
SEPTEMBER 30, DECEMBER 31, 2003 2002 ------------- ------------ Term loans.................................................... $ 326.4 $337.4 Revolving loans............................................... 64.9 78.2 Other......................................................... 12.7 36.3 -------- ------ 404.0 451.9 Less current maturities....................................... 33.5 40.8 -------- ------ $ 370.5 $411.1 ======== ======
The Company's current credit facility was entered into in 1999 with one lead bank as administrative agent, and a syndicate of lenders. The facility, as amended and reduced by prepayments, consists of: 1) term loans in Dollars in an aggregate amount up to $297.5 million, 2) term loans in Dollars and foreign currencies in an aggregate amount up to $28.9 million and 3) revolving loans and letters of credit in Dollars and foreign currencies in an aggregate amount up to $200.0 million. Borrowings are secured by assets of the Company's North American operations and a portion of the stock of its non-North American subsidiaries and are also guaranteed by the Company's principal operating subsidiaries. The credit facility, as amended, restricts certain corporate acts and contains required financial ratios and other covenants. Loans under the credit facility bear interest, at the Company's option, at (i) a spread over LIBOR or (ii) a spread over the Alternate Base Rate, which is defined as the higher of (a) the agent's Prime Rate, (b) the secondary market rate for certificates of deposit (adjusted for reserve requirements) plus 1% or (c) the Federal Funds Effective Rate plus 1/2 of 1%. A commitment fee accrues on the unused portion of the credit facility. The commitment fee is 50 basis points per annum and the spread over LIBOR on all loans under the facility ranges between 450 and 500 basis points per annum. Both the commitment fee and the spread over LIBOR are fixed for the life of the facility as a result of the October 2002 amendment (discussed below). In April 2002, the Company amended the credit facility to permit increased financial flexibility through March 2003. As a result of the amendment, the Company's spread over LIBOR increased by 25 basis points across all levels of its leverage-based pricing grid and a new leverage level was added to the pricing grid. One time fees and expenses associated with the amendment were $2.0 million and were being amortized over the one year period of the amendment. In October 2002, the Company further amended its credit facility through March 2004. The amendment substantially relaxed the Company's financial covenants primarily in response to the ongoing weakness in the Communications segment. Among other provisions, the amendment adjusted the size of the Company's revolving credit facility to $200 million from $250 million, added a new financial covenant tied to minimum quarterly earnings levels and established a contingent payment of approximately $5.5 million to lenders if the total facility commitments are not reduced by at least $100 million by December 15, 2003. As part of the amendment, the Company suspended its quarterly cash dividend of $0.05 per common share for the term of the amendment. One time costs of approximately $4 million were incurred for the amendment and are being amortized over the life of the F-48 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 7. LONG-TERM DEBT - (CONTINUED) amendment. The Company will also incur incremental annualized interest costs of approximately $4 million during the amendment period as a result of increased credit spreads. As a result of the completion of the October 2002 amendment, the Company recorded $1.1 million of other financial costs for the write-off of unamortized bank fees. Of the $1.1 million, $0.6 million related to fees paid in April 2002 for a prior amendment, the terms of which were substantially amended by the October amendment and $0.5 million was due to the reduction in borrowing capacity of the revolving portion of the credit facility. Future compliance with financial covenants will be dependent upon a number of factors, including overall economic activity, future conditions in the Company's principal end markets and the Company's future borrowing requirements. Scheduled repayments of the term loans began in December 2000 with final maturity in June 2007. 8. FINANCIAL INSTRUMENTS General Cable is exposed to various market risks, including changes in interest rates, foreign currency and commodity prices. To manage risk associated with the volatility of these natural business exposures, General Cable enters into interest rate, commodity and foreign currency derivative agreements as well as copper and aluminum forward purchase agreements. General Cable does not purchase or sell derivative instruments for trading purposes. General Cable has utilized interest rate swaps and interest rate collars to manage its interest expense exposure by fixing its interest rate on a portion of the Company's floating rate debt. Under the swap agreements, General Cable will typically pay a fixed rate while the counterparty pays to General Cable the difference between the fixed rate and the three-month LIBOR rate. During 2001, the Company entered into several interests rate swaps which effectively fixed the LIBOR portion of the interest rates for borrowings under the credit facility and other debt. The swaps outstanding as of September 30, 2003 were as follows (dollars in millions):
NOTIONAL INTEREST INTEREST RATE DERIVATIVES PERIOD AMOUNTS RATE RANGE - ------------------------- ----------------------------- -------- ---------- Interest rate swaps......................... December 2001 to October 2011 9.0 4.49% Interest rate swaps......................... January 2003 to December 2003 200.0 4.60 - 4.74%
The Company does not provide or receive any collateral specifically for these contracts. However, all counterparties are members of the lending group and as such participate in the collateral of the credit agreement and are significant financial institutions. The Company enters into forward exchange contracts principally to hedge the currency fluctuations in certain transactions denominated in foreign currencies, thereby limiting the Company's risk that would otherwise result from changes in exchange rates. Principal transactions hedged during the year were firm sales and purchase commitments. Outside of North America, General Cable enters into commodity futures for the purchase of copper and aluminum for delivery in a future month to match certain sales transactions. In North America, General Cable enters into forward pricing agreements for the purchase of copper and aluminum for delivery in a future month to match certain sales transactions. General Cable expects to recover the unrealized loss under these agreements as a result of firm sale price commitments with customers. F-49 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 9. OTHER SHAREHOLDERS' EQUITY Other shareholders' equity consisted of the following (in millions):
SEPTEMBER 30, DECEMBER 31, 2003 2002 ------------- ------------ Loans to shareholders........................................................ $(2.8) $(4.3) Restricted stock............................................................. (0.5) (0.5) ----- ----- Other shareholders' equity.................................................. $(3.3) $(4.8) ===== =====
In November 1998, General Cable entered into a Stock Loan Incentive Plan (SLIP) with executive officers and key employees. Under the SLIP, the Company loaned $6.0 million to facilitate open market purchases of General Cable common stock. The loans are evidenced by notes that bear interest at 5.12% and mature in November 2003. A matching restricted stock unit (MRSU) was issued for each share of stock purchased under the SLIP. The MRSUs generally vest after five years of continuous employment. If the vesting requirements are met, one share of General Cable common stock will be issued in exchange for each MRSU. The fair value of the MRSUs at the grant date of $6.0 million, adjusted for subsequent forfeitures, is being amortized to expense over the five-year vesting period. In June 2003, all executive officers repaid loans plus interest originally granted under the SLIP in the amount of $1.8 million. The Company accepted as partial payment for the loans common stock owned by the executive officers and restricted stock units previously awarded to them under the SLIP. In July 2003, the Company approved an extension of the loan maturity for the remaining participants in the SLIP for an additional three years to November 2006, subject in the extension period to a rate of interest of 5.0%. 10. EARNINGS (LOSS) PER COMMON SHARE OF CONTINUING OPERATIONS A reconciliation of the numerator and denominator of earnings (loss) per common share of continuing operations to earnings (loss) per common share of continuing operations assuming dilution is as follows (in millions, except per share amounts):
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------- 2003 2002 --------------------------------- ------------------------------------- PER SHARE PER SHARE INCOME(1) SHARES(2) AMOUNT LOSS(1) SHARES(2) AMOUNT --------- --------- --------- ------- --------- --------- Earnings (loss) per common share..... $2.1 33.1 $0.06 $(4.0) 33.1 $(0.12) Dilutive effect of stock options and restricted stock units........ -- 0.5 -- -- -- ---- ---- ----- ----- ---- ------ Earnings per common share - assuming dilution.......................... $2.1 33.6 $0.06 $(4.0) 33.1 $(0.12) ==== ==== ===== ===== ==== ======
NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------- 2003 2002 --------------------------------- ------------------------------------- PER SHARE PER SHARE INCOME(1) SHARES(2) AMOUNT LOSS(1) SHARES(2) AMOUNT --------- --------- --------- ------- --------- --------- Earnings (loss) per common share..... $5.2 33.1 $0.16 $(10.9) 33.0 $(0.33) Dilutive effect of stock options and restricted stock units........ -- 0.3 -- -- -- ---- ---- ----- ------ ---- ------ Earnings per common share - assuming dilution.......................... $5.2 33.4 $0.16 $(10.9) 33.0 $(0.33) ==== ==== ===== ====== ==== ======
- --------------- (1) Numerator (2) Denominator F-50 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 10. EARNINGS (LOSS) PER COMMON SHARE OF CONTINUING OPERATIONS - (CONTINUED) The earnings per common share-assuming dilution computation excludes the impact of 2.4 million and 2.5 million stock options and restricted stock units in the third quarter and first nine months of 2003, respectively, because their impact was anti-dilutive. In the third quarter and first nine months of 2002, the earnings (loss) per common share-assuming dilution computation also excludes the impact of 3.0 million stock options and restricted stock units for the same reason. 11. SEGMENT INFORMATION The energy segment manufactures and sells wire and cable products which include low-, medium- and high-voltage power distribution and power transmission products for overhead and buried applications. The industrial & specialty segment manufactures and sells products which conduct electrical current for industrial, OEM, commercial and residential power and control applications. The communications segment manufactures and sells wire and cable products which transmit low-voltage signals for voice, data, video and control applications. Summarized financial information for the Company's operating segments for the three months and nine months ended September 30, 2003 and 2002 is as follows (in millions). Certain reclassifications have been made to the prior year to conform to the current year segment presentation.
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------- INDUSTRIAL ENERGY & SPECIALTY COMMUNICATIONS CORPORATE TOTAL ------ ----------- ------------------- -------------- ---------- Net sales: 2003..................... $138.2 $128.5 $115.8 $ -- $382.5 2002..................... 123.8 116.7 106.9 -- 347.4 Operating income (loss): 2003..................... 11.6 0.7 1.8 (0.6) 13.5 2002..................... 8.6 1.3 (2.1) (3.7) 4.1
NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------ INDUSTRIAL ENERGY & SPECIALTY COMMUNICATIONS CORPORATE TOTAL ------ ----------- ------------------- -------------- --------- Net sales: 2003..................... $413.5 $395.1 $324.5 $ -- $1,133.1 2002..................... 389.0 383.1 330.4 -- 1,102.5 Operating income (loss): 2003..................... 29.4 7.8 5.3 (1.7) 40.8 2002..................... 28.7 7.5 6.7 (28.7) 14.2
For the three month and nine month period ended September 30, 2003, the corporate operating loss of $0.6 million and $1.7 million consist of charges for severance related to the Company's ongoing cost cutting efforts in Europe. The corporate operating loss of $3.7 million for the three month period ended September 30, 2002, included a $0.8 million charge related to the closure of two manufacturing plants in North America and a $2.9 million charge for severance costs. For the nine month period ended September 30, 2002, the corporate operating loss of $28.7 million included a $20.5 million charge related to the closure of two manufacturing plants in North America, a $3.6 million charge to write-down to fair value certain assets contributed to the Company's newly formed fiber optic joint venture, a $2.9 million charge related to severance and severance related costs, and $1.7 million related to the sale of the Company's small, non-strategic United Kingdom based specialty cable business. The Company has recorded the operating items discussed above in the corporate segment rather than reflect such items in the energy, industrial & specialty or communications segments operating income. These items are reported in the corporate segment because they are not considered in the operating performance evaluation F-51 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 11. SEGMENT INFORMATION - (CONTINUED) of the energy, industrial & specialty or communications segment by the Company's chief operating decision-maker, its Chief Executive Officer. Identifiable assets of the Company's operating segments are summarized in the following table (in millions). Corporate assets include cash, deferred income taxes, property, certain prepaid expenses and other non-current assets.
SEPTEMBER 30, DECEMBER 31, 2003 2002 -------------- ------------ Energy............................................................. $260.3 $229.1 Industrial & specialty............................................. 325.4 289.9 Communications..................................................... 309.6 318.3 Corporate.......................................................... 82.6 136.0 ------ ------ Total............................................................. $977.9 $973.3 ====== ======
12. SUPPLEMENTAL GUARANTOR INFORMATION General Cable Corporation (the Issuer) intends to issue and sell $275.0 million of Senior Notes due 2010. General Cable Corporation and its material North American wholly-owned subsidiaries will fully and unconditionally guarantee the notes on a joint and several basis. The Company has not presented separate financial statements and other disclosures concerning the guarantor subsidiaries because management has determined that such information will not be material to the holders of the senior notes. The following consolidating financial information presents information about the Issuer, guarantor subsidiaries and non-guarantor subsidiaries. Initially, all of the Company's subsidiaries will be "restricted subsidiaries" for purposes of the Senior Notes. Investments in subsidiaries are accounted for on the equity basis. Intercompany transactions are eliminated. SUPPLEMENTAL CONSOLIDATING STATEMENTS OF OPERATIONS (IN MILLIONS)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 ----------------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ----- Net sales: Customers.......................... $ -- $ 272.4 $ 110.1 $ -- $ 382.5 Intercompany....................... 6.7 -- -- (6.7) -- ----- ------- ------- ------ ------- 6.7 272.4 110.1 (6.7) 382.5 Cost of sales....................... -- 254.7 89.1 (6.7) 337.1 ----- ------- ------- ------ ------- Gross profit........................ 6.7 17.7 21.0 -- 45.4 Selling, general and administrative expenses......................... 4.5 18.7 8.7 -- 31.9 ----- ------- ------- ------ ------- Operating income.................... 2.2 (1.0) 12.3 -- 13.5 Interest income (expense): Interest expense................... (9.4) (16.5) (1.0) 16.5 (10.4) Interest income.................... 11.1 5.5 -- (16.5) 0.1 ----- ------- ------- ------ ------- 1.7 (11.0) (1.0) -- (10.3) Income (loss) from continuing operations before income taxes... 3.9 (12.0) 11.3 -- 3.2 Income tax (provision) benefit...... (1.4) 4.3 (4.0) -- (1.1) ----- ------- ------- ------ ------- Income (loss) from continuing operations....................... 2.5 (7.7) 7.3 -- 2.1 Loss on disposal of discontinued operations (net of tax).......... -- -- -- -- -- ----- ------- ------- ------ ------- Net income (loss)............. $ 2.5 $ (7.7) $ 7.3 $ -- $ 2.1 ===== ======= ======= ====== =======
F-52 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 --------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ -------------- ------------ ------- Net sales: Customers............................ $ -- $ 257.1 $90.3 $ -- $ 347.4 Intercompany......................... 7.0 -- -- (7.0) -- ---- ------- ----- ----- ------- 7.0 257.1 90.3 (7.0) 347.4 Cost of sales......................... -- 242.1 74.7 (7.0) 309.8 ---- ------- ----- ----- ------- Gross profit.......................... 7.0 15.0 15.6 -- 37.6 Selling, general and administrative expenses........................... 6.3 20.2 7.0 -- 33.5 ---- ------- ----- ----- ------- Operating income...................... 0.7 (5.2) 8.6 -- 4.1 Interest income (expense): Interest expense..................... (9.4) (16.1) (1.5) 16.5 (10.5) Interest income...................... 11.1 5.6 -- (16.5) 0.2 ---- ------- ----- ----- ------- 1.7 (10.5) (1.5) -- (10.3) ---- ------- ----- ----- ------- Income (loss) from continuing operations before income taxes..... 2.4 (15.7) 7.1 -- (6.2) Income tax (provision) benefit........ (0.9) 5.6 (2.5) -- 2.2 ---- ------- ----- ----- ------- Income (loss) from continuing operations......................... 1.5 (10.1) 4.6 -- (4.0) Loss on disposal of discontinued operations (net of tax)............ -- -- -- -- -- ---- ------- ----- ----- ------- Net income (loss)............... $1.5 $ (10.1) $ 4.6 $ -- $ (4.0) ==== ======= ===== ===== =======
F-53 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING STATEMENTS OF OPERATIONS (IN MILLIONS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 -------------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ -------------- ------------ ------ Net sales: Customers......................... $ -- $ 793.3 $339.8 $ -- $1,133.1 Intercompany...................... 19.7 -- -- (19.7) -- ----- ------- ------ ------ -------- 19.7 793.3 339.8 (19.7) 1,133.1 Cost of sales...................... -- 740.0 278.4 (19.7) 998.7 ----- ------- ------ ------ -------- Gross profit....................... 19.7 53.3 61.4 -- 134.4 Selling, general and administrative expenses........................ 16.2 48.7 28.7 -- 93.6 ----- ------- ------ ------ -------- Operating income................... 3.5 4.6 32.7 -- 40.8 Interest income (expense): Interest expense.................. (28.1) (50.4) (4.0) 49.4 (33.1) Interest income................... 33.3 16.4 -- (49.4) 0.3 ----- ------- ------ ------ -------- 5.2 (34.0) (4.0) -- (32.8) ----- ------- ------ ------ -------- Income (loss) from continuing operations before income taxes.. 8.7 (29.4) 28.7 -- 8.0 Income tax (provision) benefit..... (3.1) 10.5 (10.2) -- (2.8) ----- ------- ------ ------ -------- Income (loss) from continuing operations...................... 5.6 (18.9) (18.5) -- 5.2 Loss on disposal of discontinued operations (net of tax)......... -- -- -- -- -- ----- ------- ------ ------ -------- Net income (loss) $ 5.6 $ (18.9) $ 18.5 $ -- $ 5.2 ===== ======= ====== ====== ========
F-54 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 -------------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ -------- Net sales: Customers.......................... $ -- $ 825.9 $276.6 $ -- $1,102.5 Intercompany....................... 18.9 -- -- (18.9) -- ------ ------- ------ ------ -------- 18.9 825.9 276.6 (18.9) 1,102.5 Cost of sales....................... -- 760.2 230.8 (18.9) 972.1 ------ ------- ------ ------ -------- Gross profit........................ 18.9 65.7 45.8 -- 130.4 Selling, general and administrative expenses......................... 16.9 77.8 21.5 -- 116.2 ------ ------- ------ ------ -------- Operating income.................... 2.0 (12.1) 24.3 -- 14.2 Interest income (expense): Interest expense................... (28.1) (48.4) (4.8) 49.4 (31.9) Interest income.................... 33.3 16.8 0.1 (49.4) 0.8 ------ ------- ------ ------ -------- 5.2 (31.6) (4.7) -- (31.1) ------ ------- ------ ------ -------- Income (loss) from continuing operations before income taxes... 7.2 (43.7) 19.6 -- (16.9) Income tax (provision) benefit...... (2.6) 15.6 (7.0) -- 6.0 ------ ------- ------ ------ -------- Income (loss) from continuing operations....................... 4.6 (28.1) 12.6 -- (10.9) Loss on disposal of discontinued operations (net of tax).......... -- (3.9) -- -- (3.9) ------ ------- ------ ------ -------- Net income (loss)............. $ 4.6 $ (32.0) $ 12.6 $ -- $ (14.8) ====== ======= ====== ====== ========
F-55 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING BALANCE SHEETS (IN MILLIONS)
SEPTEMBER 30, 2003 -------------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ------- ASSETS Current assets: Cash....................................... $ -- $ 8.5 $ 15.7 $ -- $ 24.2 Receivables, net of allowances............. -- 9.4 132.0 -- 141.4 Retained interest in accounts receivables.............................. -- 80.9 -- -- 80.9 Inventories................................ -- 135.6 111.4 -- 247.0 Deferred income taxes...................... -- 12.2 0.1 -- 12.3 Prepaid expenses and other................. 1.3 22.6 0.7 -- 24.6 ------ ------ ------ -------- ------- Total current assets...................... 1.3 269.2 259.9 -- 530.4 Property, plant and equipment, net.......... 0.4 237.0 89.4 -- 326.8 Deferred income taxes....................... (3.1) 81.5 (3.7) -- 74.7 Intercompany accounts....................... 462.4 -- 3.9 (466.3) Investment in subsidiaries.................. 33.8 345.2 -- (379.0) -- Other non-current assets.................... 7.3 37.6 1.1 -- 46.0 ------ ------ ------ -------- ------- Total assets.............................. $502.1 $970.5 $350.6 $ (845.3) $ 977.9 ====== ====== ====== ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY ...... Current liabilities: Accounts payable........................... $ -- $117.6 $142.4 $ -- $ 260.0 Accrued liabilities........................ 12.1 75.3 16.1 -- 103.5 Current portion of long-term debt.......... -- 18.3 15.2 -- 33.5 ------ ------ ------ -------- ------- Total current liabilities................. 12.1 211.2 173.7 -- 397.0 Long-term debt.............................. 297.9 49.8 22.8 -- 370.5 Deferred income taxes....................... -- 2.4 0.3 -- 2.7 Intercompany accounts....................... 0.5 465.8 -- (466.3) -- Other liabilities........................... 32.9 78.0 13.2 -- 124.1 Total liabilities......................... 343.4 807.2 210.0 (466.3) 894.3 Total shareholders' equity.................. 158.7 163.3 140.6 (379.0) 83.6 ------ ------ ------ -------- ------- Total liabilities and shareholders' equity.. $502.1 $970.5 $350.6 $ (845.3) $ 977.9 ====== ====== ====== ======== =======
F-56 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED)
DECEMBER 31, 2002 --------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ------- ASSETS Current assets: Cash........................................ $ -- $ 8.1 $ 21.0 $ -- $ 29.1 Receivables, net of allowances.............. -- 7.4 98.5 -- 105.9 Retained interest in accounts receivables............................... -- 84.8 -- -- 84.8 Inventories................................. -- 149.5 108.8 -- 258.3 Deferred income taxes....................... -- 12.2 -- -- 12.2 Prepaid expenses and other.................. 1.3 40.4 0.9 -- 42.6 ------ -------- ------ -------- ------- Total current assets....................... 1.3 302.4 229.2 -- 532.9 Property, plant and equipment, net........... 0.5 249.9 72.9 -- 323.3 Deferred income taxes........................ (3.6) 78.1 (6.2) -- 68.3 Intercompany accounts........................ 451.8 -- 24.3 (476.1) -- Investment in subsidiaries................... 33.8 345.2 -- (379.0) -- Other non-current assets..................... 8.8 38.9 1.1 -- 48.8 ------ -------- ------ -------- ------- Total assets............................... $492.6 $1,014.5 $321.3 $ (855.1) $ 973.3 ====== ======== ====== ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable............................ $ -- $ 112.2 $129.9 $ -- $ 242.1 Accrued liabilities......................... 5.6 77.4 16.2 -- 99.2 Current portion of long-term debt........... -- 13.0 27.8 -- 40.8 ------ -------- ------ -------- ------- Total current liabilities.................. 5.6 202.6 173.9 -- 382.1 Long-term debt............................... 304.1 77.4 29.6 -- 411.1 Deferred income taxes........................ -- 1.9 0.2 -- 2.1 Intercompany accounts........................ -- 476.1 -- (476.1) -- Other liabilities............................ 32.9 78.2 6.0 -- 117.1 Total liabilities.......................... 342.6 836.2 209.7 (476.1) 912.4 Total shareholders' equity................... 150.0 178.3 111.6 (379.0) 60.9 ------ -------- ------ -------- ------- Total liabilities and shareholders' equity... $492.6 $1,014.5 $321.3 $ (855.1) $ 973.3 ====== ======== ====== ======== =======
F-57 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING CASH FLOWS (IN MILLIONS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 -------------------------------------------------------------------- NON- GUARANTOR GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------ ------------ ----- Cash flows of operating activities: Net income income (loss)............................ $ 5.6 $ (18.9) $ 18.5 $-- $ 5.2 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization.................. 0.6 21.3 1.3 -- 23.2 Deferred income taxes.......................... (0.5) (2.8) (2.5) -- (5.8) Loss on sale of business....................... -- 0.3 0.1 -- 0.4 Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: (Increase) decrease in receivables......... -- 1.9 (18.8) -- (16.9) (Increase) decrease in inventories......... -- 14.8 7.4 -- 22.2 (Increase) decrease in other assets........ 1.5 17.6 (0.4) -- 19.5 Increase (decrease) in accounts payable, accrued and other liabilities........... 8.1 5.2 (2.9) -- 10.4 ------ ------- ------ --- ----- Net cash flows of operating activities............... 15.3 39.4 3.5 -- 58.2 ------ ------- ------ --- ----- Cash flows of investing activities: Capital expenditures................................ -- (6.1) (5.7) -- (11.8) Proceeds from properties sold....................... -- 1.9 -- -- 1.9 Repayment of loans from shareholders. 1.0 -- -- -- 1.0 Other, net.......................................... -- (1.3) -- -- (1.3) ------ ------- ------ --- ----- Net cash flows of investing activities 1.0 (5.5) (5.7) -- (10.2) ------ ------- ------ --- ----- Cash flows of financing activities: Intercompany accounts............................... (10.1) (8.1) 18.2 -- -- Net changes in revolving credit borrowings (6.2) (7.1) -- -- (13.3) Net change in other debt............................ -- (6.6) (18.9) -- (25.5) Repayment of long-term debt......................... -- (11.7) (2.4) -- (14.1) ------ ------- ------ --- ----- Net cash flows of financing activities........... (16.3) (33.5) (3.1) -- (52.9) ------ ------- ------ --- ----- Increase (decrease) in cash.......................... -- 0.4 (5.3) -- (4.9) Cash-- beginning of period........................... -- 8.1 22.6 -- 29.1 ------ ------- ------ --- ----- Cash-- end of period................................. $ -- $ 8.5 $ 15.7 $-- $24.2 ====== ======= ====== === =====
F-58 GENERAL CABLE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 12. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED) SUPPLEMENTAL CONSOLIDATING CASH FLOWS (IN MILLIONS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 --------------------------------------------------------------------- GUARANTOR NON-GUARANTOR ISSUER SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ -------- Cash flows of operating activities: Net income income (loss)............................ $ 4.6 $(32.0) $ 12.6 $-- $ (14.8) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization...................... 0.7 21.9 0.2 -- 22.8 Deferred income taxes............................. (0.8) 22.0 (1.2) -- 20.0 Loss on sale of business.............. -- 1.7 -- -- 1.7 Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: (Increase) decrease in receivables................ -- 17.6 0.2 -- 17.8 (Increase) decrease in inventories................ -- 37.0 (8.7) -- 28.3 (Increase) decrease in other assets............... 0.5 2.2 0.7 -- 3.4 Increase (decrease) in accounts payable, accrued and other liabilities.................... (0.9) (11.8) 9.4 -- (3.3) ------ ------ ------ --- -------- Net cash flows of operating activities 4.1 58.6 13.2 -- 75.9 ------ ------ ------ --- -------- Cash flows of investing activities: Capital expenditures................................ -- (13.4) (9.4) -- (22.8) Proceeds from properties sale of businesses, net of cash sold................................... -- 1.7 -- -- 1.7 Proceeds from properties sold....................... -- 0.1 0.4 -- 0.5 Other, net.......................................... -- (0.8) -- -- (0.8) ------ ------ ------ --- -------- Net cash flows of investing activities -- (12.4) (9.0) -- (21.4) ------ ------ ------ --- -------- Cash flows of financing activities: Dividends paid...................................... (5.0) -- -- -- (5.0) Intercompany accounts............................... 11.7 (16.5) 4.8 -- -- Net changes in revolving credit borrowings.......... (13.1) (23.0) -- -- (36.1) Net change in other debt............................ -- (0.1) -- -- (0.1) Repayment of long-term debt......................... -- (4.6) (4.4) -- (9.0) Proceeds from exercise of stock options 2.4 -- -- -- 2.4 ------ ------ ------ --- -------- Net cash flows of financing activities (4.0) (44.2) 0.4 -- (47.8) ------ ------ ------ --- -------- Increase (decrease) in cash........................... 0.1 2.0 4.6 -- 6.7 Cash - beginning of period............................ -- 6.8 9.8 -- 16.6 ------ ------ ------ --- -------- Cash - end of period.................................. $ 0.1 $ 8.8 $ 14.4 $-- $ 23.3 ====== ====== ====== === ========
F-59 [GENERAL CABLE LOGO] GENERAL CABLE CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING OLD 9.5% SENIOR NOTES DUE 2010 FOR NEW 9.5% SENIOR NOTES DUE 2010, SERIES B ------------------- PROSPECTUS ------------------- , 2004 UNTIL , 2004, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Pursuant to the authority conferred by Section 102 of the Delaware General Corporation Law, as amended ("DGCL"), Article VII of the Registrant's amended and restated certificate of incorporation, contains provisions which eliminate personal liability of members of the Registrant's board of directors for violations of their fiduciary duty of care. Neither the DGCL nor our amended and restated certificate of incorporation, however, limits the liability of a director for breaching his duty of loyalty, failing to act in good faith, engaging in intentional misconduct or knowingly violating a law, paying a dividend or approving a stock repurchase under circumstances where such payment or repurchase is not permitted under the DGCL, or obtaining an improper personal benefit. Article VII of the Registrant's amended and restated certificate of incorporation, also provides that if the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, the liability of the Registrant's directors shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. In accordance with Section 145 of the DGCL, which provides for the indemnification of directors, officers and employees under certain circumstances, Article XIV of the Registrant's amended and restated bylaws provides that the Registrant is obligated to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the Registrant in which such person has been adjudged liable to the Registrant) by reason of the fact that he is or was a director, officer or employee of the Registrant, or is or was a director, officer or employee of the Registrant serving at the request of the Registrant as a director, officer, employee or agent or another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In the case of any action, suit or proceeding by or in the right of the Registrant in which a claim, issue or matter as to which such person shall have been adjudged to be liable to the Registrant, such person shall be indemnified only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought has determined that such person is fairly and reasonably entitled to indemnify for such expenses which such court shall deem proper. The Registrant currently maintains insurance policies that provide coverage pursuant to which it will be reimbursed for amounts it may be required or permitted by law to pay to indemnify directors and officers. II-1 EXHIBIT INDEX 1.1 Purchase Agreement dated November 18, 2003, among the Company, certain Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC as representatives of the Initial Purchasers named therein 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-22961) of the Company filed with the Securities and Exchange Commission on March 7, 1997, as amended (the "Initial S-1")) 3.2 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Initial S-1) 3.3 Certificate of Incorporation, as amended, of Diversified Contractors, Inc. 3.4 Bylaws of Diversified Contractors, Inc. 3.5 Certificate of Incorporation of Genca Corporation 3.6 Bylaws of Genca Corporation 3.7 Certificate of Incorporation and Memorandum of Association, as amended, of General Cable Canada, Ltd. 3.8 Articles of Incorporation, as amended, of General Cable Company 3.9 Bylaws of General Cable Company 3.10 Restated and Amended Certificate of Incorporation of General Cable Industries, Inc. 3.11 Bylaws of General Cable Industries, Inc. 3.12 Certificate of Formation, as amended, of General Cable Industries LLC 3.13 Operating Agreement of General Cable Industries LLC 3.14 Bylaws of General Cable de Latinoamerica S.A. de C.V. 3.15 Certificate of Formation of General Cable Management LLC 3.16 Operating Agreement, as amended, of General Cable Management LLC 3.17 General Cable de Mexico del Norte, S.A. de C.V. 3.18 Certificate of Incorporation of General Cable Overseas Holdings, Inc. 3.19 Bylaws of General Cable Overseas Holdings, Inc. 3.20 Certificate of Incorporation, as amended, of General Cable Technologies Corporation 3.21 Bylaws of General Cable Technologies Corporation 3.22 Certificate of Limited Partnership of General Cable Texas Operations, L.P. 3.23 Amendment No. 2 to Limited Partnership Agreement of General Cable Texas Operations, L.P. 3.24 Restated Certificate of Incorporation of GK Technologies, Incorporated 3.25 Bylaws of GK Technologies, Incorporated 3.26 Certificate of Incorporation, as amended, of Marathon Manufacturing Holdings, Inc. 3.27 Bylaws of Marathon Manufacturing Holdings, Inc. 3.28 Certificate of Incorporation, as amended, of Marathon Steel Company (formerly known as Allison Steel Company) 3.29 Bylaws of Marathon Steel Company 3.30 Certificate of Incorporation, as amended, of MLTC Company 3.31 Bylaws of MLTC Company 4.1 Certificate of Designations filed with the Secretary of State of Delaware on November 21, 2003, setting forth the powers, preferences and rights, and the qualifications, limitations and restrictions of the Company's 5.75% Series A redeemable convertible preferred stock (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated December 12, 2003) 4.2 Indenture among the Company, certain Guarantors named therein and U.S. Bank National Association as Trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K dated December 12, 2003) 4.3 Registration Rights Agreement dated November 24, 2003, among the Company, certain Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC as representatives of the Initial Purchasers named therein (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K dated December 12, 2003) 5.1* Opinion of Blank Rome LLP regarding the validity of the new notes 12.1 Computation of Ratio of Earnings to Fixed Charges 23.1 Independent Auditors' Consent 23.2* Consent of Blank Rome LLP (included in Exhibit 5.1) 24.1 Powers of Attorney (included on signature pages) 25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association, as Trustee under the Indenture 99.1 Form of Letter of Transmittal 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter to Clients 99.4 Form of Letter to Broker, Dealers and Other Nominees - -------------- * To be filed by amendment ITEM 22. UNDERTAKINGS. The undersigned Registrant and Co-Registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Co-Registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers and controlling persons of the Co-Registrants pursuant to the provisions described in Item 15 above, or otherwise, the Co-Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim of indemnification against such liabilities (other than the payment by the Co-Registrant of expenses incurred or paid by a director, officer or controlling person of a Co-Registrant in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Co-Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 (6) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (7) To supply by means of a post-effective amendment all information concerning a transaction that was not the subject of and included in the registration statement when it became effective. II-5 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENERAL CABLE CORPORATION (Registrant) By: /s/ Robert J. Siverd ------------------------------------- Robert J. Siverd Executive Vice President, General Counsel and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Gregory B. Kenny Director, President and Chief Executive Officer February 12, 2004 - ------------------------------------ (Principal Executive Officer) Gregory B. Kenny /s/Christopher F. Virgulak Executive Vice President, Chief Financial Officer February 12, 2004 - ------------------------------------ and Treasurer (Principal Financial and Accounting Christopher F. Virgulak Officer) /s/Robert J. Siverd Executive Vice President, General Counsel and February 12, 2004 - ------------------------------------ Secretary Robert J. Siverd /s/Jeffrey Noddle Director February 12, 2004 - ------------------------------------ Jeffrey Noddle /s/John E. Welsh, III Director February 12, 2004 - ------------------------------------ John E. Welsh, III /s/Robert L. Smialek Director February 12, 2004 - ------------------------------------ Robert L. Smialek /s/Gregory E. Lawton Director February 12, 2004 - ------------------------------------ Gregory E. Lawton
II-6 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrants certify that they have reasonable grounds to believe that they meet all of the requirements for filing on Form S-4 and have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. DIVERSIFIED CONTRACTORS, INC. MARATHON MANUFACTURING HOLDINGS, INC. MARATHON STEEL COMPANY MLTC COMPANY (Co-Registrants) By: /s/ Robert J. Siverd -------------------------------------- Robert J. Siverd President and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Robert J. Siverd Director, President and Secretary (Principal February 12, 2004 - ------------------------------------ Executive Officer) Robert J. Siverd /s/Christopher F. Virgulak Director, Executive Vice President, Chief Financial February 12, 2004 - ------------------------------------ Officer and Treasurer (Principal Financial and Christopher F. Virgulak Accounting Officer)
II-7 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENCA CORPORATION (Co-Registrant) By: /s/ Robert J. Siverd -------------------------------------- Robert J. Siverd Executive Vice President and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Gregory B. Kenny President (Principal Executive Officer) February 12, 2004 - ------------------------------------ Gregory B. Kenny /s/Christopher F. Virgulak Director, Executive Vice President, Chief Financial February 12, 2004 - ------------------------------------ Officer and Treasurer (Principal Financial and Christopher F. Virgulak Accounting Officer) /s/Robert J. Siverd Director, Executive Vice President and Secretary February 12, 2004 - ------------------------------------ Robert J. Siverd
II-8 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrants certify that they have reasonable grounds to believe that they meet all of the requirements for filing on Form S-4 and have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENERAL CABLE CANADA, LTD. GENERAL CABLE COMPANY (Co-Registrants) By: /s/ Robert J. Siverd -------------------------------------- Robert J. Siverd Executive Vice President and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Gregory B. Kenny Director and President (Principal Executive Officer) February 12, 2004 - ------------------------------------ Gregory B. Kenny /s/Christopher F. Virgulak Director, Executive Vice President, Chief Financial February 12, 2004 - ------------------------------------ Officer and Treasurer (Principal Financial and Christopher F. Virgulak Accounting Officer) /s/Robert J. Siverd Director, Executive Vice President and Secretary February 12, 2004 - ------------------------------------ Robert J. Siverd
II-9 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrants certify that they have reasonable grounds to believe that they meet all of the requirements for filing on Form S-4 and have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENERAL CABLE INDUSTRIES, INC. GENERAL CABLE INDUSTRIES, LLC GENERAL CABLE MANAGEMENT, LLC GENERAL CABLE OVERSEAS HOLDINGS, INC. GENERAL CABLE TEXAS OPERATIONS, L.P. GK TECHNOLOGIES, INCORPORATED (Co-Registrants) By: /s/ Robert J. Siverd -------------------------------------- Robert J. Siverd Executive Vice President, General Counsel and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Gregory B. Kenny President and Chief Executive Officer (Principal February 12, 2004 - ------------------------------------ Executive Officer) Gregory B. Kenny /s/Christopher F. Virgulak Director, Executive Vice President, Chief Financial February 12, 2004 - ------------------------------------ Officer and Treasurer (Principal Financial and Christopher F. Virgulak Accounting Officer) /s/Robert J. Siverd Director, Executive Vice President, General Counsel February 12, 2004 - ------------------------------------ and Secretary Robert J. Siverd
II-10 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENERAL CABLE DE LATINOAMERICA, S.A. DE C.V. (Co-Registrant) By: /s/ Robert J. Siverd -------------------------------------- Robert J. Siverd Vice President and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Gregory B. Kenny Chairman and President (Principal Executive Officer) February 12, 2004 - ------------------------------------ Gregory B. Kenny /s/Christopher F. Virgulak Vice President and Chief Financial Officer February 12, 2004 - ------------------------------------ (Principal Financial and Accounting Officer) Christopher F. Virgulak /s/Robert J. Siverd Vice President and Secretary February 12, 2004 - ------------------------------------ Robert J. Siverd /s/Jeffrey J. Whelan Director and Alternate Secretary February 12, 2004 - ----------------------------------------- Jeffrey J. Whelan /s/Jose Ausencio Sanroman Tovar Director and Plant Manager February 12, 2004 - ------------------------------------ Jose Ausencio Sanroman Tovar
II-11 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENERAL CABLE DE MEXICO DEL NORTE, S.A. DE C.V. (Co-Registrant) By: /s/ Robert J. Siverd ----------------------------------- Robert J. Siverd Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Gregory B. Kenny President (Principal Executive Officer) February 12, 2004 - ------------------------------------ Gregory B. Kenny /s/Christopher F. Virgulak Executive Vice President, Chief Financial Officer February 12, 2004 - ------------------------------------ and Treasurer (Principal Financial and Accounting Christopher F. Virgulak Officer) /s/Robert J. Siverd Secretary February 12, 2004 - ------------------------------------ Robert J. Siverd /s/German Savala General Director February 12, 2004 - ------------------------------------- German Savala
II-12 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Co-Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Highland Heights, State of Kentucky, on this 12th day of February, 2004. GENERAL CABLE TECHNOLOGIES CORPORATION (Co-Registrant) By: /s/ Robert J. Siverd ------------------------------------------- Robert J. Siverd Executive Vice President and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert J. Siverd and Christopher F. Virgulak, and each of them with power to act alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof in connection with effecting the filing of the Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/Christopher F. Virgulak Director, President and Treasurer (Principal February 12, 2004 - ------------------------------------ Executive, Financial and Accounting Officer) Christopher F. Virgulak /s/Robert J. Siverd Director, Executive Vice President and Secretary February 12, 2004 - ------------------------------------ Robert J. Siverd
II-13 EXHIBIT INDEX 1.1 Purchase Agreement dated November 18, 2003, among the Company, certain Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC as representatives of the Initial Purchasers named therein 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-22961) of the Company filed with the Securities and Exchange Commission on March 7, 1997, as amended (the "Initial S-1")) 3.2 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Initial S-1) 3.3 Certificate of Incorporation, as amended, of Diversified Contractors, Inc. 3.4 Bylaws of Diversified Contractors, Inc. 3.5 Certificate of Incorporation of Genca Corporation 3.6 Bylaws of Genca Corporation 3.7 Certificate of Incorporation and Memorandum of Association, as amended, of General Cable Canada, Ltd. 3.8 Articles of Incorporation, as amended, of General Cable Company 3.9 Bylaws of General Cable Company 3.10 Restated and Amended Certificate of Incorporation of General Cable Industries, Inc. 3.11 Bylaws of General Cable Industries, Inc. 3.12 Certificate of Formation, as amended, of General Cable Industries LLC 3.13 Operating Agreement of General Cable Industries LLC 3.14 Bylaws of General Cable de Latinoamerica S.A. de C.V. 3.15 Certificate of Formation of General Cable Management LLC 3.16 Operating Agreement, as amended, of General Cable Management LLC 3.17 General Cable de Mexico del Norte, S.A. de C.V. 3.18 Certificate of Incorporation of General Cable Overseas Holdings, Inc. 3.19 Bylaws of General Cable Overseas Holdings, Inc. 3.20 Certificate of Incorporation, as amended, of General Cable Technologies Corporation 3.21 Bylaws of General Cable Technologies Corporation 3.22 Certificate of Limited Partnership of General Cable Texas Operations, L.P. 3.23 Amendment No. 2 to Limited Partnership Agreement of General Cable Texas Operations, L.P. 3.24 Restated Certificate of Incorporation of GK Technologies, Incorporated 3.25 Bylaws of GK Technologies, Incorporated 3.26 Certificate of Incorporation, as amended, of Marathon Manufacturing Holdings, Inc. 3.27 Bylaws of Marathon Manufacturing Holdings, Inc. 3.28 Certificate of Incorporation, as amended, of Marathon Steel Company 3.29 Bylaws of Marathon Steel Company 3.30 Certificate of Incorporation, as amended, of MLTC Company 3.31 Bylaws of MLTC Company 4.1 Certificate of Designations filed with the Secretary of State of Delaware on November 21, 2003, setting forth the powers, preferences and rights, and the qualifications, limitations and restrictions of the Company's 5.75% Series A redeemable convertible preferred stock (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated December 12, 2003) 4.2 Indenture among the Company, certain Guarantors named therein and U.S. Bank National Association as Trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K dated December 12, 2003) 4.3 Registration Rights Agreement dated November 24, 2003, among the Company, certain Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC as representatives of the Initial Purchasers named therein (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K dated December 12, 2003) 5.1* Opinion of Blank Rome LLP regarding the validity of the new notes 12.1 Computation of Ratio of Earnings to Fixed Charges 23.1 Independent Auditors' Consent 23.2* Consent of Blank Rome LLP (included in Exhibit 5.1) 24.1 Powers of Attorney (included on signature pages) 25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association, as Trustee under the Indenture 99.1 Form of Letter of Transmittal 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter to Clients 99.4 Form of Letter to Broker, Dealers and Other Nominees - -------------- * To be filed by amendment EX-1.1 3 l05578aexv1w1.txt EXHIBIT 1.1 EXHIBIT 1.1 GENERAL CABLE CORPORATION (a Delaware corporation) 9.5% Senior Notes due 2010 PURCHASE AGREEMENT Dated: November 18, 2003 TABLE OF CONTENTS
Page ---- SECTION 1. REPRESENTATIONS AND WARRANTIES BY THE ISSUERS............................................... 2 (a) Representations and Warranties.................................................................. 2 (i) Offering Memorandum................................................................ 2 (ii) Independent Accountants............................................................ 3 (iii) Financial Statements............................................................... 3 (iv) No Material Adverse Change in Business............................................. 3 (v) Good Standing of the Company....................................................... 3 (vi) Good Standing of Subsidiaries...................................................... 3 (vii) Capitalization..................................................................... 4 (viii) Authorization of Agreement......................................................... 4 (ix) Authorization of the Indenture..................................................... 4 (x) Authorization of the Registration Rights Agreement................................. 4 (xi) Authorization of the Notes......................................................... 5 (xii) Authorization of the Guarantees.................................................... 5 (xiii) Authorization of the Exchange Securities and the Private Exchange Securities....... 5 (xiv) Description of the Securities and the Indenture.................................... 5 (xv) Absence of Defaults and Conflicts.................................................. 6 (xvi) Absence of Labor Dispute........................................................... 6 (xvii) Absence of Proceedings............................................................. 7 (xviii) Possession of Intellectual Property................................................ 7 (xix) Absence of Manipulation............................................................ 7 (xx) Absence of Further Requirements.................................................... 7 (xxi) Possession of Licenses and Permits................................................. 7 (xxii) Title to Property.................................................................. 8 (xxiii) Investment Company Act............................................................. 8 (xxiv) Environmental Laws................................................................. 8 (xxv) Internal Accounting Controls....................................................... 9 (xxvi) Disclosure Controls and Procedures................................................. 9 (xxvii) Loans to Directors and Executive Officers.......................................... 10 (xxviii) Statistical and Market-Related Data................................................ 10 (xxix) Sarbanes-Oxley Act of 2002......................................................... 10 (xxx) Insurance.......................................................................... 10 (xxxi) No Agents and Brokers.............................................................. 10 (xxxii) Employee Matters................................................................... 10 (xxxiii) Taxes.............................................................................. 10 (xxxiv) Rule 144A Eligibility.............................................................. 11 (xxxv) No General Solicitation............................................................ 11 (xxxvi) No Registration Required........................................................... 11
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Page ---- (xxxvii) Reporting Company.................................................................. 11 (xxxviii) No Directed Selling Efforts........................................................ 11 (xxxix) Offering Memorandum................................................................ 11 (xl) No Other Distributions............................................................. 11 (xli) Similar Offerings.................................................................. 12 (xlii) No Registration Rights............................................................. 12 (b) Officer's Certificates.......................................................................... 12 SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING............................................ 12 (a) Securities...................................................................................... 12 (b) Payment......................................................................................... 12 (c) Denominations; Registration..................................................................... 13 SECTION 3. COVENANTS OF THE ISSUERS.................................................................... 13 (a) Delivery of Offering Memoranda.................................................................. 13 (b) Amendment to Offering Memorandum and Supplements................................................ 13 (c) Notice and Effect of Material Events............................................................ 13 (d) Qualification of Securities for Offer and Sale.................................................. 14 (e) Rating of Securities............................................................................ 14 (f) Restriction on Sale of Securities............................................................... 14 (g) DTC............................................................................................. 14 (h) Use of Proceeds................................................................................. 14 (i) PORTAL Designation.............................................................................. 14 (j) Reporting Requirements.......................................................................... 14 SECTION 4. PAYMENT OF EXPENSES......................................................................... 14 (a) Expenses........................................................................................ 14 (b) Termination of Agreement........................................................................ 15 SECTION 5. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS............................................... 15 (a) Opinion of Counsel for Issuers.................................................................. 15
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Page ---- (b) Opinion of Local Counsel for Issuers............................................................ 16 (c) Opinion of General Counsel for Company.......................................................... 16 (d) Opinion of Counsel for Initial Purchasers....................................................... 16 (e) Officers' Certificate........................................................................... 16 (f) Accountant's Comfort Letter..................................................................... 17 (g) Bring-down Comfort Letter....................................................................... 17 (h) Maintenance of Rating........................................................................... 17 (i) PORTAL.......................................................................................... 17 (j) Indenture....................................................................................... 17 (k) Registration Rights Agreement................................................................... 17 (l) Additional Documents............................................................................ 17 (m) Termination of Agreement........................................................................ 17 (n) Concurrent Transactions......................................................................... 18 SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES............................................. 18 (a) Offer and Sale Procedures....................................................................... 18 (i) Offers and Sales only to Qualified Institutional Buyers............................ 18 (ii) No General Solicitation............................................................ 18 (iii) Purchases by Non-Bank Fiduciaries.................................................. 18 (iv) Subsequent Purchaser Notification.................................................. 18 (v) Minimum Principal Amount........................................................... 19 (vi) Restrictions on Transfer........................................................... 19 (vii) Delivery of Offering Memorandum.................................................... 19 (b) Covenants of the Issuers........................................................................ 19 (i) Integration........................................................................ 19 (ii) Rule 144A Information.............................................................. 19 (iii) Restriction on Repurchases......................................................... 19 (c) Qualified Institutional Buyer................................................................... 20 (d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A........................................ 20 (e) Resale Pursuant to Rule 903 of Regulation S or Rule 144A........................................ 20
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Page ---- (f) Additional Representations and Warranties of Initial Purchasers................................. 21 SECTION 7. INDEMNIFICATION................................................................................. 21 (a) Indemnification of Initial Purchasers........................................................... 21 (b) Indemnification of Issuers, Directors and Officers.............................................. 22 (c) Actions Against Parties; Notification........................................................... 22 (d) Settlement Without Consent if Failure to Reimburse.............................................. 22 SECTION 8. CONTRIBUTION.................................................................................... 23 SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.................................. 24 SECTION 10. TERMINATION OF AGREEMENT........................................................................ 24 (a) Termination; General............................................................................ 24 (b) Liabilities..................................................................................... 25 SECTION 11. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS................................................ 25 SECTION 12. INFORMATION FURNISHED BY THE INITIAL PURCHASERS................................................. 25 SECTION 13. TAX DISCLOSURE.................................................................................. 25 SECTION 14. NOTICES......................................................................................... 26 SECTION 15. PARTIES......................................................................................... 26 SECTION 16. GOVERNING LAW................................................................................... 26 SECTION 17. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL................................................ 26 SECTION 18. TIME............................................................................................ 26 SECTION 19. COUNTERPARTS.................................................................................... 26 SECTION 20. EFFECT OF HEADINGS.............................................................................. 27
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Page ---- SCHEDULES Schedule A - List of Initial Purchasers............................... Sch A-1 Schedule B - Pricing Information...................................... Sch B-1 Schedule C - List of Subsidiaries..................................... Sch C-1 Schedule D - List of Guarantors....................................... Sch D-1 Schedule E - Non-Wholly Owned Subsidiaries............................ Sch E-1 Schedule F - Issuer's Local Counsel .................................. Sch F-1 EXHIBITS Exhibit A - Form of Opinion of Issuers' Counsel....................... A-1 Exhibit B - Form of Opinion of Issuers' Local Counsel................. B-1 Exhibit C - Form of Opinion of General Counsel of the Company......... C-1
-v- GENERAL CABLE CORPORATION (a Delaware corporation) $285,000,000 9.5% Senior Notes due 2010 PURCHASE AGREEMENT November 18, 2003 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated World Financial Center - North Tower 250 Vesey Street New York, New York 10080 UBS SECURITIES LLC 299 Park Avenue New York, New York 10171 as Representatives of the several Initial Purchasers Ladies and Gentlemen: General Cable Corporation, a Delaware corporation (the "Company") and each of the guarantors listed in Schedule D attached hereto (the "Guarantors" and, together with the Company, the "Issuers"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), UBS Securities LLC ("UBS") and each of the other Initial Purchasers named in Schedule A hereto (collectively, the "Initial Purchasers", which term shall also include any initial purchaser substituted as hereinafter provided in Section 11 hereof), for whom Merrill Lynch and UBS are acting as representatives (in such capacity, the "Representatives"), with respect to the issue and sale by the Company and the purchase by the Initial Purchasers, acting severally and not jointly, of the respective principal amounts set forth in said Schedule A of $285,000,000 aggregate principal amount of the Company's 9.5% Senior Notes due 2010 (the "Notes"), which are to be unconditionally guaranteed on a senior basis (the "Guarantees" and, together with the Notes, the "Securities"). The Securities are to be issued pursuant to an indenture dated as of November 24, 2003 (the "Indenture") between the Company, the Guarantors and U.S. Bank National Association, as trustee (the "Trustee"). Securities issued in book-entry form will be issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated as of the Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC. The holders of Securities, including the Initial Purchasers, will be entitled to the benefits of a Registration Rights Agreement (the "Registration Rights Agreement"), to be dated as of the Closing Time among the Company, the Guarantors and the Initial Purchasers. Pursuant to the Registration Rights Agreement, the Issuers will agree to file with the U.S. Securities and Exchange Commission (the "Commission") under the circumstances set forth therein either (i) a registration statement under the U.S. Securities Act of 1933, as amended (the "1933 Act"), registering the Exchange Securities (as defined in the Registration Rights Agreement) to be offered in exchange for the relevant Securities or (ii) a shelf registration statement pursuant to Rule 415 under the 1933 Act. The Issuers understand that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers ("Subsequent Purchasers") at any time after this Agreement has been executed and delivered. The Securities are to be offered and sold through the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the Indenture, investors that acquire Securities may only resell or otherwise transfer such Securities if such Securities are hereafter registered under the 1933 Act or if an exemption from the registration requirements of the 1933 Act is available (including the exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S") of the rules and regulations promulgated under the 1933 Act by the Commission). The Issuers have prepared and delivered to each Initial Purchaser copies of a preliminary offering memorandum dated November 4, 2003 (the "Preliminary Offering Memorandum") and have prepared and will deliver to each Initial Purchaser, on the date hereof or the next succeeding day, copies of a final offering memorandum dated November 18, 2003 (the "Final Offering Memorandum"), each for use by such Initial Purchaser in connection with its solicitation of purchases of, or offering of, the Securities. "Offering Memorandum" means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (whether the Preliminary Offering Memorandum or the Final Offering Memorandum, or any amendment or supplement to either such document), including exhibits thereto and any documents incorporated therein by reference, which has been prepared and delivered by the Issuers to the Initial Purchasers in connection with their solicitation of purchases of, or offering of, the Securities. SECTION 1. Representations and Warranties by the Issuers. (a) Representations and Warranties. The Issuers, jointly and severally, represent and warrant to each Initial Purchaser as of the date hereof and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Initial Purchaser, as follows: (i) Offering Memorandum. The Offering Memorandum does not, and at the Closing Time will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties in this subsection shall not apply to statements in or omissions from the Offering Memorandum made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representatives expressly for use in the Offering Memorandum. -2- (ii) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Offering Memorandum are independent public accountants with respect to the Company and its subsidiaries within the meaning of Regulation S-X under the 1933 Act. (iii) Financial Statements. The financial statements included in the Offering Memorandum, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the results of operations, changes in stockholders' equity and changes in cash flows of the Company and its consolidated subsidiaries for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Offering Memorandum present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Offering Memorandum present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Offering Memorandum. (iv) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Offering Memorandum, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, and (D) there has been no obligation, contingent or otherwise, directly or indirectly incurred by the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken as a whole. (v) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, singly or in the aggregate, result in a Material Adverse Effect. (vi) Good Standing of Subsidiaries. Each "significant subsidiary" of the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its -3- business as described in the Offering Memorandum and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, singly or in the aggregate, result in a Material Adverse Effect; except as otherwise disclosed in the Offering Memorandum, all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable, except as disclosed on Schedule E, and is owned by the Company, directly or through its subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. The only subsidiaries of the Company are the subsidiaries listed on Schedule C hereto. (vii) Capitalization. The authorized, issued and outstanding capital stock of the Company as of September 30, 2003, was as set forth in the Offering Memorandum in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Offering Memorandum or pursuant to the exercise of convertible securities or options referred to in the Offering Memorandum). The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (viii) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company. (ix) Authorization of the Indenture. The Indenture has been duly authorized by each of the Issuers and, when executed and delivered by each of the Issuers and the Trustee, will constitute a valid and binding agreement of each of the Issuers, enforceable against each of the Issuers in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). (x) Authorization of the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by each of the Issuers and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and binding agreement of each of the Issuers, enforceable against each of the Issuers in accordance with its terms, except (A) as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general princi- -4- ples of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (B) the enforceability of rights to indemnification and contribution thereunder may be limited by federal or state securities laws. (xi) Authorization of the Notes. The Notes have been duly authorized and, at the Closing Time, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers) reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. (xii) Authorization of the Guarantees. The Guarantees have been duly authorized and, at the Closing Time, will have been duly executed by each Guarantor and, when the Notes are authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers) reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. (xiii) Authorization of the Exchange Securities and the Private Exchange Securities. The Exchange Securities and the Private Exchange Securities (as defined in the Registration Rights Agreement) have been duly authorized and, at the Closing Time, will have been duly executed by the Issuers and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered in exchange for the Securities in accordance with the terms of the Registration Rights Agreement, will constitute valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers) reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. (xiv) Description of the Securities and the Indenture. The Securities and the Indenture will conform in all material respects to the respective statements relating thereto -5- contained in the Offering Memorandum and will be in substantially the respective forms last delivered to the Initial Purchasers prior to the date of this Agreement. (xv) Absence of Defaults and Conflicts. Neither the Company nor any of its subsidiaries is (x) in violation of its charter or by-laws or (y) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, license, indenture, mortgage, deed of trust, loan or credit agreement, note, lease, material supply or distribution agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or affected, or to which any of the property or assets of the Company or any of its subsidiaries is subject (collectively, "Agreements and Instruments") which default, in the case of clause (y), would not, singly or in the aggregate, result in a Material Adverse Effect. The execution, delivery and performance of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated herein, therein and in the Offering Memorandum (including the entering into and borrowing under new senior secured credit facilities, the private offering and sale of Securities and convertible preferred stock, the issuance and sale of the Company's common stock, the use of the proceeds from the foregoing, including the payment of all outstanding obligations under and the termination of commitments under the Company's existing credit facilities and its U.S. accounts receivable asset-backed securitization facility, as described in the Offering Memorandum under the caption "Use of Proceeds" and the exchange offer and/or filing of a shelf registration statement related to the Securities) (the "Transactions") and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not conflict with and will not result in any breach of or constitute a default under (nor constitute any event which with notice, lapse of time or both would constitute a breach of or default under) or a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to any provision of any contract, license, indenture, mortgage, deed of trust, loan or credit agreement, note, lease, material supply or distribution agreement or any other agreement or instrument to which the Company or any of its subsidiaries is a party or by which any of them or their properties may be bound or affected (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in the aggregate, result in a Material Adverse Effect), nor will such action result in a violation of the charter or by-laws of the Company or any of its subsidiaries or any applicable federal, state, local or foreign law, statute, rule, regulation, judgment, order, writ or decree applicable to the Company or any of its subsidiaries. As used herein, a "Repayment Event" (other than such Repayment Events which will be satisfied at the Closing Time) means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries. (xvi) Absence of Labor Dispute. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the Company has no knowledge of any existing or imminent labor disturbance -6- by the employees of any of its or any of its subsidiaries' principal suppliers, manufacturers, customers or contractors, which, in either case, would not, singly or in the aggregate, result in a Material Adverse Effect. (xvii) Absence of Proceedings. There is no action, suit or proceeding (collectively, "Legal Proceedings") pending or, to the Company's knowledge, threatened against the Company or any of its subsidiaries or any of their properties, at law or in equity, or before or by any governmental authority, other than Legal Proceedings disclosed in the Offering Memorandum and Legal Proceedings that would not, singly or in the aggregate, result in a Material Adverse Effect. (xviii) Possession of Intellectual Property. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice, or has knowledge, of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, other than infringements or conflicts (if the subject of any unfavorable decision, ruling or finding) or facts or circumstances of invalidity or inadequacy that would not, singly or in the aggregate, result in a Material Adverse Effect. (xix) Absence of Manipulation. Neither the Company nor any affiliate of the Company has taken, nor will the Company or any affiliate take, directly or indirectly, any action which is designed to stabilize or manipulate the price of any security or which has constituted or which would be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (xx) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the Transactions (other than the registration of the Exchange Notes pursuant to the Registration Rights Agreement), except such as have been already obtained or as may be required under any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Securities are being offered by the Initial Purchasers. (xxi) Possession of Licenses and Permits. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material -7- Adverse Effect; the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses other than revocations or modifications that would not, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, result in a Material Adverse Effect. (xxii) Title to Property. The Company and its subsidiaries have good and marketable title to all real property owned by the Company and its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Offering Memorandum or (b) do not, singly or in the aggregate, materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Offering Memorandum, are in full force and effect, except where failure to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect, and neither the Company nor any of its subsidiaries has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease. (xxiii) Investment Company Act. Neither the Company nor any of its subsidiaries is required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Offering Memorandum neither the Company nor any of its subsidiaries will be required to register as an "investment company" under the Investment Company Act of 1940, as amended (the "1940 Act"). (xxiv) Environmental Laws. Except as described in the Offering Memorandum and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or natural resources such as wetlands, flora and fauna, including, without limitation, laws and regulations relating to the release or threatened release of Hazardous Materials or to the manufacture, processing, distribu- -8- tion, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that would reasonably be expected to prevent or interfere with compliance by the Company and its subsidiaries with any Environmental Law or to result in any liability (including, without limitation, fines or penalties or costs of remediation) to the Company or any of its subsidiaries under any Environmental Law. The term "Hazardous Materials" means any chemical, waste, pollutant, contaminant, substance, constituent, or material, including without limitation, petroleum or petroleum products, asbestos-containing material or mold, which is subject to regulation or can give rise to liability under any Environmental Law. (xxv) Internal Accounting Controls. The Company and each of the Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (B) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (xxvi) Disclosure Controls and Procedures. The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's Chief Executive Officer and its Chief Financial Officer by others within those entities, and such disclosure controls and procedures are reasonably effective to perform the functions for which they were established, subject to the limitation of any such control system; the Company's auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (A) any significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data; and (B) any fraud, whether or not material, that involves management or other employees who have a role in the Company's internal controls; any material weaknesses in internal controls have been identified for the Company's auditors; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. -9- (xxvii) Loans to Directors and Executive Officers. The Company has provided you true, correct, and complete copies of all documentation pertaining to any extension of credit in the form of a personal loan made, directly or indirectly, by the Company to any director or executive officer of the Company, or to any family member or affiliate of any director or executive officer of the Company, which loan was outstanding on July 30, 2002. (xxviii) Statistical and Market-Related Data. Any statistical and market-related data included or incorporated by reference in the Offering Memorandum are based on or derived from sources that the Company believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required. (xxix) Sarbanes-Oxley Act of 2002. There is and has been no failure on the part of the Company and the Subsidiaries or any of the officers and directors of the Company or any of the Subsidiaries, in their capacities as such, to comply in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations in connection therewith applicable to the Company or the Subsidiaries, including without limitation Section 402 thereof related to loans and Sections 302 and 906 thereof related to certifications. (xxx) Insurance. The Company and each of the Subsidiaries maintains insurance covering its properties, operations, personnel and businesses as the Company deems adequate; such insurance insures against such losses and risks to an extent which the Company believes to be adequate in accordance with customary industry practice to protect the Company and the Subsidiaries and their respective businesses; all such insurance is fully in force on the date hereof and will be fully in force at the time of purchase and any additional time of purchase. (xxxi) No Agents and Brokers. Other than Representatives, no person has the right to act as an underwriter or as a financial advisor to the Company or its subsidiaries in connection with the offer and sale of the Securities whether as a result of the sale of the Securities as contemplated hereby or otherwise. (xxxii) Employee Matters. Other than as described in the Offering Memorandum or as would not, singly or in the aggregate, result in a Material Adverse Effect, neither the Company nor any of its subsidiaries has violated any foreign, federal, state or local law, regulation, decree, order, directive, requirement or judgment applicable to the Company or any of its subsidiaries relating to the protection of human health and safety, any federal or state law relating to discrimination in the hiring, promotion or pay of employees nor any applicable federal or state wages and hours laws nor any provision of the Employee Retirement Income Security Act or the rules and regulations promulgated thereunder, and neither the Company nor any of its subsidiaries has received any notice which is pending alleging any violation thereof or liability thereunder. (xxxiii) Taxes. The Company and its subsidiaries have filed all federal or state income or franchise tax returns required to be filed and have paid all taxes shown thereon -10- as due and required to be paid except for tax assessments, if any, as to which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no material tax deficiency which has been asserted against the Company or any of its subsidiaries. All material tax liabilities are adequately provided for on the books of the Company and its subsidiaries. (xxxiv) Rule 144A Eligibility. The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Time, of the same class as securities listed on a national securities exchange registered under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer quotation system. (xxxv) No General Solicitation. None of the Company, its Affiliates or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the 1933 Act. (xxxvi) No Registration Required. Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2 and the procedures set forth in Section 6 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the 1933 Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "1939 Act"). (xxxvii) Reporting Company. The Company is subject to the reporting requirements of Section 13 or Section 15(d) of the 1934 Act. (xxxviii) No Directed Selling Efforts. With respect to those Securities sold in reliance on Regulation S, (A) none of the Company, the Guarantors, any of their Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Issuers make no representation) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (B) each of the Issuers, their Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Issuers make no representation) has complied and will comply with the offering restrictions requirement of Regulation S. (xxxix) Offering Memorandum. The statements in the Offering Memorandum under the headings "Description of New Credit Facility and New Preferred Stock," "Description of the Notes," "Exchange Offer; Registration Rights," and "Certain U.S. Federal Income Tax Consequences," insofar as such statements purport to describe or summarize certain provisions of the agreements, statutes and regulations referred to therein, are accurate descriptions or summaries. (xl) No Other Distributions. The Company has not distributed and, prior to the later to occur of (i) the Closing Time and (ii) completion of the distribution of the Securi- -11- ties, will not distribute any offering material in connection with the offering and sale of the Securities other than the Offering Memorandum. (xli) Similar Offerings. Neither the Company nor any of its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), has, directly or indirectly, solicited any offer to buy, sold or offered to sell or otherwise negotiated in respect of, or will solicit any offer to buy, sell or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the 1933 Act. (xlii) No Registration Rights. There are no persons with registration rights or other similar rights to have any securities registered pursuant to the Offering Memorandum or otherwise registered by the Company under the 1933 Act. (b) Officer's Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representatives or to counsel for the Initial Purchasers shall be deemed a representation and warranty by the Company or any such subsidiary to each Initial Purchaser as to the matters covered thereby. SECTION 2. Sale and Delivery to Initial Purchasers; Closing. (a) Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Issuers, jointly and severally, agree to sell to each Initial Purchaser, severally and not jointly, and each Initial Purchaser, severally and not jointly, agrees to purchase from the Issuers, at the price set forth in Schedule B, the aggregate principal amount of Securities set forth in Schedule A opposite the name of such Initial Purchaser, plus any additional principal amount of Securities which such Initial Purchaser may become obligated to purchase pursuant to the provisions of Section 11 hereof. (b) Payment. Payment of the purchase price for, and delivery of certificates for, the Securities shall be made at the offices of Latham & Watkins LLP, 885 Third Avenue, Suite 1000, New York, New York 10022, or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 11), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called the "Closing Time"). Payment of the purchase price for the Securities shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representatives for the respective accounts of the Initial Purchasers of certificates for the Securities to be purchased by them. It is understood that each Initial Purchaser has authorized the Representatives, for its account, to accept delivery of, give receipt for, and make payment of the purchase price for, the Securities which it has agreed to purchase. The Representatives, individually and not as representative of the Initial Purchasers, may (but shall not be obligated to) make payment of the purchase price for the Securities to be purchased by -12- any Initial Purchaser whose funds have not been received by the Closing Time, but such payment shall not relieve such Initial Purchaser from its obligations hereunder. (c) Denominations; Registration. Certificates for the Securities shall be in such denominations ($100,000 or integral multiples of $1,000 in excess thereof) and registered in such names as the Representatives may request in writing at least one full business day before the Closing Time. The certificates representing the Securities shall be made available for examination and packaging by the Initial Purchasers in The City of New York not later than 10:00 A.M. (Eastern Time) on the business day prior to the Closing Time. SECTION 3. Covenants of the Issuers. The Company, and where specifically indicated, each of the other Issuers, jointly and severally, covenants with each Initial Purchaser as follows: (a) Delivery of Offering Memoranda. The Company will furnish to each Initial Purchaser, without charge, such number of copies of the Offering Memorandum (as amended or supplemented) as such Initial Purchaser may reasonably request. (b) Amendment to Offering Memorandum and Supplements. The Company will give the Initial Purchasers notice of its intention to amend or supplement the Offering Memorandum, will furnish the Initial Purchasers with copies of any such documents a reasonable amount of time prior to such proposed use and will not effect any such document to which the Initial Purchasers or counsel for the Initial Purchasers shall object. (c) Notice and Effect of Material Events. The Company will immediately notify each Initial Purchaser, and confirm such notice in writing, of (x) any filing made by any Issuer of information relating to the offering of the Securities with any securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) prior to the completion of the placement of the Securities by the Initial Purchasers as evidenced by a notice in writing from the Initial Purchasers to the Company, any material changes in or affecting the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise which (i) make any statement in the Offering Memorandum false or misleading or (ii) are not disclosed in the Offering Memorandum. In such event or if during such time any event shall occur as a result of which it is necessary, in the reasonable opinion of any of the Company, its counsel, the Initial Purchasers or counsel for the Initial Purchasers, to amend or supplement the Final Offering Memorandum in order that the Final Offering Memorandum not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances then existing, the Issuers will forthwith amend or supplement the Final Offering Memorandum by preparing and furnishing to each Initial Purchaser an amendment or amendments of, or a supplement or supplements to, the Final Offering Memorandum (in form and substance satisfactory in the reasonable opinion of counsel for the Initial Purchasers) so that, as so amended or supplemented, the Final Offering Memorandum will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a Subsequent Purchaser, not misleading. -13- (d) Qualification of Securities for Offer and Sale. The Issuers will use their best efforts, in cooperation with the Initial Purchasers, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and will maintain such qualifications in effect as long as required for the sale of the Securities; provided, however, that no Issuer shall be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. (e) Rating of Securities. The Company shall take all reasonable action necessary to enable Standard & Poor's Ratings Services, a division of McGraw Hill, Inc. ("S&P"), and Moody's Investors Service Inc. ("Moody's") to provide their respective credit ratings of the Securities. (f) Restriction on Sale of Securities. During a period of 90 days from the date of the Offering Memorandum, the Company will not, without the prior written consent of the Representatives, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise dispose of, any other debt securities of the Company or securities of the Company that are convertible into, or exchangeable for, the Securities or such other debt securities. (g) DTC. The Issuers will cooperate with the Representatives and use their best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of DTC. (h) Use of Proceeds. The Issuers will use the net proceeds received by them from the sale of the Securities in the manner specified in the Offering Memorandum under "Use of Proceeds". (i) PORTAL Designation. The Issuers will use their best efforts to permit the Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. ("NASD") relating to trading in The PORTAL Market. (j) Reporting Requirements. The Company, during the period when the Offering Memorandum is required to be delivered pursuant to Section 6(a)(vii) hereof, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations. SECTION 4. Payment of Expenses. (a) Expenses. The Issuers will, jointly and severally, pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and printing of the Offering Memorandum (including financial statements and exhibits) and of each amendment thereto, (ii) the preparation, printing and delivery to the Initial Purchasers of this Agreement, any Agreement among Initial Purchasers, the Indenture, the Registration Rights Agreement and such other documents as may be required in connection with the offering, pur- -14- chase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Initial Purchasers, including any transfer taxes, any stamp or other duties payable upon the sale, issuance and delivery of the Securities to the Initial Purchasers and any charges of DTC in connection therewith, (iv) the fees and disbursements of the Issuers' counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Initial Purchasers in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (vii) any fees payable in connection with the rating of the Securities, (viii) any fees and expenses payable in connection with the initial and continued designation of the Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD Rule 5322, (ix) the printing and delivery to the Initial Purchasers of copies of the Preliminary Offering Memorandum and the Offering Memorandum and any amendments or supplements thereto, (x) the preparation, printing and delivery to the Initial Purchasers of copies of the Blue Sky Survey and any supplement thereto and (xi) the costs and expenses of the Issuers relating to investor presentations on any "road show" undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the costs of aircraft and other transportation chartered in connection with the road show. (b) Termination of Agreement. If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5 or Section 10(a) hereof, the Company shall reimburse the Initial Purchasers for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Initial Purchasers. SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations of the several Initial Purchasers hereunder are subject to the accuracy of the representations and warranties of the Issuers contained in Section 1 hereof or in certificates of any officer of the Issuers or any of their subsidiaries delivered pursuant to the provisions hereof, to the performance by the Issuers of their covenants and other obligations hereunder, and to the following further conditions: (a) Opinion of Counsel for Issuers. At the Closing Time, the Representatives shall have received the favorable opinion, dated as of the Closing Time, of Blank Rome LLP, counsel for the Issuers, in form and substance satisfactory to counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers to the effect set forth in Exhibit A. Such opinion may be subject to customary exceptions, limitations and qualifications reasonably acceptable to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. -15- (b) Opinion of Local Counsel for Issuers. At the Closing Time, the Representatives shall have received the favorable opinion, dated as of the Closing Time, of each of the local counsel listed on Schedule F hereto, in form and substance satisfactory to counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers to the effect set forth in Exhibit B. Such opinion may be subject to customary exceptions, limitations and qualifications reasonably acceptable to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (c) Opinion of General Counsel for Company. At the Closing Time, the Representatives shall have received the favorable opinion, dated as of the Closing Time, of Robert J. Siverd, General Counsel of the Company, in form and substance satisfactory to counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers to the effect set forth in Exhibit C. Such opinion may be subject to customary exceptions, limitations and qualifications reasonably acceptable to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, he has relied, to the extent he deems proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (d) Opinion of Counsel for Initial Purchasers. At the Closing Time, the Representatives shall have received the favorable opinion, dated as of the Closing Time, of Cahill Gordon & Reindel LLP, counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Representatives. Such opinion may be subject to customary exceptions, limitations and qualifications reasonably acceptable to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (e) Officers' Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Offering Memorandum (exclusive of any amendments, supplements or modifications thereto after the date hereof), any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Time, and (iii) the Company and the Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Time. -16- (f) Accountant's Comfort Letter. At the time of the execution of this Agreement, the Representatives shall have received from Deloitte & Touche LLP a letter dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Initial Purchasers containing statements and information of the type ordinarily included in accountants' "comfort letters" to initial purchasers with respect to the financial statements and certain financial information contained in the Offering Memorandum. (g) Bring-down Comfort Letter. At the Closing Time, the Representatives shall have received from Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (d) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. (h) Maintenance of Rating. Since the execution of this Agreement, there shall not have been any decrease in the rating of any of the Company's debt or preferred stock by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change. (i) PORTAL. At the Closing Time, the Securities shall have been designated for trading on PORTAL. (j) Indenture. At the Closing Time, the Representatives shall have received the Indenture, in form and substance reasonably satisfactory to the Initial Purchasers, executed by each of the Issuers and the Trustee, and such agreement shall be in full force and effect. (k) Registration Rights Agreement. At the Closing Time, the Representatives shall have received the Registration Rights Agreement, in form and substance reasonably satisfactory to the Initial Purchasers, executed by each of the Issuers, and such agreement shall be in full force and effect. (l) Additional Documents. At the Closing Time, counsel for the Initial Purchasers shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Issuers in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representatives and counsel for the Initial Purchasers. (m) Termination of Agreement. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party except as -17- provided in Section 4 and except that Sections 1, 7, 8 and 9 shall survive any such termination and remain in full force and effect. (n) Concurrent Transactions. On or prior to the Closing Time, the Company shall have concurrently (i) consummated a public offering of its common stock for aggregate gross proceeds of not less than $41.41 million, (ii) consummated a private placement of its 5.75% series A redeemable convertible preferred stock for gross proceeds of not less than $90.0 million, (iii) entered into and made initial borrowings under the new $240.0 million senior secured credit facilities, (iv) repaid all outstanding obligations made and terminated commitments under the Company's existing senior secured credit facilities and (v) repaid all outstanding obligations made and terminated commitments under the Company's U.S. accounts receivable asset-backed securitization facility. SECTION 6. Subsequent Offers and Resales of the Securities. (a) Offer and Sale Procedures. Each of the Initial Purchasers and the Issuers hereby establish and agree to, severally and not jointly, observe the following procedures in connection with the offer and sale of the Securities: (i) Offers and Sales only to Qualified Institutional Buyers. Offers and sales of the Securities shall only be made (A) to persons whom the offeror or seller reasonably believes to be qualified institutional buyers, as defined in Rule 144A under the 1933 Act ("Qualified Institutional Buyers") or (B) non-U.S. persons outside the United States, as defined in Regulation S under the 1933 Act, to whom the offeror or seller reasonably believes offers and sales of the Securities may be made in reliance upon Regulation S under the 1933 Act. Each Initial Purchaser, severally and not jointly, agrees that it will not offer, sell or deliver any of the Securities in any jurisdiction outside the United States except under circumstances that will result in compliance with the applicable laws thereof, and that it will take at its own expense whatever action is required to permit its purchase and resale of the Securities in such jurisdictions. (ii) No General Solicitation. No general solicitation or general advertising (within the meaning of Rule 502(c) under the 1933 Act) will be used in the United States in connection with the offering or sale of the Securities. (iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank Subsequent Purchaser of a Security acting as a fiduciary for one or more third parties, each third party shall, in the judgment of the applicable Initial Purchaser, be a Qualified Institutional Buyer or a non-U.S. person outside the United States. (iv) Subsequent Purchaser Notification. Each Initial Purchaser will take reasonable steps to inform, and cause each of its U.S. Affiliates to take reasonable steps to inform, persons acquiring Securities from such Initial Purchaser or Affiliate, as the case may be, in the United States that the Securities (A) have not been and will not be registered under the 1933 Act, (B) are being sold to them without registration under the 1933 Act in reliance on Rule 144A or in accordance with another exemption from registration under the 1933 Act, as the case may be, and (C) may not be offered, sold or otherwise -18- transferred except (1) to the Company, (2) outside the United States in accordance with Regulation S, or (3) inside the United States in accordance with (x) Rule 144A to a person whom the seller reasonably believes is a Qualified Institutional Buyer that is purchasing such Securities for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A or (y) pursuant to another available exemption from registration under the 1933 Act. (v) Minimum Principal Amount. No sale of the Securities to any one Subsequent Purchaser will be for less than $100,000 principal amount and no Security will be issued in a smaller principal amount. If the Subsequent Purchaser is a non-bank fiduciary acting on behalf of others, each person for whom it is acting must purchase at least $100,000 principal amount of the Securities. (vi) Restrictions on Transfer. The transfer restrictions and the other provisions set forth in the Offering Memorandum under the heading "Notice to Investors", including the legend required thereby, shall apply to the Securities except as otherwise agreed by the Company and the Initial Purchasers. (vii) Delivery of Offering Memorandum. Each Initial Purchaser will deliver to each purchaser of the Securities from such Initial Purchaser, in connection with its original distribution of the Securities, a copy of the Offering Memorandum, as amended and supplemented at the date of such delivery. (b) Covenants of the Issuers. The Company, and where specifically indicated, each of the other Issuers, jointly and severally, covenants with each Initial Purchaser as follows: (i) Integration. The Company, relying on the Black Box and related "no action" letters, agrees that it will not and will cause its Affiliates not to, directly or indirectly, solicit any offer to buy, sell or make any offer or sale of, or otherwise negotiate in respect of, securities of the Company of any class if, as a result of the doctrine of "integration" referred to in Rule 502 under the 1933 Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Securities by the Issuers to the Initial Purchasers, (ii) the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the 1933 Act provided by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise. (ii) Rule 144A Information. The Issuers agree that, in order to render the Securities eligible for resale pursuant to Rule 144A under the 1933 Act, while any of the Securities remain outstanding, it will make available, upon request, to any holder of Securities or prospective purchasers of Securities the information specified in Rule 144A(d)(4), unless the Issuers furnish information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act. (iii) Restriction on Repurchases. Until the expiration of two years after the original issuance of the Securities, the Issuers will not, and will cause their affiliates not -19- to, resell any Securities which are "restricted securities" (as such term is defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise (except as agent acting as a securities broker on behalf of and for the account of customers in the ordinary course of business in unsolicited broker's transactions). (c) Qualified Institutional Buyer. Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, the Company that it is a "qualified institutional buyer" within the meaning of Rule 144A under the 1933 Act (a "Qualified Institutional Buyer") and an "accredited investor" within the meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor"). (d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each Initial Purchaser understands that the Securities have not been and will not be registered under the 1933 Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act. Each Initial Purchaser, severally and not jointly, represents and agrees that it has not offered or sold, and will not offer or sell, any Securities constituting part of its allotment within the United States except in accordance with Rule 903 of Regulation S under the Securities Act, Rule 144A under the Securities Act or another applicable exemption from the registration requirements of the 1933 Act. Accordingly, neither it nor its affiliates or any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the Securities. Terms used in this paragraph have the meanings given to them by Regulation S. (e) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each Initial Purchaser understands that the Securities have not been and will not be registered under the 1933 Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the 1933 Act or pursuant to an exemption from the registration requirements of the 1933 Act. Each Initial Purchaser, severally and not jointly, represents and agrees, that, except as permitted by Section 6(a) above, it has offered and sold Securities and will offer and sell Securities (i) as part of their distribution at any time and (ii) otherwise until forty days after the later of the date upon which the offering of the Securities commences and the Closing Time, only in accordance with Rule 903 of Regulation S, Rule 144A under the 1933 Act or another applicable exemption from the registration requirements of the 1933 Act. Accordingly, neither the Initial Purchasers, their affiliates nor any persons acting on their behalf have engaged or will engage in any directed selling efforts with respect to Securities sold hereunder pursuant to Regulation S, and the Initial Purchasers, their affiliates and any person acting on their behalf have complied and will comply with the offering restriction requirements of Regulation S. Each Initial Purchaser, severally and not jointly, agrees that, at or prior to confirmation of a sale of Securities pursuant to Regulation S it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it or through it during the restricted period a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the United States Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons (i) -20- as part of their distribution at any time and (ii) otherwise until forty days after the later of the date upon which the offering of the Securities commenced and the date of closing, except in either case in accordance with Regulation S or Rule 144A under the Securities Act. Terms used above have the meaning given to them by Regulation S." Terms used in the above paragraph have the meanings given to them by Regulation S. (f) Additional Representations and Warranties of Initial Purchasers. Each Initial Purchaser, severally and not jointly, represents and agrees that it has not entered and will not enter into any contractual arrangements with respect to the distribution of the Securities, except with its affiliates or with the prior written consent of the Company. SECTION 7. Indemnification. (a) Indemnification of Initial Purchasers. The Issuers agree, jointly and severally, to indemnify and hold harmless each Initial Purchaser, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, and "Affiliate"), its selling agents and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 7(d) below) any such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; -21- provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by such Initial Purchaser through the Representatives expressly for use in the Offering Memorandum (or any amendment or supplement thereto). (b) Indemnification of Issuers, Directors and Officers. Each Initial Purchaser, severally agrees to indemnify and hold harmless the Issuers, its directors and each person, if any, who controls an Issuer within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Offering Memorandum (or any amendment or supplement thereto) in reliance upon and in conformity with written information relating to such Initial Purchaser furnished to the Company by such Initial Purchaser through the Representatives expressly for use in the Offering Memorandum (or any amendment or supplement thereto). (c) Actions Against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 7(a) above, counsel to the indemnified parties shall be selected by the Representatives, and, in the case of parties indemnified pursuant to Section 7(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 7 or Section 8 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement Without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 7(a)(ii) effected without its written consent if -22- (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party for such fees and expenses of counsel in accordance with such request prior to the date of such settlement. SECTION 8. Contribution. If the indemnification provided for in Section 7 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuers on the one hand and the Initial Purchasers on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuers on the one hand and of the Initial Purchasers on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Issuers on the one hand and the Initial Purchasers on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Issuers and the total discount received by the Initial Purchasers, bear to the aggregate initial offering price of the Securities. The relative fault of the Issuers on the one hand and the Initial Purchasers on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 8. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 8 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 8, no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased and sold by it hereunder exceeds the amount of any damages which such -23- Initial Purchaser has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Initial Purchaser's Affiliates and selling agents shall have the same rights to contribution as such Initial Purchaser, and each director of the Company and each person, if any, who controls an Issuer within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Issuer. The Initial Purchasers' respective obligations to contribute pursuant to this Section 8 are several in proportion to the principal amount of Securities set forth opposite their respective names in Schedule A hereto and not joint. SECTION 9. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Issuers or any of their subsidiaries submitted pursuant hereto shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Initial Purchaser or its Affiliates or selling agents, any person controlling any Initial Purchaser, its officers or directors or any person controlling the Issuers and (ii) delivery of and payment for the Securities. SECTION 10. Termination of Agreement. (a) Termination; General. The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Offering Memorandum (exclusive of any amendments, supplements or modifications thereto after the date hereof), any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the NASD, or any other governmental authority, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, or (v) if a banking moratorium has been declared by either Federal or New York authorities. -24- (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 7, 8 and 9 shall survive such termination and remain in full force and effect. SECTION 11. Default by One or More of the Initial Purchasers. If one or more of the Initial Purchasers shall fail at the Closing Time to purchase the Securities which it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Initial Purchasers, or any other initial purchasers, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal amount of the Securities to be purchased hereunder, each of the non-defaulting Initial Purchasers shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Initial Purchasers, or (b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the Securities to be purchased hereunder, this Agreement shall terminate without liability on the part of any non-defaulting Initial Purchaser. No action taken pursuant to this Section shall relieve any defaulting Initial Purchaser from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Issuers shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Offering Memorandum or in any other documents or arrangements. As used herein, the term "Initial Purchaser" includes any person substituted for an Initial Purchaser under this Section 11. SECTION 12. Information Furnished by the Initial Purchasers. The statements set forth in the fourth, seventh and eighth paragraphs under the caption "Plan of Distribution" in the final Offering Memorandum constitute the only information furnished by or on behalf of the Initial Purchasers. SECTION 13. Tax Disclosure. Notwithstanding any other provision of this Agreement, from the commencement of discussions with respect to the Transactions and the other transactions contemplated by this Agreement, the Company (and each employee, representative or other agent of the Company) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure (as such terms are used in Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations promulgated thereunder) of the Transactions and the other transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided relating to such tax treatment and tax structure. -25- SECTION 14. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Initial Purchasers shall be directed to the Representatives at Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center - North Tower, 250 Vesey Street, New York, New York 10080, attention of High Yield Debt Capital Markets and UBS Securities LLC, 677 Washington Boulevard, Stamford, CT 06901, attention of High Yield Syndicate Department; and notices to the Company shall be directed to it at 4 Tesseneer Drive, Highland Heights, Kentucky 41076 attention of Chief Executive Officer. SECTION 15. Parties. This Agreement shall each inure to the benefit of and be binding upon the Initial Purchasers and the Issuers and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Initial Purchasers and the Issuers and their respective successors and the controlling persons and officers and directors referred to in Sections 7 and 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Initial Purchasers and the Issuers and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Initial Purchasers shall be deemed to be a successor by reason merely of such purchase. SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 17. Submission to Jurisdiction; Waiver of Jury Trial. No proceeding related to this Agreement or the transactions contemplated hereby may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Issuers hereby consent to the jurisdiction of such courts and personal service with respect thereto. Each of the Issuers and the Initial Purchasers hereby waive all right to trial by jury in any proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. Each of the Issuers and the Initial Purchasers agrees that a final judgment in any such proceeding brought in any such court shall be conclusive and binding upon the Issuers and the Initial Purchasers and may be enforced in any other courts in the jurisdiction of which the Issuers are or may be subject, by suit upon such judgment. SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. -26- SECTION 20. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. -27- If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Issuers and the Initial Purchasers in accordance with its terms. Very truly yours, GENERAL CABLE CORPORATION By: /s/ Robert J. Siverd ----------------------------------- Name: Robert J. Siverd Title: Executive Vice President GUARANTORS: GENCA CORPORATION GENERAL CABLE CANADA, LTD. GENERAL CABLE COMPANY GENERAL CABLE HOLDINGS, INC. GENERAL CABLE INDUSTRIES, INC. GENERAL CABLE INDUSTRIES, LLC GENERAL CABLE MANAGEMENT LLC GENERAL CABLE OVERSEAS HOLDINGS, INC. GENERAL CABLE RESOURCES CORPORATION GENERAL CABLE TECHNOLOGIES CORPORATION GENERAL CABLE TEXAS OPERATIONS, L.P. GK TECHNOLOGIES, INCORPORATED By: /s/ Robert J. Siverd ----------------------------------- Name: Robert J. Siverd Title: Executive Vice President DIVERSIFIED CONTRACTORS, INC. GENERAL CABLE DE MEXICO DEL NORTE, S.A. DE C.V. GENERAL CABLE DE LATINOAMERICA, S.A. DE C.V. MARATHON STEEL COMPANY MARATHON MANUFACTURING HOLDINGS, INC. MLTC COMPANY By: /s/ Robert J. Siverd ----------------------------------- Name: Robert J. Siverd Title: Secretary -28- CONFIRMED AND ACCEPTED, as of the date first above written for themselves and as Representatives of the other Initial Purchasers named in Schedule A hereto. MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ R.D. Faber ----------------------------- Authorized Signatory UBS SECURITIES LLC By: /s/ Richard Beaudoin ----------------------------- Authorized Signatory By: /s/ Charles Nifong ----------------------------- Authorized Signatory -29- SCHEDULE A
Principal Amount of Name of Initial Purchaser Securities ------------------------- ---------- Merrill Lynch, Pierce, Fenner & Smith Incorporated...................... $142,500,000 UBS Securities LLC...................................................... 142,500,000 ------------ Total................................................................... $285,000,000 ============
Sch A-1 SCHEDULE B PRICING INFORMATION GENERAL CABLE CORPORATION $285,000,000 Senior Notes due 2010 1. The initial offering price of the Notes shall be 100% of the principal amount thereof, plus accrued interest, if any, from the date of issuance. 2. The purchase price to be paid by the Initial Purchasers for the Notes shall be 97.375% of the principal amount thereof. 3. The interest rate on the Notes shall be 9.5% per annum. 4. Optional Redemption: The Notes are redeemable, in whole or in part, at any time on or after November 15, 2007 at the Company's option at certain redemption prices as set forth in the Indenture plus accrued and unpaid interest to the redemption date. 5. On or before November 15, 2006, the Company may redeem up to 35% of the Notes with the net proceeds of certain equity offerings at 109.5% of the principal amount thereof, plus accrued interest, if at least 65% of the aggregate principal amount of the originally issued Notes remain outstanding. 6. Mandatory Offer to Purchase: Upon a change of control of the Company, the Company will be required to offer to repurchase the Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date or repurchase. Sch B-1 SCHEDULE C LIST OF SUBSIDIARIES Austral Standard Cables Pty. Ltd. BICCGeneral do Brasil S.A. Comercializadora de Cables Dominicana, S.A. Condel-Fabrica de Contudores Electricos de Angola SARL Diversified Contractors, Inc. Dominion Wire and Cables Ltd. Genca Corporation General Cable (WA) Pty. Ltd. General Cable Argentina S.A. General Cable Australia Pty. Ltd. General Cable Canada, Ltd. General Cable Capital Funding, Inc. General Cable Celcat, Energia e Telecomunicacoes SA General Cable Company General Cable Corporation General Cable de Latinoamerica, S.A. de C.V. General Cable de Mexico del Norte, S.A. de C.V. General Cable Export Sales Corporation General Cable Finance Co. Limited General Cable Holdings (Spain) SRL General Cable Holdings (UK) Limited General Cable Holdings de Mexico, S.A de C.V. General Cable Holdings Netherlands C.V. General Cable Holdings New Zealand General Cable Holdings, Inc. General Cable Industries, Inc. General Cable Industries, LLC General Cable Investments, SGPS, Sociedade Unipessoal, SA General Cable Management LLC General Cable New Zealand Limited General Cable Norge A/S General Cable Overseas Holdings, Inc. General Cable Prescot Property Limited General Cable Projects Limited General Cable Property Holdings Limited General Cable Resources Corporation General Cable Services Europe Limited General Cable Services Limited General Cable Technologies Corporation General Cable Texas Operations L.P. General Cable UK Pension Trustee Limited Sch C-1 General Cables Sistema S.A. GK Technologies, Inc Grupo General Cable Sistemas, S.A. KAISER KWO KABEL Energie Gmbh KAISER KWO KABEL Verwaltungs Gmbh Marathon Manufacturing Holdings, Inc. Marathon Steel Company MLTC Company NextGen Fiber Optics, LLC PT BICC Berca Cables Telmag Internacional, S.A. de C.V. Sch C-2 SCHEDULE D GUARANTORS Diversified Contractors, Inc. Genca Corporation General Cable Canada, Ltd. General Cable Company General Cable de Mexico Del Norte, S.A. de C.V. General Cable de Latinoamerica, S.A. de C.V. General Cable Holdings, Inc. General Cable Industries, Inc. General Cable Industries, LLC General Cable Management LLC General Cable Overseas Holdings, Inc. General Cable Resources Corporation General Cable Technologies Corporation General Cable Texas Operations, L.P. GK Technologies, Incorporated Marathon Steel Company Marathon Manufacturing Holdings, Inc. MLTC Company Sch D-1 SCHEDULE E NON-WHOLLY OWNED SUBSIDIARIES
Name Ownership % ---- ----------- BICCGeneral do Brasil S.A. 80% Dominion Wire and Cables Ltd. 51% General Cable Argentina S.A. 96.25% General Cable Norge A/S 85% NextGen Fiber Optics, LLC 49% PT BICC Berca Cables 50%
Sch E-1 SCHEDULE F Issuer's Local Counsel Kuri Brena, Sanchez Ugarte, Concuera Y Aznar (Mexico) Fennemore Craig, A Professional Corporation (Arizona) Osler, Hoskin & Harcourt (Ontario) Stewart McKelvey Sterling Scales (Nova Scotia) Sch F-1 Exhibit A FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(a) 1. The Company is validly existing as a corporation in good standing under the laws of the State of Delaware. 2. The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and to enter into and perform its obligations under the Purchase Agreement, the Indenture, the Securities, the Exchange Securities, the Private Exchange Securities and the Registration Rights Agreement. 3. The authorized capital stock of the Company is as set forth in the Offering Memorandum in the column entitled "Actual" under the caption "Capitalization." 4. The issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company under the Delaware General Corporation Law, the Company's charter or bylaws or any agreement to which the Company is a party and to which we have knowledge. 5. The Purchase Agreement has been duly authorized, executed and delivered by the Company. 6. The Indenture has been duly authorized, executed and delivered by the Company and each U.S. Guarantor and (assuming the due authorization, execution and delivery thereof by the Trustee) constitutes a valid and binding agreement of the Company and each Guarantor, enforceable against the Company and the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 7. The Securities are in the form contemplated by the Indenture, have been duly authorized and executed by the Company and each U.S. Guarantor and, when authenticated by the Trustee in the manner provided in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) and issued and delivered against payment of the purchase price therefor will constitute valid and binding obligations of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium (including, without limitation, all laws re- A-1 lating to fraudulent transfers), or other similar laws relating to or affecting enforcement of creditor's rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be entitled to the benefits of the Indenture. 8. The Securities and the Indenture conform in all material respects to the descriptions thereof contained in the Offering Memorandum. 9. The Exchange Securities and Private Exchange Securities, have been duly authorized by the Company and each U.S. Guarantor and, when executed by the Company and the Guarantors and authenticated by the Trustee in the manner provided in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) and issued and delivered in exchange for the Securities will constitute valid and binding obligations of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium (including, without limitation, all laws relating to fraudulent transfers), or other similar laws relating to or affecting enforcement of creditor's rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be entitled to the benefits of the Indenture. 10. The Registration Rights Agreement has been duly authorized, executed and delivered by the Company and each U.S. Guarantor and (assuming the due authorization, execution and delivery by the other parties thereto) constitute valid and binding agreement of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium (including, without limitation, all laws relating to fraudulent transfers), or other similar laws relating to or affecting enforcement of creditor's rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 11. Each of the other Transaction Documents has been duly authorized, executed and delivered by the Company and each U.S. Guarantor, to the extent a party thereto, and, when (assuming the due authorization, execution and delivery by the other parties thereto) constitute valid and binding agreement of the Company and the Guarantors, as applicable, enforceable against the Company and the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium (including, without limitation, all laws relating to fraudulent transfers), or other similar laws relating to or affecting enforcement of creditor's rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 12. Except as disclosed or incorporated by reference in the Offering Memorandum, to our knowledge, there is not pending or threatened in writing any action, suit, proceeding, inquiry or investigation, to which the Company or any of its subsidiaries is a party, or to which the property of the Company or any of its subsidiaries is subject, before or brought by any court or governmental agency or body, domestic or foreign, which would result in A-2 a Material Adverse Effect, or which would to materially and adversely affect the properties or assets thereof or the consummation of the Transactions contemplated in the Purchase Agreement or the performance by the Company of its obligations thereunder. 13. The information in the Offering Memorandum under "Business -- Environmental Matters," "Business -- Legal Proceedings," "Description of New Credit Facility and New Preferred Stock," "Description of the Notes," "Exchange Offer; Registration Rights" and "Certain U.S. Federal Income Tax Considerations" in the Offering Memorandum, to the extent that it constitutes matters of law, summaries of legal matters, agreements, the Certificate of Designations, or legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material respects. 14. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (other than as may be required under the securities or blue sky laws of the various states, as to which we need express no opinion) is necessary or required in connection with the due authorization, execution and delivery of the Purchase Agreement or for the offering, issuance, sale or delivery of the Securities. 15. The execution, delivery and performance of the Purchase Agreement, the Registration Rights Agreement, the Indenture and the Securities and the consummation of the transactions contemplated in the Purchase Agreement and the Registration Rights Agreement and in the Offering Memorandum (including the issuance and sale of the Securities, the use of the proceeds from the sale of the Securities as described in the Offering Memorandum under the caption "Use of Proceeds" and the exchange offer and/or filing of a shelf registration statement related to the Securities) and compliance by the Company with its obligations under the Purchase Agreement and the Registration Rights Agreement do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section 1(a)(xi) of the Purchase Agreement) under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to any provision of any agreement or instrument which is listed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2002 or any subsequent filing by the Company under the Exchange Act or of the new senior secured credit facility (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not have a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries, or any applicable federal, state or local law, statute, rule, or regulation which we, in our experience, believe are generally applicable to the Company and the Transactions or any judgment, order, writ or decree, known to us. 16. None of the Company, General Cable Industries, Inc. or, to our knowledge, any of the other Guarantors is required, or upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Offering Memorandum will be required, to register as an "investment company" under the 1940 Act. A-3 Nothing has come to our attention that would lead us to believe that the Offering Memorandum or any amendment thereto (it being understood that we express no comment with respect to the financial statements, including the notes thereto, or any other financial or statistical data that is found in or derived from the internal accounting or financial records of the Company and its subsidiaries set forth or referred to in the Offering Memorandum), at the time the Offering Memorandum was issued, at the time any such amended or supplemented Offering Memorandum was issued or at the Closing Time, included or include an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. A-4 Exhibit B FORM OF OPINION OF COMPANY'S LOCAL COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) 1. Each Guarantor is validly existing and in good standing under the laws of its jurisdiction of formation. 2. The Purchase Agreement has been duly authorized, executed and delivered by each of the Guarantors. 3. The Indenture has been duly authorized, executed and delivered by each of the Guarantors. 4. The Guarantees have been duly authorized, executed and delivered by each Guarantor. 5. The Guarantees of the Exchange Notes and Private Exchange Notes have been duly authorized by each Guarantor. 6. The Registration Rights Agreement has been duly authorized, executed and delivered by each Guarantor. 7. The execution, delivery and performance of the Purchase Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated in the Purchase Agreement and the Registration Rights Agreement and in the Offering Memorandum (including the issuance and sale of the Securities, the use of the proceeds from the sale of the Securities as described in the Offering Memorandum under the caption "Use of Proceeds" and the exchange offer and/or filing of a shelf registration statement related to the Securities) and compliance by the Guarantors with its obligations under the Purchase Agreement do not and will not result in any violation of the provisions of the charter or by-laws of the Guarantors, or any applicable [name of jurisdiction] law, statute, rule, or regulation which we, in our experience, believe are generally applicable to the Guarantors and the Transactions or any judgment, order, writ or decree, known to us. 8. To our knowledge, there are no judicial administrative or arbitration orders, awards or proceedings pending or threatened against or affecting any of the Guarantors in any court of before any governmental instrumentality or arbitration board of tribunal. 9. It is not necessary for the execution delivery, performance or enforcement by any Trustee of the rights of the Noteholders under the Transaction Documents to which each of the A-1 Guarantors is a party that such Trustee be licensed, qualified or otherwise entitled to carry on business in [name of jurisdiction].(1) 10. No taxes or other charges are payable in or to any political subdivision therein on account of the execution and delivery of the Transaction Documents or the creation of any of the indebtedness evidenced by any of the Transaction Documents.(1) 11. A court in [name of jurisdiction] applying the choice of law principles of [name of jurisdiction] will give effect to the provisions in the Transaction Documents which select the laws of the State of New York as the governing law thereof and will apply such laws, rather than the laws of the any other jurisdiction, to the enforceability, construction and application thereof.(1) - ---------------------------- (1) For opinion of non-U.S. counsel only. A-2 Exhibit C FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY TO BE DELIVERED PURSUANT TO SECTION 5(c) 1. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. 2. The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to the Purchase Agreement or pursuant to reservations, agreements or employee benefit plans referred to in the Offering Memorandum or pursuant to the exercise of convertible securities or options referred to in the Offering Memorandum); the shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. 3. Each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing could not reasonably be expected to result in a Material Adverse Effect; except as otherwise disclosed in the Offering Memorandum, all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and, to my knowledge, is owned by the Company, directly or through its subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. 4. The Company has been duly incorporated. To my knowledge, there is not pending or threatened in writing any action, suit, proceeding, inquiry or investigation, to which the Company or any of its subsidiaries is a party, or to which the property of the Company or any of its subsidiaries is subject, before or brought by any court or governmental agency or body, domestic or foreign, which would reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the Transactions contem- B-1 plated in the Purchase Agreement or the performance by the Company of its obligations thereunder. 5. All descriptions in the Offering Memorandum of contracts and other documents to which the Company or its subsidiaries are a party are accurate in all material respects; to my knowledge, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Offering Memorandum. 6. The execution, delivery and performance of the Purchase Agreement, the Registration Rights Agreement, the Indenture and the Securities and the consummation of the transactions contemplated in the Purchase Agreement and the Registration Rights Agreement and in the Offering Memorandum (including the issuance and sale of the Securities, the use of the proceeds from the sale of the Securities as described in the Offering Memorandum under the caption "Use Of Proceeds" and the exchange offer and/or filing of a shelf registration statement related to the Securities) and compliance by the Company with its obligations under the Purchase Agreement and the Registration Rights Agreement do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section 1(a)(xi) of the Purchase Agreement) under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to any provision of any contract, license, indenture, mortgage, deed of trust, loan or credit agreement, note, lease, material supply or distribution agreement or any other agreement or instrument, known to me, to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that could not reasonably be expected to have a Material Adverse Effect). Nothing has come to such counsel's attention that would lead such counsel to believe that the Offering Memorandum or any amendment thereto (it being understood that I express no comment with respect to the financial statements, including the notes thereto, or any other financial or statistical data that is found in or derived from the internal accounting or financial records of the Company and its subsidiaries set forth or referred to in the Offering Memorandum), at the time the Offering Memorandum was issued, at the time any such amended or supplemented Offering Memorandum was issued or at the Closing Time, included or include an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. B-2 EX-3.3 4 l05578aexv3w3.txt EXHIBIT 3.3 EXHIBIT 3.3 CERTIFICATE OF INCORPORATION OF MARATHON CONSTRUCTION COMPANY (DELAWARE), INC. FIRST. The name of the corporation is Marathon Construction Company (Delaware), Inc. SECOND. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares of stock which the corporation shall have authority to issue is 1,000 shares, and the par value of each of such shares is One Dollar ($1.00). FIFTH. The name and mailing address of the incorporator is S. Maria Narisi, 600 Jefferson, Houston, Texas 77002. SIXTH. The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and qualified are as follows: Name Mailing Address David C. Crawford Marathon Manufacturing Company 1900 Marathon Building 600 Jefferson Houston, Texas 77002 Ray R. Seegmiller Marathon Manufacturing Company 1900 Marathon Building 600 Jefferson Houston, Texas 77002 Charles P. Siess, Jr. Marathon Manufacturing Company 1900 Marathon Building 600 Jefferson Houston, Texas 77002 SEVENTH. The private property of the stockholders of the corporation shall not be subject to the payment of corporate debts to any extent whatsoever. EIGHTH. The following provisions are inserted for the management of the business and for the conduct of the affairs of the corporation and for further definition, limitation, and regulation of the powers of the corporation and of its directors and stockholders: (1) The number of directors of the corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the Bylaws. Election of directors need not be by ballot unless the Bylaws so provide. (2) The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the corporation, whether or not the contract or act would otherwise be open to legal attack because of directors' interest, or for any other reason. (3) In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, or repeal the Bylaws of the corporation. NINTH. Meetings of stockholders may be held within or without the State of Delaware, as provided in the Bylaws. TENTH. The corporation shall, to the full extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time, indemnify all persons whom it may indemnify pursuant thereto. ELEVENTH. Whenever a compromise or arrangement is proposed between the corporation and its creditors or any class of them and/or between the corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the corporation under the provisions of Section 291 of Title 8 of the Delaware Code, or on the application of trustees in dissolution or of any receiver or receivers appointed for the corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the corporation, as the case may be, and also on the corporation. TWELFTH. The corporation reserves the right to amend, alter, change, or repeal any provisions contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. The undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate, hereby declaring and certifying that this is her act and deed and that the facts herein stated are true, and accordingly has hereunto set her hand this 17th day of November, 1983. /s/ S. Maria Narisi -------------------------- S. Maria Narisi AGREEMENT AND PLAN OF MERGER MARATHON CONSTRUCTION COMPANY, INC. (the "Merging Company"), a corporation incorporated in the State of Texas, and MARATHON CONSTRUCTION COMPANY (DELAWARE), INC. (the "Surviving Company"), a corporation incorporated in the State of Delaware, agree that: 1. The Merging Company shall be merged into the Surviving Company. 2. The terms and conditions of this merger and the mode of carrying same into effect are as set forth in this Agreement and Plan of Merger. The Surviving Company shall continue to exist as a corporation incorporated under the laws of the State of Delaware. The Certificate of Incorporation of the Surviving Company shall be amended by deleting Article FIRST and Article FIRST shall read in its entirety: "The name of the corporation is Marathon Construction Company, Inc." 3. The directors of the Merging Company immediately prior to the effectiveness of the merger shall become the directors of the Surviving Company after the merger. The officers of the Merging Company immediately prior to the effectiveness of the merger shall become the officers, with the same titles, duties and responsibilities as they had with the Merging Company, of the Surviving Company after the merger. 4. All the issued and outstanding shares of stock of the Merging Company shall, upon consummation of the merger, be surrendered for cancellation and the holders thereof shall not be entitled to receive anything in exchange therefor. The merger shall make no change in the shares of stock of the Surviving Company issued and outstanding on the effective date of the merger. 5. This Agreement and Plan of Merger and the merger herein provided for may be terminated by the Boards of Directors of the Merging Company and the Surviving Company at any time prior to the filing of this document. 6. The merger shall become effective upon the filing of this Agreement and Plan of Merger with the Delaware Secretary of State and the Articles of Merger with the Texas Secretary of State. IN WITNESS WHEREOF, the parties hereto have caused this document to be executed by their respective duly authorized officers this 22nd day of November, 1983. ATTEST: MARATHON CONSTRUCTION COMPANY, INC. /s/ S. Maria Narisi By /s/ Richard A. Berry - ------------------------------ --------------------------- S. Maria Narisi Richard A. Berry Secretary President ATTEST: MARATHON CONSTRUCTION COMPANY (DELAWARE), INC. /s/ S. Maria Narisi By /s/ Roger J. Klatt - ------------------------------ ---------------------------- S. Maria Narisi Roger J. Klatt Secretary President CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF MARATHON CONSTRUCTION COMPANY, INC. I, the undersigned, Richard A. Berry, President of Marathon Construction Company, Inc (the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby certify as follows: FIRST. The Board of Directors of the Company by unanimous written consent pursuant to Section 141(f) of the Delaware General Corporation Law adopted a resolution that in its judgment it is advisable to change the name of the Company and that therefore Article FIRST shall be amended to read as follows: FIRST: The corporate name is Diversified Contractors, Inc. SECOND. Thereafter, the sole stockholder by written consent pursuant to Section 228 of the Delaware General Corporation Law consented to and approved the said amendment. THIRD. The said amendment was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law. IN WITNESS WHEREOF, this Certificate has been made under the corporate seal of MARATHON CONSTRUCTION COMPANY, INC. by Richard A. Berry, its President, who hereunto signed his name this 21st day of August, 1984. MARATHON CONSTRUCTION COMPANY, INC. By /s/ Richard A. Berry Attest: /s/ S. Naria Narisi Secretary AGREEMENT AND PLAN MERGER Pursuant to Section 251 of the General Corporation Laws of the State of Delaware, MARATHON CONSTRUCTION COMPANY, INC. (the "Merging Company"), a corporation incorporated in the State of Delaware and DIVERSIFIED CONTRACTORS, INC. (the "Surviving Company"), a corporation incorporated in the Stats of Delaware, agree that: 1. The Merging Company shall be Merged into the Surviving Company. 2. The terms and condition of this merger and the mode of carrying same into effect are as set forth in this agreement and Plan of Merger. The Surviving Company shall continue to exist as a corporation incorporated under the laws of the State of Delaware and the Certificate of Incorporation of the Surviving company shall remain the same. 3. The directors and officers of the Surviving Company immediately prior to the merger shall remain as the officers and directors of the Surviving Company after the merger. 4. All the issued and outstanding shares of stock of the Merging Company shall, upon consummation of the merger, be surrendered for cancellation and the holders thereof shall not be entitled to receive anything in exchange therefore. The merger shall make no change in the shares of stock of the Surviving Company issued and outstanding on the effective date of the merger. 5. This Agreement and Plan of Merger and the merger herein provided for may be terminated by the Boards of Directors of the Merging Company and the Surviving Company at any time prior to the filing of this document. 6. The merger shall become effective December 31, 1986. IN WITNESS WHEREOF, the parties hereto have caused this document to be executed by their respective duly authorized officers this 22nd day of December, 1986. ATTEST: MARATHON CONSTRUCTION COMPANY, INC. /s/ S. Maria Narisi By /s/ Ray R. Seegmiller - --------------------------------- -------------------------- S. Maria Narisi Ray R. Seegmiller Secretary President ATTEST: DIVERSIFIED CONTRACTORS, INC. /s/ S. Maria Narisi By /s/ Ray R. Seegmiller - --------------------------------- -------------------------- S. Maria Narisi Ray R. Seegmiller Secretary President EX-3.4 5 l05578aexv3w4.txt EXHIBIT 3.4 EXHIBIT 3.4 BYLAWS of DIVERSIFIED CONTRACTORS, INC. ARTICLE I Offices Section 1.01. Registered Office. The registered office of the Corporation in the State of Delaware shall be established and maintained at the office of The Corporation Trust Company, 100 West Tenth Street, in the City of Wilmington, County of New Castle, and said corporation shall be the Registered Agent of the Corporation in charge thereof. Section 1.02. Other Offices. The principal place of business of the Corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle, or such other place in the State of Delaware as the Board of Directors may from time to time select, and the Corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require. ARTICLE II Meetings of Stockholders Section 2.01. Annual Meetings. Annual Meetings of stockholders for the election of directors and for the transaction of any proper business shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution shall determine and as set forth in the notice of the meeting. If the annual meeting of stockholders is not held on the date designated therefor, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as may properly be brought before the meeting. Section 2.02. Voting. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these Bylaws shall be entitled to one vote, in person or by proxy, for each share of stock outstanding and entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any questions before the meeting shall be by written ballot. When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock outstanding and having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of a statute or of the Certificate of Incorporation a different vote is required in which case such express provision shall govern and control the decision of such question. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. Section 2.03. Quorum. At all meetings of stockholders, except as otherwise required by statute or by the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares of stock outstanding and entitled to vote thereat shall be requisite for, and shall constitute a quorum for, the transaction of business. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of shares entitled to vote shall be present or represented. At any such adjourned meeting at which the requisite amount of shares entitled to vote shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 2.04. Special Meetings. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President or the Secretary and shall be called by the President or the Secretary at the request of the Board of Directors or at the request in writing of the holders of a majority of the shares of stock outstanding and having voting power. Such request shall state the purpose or purposes of the proposed meeting. Special meetings may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. Section 2.05. Notice of Meetings. Written notice stating the place, date and time of any meeting, annual or special, and, if a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten nor more than sixty days before the date of the meeting. Section 2.06. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than a minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. 2 EX-3.5 6 l05578aexv3w5.txt EXHIBIT 3.5 EXHIBIT 3.5 CERTIFICATE OF INCORPORATION OF GENCA CORPORATION 1. The name of the corporation is: GENCA CORPORATION 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority at issue is One Thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00). 5. The board of directors is authorized to make, alter or repeal the by-laws of the corporation. Election of directors need not be by written ballot. 6. The name and mailing address of the incorporator is: T. L. Ford Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801 I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 23rd day of February, 1988. /s/ T.L. Ford ------------------------------ T. L. Ford EX-3.6 7 l05578aexv3w6.txt EXHIBIT 3.6 EXHIBIT 3.6 BY-LAWS OF GENCA CORPORATION . . . TABLE OF CONTENTS
Page ---- ARTICLE I -- Offices............................................................ 1 Section 1.01. Registered Office.............................................. 1 Section 1.02. Other Offices.................................................. 1 ARTICLE II -- Meetings of Stockholders.......................................... 1 Section 2.01. Annual Meetings................................................ 1 Section 2.02. Voting......................................................... 1 Section 2.03. Quorum......................................................... 2 Section 2.04. Special Meetings............................................... 2 Section 2.05. Notice of Meetings............................................. 2 Section 2.06. Action Without Meeting......................................... 2 ARTICLE III -- Directors........................................................ 2 Section 3.01. Number and Term................................................ 2 Section 3.02. Resignation.................................................... 2 Section 3.03. Vacancies...................................................... 2 Section 3.04. Removal........................................................ 3 Section 3.05. Powers......................................................... 3 Section 3.06. Committees of the Board........................................ 3 Section 3.07. Meetings....................................................... 3 Section 3.08. Quorum......................................................... 4 Section 3.09. Compensation................................................... 4 Section 3.10. Action Without Meeting; Presence at Meetings................... 4 ARTICLE IV -- Officers.......................................................... 4 Section 4.01. Officers....................................................... 4 Section 4.02. Other Officers and Agents...................................... 4 Section 4.03. Resignation; Removal........................................... 4 Section 4.04. President...................................................... 4 Section 4.05. Vice Presidents................................................ 5 Section 4.06. Controller..................................................... 5 Section 4.07. Treasurer...................................................... 5 Section 4.08. Secretary...................................................... 5 Section 4.09. Assistant Secretaries.......................................... 5 Section 4.10. Assistant Treasurers........................................... 5 Section 4.11. Compensation................................................... 5 ARTICLE V -- Miscellaneous...................................................... 6 Section 5.01. Certificates of Stock.......................................... 6 Section 5.02. Transfer Agents and Registrars................................. 6 Section 5.03. Lost Certificates.............................................. 6 Section 5.04. Transfer of Shares............................................. 6 Section 5.05. Stockholders Record Date....................................... 6 Section 5.06. Dividends...................................................... 6 Section 5.07. Registered Stockholders........................................ 6
i Section 5.08. Seal........................................................... 7 Section 5.09. Fiscal Year.................................................... 7 Section 5.10. Checks......................................................... 7 Section 5.11. Execution of Proxies........................................... 7 Section 5.12. Notice and Waiver of Notice.................................... 7 ARTICLE VI -- Amendments........................................................ 7
ii BY-LAWS OF GENCA CORPORATION ARTICLE I OFFICES SECTION 1.01. Registered Office. The registered office of the Corporation in the State of Delaware shall be established and maintained at the office of The Corporation Trust Company, in the City of Wilmington, County of New Castle, and said corporation shall be the Registered Agent of the Corporation in charge thereof. SECTION 1.02. Other Offices. The principal place of business of the Corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle; and the Corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS SECTION 2.01. Annual Meetings. Annual meetings of stockholders for the election of directors and for the transaction of any proper business shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution shall determine and as set forth in the notice of the meeting. If the annual meeting of stockholders is not held on the date designated therefor, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as may properly be brought before the meeting. SECTION 2.02. Voting. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these By-Laws shall be entitled to one vote, in person or by proxy, for each share of stock outstanding and entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be by written ballot. When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock outstanding and having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of a statute or of the Certificate of Incorporation a different vote is required in which case such express provision shall govern and control the decision of such question. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such a list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. SECTION 2.03. Quorum. At all meetings of stockholders, except as otherwise required by statute or by the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares of stock outstanding and entitled to vote thereat shall be requisite for, and shall constitute a quorum for, the transaction of business. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of shares entitled to vote shall be present or represented. At any such adjourned meeting at which the requisite amount of shares entitled to vote shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2.04. Special Meetings. Special meetings of the stockholders for any purpose or purposes unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President or the Secretary and shall be called by the president or the Secretary at the request of the Board of Directors or at the request in writing of the holders of a majority of the shares of stock outstanding and having voting power. Such request shall state the purpose or purposes of the proposed meeting. Special meetings may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. SECTION 2.05. Notice of Meetings. Written notice, stating the place date and time of any meeting, annual or special, and, if a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten or more than sixty days before the date of the meeting. SECTION 2.06. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meetings without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS SECTION 3.01. Number and Term. The number of directors shall be three or such other number as may be fixed from time to time by resolution of the Board of Directors or by action of the stockholders. The directors shall be elected at the annual meeting of the stockholders and each director shall be elected to hold office until his successor shall be elected and qualified. Directors need not be stockholders. SECTION 3.02. Resignation. Any director or member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. SECTION 3.03. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors shall be elected and qualified. 2 Unless otherwise provided by the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies. In the event that a vacancy or newly created directorship shall not have been filled by the Board of Directors, the additional director or directors may be elected by the stockholders entitled to vote thereon, either at an annual meeting of stockholders or at a special meeting called for the purpose. The director or directors so chosen shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualified. SECTION 3.04. Removal. Any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the holders of such shares and the vacancies thus created may be filled, at such meeting or at any subsequent meeting, by the affirmative vote of a majority in interest of the stockholders entitled to vote. SECTION 3.05. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors which may exercise all the powers of the Corporation and do all lawful acts and things which are not conferred upon or reserved to the stockholders by law, by the Certificate of Incorporation or by these By-Laws. SECTION 3.06. Committees of the Board. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation; and, unless the resolution or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. SECTION 3.07. Meetings. Meetings of the Board of Directors shall be held at such place, either within or without the State of Delaware, as the Board of Directors shall from time to time designate or as may be specified in the notice of such meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President or the Secretary by notice to each director given not less than two days, or not less than three days in the case of notice given by mail, before such meeting. Special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. The first meeting of a newly elected Board of Directors shall be held without notice as soon as practicable after each annual meeting of the stockholders at the same place at which such meeting was held, provided a quorum is present. If a quorum is not present, such first meetings may be held at such time and such place as shall be specified in a notice given as herein provided for special meetings of the Board of Directors. 3 SECTION 3.08. Quorum. Not less than a majority of the total number of directors shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless a statute or the Certificate of Incorporation shall require a vote of a greater number. SECTION 3.09. Compensation. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent or otherwise and receiving compensation therefor. SECTION 3.10. Action Without Meeting; Presence at Meetings. Unless otherwise restricted in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or the committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by such Board, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another, and such participation in a meeting shall constitute presence in person at such meeting. ARTICLE IV OFFICERS SECTION 4.01. Officers. The officers of the Corporation shall be the President, a Secretary, a Treasurer and a Controller, each of whom shall be elected by the Board of Directors and shall hold office until his successor shall be elected and have qualified. The Board of Directors also may elect one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. The officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders and shall hold office until their successors are chosen and have qualified. Any number of offices may be held by the same person. SECTION 4.02. Other Officers and Agents. The Board of Directors may appoint such other officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. SECTION 4.03. Resignation; Removal. Any officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. Any officer may be removed, for or without cause, at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office shall be filled for the unexpired portion of the term by the Board of Directors. SECTION 4.04. President. The President shall be the Chief Executive Officer of the Corporation. The President shall have general and active control of the Corporation's business, finances and affairs subject to the control of the Board of Directors. Except as may otherwise be provided by the Board of Directors from time to time, the president shall have general power to execute bonds, deeds, contracts, conveyances and other instruments in the name of the Corporation and to affix the corporate seal; to appoint all employees and agents of the Corporation whose appointment is not otherwise provided for and to fix the compensation thereof subject to the provisions of these By-Laws and subject to the approval of the Board of Directors; to remove or suspend any 4 employee or agent who shall not have been appointed by the Board of Directors; and to suspend for cause, pending final action by the body which shall have appointed him, any officer other than an elected officer, or any employee or agent who shall have been appointed by the Board of Directors. He shall have such further powers and duties as may be conferred on him by the Board of Directors. SECTION 4.05. Vice Presidents. The Vice Presidents, if any, shall have such powers and perform such duties as may be respectively assigned to them from time to time by the Board of Directors or the Chief Executive Officer. In the absence or the disability of the President, his duties shall be performed and his performance may be exercised by the Senior Vice President or other Vice President or Vice Presidents in the order determined by the Board of Directors or, failing such delegation, in the order of their last election to that office. SECTION 4.06. Controller. The Controller shall prescribe and have charge of the system of books and accounts. He may require reports from the Treasurer and all other officers or agents of the Corporation who receive or disburse funds for its account at such times and in such forms as he may deem desirable. SECTION 4.07. Treasurer. The Treasurer shall have the care and custody of all the funds of the Corporation and shall deposit the same in such banks or other depositories as the Board of Directors, or any officer or officers, or any officer and agent jointly, duly authorized by the Board of Directors, shall, from time to time, direct or approve. He shall disburse the funds of the Corporation under the direction of the Board of Directors or the Chief Executive Officer. He shall keep a full and accurate account of all moneys received and paid on account of the Corporation and shall render a statement of his accounts whenever the Board of Directors shall require. He shall perform all other necessary acts and duties in connection with the administration of the financial affairs of the Corporation and shall generally perform all the duties usually appertaining to the office of treasurer of a corporation. When required by the Board of Directors, he shall give bonds for the faithful discharge of his duties in such sums and with such sureties as the Board of Directors shall approve. SECTION 4.08. Secretary. The Secretary shall attend all meetings of the Board of Directors and the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall, when requested, perform like duties for all committees of the Board of Directors. He shall attend to the giving of notice of all meetings of the stockholders and, if notice is required, of meetings of the Board of Directors and of committees thereof; he shall have custody of the corporate seal and, when authorized by the Board of Directors, shall have authority to affix the same to any instrument and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary or an Assistant Treasurer. He shall keep and account for all documents, papers and records of the Corporation, except those for which some other officer or agent is properly accountable. He shall generally perform all the duties appertaining to the off ice of secretary of a corporation. In the absence of the Secretary, such person as shall be designated by the Chief Executive Officer shall perform his duties. SECTION 4.09. Assistant Secretaries. Each Assistant Secretary shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Secretary, his duties shall be performed and his powers may be exercised by the Assistant Secretary or the Assistant Secretaries in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.10. Assistant Treasurers. Each Assistant Treasurer shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Treasurer, his duties shall be performed and his powers may be exercised by the Assistant Treasurer or the Assistant Treasurers in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.11. Compensation. The Board of Directors shall have the power to fix the compensation of all officers of the Corporation. 5 ARTICLE V MISCELLANEOUS SECTION 5.01. Certificates of Stock. The shares of stock of the Corporation shall be represented by certificates in such form as shall be determined by the Board of Directors and shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the Corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. SECTION 5.02. Transfer Agents and Registrars. The Board of Directors may, in its discretion, appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation and, upon such appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars. SECTION 5.03. Lost Certificates. In case any certificate representing shares shall be lost, stolen or destroyed, the Board of Directors, or any officer or officers authorized by the Board of Directors, may authorize the issue of a substitute certificate in place of the certificate so lost, stolen or destroyed, and, if the Corporation shall have a Transfer Agent and Registrar, may cause or authorize such substitute certificate to be countersigned by the appropriate Transfer Agent and registered by the appropriate Registrar. In each such case, the applicant for a substitute certificate shall furnish to the Corporation and to such of its Transfer Agents and Registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft or destruction of such certificate and of the ownership thereof, and also such security or indemnity as may by them be required. SECTION 5.04. Transfer of Shares. Transfers of shares shall be made on the books of the Corporation only by the person named in the certificates or by his attorney lawfully constituted in writing, and upon surrender and cancellation of a certificate or certificates of a like number of shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. SECTION 5.05. Stockholders Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjournment meeting. SECTION 5.06. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividends, there may be set apart, out of any funds of the Corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conducive to the interests of the Corporation; and in its discretion the Board of Directors may decrease or abolish any such reserve. SECTION 5.07. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and other distributions, and to vote as such owner, and to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such 6 shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. SECTION 5.08. Seal. The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its organization and the words "CORPORATE SEAL, DELAWARE." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. SECTION 5.09. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors. SECTION 5.10. Checks. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall be determined from time to time by resolution of the Board of Directors. SECTION 5.11. Execution of Proxies. The President, or, in the absence or disability of the president, a Vice President may authorize from time to time the signature and issuance of proxies to vote upon shares of stock of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such proxies and consents shall be signed in the name of the Corporation by the president or a Vice President and by the Secretary or an Assistant Secretary. SECTION 5.12. Notice and Waiver of Notice. Whenever any notice is required to be given under the provisions of any law, of the Certificate of Incorporation or of these By-Laws, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice to directors may also be given on the day of such mailing. Notice to directors may also be given by telex, cable or telegram. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute. Whenever any notice whatever is required to be given under the provisions of any law or of the Certificate of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE VI AMENDMENTS These By-Laws may be altered, amended or repealed, and new By-Laws may be adopted, by the stockholders or, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, by the Board of Directors, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of the proposed alteration, amendment, repeal or adoption be contained in the notice of such special meeting. 7 EX-3.7 8 l05578aexv3w7.txt EXHIBIT 3.7 EXHIBIT 3.7 NOVA SCOTIA CERTIFICATE OF INCORPORATION Companies Act Registry Number 3027234 Name of Company 3027234 NOVA SCOTIA COMPANY I hereby certify that the above-mentioned company was incorporated this date under the Companies Act and that the liability of the members is unlimited. /s/ Karen Richard May 13, 1999 - ----------------------------------------- --------------------- Deputy Registrar of Joint Stock Companies Date of Incorporation NOVA SCOTIA CERTIFICATE OF NAME CHANGE Companies Act Registry Number 3027234 Name of Company 3027234 NOVA SCOTIA COMPANY I hereby certify that the above-mentioned company has with approval of the Registrar of Joint Stocks changed its name to: BICC GENERAL CABLE COMPANY / COMPAGNIE BICC GENERAL CABLE /s/ N.M. Homans May 21, 1999 - ----------------------------------------- ------------------- Deputy Registrar of Joint Stock Companies Date of Name Change NOVA SCOTIA CERTIFICATE OF NAME CHANGE Companies Act Registry Number 3027234 Name of Company BICC GENERAL CABLE COMPANY / COMPAGNIE BICC GENERAL CABLE I hereby certify that the above-mentioned company has with approval of the Registrar of Joint Stocks changed its name to: GENERAL CABLE COMPANY / COMPAGNIE GENERAL CABLE October 25, 2000 - ----------------------------------------- ------------------- Deputy Registrar of Joint Stock Companies Date of Name Change NOVA SCOTIA CERTIFICATE OF REGISTRATION Companies Act Registry Number 3027234 Name of Company 3027234 NOVA SCOTIA COMPANY I hereby certify that the above-mentioned corporation is registered under the provisions of the Corporations Registration Act. /s/ Karen Richard May 13, 1999 - ----------------------------------------- -------------------- Deputy Registrar of Joint Stock Companies Date of Registration MEMORANDUM AND ARTICLES OF ASSOCIATION OF 3027234 NOVA SCOTIA COMPANY STEWART MCKELVEY STIRLING SCALES BARRISTERS & SOLICITORS HALIFAX, NOVA SCOTIA MEMORANDUM OF ASSOCIATION OF 3027234 NOVA SCOTIA COMPANY 1. The name of the Company is 3027234 Nova Scotia Company. 2. There are no restrictions on the objects and powers of the Company and the Company shall expressly have the following powers: (1) to sell or dispose of its undertaking, or a substantial part thereof; (2) to distribute any of its property in specie among its members; and (3) to amalgamate with any company or other body of persons. 3. The liability of the members is unlimited. I, the undersigned, whose name, address and occupation are subscribed, am desirous of being formed into a company in pursuance of this Memorandum of Association, and I agree to take the number and kind of shares in the capital stock of the Company written below my name. /s/ Charles S. Reagh ------------------------------------------------ Name or Subscriber: Charles S. Reagh 800-1959 Upper Water Street, Halifax, NS B3J 2X2 Occupation: Solicitor Number of shares subscribed: One Common share TOTAL SHARES TAKEN: one common share Dated this 13th day of May, 1999. Witness to above signature: /s/ Leanne Thomas ------------------------------------------------ Name of Witness: Leanne Thomas 800-1959 Upper Water Street, Halifax, NS B3J 2X2 Occupation: Legal Assistant ARTICLES OF ASSOCIATION OF 3027234 NOVA SCOTIA COMPANY INTERPRETATION 1. In these Articles, unless there be something in the subject or context inconsistent therewith: (1) "Act" means the Companies Act (Nova Scotia); (2) "Articles" means these Articles of Association of the Company and all amendments hereto; (3) "Company" means the company named above; (4) "director" means a director of the Company; (5) "Memorandum" means the Memorandum of Association of the Company and all amendments thereto; (6) "month" means calendar month;. (7) "Office" means the registered office of the Company; (8) "person" includes a body corporate; (9) "proxyholder" includes an alternate proxyholder; (10) "Register" means the register of members kept pursuant to the Act, and where the context permits includes a branch register of members; (11) "Registrar" means the Registrar as defined in the Act; (12) "Secretary" includes any person appointed to perform the duties of the Secretary temporarily; (13) "shareholder" means member as that term is used in the Act in connection with an unlimited company having share capital and as that term is used in the Memorandum; (14) "special resolution" has the meaning assigned by the Act; (15) "in writing" and "written" includes printing, lithography and other modes of representing or reproducing words in visible form; (16) words importing number or gender include all numbers and genders unless the context otherwise requires. 2. The regulations in Table A in the First Schedule to the Act shall not apply to the Company. 3. The directors may enter into and carry into effect or adopt and carry into effect any agreement made by the promoters of the Company on behalf of the Company and may agree to any modification in the terms of any such agreement, either before or after its execution. 4. The directors may, out of the funds of the Company, pay all expenses incurred for the incorporation and organization of the Company. 5. The Company may commence business on the day following incorporation or so soon thereafter as the directors think fit, notwithstanding that part only of the shares has been allotted. SHARES 6. The capital of the company shall consist of 1,000 common shares without nominal or par value, with the power to divide the shares in the capital for the time being into classes or series and to attach thereto respectively any preferred, deferred or qualified rights, privileges or conditions, including restrictions on voting rights and including redemption, purchase and other acquisition of such shares, subject, however, to the provisions of the Act. 7. The directors shall control the shares and, subject to the provisions of these Articles, may allot or otherwise dispose of them to such person at such times, on such terms and conditions and, if the shares have a par value, either at a premium or at par, as they think fit. 8. The directors may pay on behalf of the Company a reasonable commission to any person in consideration of subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in the Company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any shares in the Company. Subject to the Act, the commission may be paid or satisfied in shares of the Company. 9. On the issue of shares the Company may arrange among the holders thereof differences in the calls to be paid and in the times for their payment. 10. If the whole or part of the allotment price of any shares is, by the conditions of their allotment, payable in installments, every such installment shall, when due, be payable to the Company by the person who is at such time the registered holder of the shares. 11. Shares may be registered in the names of joint holders not exceeding three in number. 12. Joint holders of a share shall be jointly and severally liable for the payment of all installments and calls due in respect of such share. On the death of one or more joint holders of shares the survivor or survivors of them shall alone be recognized by the Company as the registered holder or holders of the shares. 13. Save as herein otherwise provided, the Company may treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or required by statute, be bound to recognize any equitable or other claim to or interest in such share on the part of any other person. 14. The Company is a private company, and: (1) no transfer of any share or prescribed security of the Company shall be effective unless or until approved by the directors (2) the number of holders of issued and outstanding prescribed securities or shares of the Company, exclusive of persons who are in the employment of the Company or in the employment of an affiliate of the Company and exclusive of persons who, having been formerly in the employment of the Company or the employment of an affiliate of the Company, were, while in that employment, and have continued after termination of that employment, to own at least one prescribed security or share of the Company, shall not exceed 50 in number, two or more persons or companies who are the joint registered owners of one or more prescribed securities or shares being counted as one holder; and (3) the Company shall not invite the public to subscribe for any of its securities. 2 In this Article, "private company" and "securities" have the meanings ascribed to those terms in the Securities Act (Nova Scotia), and "prescribed security" means any of the securities prescribed by the Nova Scotia Securities Commission from time to time for the purpose of the definition of "private company" in the Securities Act (Nova Scotia). CERTIFICATES 15. Certificates of title to shares shall comply with the Act and may otherwise be in such form as the directors may from time to time determine. Unless the directors otherwise determine, every certificate of title to shares shall be signed manually by at least one of the Chairman, President, Secretary, Treasurer, a vice-president, an assistant secretary, any other officer of the Company or any director of the Company or by or on behalf of a share registrar transfer agent or branch transfer agent appointed by the Company or by any other person whom the directors may designate. When signatures of more than one person appear on a certificate all but one may be printed or otherwise mechanically reproduced. All such certificates when signed as provided in this Article shall be valid and binding upon the Company. If a certificate contains a printed or mechanically reproduced signature of a person, the Company may issue the certificate, notwithstanding that the person has ceased to be a director or an officer of the Company and the certificate is as valid as if such person were a director or an officer at the date of its issue. 16. Except as the directors may determine, each shareholder's shares may be evidenced by any number of certificates so long as the aggregate of the shares stipulated in such certificates equals the aggregate registered in the name of the shareholder. 17. Where shares are registered in the names of two or more persons, the Company shall not be bound to issue more than one certificate or set of certificates, and such certificate or set of certificates shall be delivered to the person first named on the Register. 18. Any certificate that has become worn, damaged or defaced may, upon its surrender to the directors, be cancelled and replaced by a new certificate. Any certificate that has become lost or destroyed may be replaced by a new certificate upon proof of such loss or destruction to the satisfaction of the directors and the furnishing to the Company of such undertakings of indemnity as the directors deem adequate. 19. The sum of one dollar or such other sum as the directors from time to time determine shall be paid to the Company for every certificate other than the first certificate issued to any holder in respect of any share or shares. 20. The directors may cause one or more branch Registers of shareholders to be kept in any place or places, whether inside or outside of Nova Scotia. CALLS 21. The directors may make such calls upon the shareholders in respect of all amounts unpaid on the shares held by them respectively and not made payable at fixed times by the conditions on which such shares were allotted, and each shareholder shall pay the amount of every call so made to the person and at the times and places appointed by the directors. A call may be made payable by installments. 22. A call shall be deemed to have been made at the time when the resolution of the directors authorizing such call was passed. 23. At least 14 days' notice of any call shall be given, and such notice shall specify the time and place at which and the person to whom such call shall be paid. 24. If the sum payable in respect of any call or installment is not paid on or before the day appointed for the payment thereof, the holder for the time being of the share in respect of which the call has been made or the installment is due shall pay interest on such call or installment at the rate of 9% per year or such other rate 3 of interest as the directors may determine from the day appointed for the payment thereof up to the time of actual payment. 25. At the trial or hearing of any action for the recovery of any amount due for any call, it shall be sufficient to prove that the name of the shareholder sued is entered on the Register as the holder or one of the holders of the share or shares in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book and that such notice of such call was duly given to the shareholder sued in pursuance of these Articles. It shall not be necessary to prove the appointment of the directors who made such call or any other matters whatsoever and the proof of the matters stipulated shall be conclusive evidence of the debt. FORFEITURE OF SHARES 26. If any shareholder fails to pay any call or installment on or before the day appointed for payment, the directors may at any time thereafter while the call or installment remains unpaid serve a notice on such shareholder requiring payment thereof together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment. 27. The notice shall name a day (not being less than 14 days after the date of the notice) and a place or places on and at which such call or installment and such interest and expenses are to be paid. The notice shall also state that, in the event of non-payment on or before the day and at the place or one of the places so named, the shares in respect of which the call was made or installment is payable will be liable to be forfeited. 28. If the requirements of any such notice are not complied with, any shares in respect of which such notice has been given may at any time thereafter, before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. 29. When any share has been so forfeited, notice of the resolution shall be given to the shareholder in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture shall be made in the Register. 30. Any share so forfeited shall be deemed the property of the Company and the directors may sell, re-allot or otherwise dispose of it in such manner as they think fit. 31. The directors may at any time before any share so forfeited has been sold, re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as they think fit. 32. Any shareholder whose shares have been forfeited shall nevertheless be liable to pay and shall forthwith pay to the Company all calls, installments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture together with interest thereon at the rate of 9% per year or such other rate of interest as the directors may determine from the time of forfeiture until payment. The directors may enforce such payment if they think fit, but are under no obligation to do so. 33. A certificate signed by the Secretary stating that a share has been duly forfeited on a specified date in pursuance of these Articles and the time when it was forfeited shall be conclusive evidence of the facts therein stated as against any person who would have been entitled to the share but for such forfeiture. LIEN ON SHARES 34. The Company shall have a first and paramount lien upon all shares (other than fully paid-up shares) registered in the name of a shareholder (whether solely or jointly with others) and upon the proceeds from the sale thereof for debts, liabilities and other engagements of the shareholder, solely or jointly with any other person, to or with the Company, whether or not the period for the payment, fulfillment or discharge thereof has actually arrived, and such lien shall extend to all dividends declared in respect of such shares. 4 Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of any lien of the Company on such shares. 35. For the purpose of enforcing such lien the directors may sell the shares subject to it in such manner as they think fit, but no sale shall be made until the period for the payment, fulfillment or discharge of such debts, liabilities or other engagements has arrived, and until notice in writing of the intention to sell has been given to such shareholder or the shareholder's executors or administrators and default has been made by them in such payment, fulfillment or discharge for seven days after such notice. 36. The net proceeds of any such sale after the payment of all costs shall be applied in or towards the satisfaction of such debts, liabilities or engagements and the residue, if any, paid to such shareholder. VALIDITY OF SALES 37. Upon any sale after forfeiture or to enforce a lien in purported exercise of the powers given by these Articles the directors may cause the purchaser's name to be entered in the Register in respect of the shares sold, and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money, and after the purchaser's name has been entered in the Register in respect of such shares the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively. TRANSFER OF SHARES 38. The instrument of transfer of any share in the Company shall be signed by the transferor. The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect thereof and shall be entitled to receive any dividend declared thereon before the registration of the transfer. 39. The instrument of transfer of any share shall be in writing in the following form or to the following effect: For value received, _________ hereby sell, assign, and transfer unto _____________, ________ shares in the capital of the Company represented by the within certificate, and do hereby irrevocably constitute and appoint attorney to transfer such shares on the books of the Company with full power of substitution in the premises. Dated the ___ day of, ______. Witness: 40. The directors may, without assigning any reason therefor, decline to register any transfer of shares (1) not fully paid-up or upon which the Company has a lien, or (2) the transfer of which is restricted by any agreement to which the Company is a party. 41. Every instrument of transfer shall be left for registration at the Office of the Company, or at any office of its transfer agent where a Register is maintained, together with the certificate of the shares to be transferred and such other evidence as the Company may require to prove title to or the right to transfer the shares. 42. The directors may require that a fee determined by them be paid before or after registration of any transfer. 43. Every instrument of transfer shall, after its registration, remain in the custody of the Company. Any instrument of transfer that the directors decline to register shall, except in case of fraud, be returned to the person who deposited it. 5 TRANSMISSION OF SHARES 44. The executors or administrators of a deceased shareholder (not being one of several joint holders) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such shareholder. When a share is registered in the names of two or more joint holders, the survivor or survivors or the executors or administrators of the deceased survivor, shall be the only persons recognized by the Company as having any title to, or interest in, such share. 45. Notwithstanding anything in these Articles, if the Company has only one shareholder (not being one of several joint holders) and that shareholder dies, the executors or administrators of the deceased shareholder shall be entitled to register themselves in the Register as the holders of the shares registered in the name of the deceased shareholder whereupon they shall have all the rights given by these Articles and by law to shareholders. 46. Any person entitled to shares upon the death or bankruptcy of any shareholder or in any way other than by allotment or transfer, upon producing such evidence of entitlement as the directors require, may be registered as a shareholder in respect of such shares, or may, without being registered, transfer such shares subject to the provisions of these Articles respecting the transfer of shares. The directors shall have the same right to refuse registration as if the transferee were named in an ordinary transfer presented for registration. SURRENDER OF SHARES 47. The directors may accept the surrender of any share by way of compromise of any question as to the holder being properly registered in respect thereof. Any share so surrendered may be disposed of in the same manner as a forfeited share. INCREASE AND REDUCTION OF CAPITAL 48. Subject to the Act, the shareholders may by special resolution amend these Articles to increase or alter the share capital of the Company as they think expedient. Without prejudice to any special rights previously conferred on the holders of existing shares, any share may be issued with such preferred, deferred or other special rights, or with such restrictions, whether in regard to dividends, voting, return of share capital or otherwise, as the shareholders may from time to time determine by special resolution. Except as otherwise provided by the conditions of issue, or by these Articles, any capital raised by the creation of new shares shall be considered part of the original capital and shall be subject to the provisions herein contained with reference to payment of calls and installments, transfer and transmission, forfeiture, lien and otherwise. 49. The Company may, by special resolution where required, reduce its share capital in any way and with, and subject to any incident authorized and consent required by law. Subject to the Act and any provisions attached to such shares, the Company may redeem, purchase or acquire any of its shares and the directors may determine the manner and the terms for redeeming, purchasing or acquiring such shares and may provide a sinking fund on such terms as they think fit for the redemption, purchase or acquisition of shares of any class or series. MEETINGS AND VOTING BY CLASS OR SERIES 50. Where the holders of shares of a class or series have, under the Act, the terms or conditions attaching to such shares or otherwise, the right to vote separately as a class in respect of any matter then, except as provided in the Act, these Articles or such terms or conditions, all the provisions in these Articles concerning general meetings (including, without limitation, provisions respecting notice, quorum and procedure) shall, mutatis mutandis, apply to every meeting of holders of such class or series of shares convened for the purpose of such vote. 6 51. Unless the rights, privileges, terms or conditions attached to a class or series of shares provide otherwise, such class or series of shares shall not have the right to vote separately as a class or series upon an amendment to the Memorandum or Articles to: (1) increase or decrease any maximum number of authorized shares of such class or series, or increase any maximum number of authorized shares of a class or series having rights or privileges equal or superior to the shares of such class or series; (2) effect an exchange, reclassification or cancellation of all or part of the shares of such class or series; or. (3) create a new class or series of shares equal or superior to the shares of such class or series. BORROWING POWERS 52. The directors on behalf of the Company may: (1) raise or borrow money for the purposes of the Company or any of them; (2) secure, subject to the sanction of a special resolution where required by the Act, the repayment of funds so raised or borrowed in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the execution and delivery of mortgages of the Company's real or personal property, or by the issue of bonds, debentures or other securities of the Company secured by mortgage or other charge upon all or any part of the property of the Company, both present and future including its uncalled capital for the time being; (3) sign or endorse bills, notes, acceptances, cheques, contracts, and other evidence of or securities for funds borrowed or to be borrowed for the purposes aforesaid; (4) pledge debentures as security for loans; (5) guarantee obligations of any person. 53. Bonds, debentures and other securities may be made assignable, free from any equities between the Company and the person to whom such securities were issued. 54. Any bonds, debentures and other securities may be issued at a discount, premium or otherwise and with special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of directors and other matters. GENERAL MEETINGS 55. Ordinary general meetings of the Company shall be held at least once in every calendar year at such time and place as may be determined by the directors and not later than 15 months after the preceding ordinary general meeting. All other meetings of the Company shall be called special general meetings. Ordinary or special general meetings may be held either within or without the Province of Nova Scotia. 56. The President, a vice-president or the directors may at any time convene a special general meeting, and the directors, upon the requisition of shareholders in accordance with the Act shall forthwith proceed to convene such meeting or meetings to be held at such time and place or times and places as the directors determine. 57. The requisition shall state the objects of the meeting requested, be signed by the requisitionists and deposited at the Office of the Company. It may consist of several documents in like form each signed by one or more of the requisitionists. 7 58. At least seven clear days' notice, or such longer period of notice as may be required by the Act, of every general meeting, specifying the place, day and hour of the meeting and, when special business is to be considered, the general nature of such business, shall be given to the shareholders entitled to be present at such meeting by notice given as permitted by these Articles. With the consent in writing of all the shareholders entitled to vote at such meeting; a meeting may be convened by a shorter notice and in any manner they think fit, or notice of the time, place and purpose of the meeting may be waived by all of the shareholders. 59. When it is proposed to pass a special resolution, the two meetings may be convened by the same notice, and it shall be no objection to such notice that it only convenes the second meeting contingently upon the resolution being passed by the requisite majority at the first meeting. 60. The accidental omission to give notice to a shareholder, or non-receipt of notice by a shareholder, shall not invalidate any resolution passed at any general meeting. RECORD DATES 61. (1) The directors may fix in advance a date as the record date for the determination of shareholders (a) entitled to receive payment of a dividend or entitled to receive any distribution; (b) entitled to receive notice of a meeting; or (c) for any other purpose. (2) If no record date is fixed, the record date for the determination of shareholders (a) entitled to receive notice of a meeting shall be the day immediately preceding the day on which the notice is given, or, if no notice is given, the day on which the meeting is held; and (b) for any other purpose shall be the day on which the directors pass the resolution relating to the particular purpose. PROCEEDINGS AT GENERAL MEETINGS 62. The business of an ordinary general meeting shall be to receive and consider the financial statements of the Company and the report of the directors and the report, if any, of the auditors, to elect directors in the place of those retiring and to transact any other business which under these Articles ought to be transacted at an ordinary general meeting. 63. No business shall be transacted at any general meeting unless the requisite quorum is present at the commencement of the business. A corporate shareholder of the Company that has a duly authorized agent or representative present at any such meeting shall for the purpose of this Article be deemed to be personally present at such meeting. 64. One person, being a shareholder, proxyholder or representative of a corporate shareholder, present and entitled to vote shall constitute a quorum for a general meeting, and may hold a meeting. 65. The Chairman shall be entitled to take the chair at every general meeting or, if there be no Chairman, or if the Chairman is not present within fifteen 15 minutes after the time appointed for holding the meeting, the President or, failing the President, a vice-president shall be entitled to take the chair. If the Chairman, the President or a vice-president is not present within 15 minutes after the time appointed for holding the meeting or if all such persons present decline to take the chair, the shareholders present entitled to vote at 8 the meeting shall choose another director as chairman and if no director is present or if all the directors present decline to take the chair, then such shareholders shall choose one of their number to be chairman. 66. If within half an hour from the time appointed for a general meeting a quorum is not present, the meeting, if it was convened pursuant to a requisition of shareholders, shall be dissolved; if it was convened in any other way, it shall stand adjourned to the same day, in the next week, at the same time and place. If at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may hold the meeting. 67. Subject to the Act, at any general meeting a resolution put to the meeting shall be decided by a show of hands unless, either before or on the declaration of the result of the show of hands, a poll is demanded by the chairman, a shareholder or a proxyholder; and unless a poll is so demanded, a declaration by the chairman that the resolution has been carried, carried by a particular majority, lost or not carried by a particular majority and an entry to that effect in the Company's book of proceedings shall, be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favor or against such resolution. 68. When a poll is demanded, it shall be taken in such manner and at such time and place as the chairman directs, and either at once or after an interval or adjournment or otherwise. The result of the poll shall be the resolution of the meeting at which the poll was demanded. The demand of a poll may be withdrawn. When any dispute occurs over the admission or rejection of a vote, it shall be resolved by the chairman and such determination made in good faith shall be final and conclusive. 69. The chairman shall not have a casting vote in addition to any vote or votes that the chairman has as a shareholder. 70. The chairman of a general meeting may with the consent of the meeting adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting that was adjourned. 71. Any poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith without adjournment. 72. The demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded. VOTES OF SHAREHOLDERS 73. Subject to the Act and to any provisions attached to any class or series of shares concerning or restricting voting rights: (1) on a show of hands every shareholder entitled to vote present in person, every duly authorized representative of a corporate shareholder, and, if not prevented from voting by the Act, every proxyholder, shall have one vote; and (2) on a poll every shareholder present in person, every duly authorized representative of a corporate shareholder, and every proxyholder, shall have one vote for every share held; whether or not such representative or proxyholder is a shareholder. 74. Any person entitled to transfer shares upon the death or bankruptcy of any shareholder or in any way other than by allotment or transfer may vote at any general meeting in respect thereof in the same manner as if such person were the registered holder of such shares so long as the directors are satisfied at least 48 hours before the time of holding the meeting of such person's right to transfer such shares. 9 75. Where there are joint registered holders of any share, any of such holders may vote such share at any meeting, either personally or by proxy, as if solely entitled to it. If more than one joint holder is present at any meeting; personally or by proxy, the one whose name stands first on the Register in respect of such share shall alone be entitled to vote it. Several executors or administrators of a deceased shareholder in whose name any share stands shall for the purpose of this Article be deemed joint holders thereof. 76. Votes may be cast either personally or by proxy or, in the case of a corporate shareholder by a representative duly authorized under the Act. 77. A proxy shall be in writing and executed in the manner provided in the Act. A proxy or other authority of a corporate shareholder does not require its seal. 78. A shareholder of unsound mind in respect or whom an order has been made by any court of competent jurisdiction may vote by guardian or other person in the nature of a guardian appointed by that court, and any such guardian or other person may vote by proxy. 79. A proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Office of the Company or at such other place as the directors may direct. The directors may, by resolution, fix a time not exceeding 48 hours excluding Saturdays and holidays preceding any meeting or adjourned meeting before which time proxies to be used at that meeting must be deposited with the Company at its Office or with an agent of the Company. Notice of the requirement for depositing proxies shall be given in the notice calling the meeting. The chairman of the meeting shall determine all questions as to validity of proxies and other instruments of authority. 80. A vote given in accordance with the terms of a proxy shall be valid notwithstanding the previous death of the principal, the revocation of the proxy, or the transfer of the share in respect of which the vote is given, provided no intimation in writing of the death, revocation or transfer is received at the Office of the Company before the meeting or by the chairman of the meeting before the vote is given. 81. Every form of proxy shall comply with the Act and its regulations and subject thereto may be in the following form: I, _____________ of________ being a shareholder of hereby appoint _______________ of _____________ (or failing him/her _______________ of __________) as my proxyholder to attend and to vote for me and on my behalf at the ordinary/special general meeting of the Company, to be held on the day of and at any adjournment thereof, or at any meeting of the Company winch may be held prior to [insert specified date or event]. [If the proxy is solicited by or behalf of the management of the Company, insert a statement to that effect.] Dated this _______ day of______ ______. _______________________________ Shareholder 82. Subject to the Act, no shareholder shall be entitled to be present or to vote on any question, either personally or by proxy, at any general meeting or be reckoned in a quorum while any call is due and payable to the Company in respect of any of the shares of such shareholder. 83. Any resolution passed by the directors, notice of which has been given to the shareholders in the manner in which notices are hereinafter directed to be given and which is, within one month after it has been passed, ratified and confirmed in writing by shareholders entitled on a poll to three-fifths of the votes, shall be as valid and effectual as a resolution of a general meeting. This Article shall not apply to a resolution for winding up the Company or to a resolution dealing with any matter that by statute or these Articles ought to be dealt with by a special resolution or other method prescribed by statute. 10 84. A resolution, including a special resolution, in writing and signed by every shareholder who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such shareholders at a meeting and satisfies all of the requirements of the Act respecting meetings of shareholders. DIRECTORS 85. Unless otherwise determined by resolution of shareholders, the number of directors shall not be less than one or more than ten. 86. Notwithstanding anything herein contained the subscribers to the Memorandum shall be the first directors of the Company. 87. The directors may be paid out of the funds of the Company as remuneration for their service such sums, if any, as the Company may by resolution of its shareholders determine, and such remuneration shall be divided among them in such proportions and manner as the directors determine. The directors may also be paid their reasonable traveling, hotel and other expenses incurred in attending meetings of directors and otherwise in the execution of their duties as directors. 88. The continuing directors may act notwithstanding any vacancy in their body, but if their number falls below the minimum permitted, the directors shall not, except in emergencies or for the purpose of filling vacancies, act so long as their number is below the minimum. 89. A director may, in conjunction with the office of director, and on such terms as to remuneration and otherwise as the directors arrange or determine, hold any other office or place of profit under the Company or under any company in which the Company is a shareholder or is otherwise interested. 90. The office of a director shall ipso facto be vacated, if the director: (1) becomes bankrupt or makes an assignment for the benefit of creditors; (2) is, or is found by a court of competent jurisdiction to be, of unsound mind; (3) by notice in writing to the Company, resigns the office of director; or (4) is removed in the manner provided by these Articles. 91. No director shall be disqualified by holding the office of director from contracting with the Company, either as vendor, purchaser, or otherwise, nor shall any such contract, or any contract or arrangement entered into or proposed to be entered into by or on behalf of the Company in which any director is in any way interested, either directly or indirectly, be avoided, nor shall any director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by, reason only of such director holding that office or of the fiduciary relations thereby established, provided the director makes a declaration or gives a general notice in accordance with the Act. No director shall, as a director, vote in respect of any contract or arrangement in which the director is so interested, and if the director does so vote, such vote shall not be counted. This prohibition may at any time or times be suspended or relaxed to any extent by a resolution of the shareholders and shall not apply to any contract by or on behalf of the Company to give to the directors or any of them any security for advances or by way of indemnity. ELECTION OF DIRECTORS 92. At the dissolution of every ordinary general meeting at which their successors are elected, all the directors shall retire from office and be succeeded by the directors elected at such meeting. Retiring directors shall be eligible for re-election. 11 93. If at any ordinary general meeting at which an election of directors ought to take place no such election takes place, or if no ordinary general meeting is held in any year or period of years, the retiring directors shall continue in office until their successors are elected. 94. The Company may by resolution of its shareholders elect any number of directors permitted by these Articles and may determine or alter their qualification. 95. The Company may, by special resolution or in any other manner permitted by statute, remove any director before the expiration of such director's period of office and may, if desired, appoint a replacement to hold office during such time only as the director so removed would have held office. 96. The directors may appoint any other person as a director so long as the total number of directors does not at any time exceed the maximum number permitted. No such appointment, except to fill a casual vacancy, shall be effective unless two-thirds of the directors concur in it. Any casual vacancy occurring among the directors may be filled by the directors, but any person so chosen shall retain office only so long as the vacating director would have retained it if the vacating director had continued as director. MANAGING DIRECTOR 97. The directors may appoint one or more of their body to be managing directors of the Company, either for a fixed term or otherwise, and may remove or dismiss them from office and appoint replacements. 98. Subject to the provisions of any contract between a managing director and the Company, a managing director shall be subject to the same provisions as to resignation and removal as the other directors of the Company. A managing director who for any reason ceases to hold the office of director shall ipso facto immediately cease to be a managing director. 99. The remuneration of a managing director shall from time to time be fixed by the directors and may be by way of any or all of salary, commission and participation in profits. 100. The directors may from time to time entrust to and confer upon a managing director such of the powers exercisable under these Articles by the directors as they think fit, and may confer such powers for such time, and to be exercised for such objects and purposes and upon such terms and conditions, and with such restrictions as they think expedient; and they may confer such powers either collaterally with, or to the exclusion of, and in substitution for, all or any of the powers of the directors in that behalf; and may from time to time revoke; withdraw, alter or vary all or any of such powers. CHAIRMAN OF THE BOARD 101. The directors may elect one of their number to be Chairman and may determine the period during which the Chairman is to hold office. The Chairman shall perform such duties and, receive such special remuneration as the directors may provide. PRESIDENT AND VICE-PRESIDENTS 102. The directors shall elect the President of the Company, who need not be a director, and may determine the period for which the President is to hold office. The President shall have general supervision of the business of the Company and shall perform such duties as may be assigned from time to time by the directors. 103. The directors may also elect vice-presidents, who need not be directors, and may determine the periods for which they are to hold office. A vice-president shall, at the request of the President or the directors and subject to the directions of the directors, perform the duties of the President during the absence, illness or incapacity of the President, and shall also perform such duties as may be assigned by the President or the directors. 12 SECRETARY AND TREASURER 104. The directors shall appoint a Secretary of the Company to keep minutes of shareholders' and directors' meetings and perform such other duties as may be assigned by the directors. The directors may also appoint a temporary substitute for the Secretary who shall, for the purposes of these Articles, be deemed to be the Secretary. 105. The directors may appoint a treasurer of the Company to carry out such duties as the directors may assign. OFFICERS 106. The directors may elect or appoint such other officers of the Company, having such powers and duties, as they think fit. 107. If the directors so decide the same person may hold more than one of the offices provided for in these Articles. PROCEEDINGS OF DIRECTORS 108. The directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings and proceedings, as they think fit, and may determine the quorum necessary for the transaction of business. Until otherwise determined, one director shall constitute a quorum and may hold a meeting. 109. If all directors of the Company entitled to attend a meeting either generally or specifically consent, a director may participate in a meeting of directors or of a committee of directors by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed to be present at that meeting for purposes of these Articles. 110. Meetings of directors may be held either within or without the Province of Nova Scotia and the directors may from time to time make arrangements relating to the time and place of holding directors' meetings, the notices to be given for such meetings and what meetings may be held without notice. Unless otherwise provided by such arrangements: (1) meeting of directors may be held at the close of every ordinary general meeting of the Company without notice. (2) Notice of every other directors' meeting may be given as permitted by these Articles to each director at least 48 hours before the time fixed for the meeting. (3) A meeting of directors may be held without formal notice if all the directors are present or if those absent have signified their assent to such meeting or their consent to the business transacted at such meeting. 111. The President or any director may at any time, and the Secretary, upon the request of the President or any director, shall summon a meeting of the directors to be held at the Office of the Company. The President, the Chairman or a majority of the directors may at any time, aid the Secretary, upon the request of the President, the Chairman or a majority of the directors shall, summon a meeting to be held elsewhere. 112. (1) Questions arising at any meeting of directors shall be decided by a majority of votes. The chairman of the meeting may vote as a director but shall not have a second or casting vote. (2) At any meeting of directors the chairman shall receive and count the vote of any director not present in person at such meeting on any question or matter arising at such meeting whenever such absent director has indicated by telegram, letter or other writing lodged with the chairman of such 13 meeting the manner in which the absent director desires to vote on such question or matter and such question or matter has been specifically mentioned in the notice calling the meeting as a question or matter to be discussed or decided thereat. In respect of any such question or matter so mentioned in such notice any director may give to any other director a proxy authorizing such other director to vote for such first named director at such meeting, and the chairman of such meeting, after such proxy has been so lodged, shall receive and count any vote given in pursuance thereof notwithstanding the absence of the director giving such proxy. 113. If no Chairman is elected, or if at any meeting of directors the Chairman is not present within five minutes after the time appointed for holding the meeting, or declines to take the chair, the President, if a director, shall preside. If the President is not a director, is not present at such time or declines to take the chair, a vice-president who is also a director shall preside. If no person described above is present at such time and willing to take the chair, the directors present shall choose some one of their number to be chairman of the meeting. 114. A meeting of the directors at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions for the time being vested in or exercisable by the directors generally. 115. The directors may delegate any of their powers to committees consisting of such number of directors as they think fit. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on them by the directors. 116. The meetings and proceedings of any committee of directors shall be governed by the provisions contained in these Articles for regulating the meetings and proceedings of the directors insofar as they are applicable and are not superseded by any regulations made by the directors. 117. All acts done at any meeting of the directors or of a committee of directors or by any person acting as a director shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of the director or person so acting, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director. 118. A resolution in writing and signed by every director who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such directors at a meeting. 119. If any one or more of the directors is called upon to perform extra services or to make any special exertions in going or residing abroad or otherwise for any of the purposes of the Company or the business thereof, the Company may remunerate the director or directors so doing, either by a fixed sum or by a percentage of profits or otherwise. Such remuneration shall be determined by the directors and may be either in addition to or in substitution for remuneration otherwise authorized by these Articles. REGISTERS 120. The directors shall cause to be kept at the Company's Office in accordance with the provisions of the Act a Register of the shareholders of the Company, a register of the holders of bonds, debentures and other securities of the Company and a register of its directors. Branch registers of the shareholders and of the holders of bonds, debentures and other securities may be kept elsewhere, either within or without the Province of Nova Scotia, in accordance with the Act. MINUTES 121. The directors shall cause minutes to be entered in books designated for the purpose: (1) of all appointments of officers; (2) of the names of directors present at each meeting of directors and of any committees of directors; 14 (3) of all orders made by the directors and committees of directors; and (4) of all resolutions and proceedings of meetings of shareholders and of directors. Any such minutes of any meeting of directors or of any committee of directors or of shareholders, if purporting to be signed by the chairman of such meeting or by the chairman of the next succeeding meeting, shall be receivable as prima facie evidence of the matters stated in such minutes. POWERS OF DIRECTORS 122. The management of the business of the Company is vested in the directors who, in addition to the powers and authorities by these Articles or otherwise expressly conferred upon them, may exercise all such powers and do all such acts and things as may be exercised or done by the Company and are not hereby or by statute expressly directed or required to be exercised or done by the shareholders, but subject nevertheless to the provisions of any statute, the Memorandum or these Articles. No modification of the Memorandum or these Articles shall invalidate any prior act of the directors that would have been valid if such modification had not been made. 123. Without restricting the generality of the terms of any of these Articles and without prejudice to the powers conferred thereby, the directors may: (1) take such steps as they think fit to carry out any agreement or contract made by or on behalf of the Company; (2) pay costs, charges and expenses preliminary and incidental to the promotion, formation, establishment, and registration of the Company, (3) purchase or otherwise acquire for the Company any property, rights or privileges that the Company is authorized to acquire, at such price and generally on such terms and conditions as they think fit; (4) pay for any property, rights or privileges acquired by, or services rendered to the Company either wholly or partially in cash or in shares (fully paid-up or otherwise), bonds, debentures or other securities of the Company; (5) subject to the Act, secure the fulfillment of any contracts or engagements entered into by the Company by mortgaging or charging all or any of the property of the Company and its unpaid capital for the time being, or in such other manner as they think fit; (6) appoint, remove or suspend at their discretion such experts, managers, secretaries, treasurers, officers, clerks, agents and servants for permanent, temporary or special services, as they from time to time think fit, and determine their powers and duties and fix their salaries or emoluments and require security in such instances and to such amounts as they think fit; (7) accept a surrender of shares from any shareholder insofar as the law permits and on such terms and conditions as may be agreed; (8) appoint any person or persons to accept and hold in trust for the Company any property belonging to the Company, or in which it is interested, execute and do all such deeds and things as may be required in relation to such trust, and provide for the remuneration of such trustee or trustees; (9) institute, conduct, defend, compound or abandon any legal proceedings by and against the Company, its directors or its officers or otherwise concerning the affairs of the Company, and also compound and allow time for payment or satisfaction of any debts due and of any claims or demands by or against the Company; 15 (10) refer any claims or demands by or against the Company to arbitration and observe and perform the awards; (11) make and give receipts, releases and other discharges for amounts payable to the Company and for claims and demands of the Company; (12) determine who may exercise the borrowing powers of the Company and sign on the Company's behalf bonds, debentures or other securities, bills, notes, receipts, acceptances, assignments, transfers, hypothecations, pledges, endorsements, cheques, drafts, releases, contracts, agreements and all other instruments and documents; (13) provide for the management of the affairs of the Company abroad in such manner as they think fit, and in particular appoint any person to be the attorney or agent of the Company with such powers (including power to sub-delegate) and upon such terms as may be thought fit; (14) invest and deal with any funds of the Company in such securities and in such manner as they think fit; and vary or realize such investments; (15) subject to the Act, execute in the name and on behalf of the Company in favour of any director or other person who may incur or be about to incur any personal liability for the benefit of the Company such mortgages of the Company's property, present and future, as they think fit; (16) give any officer or employee of the Company a commission on the profits of any particular business or transaction or a share in the general profits of the Company; (17) set aside out of the profits of the Company before declaring any dividend such amounts as they think proper as a reserve fund to meet contingencies or provide for dividends, depreciation, repairing, improving and maintaining any of the property of the Company and such other purposes as the directors may in their absolute discretion think in the interests of the Company, and invest such amounts in such investments as they think fit, and deal with and vary such investments, and dispose of all or any part of them for the benefit of the Company, and divide the reserve fund into such special funds as they think fit, with full power to employ the assets constituting the reserve fund in the business of the Company without being bound to keep them separate from the other assets; (18) make, vary and repeal rules respecting the business of the Company, its officers and employees, the shareholders of the Company or any section or class of them; (19) enter into all such negotiations and contracts, rescind and vary all such contracts, and execute and do all such acts, deeds and things in the name and on behalf of the Company as they consider expedient for or in relation to any of the matters aforesaid or otherwise for the purposes of the Company; (20) provide for the management of the affairs of the Company in such manner as they think fit. SOLICITORS 124. The Company may employ or retain solicitors any of whom may, at the request or on the instruction of the directors, the Chairman, the President or a managing director, attend meetings of the directors or shareholders, whether or not the solicitor is a shareholder or a director of the Company. A solicitor who is also a director may nevertheless charge for services rendered to the Company as a solicitor. 16 THE SEAL 125. The directors shall arrange for the safe custody of the common seal of the Company (the "Seal"). The Seal may be affixed to any instrument in the presence of and contemporaneously with the attesting signature of (i) any director or officer acting within such person's authority or (ii) any person under the authority of a resolution of the directors or a committee thereof. For the purpose of certifying documents or proceedings the Seal may be affixed by any director or the President, a vice-president, the Secretary, an assistant secretary or any other officer of the Company without the authorization of a resolution of the directors. 126. The Company may have facsimiles of the Seal which may be used interchangeably with the Seal. 127. The Company may have for use at any place outside the Province of Nova Scotia, as to all matters to which the corporate existence and capacity of the Company extends, an official seal that is a facsimile of the Seal of the Company with the addition on its face of the name of the place where it is to be used; and the Company may by writing under its Seal authorize any person to affix such official seal at such place to any document to which the Company is a party. DIVIDENDS 128. The directors may from time to time declare such dividend as they deem proper upon shares of the Company according to the rights and restrictions attached to any class or series of shares, and may determine the date upon which such dividend will be payable and that it will be payable to the persons registered as the holders of the shares on which it is declared at the close of business upon a record date. No transfer of such shares registered after the record date shall pass any right to the dividend so declared. 129. Dividends may be paid as permitted by law and, without limitation, may be paid out of the profits, retained earnings or contributed surplus of the Company. No interest shall be payable on any dividend except insofar as the rights attached to any class or series of shares provide otherwise. 130. The declaration of the directors as to the amount of the profits, retained earnings or contributed surplus of the Company shall be conclusive. 131. The directors may from time to time pay to the shareholders such interim dividends as in their judgment the position of the Company justifies. 132. Subject to these Articles and the rights and restrictions attached to any class or series of shares, dividends may be declared and paid to the shareholders in proportion to the amount of capital paid-up on the shares (not including any capital paid-up bearing interest) held by them respectively. 133. The directors may deduct from the dividends payable to any shareholder amounts due and payable by the shareholder to the Company on account of calls, installments or otherwise, and may apply the same in or towards satisfaction of such amounts so due and payable. 134. The directors may retain any dividends on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists. 135. The directors may retain the dividends payable upon shares to which a person is entitled or entitled to transfer upon the death or bankruptcy of a shareholder or in any way other than by allotment or transfer, until such person has become registered as the holder of such shares or has duly transferred such shares. 136. When the directors declare a dividend on a class or series of shares and also make a call on such shares payable on or before the date on which the dividend is payable, the directors may retain, all or part of the dividend and set off the amount retained against the call. 17 137. The directors may declare that a dividend be paid by the distribution of cash, paid-up shares (at par or at a premium), debentures, bonds or other securities of the Company or of any other company or any other specific assets held or to be acquired by the Company or in any one or more of such ways. 138. The directors may settle any difficulty that may arise in regard to the distribution of a dividend as they think expedient, and in particular without restricting the generality of the foregoing may issue fractional certificates, may fix the value for distribution of any specific assets, may determine that cash payments will be made to any shareholders upon the footing of the value so fixed or that fractions may be disregarded in order to adjust the rights of all parties, and may vest cash or specific assets in trustees upon such trusts for the persons entitled to the dividend as may seem expedient to the directors. 139. Any person registered as a joint holder of any share may give effectual receipts for all dividends and payments on account of dividends in respect of such share. 140. Unless otherwise determined by the directors, any dividend may be paid by a cheque or warrant delivered to or sent through the post to the registered address of the shareholder entitled, or, when there are joint holders, to the registered address of that one whose name stands first on the register for the shares jointly held. Every cheque or warrant so delivered or sent shall be made payable to the order of the person to whom it is delivered or sent. The mailing or other transmission to a shareholder at the shareholder's registered address (or, in the case of joint shareholders at the address of the holder whose name stands first on the register) of a cheque payable to the order of the person to whom it is addressed for the amount of any dividend payable in cash after the deduction of any tax which the Company has properly withheld, shall discharge the Company's liability for the dividend unless the cheque is not paid on due presentation. If any cheque for a dividend payable in cash is not received, the Company shall issue to the shareholder a replacement cheque for the same amount on such terms as to indemnity and evidence of non-receipt as the directors may impose. No shareholder may recover by action or other legal process against the Company any dividend represented by a cheque that has not been duly presented to a banker of the Company for payment or that otherwise remains unclaimed for 6 years from the date on which it was payable. ACCOUNTS 141. The directors shall cause proper books of account to be kept of the amounts received and expended by the Company, the matters in respect of which such receipts and expenditures take place, all sales and purchases of goods by the Company, and the assets, credits and liabilities of the Company. 142. The books of account shall be kept at the head office of the Company or at such other place or places as the directors may direct. 143. The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions the accounts and books of the Company or any of them shall be open to inspection of the shareholders, and no shareholder shall have any right to inspect any account or book or document of the Company except as conferred by statute or authorized by the directors or a resolution of the shareholders. 144. At the ordinary general meeting in every year the directors shall lay before the Company such financial statements and reports in connection therewith as may be required by the Act or other applicable statute or regulation thereunder and shall distribute copies thereof at such times and to such persons as may be required by statute or regulation. AUDITORS AND AUDIT 145. Except in respect of a financial year for which the Company is exempt from audit requirements in the Act, the Company shall at each ordinary general meeting appoint an auditor or auditors to hold office until the next ordinary general meeting. If at any general meeting at which the appointment of an auditor or auditors is to take place and no such appointment takes place, or if no ordinary general meeting is held in any year 18 or period of years, the directors shall appoint an auditor or auditors to hold office until the next ordinary general meeting. 146. The first auditors of the Company may be appointed by the directors at any time before the first ordinary general meeting and the auditors so appointed shall hold office until such meeting unless previously removed by a resolution of the shareholders, in which event the shareholders may appoint auditors. 147. The directors may fill any casual vacancy in the office of the auditor but while any such vacancy continues the surviving or continuing auditor or auditors, if any, may act. 148. The Company may appoint as auditor any person, including a shareholder, not disqualified by statute. 149. An auditor may be removed or replaced in the circumstances and in the manner specified in the Act. 150. The remuneration of the auditors shall be fixed by the shareholders, or by the directors pursuant to authorization given by the shareholders, except that the remuneration of an auditor appointed to fill a casual vacancy may be fixed by the directors. 151. The auditors shall conduct such audit as may be required by the Act and their report, if any, shall be dealt with by the Company as required by the Act. NOTICES 152. A notice (including any communication or document) shall be sufficiently given, delivered or served by the Company upon a shareholder, director, officer or auditor by personal delivery at such person's registered address (or, in the case of a director, officer or auditor, last known address) or by prepaid mail, telegraph, telex, facsimile machine or other electronic means, of communication addressed to such person at such address. 153. Shareholders having no registered address shall not be entitled to receive notice. 154. All notices with respect to registered shares to which persons are jointly entitled may be sufficiently given to all joint holders thereof by notice given to whichever of such persons is named first in the Register, for such shares. 155. Any notice sent by mail shall be deemed to be given, delivered or served on the earlier of actual receipt and the third business day following that upon which it is mailed, and in proving such service it shall be sufficient to prove that the notice was properly addressed and mailed with the postage prepaid thereon. Any notice given by electronic means of communication shall be deemed to be given when entered into the appropriate transmitting device for transmission. A certificate in writing signed on behalf of the Company that the notice was so addressed and mailed or transmitted shall be conclusive evidence thereof. 156. Every person who by operation of law, transfer or other means whatsoever becomes entitled to any share shall be bound by every notice in respect of such share that prior to such person's name and address being entered on the Register was duly served in the manner hereinbefore provided upon the person from whom such person derived title to such share. 157. Any notice delivered, sent or transmitted to the registered address of any shareholder pursuant to these Articles, shall, notwithstanding that such shareholder is then deceased and that the Company has notice thereof, be deemed to have been served in respect of any registered shares, whether held by such deceased shareholder solely or jointly with other persons, until some other person is registered as the holder or joint holder thereof, and such service shall for all purposes of these Articles be deemed a sufficient service of such notice on the heirs, executors or administrators of the deceased shareholder and all joint holders of such shares. 19 158. Any notice may bear the name or signature, manual or reproduced, of the person giving the notice written or printed. 159. When a given number of days' notice or notice extending over any other period is required to be given, the day of service and the day upon which such notice expires shall not, unless it is otherwise provided, be counted in such number of days or other period. INDEMNITY 160. Every director or officer, former director or officer, or person who acts or acted at the Company's request, as a director or officer of the Company, a body corporate, partnership or other association of which the Company is or was a shareholder, partner, member or creditor, and the heirs and legal representatives of such person, in the absence of any dishonesty on the part of such person, shall be indemnified by the Company against, and it shall be the duty of the directors out of the funds of the Company to pay, all costs, losses and expenses, including an amount paid to settle an action or claim or satisfy a judgment, that such director, officer or person may incur or become liable to pay in respect of any claim made against such person or civil, criminal or administrative action or proceeding to which such person is made a party by reason of being or having been a director or officer of the Company or such body corporate, partnership or other association, whether the Company is a claimant or party to such action or proceeding r otherwise; and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the Company and have priority as against the shareholders over all other claims. 161. No director or officer, former director or officer, or person who acts or acted at the Company's request, as a director or officer of the Company, a body corporate, partnership or other association of which the Company is or was a shareholder, partner, member or creditor, in the absence of any dishonesty on such person's part, shall be liable for the acts, receipts, neglects or defaults of any other director, officer or such person, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to the Company through the insufficiency or deficiency of title to any property acquired for or on behalf of the Company, or through the insufficiency or deficiency of any security in or upon which any of the funds of the Company are invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any funds, securities or effects are deposited, or for any loss occasioned by error of judgment or oversight on the part of such person, or for any other loss, damage or misfortune whatsoever which happens in the execution of the duties of such person or in relation thereto. REMINDERS 162. The directors shall comply with the following provisions of the Act or the Corporations Registration Act (Nova Scotia) where indicated: (1) Keep a current register of shareholders (Section 42). (2) Keep a current register of directors, officers and managers, send to the Registrar a copy thereof and notice of all changes therein (Section 98). (3) Keep a current register of holders of bonds, debentures and other securities (Section Ill and Third Schedule). (4) Call a general meeting every year within the proper time (Section 83). Meetings must be held not later than 15 months after the preceding general meeting. (5) Send to the Registrar copies of all special resolutions,(Section 88). (6) Send to the Registrar notice of the address of the Company's Office and of all changes in such address (Section 79). 20 (7) Keep proper minutes of all shareholders' meetings and directors' meetings in the Company's minute book kept at the Company's Office (Sections 89 and 90). (8) Obtain a certificate under the Corporations Registration Act (Nova Scotia) as soon as business is commenced. (9) Send notice of recognized agent to the Registrar under the Corporations Registration Act (Nova Scotia). NAME OF SUBSCRIBER /s/ Charles S. Reagh - ------------------------------------- Dated at Halifax, Nova Scotia the 13th day of May, 1999. Witness to above signature: /s/ Leanne Thomas - ------------------------------------ Halifax, Nova Scotia 21 3027324 NOVA SCOTIA COMPANY SPECIAL RESOLUTION BE IT RESOLVED a Special Resolution of the Company that the name of the Company be, with the approval of the Registrar of Joint Stock Companies, changed from 3027234 NOVA SCOTIA COMPANY to BICC GENERAL CABLE COMPANY, and in its french language form COMPAGNIE BICC GENERAL CABLE, effective immediately following approval thereof by the Registrar of Joint Stock Companies and that application be made to the Registrar of Joint Stock Companies to enter the said new name on the register of companies in the place of the present name of the Company; AND BE IT FURTHER RESOLVED that the Company may be legally designated by either of such language forms and., unless expressly required bylaw to use a particular language form or all language forms of its name, it may use any one language form of its name by itself in any case where its name is required to be used effective immediately following approval thereof by the Registrar of Joint Stock Companies and that application be made to the Registrar of Joint Stock Companies to enter the said new name on the register of companies in the place of the present name of the Company upon receipt by the Company of the required consent to permit the use of such name. * * * * * * * * * * * * * * * * * * * * CERTIFICATE I hereby certify that the foregoing resolution is a true copy of a Special Resolution duly passed by being signed by all of the shareholders of the Company who would be entitled to vote on the resolution at a meeting, all in accordance with the provisions of sub-section (1) of Section 92 of the Companies Act of Nova Scotia, and that the resolution is a Special Resolution in accordance with the Companies Act of Nova Scotia. WITNESS my hand and seal of the Company this 19th day of May, 1999. /s/ Robert J. Siverd -------------------------------- Robert J. Siverd, Secretary 3027324 Nova Scotia Company _____________________________________ EFFECTIVE DATE _____________________________________ REGISTRAR OF JOINT STOCK COMPANIES _____________________________________ REGISTERED AND FILED BICC GENERAL CABLE COMPANY/COMPAGNIE BICC GENERAL CABLE SPECIAL RESOLUTION BE IT RESOLVED as a Special Resolution of the Company that the name of the Company be changed from BICC GENERAL CABLE COMPANY/COMPAGNIE BICC GENERAL CABLE to GENERAL CABLE COMPANY and in its french language form COMPAGNIE GENERAL CABLE, effective immediately following approval thereof by the Registrar of Joint Stock Companies and that application be made to the Registrar of Joint Stock Companies to enter the said new name on the register of companies in the place of the present name of the Company. AND BE IT FURTHER RESOLVED that following the change of its name the Company may be legally designated by either of the language forms thereof and, unless expressly required by law to use a particular language form or all language forms of its name, may use any one language form of its name by itself in any case where its name is required to be used. * * * * * * * * * * * * ** * * * * * * * * CERTIFICATE I hereby certify that the foregoing resolution is a true copy of a Special Resolution duly passed by being signed by all of the shareholders of the Company who would be entitled to vote on the resolution at a meeting, all in accordance with the provisions of sub-section (1) of Section 92 of the Companies Act of Nova Scotia, and that the resolution is a Special Resolution in accordance with the Companies Act of Nova Scotia. WITNESS my hand and seal of the Company this 19th day of October, 2000. /s/ Robert J. Siverd ------------------------------------ Robert J. Siverd, Secretary BICC General Cable Company/Compagnie BICC General Cable ___________________________________ EFFECTIVE DATE ___________________________________ REGISTRAR OF JOINT STOCK COMPANIES ___________________________________ REGISTERED AND FILED GENERAL CABLE COMPANY/COMPAGNIE GENERAL CABLE SPECIAL RESOLUTION CERTIFICATE "RECITALS: A. The authorized capital of the Company consists of 1,000 common shares without nominal or par value as set out in Article 6 of the Articles of Association of the Company; B. It is desirable that the authorized capital of the Company be increased as provided below; RESOLVED AS A SPECIAL RESOLUTION OF THE COMPANY: 1. The authorized capital of the Company be increased by the creation of 100,000,000 Preferred Shares without nominal or par value, with the rights, restrictions, conditions and limitations set out in Annex 1 to this resolution and, to that intent, Article 6 of the Articles of Association of the Company shall immediately following the enactment of this resolution read as follows: The capital of the Company shall consist of 1,000 common shares without nominal or par value and 100,000,000 Preferred Shares without nominal or par value, each with the rights, restrictions, conditions and limitations set out in Annex 1 hereto and with the power to divide the shares in the capital for the time being into classes or series and to attach thereto respectively any preferred, deferred or qualified rights, privileges or conditions, including restrictions on voting rights and including redemption, purchase and other acquisition of such shares, subject, however, to the provisions of the Act. 2. Annex 1 to this resolution shall become Annex 1 to the Articles of Association of the Company effective immediately. 3. The Secretary of the Company is hereby directed to file a certified copy of this resolution at the office of the Registrar of Joint Stock Companies for the Province of Nova Scotia as required by the Companies Act (Nova Scotia)." I hereby certify that the foregoing resolution is a true copy of a special resolution duly passed by being signed by all of the shareholders of the Company who would be entitled to vote on the resolution at a meeting, all in accordance with the provisions of subsection (1) of Section 92 of the Companies Act of Nova Scotia. WITNESS my hand and seal of the Company this 24th day of December, 2001. /s/ Robert J. Siverd ----------------------------------- Robert J. Siverd, Secretary GENERAL CABLE COMPANY ANNEX 1 COMMON SHARES 1. VOTING RIGHTS Each holder of common shares shall be entitled to receive notice of and to attend all meetings of shareholders of the Company and to vote thereat, except meetings at which only holders of a specified class of shares (other than common shares) or specified series of shares are entitled to vote. At all meetings of which notice must be given to the holders of the common shares, each holder of common shares shall be entitled to one vote in respect of each common share held by such holder. 2. DIVIDENDS The holders of the common shares shall be entitled, subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of the Company, to receive any dividend declared by the Company. 3. LIQUIDATION, DISSOLUTION OR WINDING-UP The holders of the common shares shall be entitled, subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of the Company, to receive the remaining property of the Company on a liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary. PREFERRED SHARES 1. DEFINITIONS With respect to the Preferred Shares, the following terms shall have the meanings ascribed to them below: (a) "ASSUMED LIABILITIES" means any liabilities assumed by the Company pursuant to the Asset Transfer Agreement (as hereinafter defined) in partial consideration for the transfer of the Purchased Assets to the Company. (b) "NET FAIR MARKET VALUE" WITH RESPECT TO PURCHASED Assets shall mean the fair market value, as at the date of transfer (the "Transfer Date") of such Purchased Assets less the fair market value, as at the Transfer Date, of the rights in respect of such Assumed Liabilities of the person to whom such Assumed Liabilities are owed, as agreed to by the Company and General Cable Canada, Ltd. of the Purchased Assets (collectively the "Parties") within 90 days following the Transfer Date or such longer period as the Parties may determine. (c) "PURCHASED ASSETS" means any assets transferred to the Company pursuant to an asset transfer agreement between the Parties effective as of January 1, 2002 (the "Asset Transfer Agreement") in consideration for the assumption by the Company of the Assumed Liabilities and the issuance of Preferred Shares. (d) "REDEMPTION AMOUNT" means the quotient obtained by dividing (i) the Net Fair Market Value of the Purchased Assets by (ii) the number of Preferred Shares issued as partial consideration for the Purchased Assets, provided that if subsequent to any determination of the Net Fair Market Value of the Purchased Assets, the Parties shall agree, or the Canada Customs and Revenue Agency, or any other taxing authority, shall assert by assessment, reassessment or otherwise, within the time period prescribed by the Income Tax Act (Canada) or applicable provincial legislation, for such action, that the Net Fair Market Value of such Purchased Assets on the Transfer Date was greater or less than the amount determined, then the Redemption Amount of each Preferred Share shall be deemed to be and always to have been the amount that is determined in the manner described above, provided the Net Fair Market Value of the Purchased Assets shall be deemed to be such amount as may be finally determined by agreement of the Parties or by agreement among the particular taxing authority "and the Parties to have been the Net Fair Market Value of the Purchased Assets on `the Transfer Date, or in the absence of such determination, such amount as shall be finally determined by a court having jurisdiction in the matter (after all appeal rights have been exhausted or all time periods for appeal have expired without appeals having been taken) to have been the Net Fair Market Value on the Transfer Date. The Redemption Amount of each Preferred Share so adjusted shall be deemed retroactively to the Transfer Date to have been its Redemption Amount; and in the event that any of such Preferred Shares have been redeemed prior to the date the Net Fair Market Value of the Purchased Assets is ultimately determined as provided herein, a cash settlement in the amount of any such adjustment shall be made by the holder of Preferred Shares, or the Company, as the case may be or, if a demand note was issued pursuant to either paragraph 5 or 6, as the case may be, the principal amount outstanding thereunder shall be deemed to have been retroactively adjusted. (e) "REDEMPTION PRICE" in respect of each Preferred Share means the Redemption Amount together with all dividends declared thereon and unpaid up to the date of liquidation, dissolution or winding up or the date of redemption, as the case may be. 2. DIVIDENDS The holders of the Preferred Shares shall be entitled to receive and the Company shall pay thereon, as and when declared by the board of directors out of the moneys of the Company properly applicable to the payment of dividends, preferential non-cumulative dividends in such amount or in such form at such rate as the directors may from time to time determine and, except with the consent in writing of the holders of all the Preferred Shares outstanding, no dividend may be paid in any year to the holders of the common shares or any other class of shares of the Company ranking junior to the Preferred Shares unless in such year the full amount of the preferential dividend herein provided for shall have been paid to the holders of the Preferred Shares prior thereto or simultaneously therewith. 3. NO VOTING RIGHTS Except as otherwise provided in the Companies Act, the holders of the Preferred Shares shall not be entitled to receive notice of, or to attend or to vote at any meeting of the shareholders of the Company. 4. LIQUIDATION, DISSOLUTION OR WINDING-UP In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the Preferred Shares shall be-entitled to receive in respect of each such share, before any distribution of any part of the assets of the Company among the holders of the common shares and any other class of shares of the Company ranking junior to the Preferred Shares, an amount equal to the Redemption Price. After payment to the holders of the Preferred Shares of the amount so payable to such holders as herein provided, the holders shall not be entitled to share in any further distribution of the property or assets of the Company. 5. REDEMPTION AT THE OPTION OF THE COMPANY Subject to any applicable law, the Company shall, at its option, be entitled to redeem at any time or times all or any part of the Preferred Shares registered in the name of any holder of any such Preferred Shares on the books of the Company with or without the consent of such holder by giving notice in writing to such holder specifying: (a) that the Company desires to redeem all or any part of the Preferred Shares registered in the name of such holder; (b) if part only of the Preferred Shares registered in the name of such holder is to be redeemed, the number thereof to be so redeemed; (c) the business day (in this paragraph referred to as the "Redemption Date") on which the Company desires to redeem such Preferred Shares. Such notice shall specify a Redemption Date which shall not be less than 30 days after the date on which the notice is given by the Company or such shorter period of time as the Company and the holder of any such Preferred Shares may agree; and (d) the place of redemption. The Company shall, on the Redemption Date, redeem such Preferred Shares by paying to such holder an amount equal to the Redemption Price on presentation and surrender of the certificate(s) for the Preferred Shares so called for redemption at such place as may be specified in such notice. The certificate(s) for such Preferred Shares shall thereupon be cancelled and the, Preferred Shares represented thereby shall thereupon be redeemed. Such payment shall be made by delivery to such holder of a cheque payable in the amount of, or at the, option of the Company, a demand note with a principal amount equal to the aggregate Redemption Price for the Preferred Shares to be redeemed. From and after the Redemption Date, the holder thereof shall not be entitled to exercise any of the rights of holders of Preferred Shares in respect thereof unless payment of the Redemption Price is not made on the Redemption Date, or on presentation and surrender of the certificate(s) for the Preferred Shares so called for redemption, whichever is later in which case the rights of the holder of the Preferred Shares shall remain unaffected until payment in full of the Redemption Price. Where at any time some but not all of such Preferred Shares are to be redeemed, the Preferred Shares to be redeemed shall be selected by lot in such manner as the board of directors determines, or as nearly as may be in proportion to the number of Preferred Shares registered in the name of each holder, or in such other manner as the board of directors determines. 6. REDEMPTION AT THE OPTION OF THE HOLDER Subject to any applicable law, a holder of any Preferred Shares shall be entitled to require the Company to redeem at any time or times any Preferred Shares registered in the name of such' holder on the books of the Company by tendering to the Company at its registered office a share certificate representing the Preferred Shares which the holder desires to have the Company redeem together with a request in writing (in this paragraph referred to as a "Redemption Demand") specifying: (a) that the holder desires to have the Preferred Share represented by such certificate redeemed by the Company; (b) if part only of the Preferred Shares registered in the name of such holder is to be redeemed, that number thereof to be so redeemed; and (c) the business day (in this paragraph referred to as the "Redemption Date") on which the holder desires to have the Company redeem such Preferred Shares. The Redemption Demand shall specify a Redemption Date which shall not be less than 30 days after the date on which the Redemption Demand is tendered to the Company or such other date as the holder and the Company may agree. The Company shall, on such Redemption Date, subject to paragraph 7 below, redeem all Preferred Shares required to be redeemed by paying to such holder an amount equal to the aggregate Redemption Price therefor on presentation and surrender of the certificate(s) for the Preferred Shares to be so redeemed at the registered office of the Company. The certificate(s) for such Preferred Shares shall thereupon be cancelled and the Preferred Shares represented thereby shall thereupon be redeemed. Such payment shall be made by delivery to such holder of a cheque in the amount of, or at the option of the Company, a demand note with a principal amount equal to the aggregate Redemption Price for the Preferred Shares to be redeemed. From and after the Redemption Date, such Preferred Shares shall cease to be entitled to dividends and the holder thereof shall not be entitled to exercise any of the rights of holders of Preferred Shares in respect thereof unless payment of the said Redemption Price is not made on the Redemption Date, in which case the rights of the holder of the Preferred Shares shall remain unaffected until payment in full of the Redemption Price. 7. PARTIAL REPAYMENT If less than all Preferred Shares represented by a certificate are redeemed, the holder shall be entitled to receive, at the expense of the Company, a new certificate representing the Preferred Shares which have not been redeemed. EX-3.8 9 l05578aexv3w8.txt EXHIBIT 3.8 EXHIBIT 3.8 For Ministry Use Only Ontario Corporation Number A l'usage exclusil du ministere Number de la compagine en Ontario Ontario Corporation Number Numero de a cornpagnie en Ontario 886346 TRANS CODE C 18 ARTICLES OF AMENDMENT STATUS DE MODIFICATION Form 3 Business Corporations Act Formule numero 3 Loi sur es compagnies 1. The present name of the corporation is Denomination sociale actuelle de la compagnie: GENERAL CABLE CANADA LTD./ GENERAL CABLE CANADA LTEE 2. The name of the corporation is changed to Nouvelle denomination sociale de la compagnie (s'il (if applicable): y a lieu): N / A 3. Date of incorporation/amalgamation: Date de la constitution ou de la fusion: 5 March 1990 ------------------------------------------ (Day, Month, Year) (jour, mois, annee) 4. The articles of the corporation are amended Les status de la compagnie sont modifies de la facon as follows: suivante:
The one (1) issued and outstanding common share in the capital of the Corporation shall be subdivided and changed into one hundred (100) issued and outstanding common shares. 5. The amendment has been duly authorized as La modification a ete dument autorisee contormement required by Sections 168 & 170 (as a l'article 168 at, s'il y a lieu, a article 170 de Ia Loi applicable) of the Business Corporations Act. sur les compagnies. 6. The resolution authorizing the amendment Las actionnaires ou las administrateurs (le cas was approved by the shareholders/directors echeant) de Ia compagnie ont approuve Ia resolution (as applicable) of the corporation on autorisant /a modification 25 May 1999 --------------------------------------------- (Day, Month, Year) (jour, mois, annee) These articles are signed in duplicate. Les presents status sont signes en double exemplaire.
GENERAL CABLE CANADA LTD./ GENERAL CABLE CANADA LTEE (Name of Corporation) (Denomination social de la compagnie) Director By/Par: /s/ Brigitte Sayers -------------------------------------- (Signature) (Description of Office) (Signature) (Fonction) Ontario Corporation Number Numero de la compagnie en Ontario Trans Line Comp Method Code No Stat Type Incorp A G G A 3 18 20 24 28 30 JURISDICTION S N ONTARIO 31 32 33 47 ARTICLES OF INCORPORATION STATUTS CONSTITUTIFS Form 1 Business Corporations Act 1982 Formule Numero 1 Loi de 1982 sur les compagnies 1. The name of the corporation is: DEnomination sociale de la compagnie: CAROL CABLE COMPANY CANADA LTD. 2. The address of the registered office is: Adresse du siege social: 100 KING STREET WEST, SUITE 6600, 1 FIRST CANADIAN PLACE (Street & Number or R R Number & if Multi-Office Building give Room No.) (Rue el numero ou numero de la R.R. et. sil d un edilice a bureaux numero du bureau) TORONTO, ONTARIO M 5 X 1 B 8 (Name of Municipality or Post Office) (Postal Code) (Nom de la municipalite ou du bureau de poste) (Code postal) CITY OF TORONTO in the MUNICIPALITY OF (Name of Municipality Geographical dans le/la METROPOLITAN TORONTO Township) (County, District) Regional Municipality) (Nom de la municipalite, du canton) (Comie, district, municipalite regionale) 3. Number (or minimum and maximum number) of Nombre (ou nombres minimal et maximal) directors is: d'administrateurs: A MINIMUM OF ONE (1) AND A MAXIMUM OF TEN (10). 4. THE FIRST DIRECTOR(S) IS/ARE: PREMIER(S) ADMINISTRATEUR(S):
RESIDENCE ADDRESS, GIVING STREET & No. or R.R. No. or municipality and postal code. Resident Canadian Adresse personnelle, y compris la rue et le State Yes or No FIRST NAME, INITIALS AND SUMAME numero, le numero de la R.R. ou, le nom Resident Canadien PRENOM, INITIALES ET NOM DE FAMILLE de la municipalite et le code postal Oui/Non BRIGITTE C. SAYERS 84 LEEWARD DRIVE YES BRAMALEA, ONTARIO L6S 5V8
5. [ILLEGIBLE] [ILLEGIBLE] may carry on or on powers the corporation may commerciales ou aux pouvoirs de la compagnie. exercise. NONE 6. The classes and any maximum number of shares Categories et nombre maximal,s'il y a lieu, that the corporation is authorized to issue. d'actions que la compagnie est autorisee a emettre:
AN UNLIMITED NUMBER OF COMMON SHARES. 7. Rights, privileges, restrictions and conditions Droits, privileges, restrictions et conditions, (if any) attaching to each class of shares and s'il y a lieu, rattaches a chaque categorie directors authority with respect to any class of d'actions et pouvoirs des administrateurs relatifs shares which may be issued in series. a chaque categorie d'actions qui peut etre emise en serie: NOT APPLICABLE. 8. The issue, transfer or ownership of shares is/is L emission, le transfert ou la propriete d'actions not restricted and the restrictions (if any) are est/ n'est pas restreinte. Les restrictions, s'il as follows: y a lieu, sont les suivantes:
THE SHARES OF THE CORPORATION SHALL NOT BE TRANSFERRED WITHOUT THE APPROVAL OF THE BOARD OF DIRECTORS OF THE CORPORATION TO BE EVIDENCED BY A RESOLUTION OF THE BOARD. 9. Other provisions, if any, are: Autres dispositions, s'il y a lieu: 1. THE NUMBER OF SHAREHOLDERS OF THE CORPORATION EXCLUSIVE OF PERSONS WHO ARE IN ITS EMPLOYMENT AND EXCLUSIVE OF PERSONS WHO, HAVING BEEN FORMERLY IN THE EMPLOYMENT OF THE CORPORATIONS, WERE, WHILE IN THAT EMPLOYMENT, AND HAVE CONTINUED AFTER TERMINATION OF THAT EMPLOYMENT TO BE, SHAREHOLDERS OF THE CORPORATION, IS LIMITED TO NOT MORE THAN FIFTY, TWO OR MORE PERSONS WHO ARE THE JOINT REGISTERED OWNERS OF ONE OR MORE SHARES BEING COUNTED AS ONE SHAREHOLDER. 2. ANY INVITATION TO THE PUBLIC TO SUBSCRIBE FOR ANY SECURITIES OF THE CORPORATION SHALL BE PROHIBITED. 10. The names and addresses of the Full residence address or address of registered office or of incorporators are principal place of business giving street & No. or R.R. No., Nom et adresse des fondateurs municipality and postal code. Adresse personnelle au complet, adresse du siege social ou First name, initials and surname or adresse de l etablissement principal, y compris la rue et le corporate name numero, le numero de la R.R., le nom de la municipalite et le Prenom, initiale et nom de famille ou code postal. denomination sociale BRIGITTE C. SAYERS 84 LEEWARD DRIVE BRAMALEA, ONTARIO L6S 5V8 These articles are signed in duplicate Les presents statuts sont signes en double exemplaire.
Signatures of incorporators (Signature des londateurs) /s/ Brigitte C. Sayers --------------------------- BRIGITTE C. SAYERS EX-3.9 10 l05578aexv3w9.txt EXHIBIT 3.9 EXHIBIT 3.9 BY-LAW NO. 1 a by-law relating generally to the transaction of the business and affairs of CAROL CABLE COMPANY CANADA LTD. INTERPRETATION 1.0 Definitions--In this by-law and all other by-laws of the Corporation, unless the context requires otherwise: (a) "the Act" means the Business Corporations Act, 1982 (Ontario), or any statute which may be substituted therefor, including the regulations made thereunder as amended from time to time; (b) "articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of dissolution, articles of re-organization, articles of revival, letters patent, supplementary letters patent, a special Act and any other instrument by which the Corporation is incorporated; (c) "board" means the board of directors of the Corporation; and "director" means a member of the board; (d) "Corporation" means CAROL CABLE COMPANY CANADA LTD.; (e) "meeting of shareholders" means an annual meeting of shareholders or a special meeting of shareholders; (f) "non-business day" means Saturday, Sunday and any other day that is a holiday as defined in the Interpretation Act (Ontario); (g) "person" includes an individual, sole proprietorship, partnership unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, and a natural person in the capacity of trustee, executor, administrator, or other legal representative; (h) "resident Canadian" means a Canadian citizen ordinarily resident in Canada or as otherwise defined in the Act; (i) "unanimous shareholder agreement" means a written agreement among all the shareholders of the Corporation, or among all such shareholders and one or more persons who are not shareholders, or a written declaration by a person who is the beneficial owner of all the issued shares of the Corporation, that restricts, in whole or in part, the powers of the directors to manage or supervise the management of the business and affairs of the Corporation, as may be from time to time amended; (j) words importing the singular number also include the plural and vice-versa; words importing the masculine gender include the feminine and neuter genders; (k) all words used in this by-law and defined in the Act shall have the meanings given to such words in the Act or in the related Parts thereof. 1.2 Execution in Counterpart -- Any articles, notice, resolution, requisitions statement or other document required or permitted to be executed by more than one person for the purposes of the Act may be executed in several documents of like form each of which is executed by one or more of such persons, and such documents, when duly executed by all persons required or permitted, as the case may be, to do so, shall be deemed to constitute one document for the purposes of the Act. GENERAL BUSINESS 2.0 Registered Office -- The registered office of the Corporation shall be in the municipality or geographical township within Ontario specified in the articles or in a special resolution and at such location therein as the board may from time to time determine. 2.1 Seal -- The Corporation may have a seal which shall be adopted and may be changed by the board. 2.2 Financial Year -- Until changed by the board, the financial year of the Corporation shall end on the 31st day of December in each year. 2.3 Execution of Instruments -- Deeds, transfers, assignments, contracts, obligations, certificates and other instruments shall be signed on behalf of the Corporation by any director or officer of the Corporation. In addition, the board may from time to time direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. The secretary or any other officer or any director may sign certificates and similar instruments (other than share certificates) on the Corporation's behalf with respect to any factual matters relating to the Corporation's business and affairs, including certificates verifying copies of the articles, by-laws, resolutions and minutes of meetings of the Corporation. 2.4 Banking Arrangements -- The banking business of the Corporation, or any part thereof, shall be transacted with such bank, trust company or other firm or body corporate as the board may designate, appoint or authorize from time to time and all such banking business, or any part thereof, shall be transacted on the Corporation's behalf by such one or more officers or other persons as the board may designate, direct or authorize from time to time and to the extent thereby provided. BORROWING 3.0 Borrowing -- Without limit to the powers of the board as provided in the Act, the board may from time to time on behalf of the Corporation: (a) borrow money upon the credit of the Corporation; (b) issue, reissue, sell or pledge debt obligations of the Corporation; (c) to the extent permitted by the Act, give, directly or indirectly, financial assistance to any person by means of a loan, a guarantee or otherwise to secure the performance of an obligation; and (d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Corporation, owned or subsequently acquired, to secure any obligation of the Corporation. 3.1 Delegation -- Subject to the Act, the articles, the by-laws and any unanimous shareholder agreement, the board may from time to time delegate to a director, a committee of directors or an officer of 2 the Corporation all or any of the powers conferred on the board by section 3.0 or by the Act to such extent and in such manner as the board shall determine at the time of each such delegation. DIRECTORS 4.0 Duties of Directors -- Subject to any unanimous shareholder agreement, the board shall manage or supervise the management of the business and affairs of the Corporation. 4.1 Qualifications of Directors -- A majority of directors on the board shall be resident Canadians but where a Corporation has only one or two directors, that director or one of the two directors, as the case may be, shall be a resident Canadian. No person shall be elected or appointed a director if that, person is less than 18 years of age, of unsound mind and has been so found by a court in Canada or elsewhere, is not an individual, or has the status of bankrupt. A director need not hold shares issued by the Corporation. At least one-third of the directors of an offering corporation shall not be officers or employees of the corporation or any of its affiliates. 4.2 Number of Directors -- The board shall consist of such number of directors as shall be set out in the articles or as may from time to time be determined in accordance with the Act. Where the board is empowered by special resolution to determine the number of directors within a range set out in the articles: (a) the directors may appoint additional directors provided that after such appointment the total number of directors would not be greater than one and one-third times the number of directors required to have been elected at the last annual meeting nor greater than the maximum number set out above; and (b) the number of directors to be elected at the annual meeting shall be the number of directors last determined by the board. 4.3 Quorum -- A majority of the number or minimum number of directors set out in the articles, as the case may be, shall constitute a quorum for the transaction of business. Where the corporation has fewer than three directors, all directors must be present at any meeting to constitute a quorum for the transaction of business. Notwithstanding vacancies, a quorum of directors may exercise all the powers of the board. 4.4 Election and Term -- Directors shall be elected by the shareholders at the first meeting of shareholders after the effective date of this by-law and at each succeeding annual meeting at which an election of directors is required and shall hold office until the next annual meeting of shareholders or, if elected for an expressly stated term, for a term expiring not later than the close of the third annual meeting of shareholders following the election. The number of directors to be elected at any such meeting shall be that number most recently determined in the manner referred to in section 4.2. The election need not be by ballot unless a ballot is demanded by any shareholder or required by the chairman in accordance with section 8.17. If an election of directors is not held at an annual meeting of shareholders at which such election is required, the incumbent directors shall continue in office until their successors are elected. 4.5 Removal of Directors -- Subject to the provisions of the Act, the shareholders may, by ordinary resolution passed by a majority of the votes cast at a meeting of shareholders, remove any director and may at that meeting elect a qualified person in place of that director for the unexpired term of his predecessor. 4.6 Ceasing to Hold Office -- A director may resign as director by delivering a written resignation to the Corporation and such resignation becomes effective at the time the resignation is received by the Corporation or the time specified in the resignation whichever is later. A director shall forthwith cease to hold office as a director should the director cease to be qualified in accordance with the Act. Any attempt to amend or terminate any unanimous shareholder agreement without written consent of all persons who are then directors of the Corporation shall constitute the immediately effective resignation of all such directors who have not so consented. 3 4.7 Vacancies -- Subject to the Act, a quorum of directors (whether or not the majority of such quorum are resident Canadians) may fill a vacancy among the directors, except a vacancy resulting from, (a) an increase in the number of directors otherwise than an increase in the board of directors pursuant to a special resolution empowering the board to fix the number of directors within a range set out in the articles; or, (b) an increase in the maximum number of directors set out in the articles, as the case may be; or, (c) a failure to elect the number of directors required to be elected at any meeting of shareholders. 4.8 Action by the Board -- Subject to any unanimous shareholder agreements the board shall exercise its powers by or pursuant to a by-law or resolution either passed at a meeting of directors at which a quorum is present and at which a majority of the directors present are resident Canadians or consented to by the signatures of all the directors then in office if constituting a quorum. Where a corporation has fewer than three directors, one of the directors present at a meeting of directors shall be a resident Canadian. Subject to the Act, the board may transact business at a meeting of directors where a majority of resident Canadian directors is not present if a resident Canadian director who is unable to be present approves in writing or by telephone or other communications facilities the business transacted at the meeting, and a majority of resident Canadian directors would have been present had that director been present at the meeting. Where the Corporation has only one director, that director may constitute a meeting. 4.9 Action in Writing -- A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors, is as valid as if it had been passed at a meeting of directors or a committee of directors. 4.10 Meetings by Telephone -- Any director may participate in a meeting of the board by means of such telephone, electronic, or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, if all the directors present at or participating in the meeting consent to the holding of meetings in such manner. 4.11 Place of Meetings -- Meetings of the board may be held at the registered office of the Corporation or at any other place within or outside Ontario and in any financial year of the Corporation a majority of the meetings of the board need not be held in Canada. 4.12 Calling of Meeting -- Meetings of the board shall be held from time to time at such place, on such day and at such time as the board, the chairman of the board, the managing director, the president, the secretary or any two directors may determine. 4.13 Notice of Meeting -- Notice of the time and place of each meeting of the board shall be given to each director not less than 48 hours before the time when the meeting is to be held and need not be in writing. 4.14 First Meeting of New Board -- provided a quorum of directors is present, each newly elected board may without notice hold its first meeting following the meeting of shareholders at which such board is elected. 4.15 Adjourned Meeting -- Notice of an adjourned meeting of the directors is not required if the time and place of the adjourned meeting is announced at the original meeting. 4.16 Regular Meetings -- The board may appoint a day or days in any month or months for regular meetings at a place and hour to be named. A copy of any resolution by the board fixing the time and place 4 of regular meetings of the board shall be sent to each director forthwith after being passed, but no other notice shall be required for any such regular meeting. 4.17 Votes to Govern -- At all meetings of the board any question shall be decided by a majority of the votes cast on the question and in the case of an equality of votes the chairman of the meeting shall be entitled to a second or casting vote. Any question at a meeting of the board shall be decided by a show of hands unless a ballot is required or demanded. 4.18 Chairman and Secretary -- The chairman of the board or, in the absence of the chairman, the president if a director or, in the absence of the president, a vice-president who is a director shall be chairman of any meeting of the board. If none of the said officers is present, the directors present shall choose one of their number to be chairman. The secretary of the Corporation shall act as secretary at any meeting of the board and, if the secretary of the Corporation be absent, the chairman of the meeting shall appoint a person who need not be a director to act as secretary of the meeting. 4.19 Remuneration and Expenses -- Subject to any unanimous shareholder agreement, the directors shall be paid such remuneration for their services as directors as the board may from time to time authorize. The directors shall also be entitled to be paid in respect of traveling and other expenses properly incurred by them in attending meetings of the board or any committee thereof or in otherwise serving the Corporation. Nothing herein contained shall preclude any director from serving the Corporation in any other capacity and receiving remuneration therefor. 4.20 Conflict of Interest -- Subject to and in accordance with the provisions of the Act, a director or officer of the Corporation who is a party to a material contract or transaction or proposed material contract or transaction with the Corporation, or is a director or an officer of or has a material interest in any person who is a party to a material contract or transaction or proposed material contract or transaction with the Corporation, shall disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors the nature and extent of such interest, and any such director shall refrain from voting in respect thereof unless otherwise permitted by the Act. COMMITTEES 5.0 Committees of Directors -- The board may appoint, from their number, a committee or committees of directors, however designated, and delegate to such committee or committees any of the powers of the board except powers to: (a) submit to the shareholders any question or matter requiring the approval of the shareholders; (b) fill a vacancy among the directors or in the office of auditor, or appoint or remove any of the chief executive officer, however designated, the chief financial officer, however designated, the chairman of the board or the president of the corporation; (c) issue securities except in the manner and on the terms authorized by the directors; (d) declare dividends; (e) purchase, redeem or otherwise acquire shares issued by the Corporation; (f) pay a commission for the sale of shares of the Corporation; (g) approve a management information circular; (h) approve a take-over bid or directors' circular; 5 (i) approve any annual financial statements; or (j) adopt, amend or repeal by-laws. A majority of the members of any such committee shall be resident Canadians. 5.1 Transaction of Business -- The powers of a committee of directors may be exercised by a meeting at which a quorum is present or by resolution in writing signed by all the members of such committee who would have been entitled to vote on that resolution at a meeting of the committee. Meetings of such committee may be held at any place in or outside Ontario and, subject to the provisions of section 4.10 which shall be applicable mutatis mutandis, may be held by means of telephone or other communications equipment. 5.2 Procedure -- Unless otherwise determined by the board, each committee shall have the power to fix its quorum at not less than a majority of its members, to elect its chairman and to regulate its procedure. OFFICERS 6.0 Appointment of Officers -- Subject to any unanimous shareholder agreement, the board may from time to time appoint a chairman of the board, a managing director (who shall be a resident Canadian), a president, one or more vice-presidents, a secretary, a treasurer and such other officers as the board may determine, including one or more assistants to any of the officers so appointed. The board may specify the duties of such officers and, in accordance with this bylaw and subject to the provisions of the Act, delegate to such officers powers to manage the business and affairs of the Corporation other than any of the powers listed in section 5.0. Except for a managing director and a chairman of the board, an officer need not be a director and one person may hold more than one office. The president or such other officer as the board may designate shall be the chief executive officer of the Corporation. 6.1 Agents and Attorneys -- The board shall have the power from time to time to appoint agents or attorneys for the Corporation in or out of Ontario with such powers of management or otherwise (including the power to sub-delegate) as the board may determine. 6.2 Conflict of Interest -- An officer shall disclose an interest in any material contract or transaction or proposed material contract or transaction with the Corporation in accordance with Section 4.20. PROTECTION OF DIRECTORS AND OFFICERS 7.0 Indemnity of Directors and Officers -- The Corporation shall indemnify a director or officer of the Corporation, a former director or officer of the Corporation or a person who acts or acted at the Corporation's request as a director or officer of a body corporate of which the Corporation is or was a shareholder or creditor, and the heirs and legal representatives of any such person, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by such person in respect of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a director or officer of such corporation or body corporate, if: (a) the person acted honestly and in good faith with a view to the best interests of the Corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that the relevant conduct was lawful. The Corporation may, with the approval of the court, indemnify a person referred to above in respect of an action by or on behalf of the Corporation or body corporate to procure a judgment in its favor, to which the 6 person is made a party by reason of being or having been a director or an officer of the Corporation or body corporate, against all costs, charges and expenses reasonably incurred by that person in connection with such action if the person fulfills the conditions set out in (a) and (b) above. Notwithstanding anything in this section, a person referred to above is entitled to indemnity from the Corporation in respect of all costs, charges and expenses reasonably incurred by that person in connection with the defense of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a director or officer of the Corporation or body corporate, if the person seeking indemnity, (a) was substantially successful on the merits in that person's defense of the action or proceeding; and (b) fulfills the conditions set out in (a) and (b) above. 7.1 Insurance -- Subject to the Act, the Corporation may purchase and maintain insurance for the benefit of any person referred to above against any liability incurred by that person, (a) in the capacity as a director or officer of the Corporation, except where the liability relates to that person's failure to act honestly and in good faith with a view to the best interests of the Corporation; or (b) in the capacity as a director or officer of another body corporate where he acts or acted in that capacity at the Corporation's request, except where the liability relates to that person's failure to act honestly and in good faith with a view to the best interests of the body corporate. MEETINGS OF SHAREHOLDERS 8.0 Annual Meetings -- The annual meeting of shareholders shall be held on such day and at such time in each year as the board, or the chairman of the board, or the president, in the absence of the chairman of the board, may from time to time determine, for the purpose of considering the financial statements and reports required by the Act to be placed before the annual meeting, electing directors, appointing auditors and the transaction of such other business as may properly be brought before the meeting. 8.1 Special Meetings-- The board shall have power to call a special meeting of shareholders at any time. 8.2 Resolution in Lieu of Meeting -- Except where a written statement is submitted by a director or where representations in writing are submitted by an auditor in accordance with the provisions of the Act, a resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders; and a resolution in writing dealing with all matters required to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at such meeting, satisfies all the requirements of the Act relating to meetings of shareholders. 8.3 Place of Meetings -- Subject to the articles and any unanimous shareholder agreement, a meeting of shareholders of the Corporation shall be held at such place in or outside Ontario as the directors determine or, in the absence of such a determination, at the place where the registered office of the Corporation is located. 8.4 Notices of Meetings -- Notice of the time and place of every meeting of shareholders shall be sent in the case of an offering corporation, not less than 21 days and, in the case of any other corporation, not less than 10 days, but in either case, not more than 50 days before the meeting to each shareholder entitled to vote at the meeting, to each director and to the auditor of the Corporation. Notice of a meeting of 7 shareholders at which special business is to be transacted shall state or be accompanied by a statement of (i) the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment thereon and (ii) the text of any special resolution or by-law to be submitted to the meeting. All business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the minutes of an earlier meeting, the financial statements and auditor's report, election of directors and reappointment of the incumbent auditor, is deemed to be special business. 8.5 Record Date for Notice -- The board may fix in advance a record date, preceding the date of any meeting of shareholders by not more than 50 days and not less than 21 days, for the determination of the shareholders entitled to notice of the meeting, provided that notice of any such record date is given, not less than 7 days before such record date, by advertisement in a newspaper published or distributed in the place where the Corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of the Corporation's shares may be recorded, and, where applicable, by written notice to each stock exchange in Canada on which the Corporation's shares are listed for trading unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register of the Corporation at the close of business on the day the directors fix the record date. If no record date is fixed the record date for the determination of the shareholders entitled to notice of the meeting shall be at the close of business on the day immediately preceding the day on which the notice is given. 8.6 List of Shareholders Entitled to Notice -- For every meeting of shareholders, the Corporation shall prepare a list of shareholders entitled to receive notice of the meeting, arranged in alphabetical order and showing the number of shares entitled to be voted at the meeting held by each shareholder. If a record date for the meeting is fixed, such list shall be prepared as of such record date and not later than 10 days after such record date. If no record date is fixed, such list shall be prepared as of the close of business on the day immediately preceding the day on which the notice of the meeting is given and shall be prepared at such time. The list shall be available for examination by any shareholder during usual business hours at the registered office of the Corporation or at the place where its central securities register is maintained and at the meeting for which the list is prepared. Notwithstanding the foregoing, where no notice of meeting is given, such list shall be prepared as of the day on which the meeting is held and so that it is available at such meeting. 8.7 Chairman and Secretary -- The chairman of the board or, in the absence of the chairman, the president or, in the absence of the president, a vice-president shall be chairman of any meeting of shareholders and, if none of the said officers be present within 15 minutes after the time appointed for holding the meeting, the shareholders present and entitled to vote shall choose a chairman from amongst themselves. The secretary of the Corporation shall act as secretary at any meeting of shareholders or, if the secretary of the Corporation be absent, the chairman of the meeting shall appoint some person, who need not be a shareholder, to act as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders, may be appointed by resolution or by the chairman with the consent of the meeting. 8.8 Persons Entitled to be Present -- The only persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and auditors of the Corporation and others who, although not entitled to vote, are entitled or required under any provision of the Act or the articles or by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with the consent of the meeting. 8.9 Quorum -- A quorum of shareholders is present at a meeting of shareholders irrespective of the number of persons actually present at the meeting, if the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy. A quorum need not be present throughout the meeting provided that a quorum is present at the opening of the meeting. 8.10 Right to Vote -- At any meeting of shareholders every person who is named in the list referred to in section 8.6, shall be entitled to vote the shares shown thereon opposite his name except to the extent that such person has transferred any of his shares and the transferee, upon producing properly endorsed 8 certificates evidencing, such shares or otherwise establishing that he owns such shares, demands not later than the time at which the meeting commences that his name be included on the list to vote the transferred shares at the meeting. 8.11 Proxies and Representatives -- Every shareholder entitled to vote at a meeting of shareholders may, by means of a proxy, appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, as that shareholder's nominee, to attend and act at the meeting in the manner, to the extent, and with the authority conferred by the proxy. A proxy shall be in writing executed by the shareholder or shareholder's attorney authorized in writing. A body corporate or association which is a shareholder of the Corporation may be represented at a meeting of shareholders by any individual authorized by a resolution of its directors or governing body of the body corporate or association and such individual may exercise on behalf of the body corporate or association represented all the powers it could exercise if it were an individual shareholder. In the case of a proxy appointing a proxyholder to attend and act at a meeting or meetings of shareholders of an offering corporation, the proxy ceases to be valid one year from its date. 8.12 Time for Deposit of Proxies -- The directors may by resolution fix a time not exceeding forty-eight hours, excluding non-business days, preceding any meeting or adjourned meeting of shareholders before which time proxies to be used at that meeting must be deposited with the Corporation or an agent thereof, and any period of time so fixed shall be specified in the notice calling the meeting. A proxy may be used at the meeting only if, prior to the time so specified, it shall have been deposited with the Corporation or an agent thereof specified in such notice or, if no such time is specified in such notice, it shall have been received by the secretary of the Corporation or by the chairman of the meeting or adjournment thereof prior to the time of voting. 8.13 Joint Shareholders -- Where two or more persons hold the same shares jointly, one of those holders present or represented by proxy at a meeting of shareholders may in the absence of the other or others vote such shares, but, if more than one of such persons are present or represented by proxy, that one of such persons whose name stands first on the securities register of the Corporation or that person's proxy shall alone be entitled to vote such shares. 8.14 Votes to Govern -- Except as otherwise required by the Act, all questions proposed for the consideration of shareholders at a meeting of shareholders shall be determined by the majority of the votes cast, whether by a show of hands or by ballot, as the case may be. 8.15 Casting Vote -- In case of an equality of votes at any meeting of shareholders either upon a show of hands or upon a ballot, the chairman of the meeting shall be entitled to a second or casting vote. 8.16 Show of Hands -- Any question at a meeting of shareholders shall be decided by a show of hands unless a ballot thereon is required or demanded as hereinafter provided. Upon a show of hands every person who is present and entitled to vote thereon shall have one vote. Whenever a vote by show of hands shall have been taken upon a question, unless a ballot thereon is so required or demanded, a declaration by the chairman of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favor of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the shareholders upon the said question. 8.17 Ballots -- On any question proposed for consideration at a meeting of shareholders, and whether or not a show of hands has been taken thereon, the chairman may require, or any shareholder or proxyholder entitled to vote at the meeting may demand, a ballot. A ballot so required or demanded shall be taken in such manner as the chairman shall direct. A requirement or demand for a ballot may be withdrawn at any time prior to the taking of the ballot. If a ballot is taken each person present shall be entitled, in respect of the shares which the person is entitled to vote at the meeting upon the question, to that number of votes provided by the Act or the articles, and the result of the ballot so taken shall be the decision of the shareholders upon the said question. 9 8.18 Adjournments -- If a meeting of shareholders is adjourned for less than 30 days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting. 8.19 One Shareholder -- Where the Corporation has only one shareholder or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting. SECURITIES 9.0 Options or Rights -- Subject to the provisions of the Act, the articles and any unanimous shareholder agreement, the board may from time to time issue or grant options to purchase or rights to acquire unissued shares of the Corporation at such times and to such persons and for such consideration as the board shall determine, provided that no share shall be issued until it is fully paid. 9.1 Commissions -- The board may from time to time authorize the Corporation to pay a reasonable commission to any person in consideration of purchasing or agreeing to purchase shares of the Corporation, whether from the Corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares. 9.2 Securities Records -- The Corporation shall prepare and maintain, at its registered office or at any other place in Ontario designated by the board, a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series of securities: (a) the names, alphabetically arranged, of persons who, (i) are or have been within six years registered as shareholders of the Corporation, the address including the street and number, if any, of every such person while a holder, and the number and class of shares registered in the name of such holder, (ii) are or have been within six years registered as holders of debt obligations of the Corporation, the address including the street and number, if any, of every such person while a holder, and the class or series and principal amount of the debt obligations registered in the name of such holder, or (iii) are or have been within six years registered as holders of warrants of the Corporation, other than warrants exercisable within one year from the date of issue, the address including the street and number, if any, of every such person while a registered holder, and the class or series and number of warrants registered in the name of such holder; and (b) the date and particulars of the issue of each security and warrant. 9.3 Register of Transfer -- The Corporation shall cause to be kept a register of transfers in which all transfers of securities issued by the Corporation in registered form and the date and other particulars of each transfer shall be set out. 9.4 Registration of Transfer -- Subject to the provisions of the Act, no transfer of shares shall be registered in a securities register except upon presentation of the certificate representing such shares with a transfer endorsed thereon or delivered therewith duly executed by the registered holder or by the holder's attorney or successor duly appointed, together with such reasonable assurance or evidence of signature, identification and authority to transfer as the board may from time to time prescribe, upon payment of all applicable taxes and any fees prescribed by the board or in accordance with the Act upon compliance with such restrictions on transfer as are authorized by the articles and upon satisfaction of any lien referred to in section 9.5. 10 9.5 Lien for Indebtedness -- Except in the case of any class or series of shares of the Corporation listed on a stock exchange, the Corporation shall have a lien on the shares registered in the name of a shareholder who is indebted to the Corporation, to the extent of such indebtedness and such lien may be enforced, subject to any provision of the articles and to any unanimous shareholder agreement, by the sale of the shares thereby affected or by any other action, suit, remedy or proceeding authorized or permitted by law or by equity and, pending such enforcement, the Corporation may refuse to register a transfer of the whole or part of such shares. 9.6 Non-recognition of Trusts -- Subject to the provisions of the Act, the Corporation may treat the registered owner of a share as the person exclusively entitled to vote, to receive notices, to receive any dividend or other payments in respect thereof and otherwise to exercise all the rights and powers of an owner of a share. 9.7 Security Instruments -- Every holder of one or more securities of the Corporation shall be entitled, at the holder's option, to a security certificate in respect of the securities held by that person or to a non-transferable written acknowledgement of that person's right to obtain a security certificate, stating the number and class or series of shares held by that person as shown on the securities register. Security certificates and acknowledgements of a shareholder's right to a security certificate, respectively, shall be in such form as the board may from time to time approve. Unless otherwise' ordered by the board, security certificates shall be signed by any one of: (a) the chairman of the board, the president, the managing director, a vice-president or a director, and any one of: (b) the secretary, treasurer, any assistant secretary or any assistant treasurer or a director and need not be under corporate seal. Signatures of signing officers may be printed or mechanically reproduced in facsimile upon security certificates and every such facsimile shall for all purposes be deemed to be the signature of the officer whose signature it reproduces and shall be binding upon the Corporation; provided that at least one director or officer of the Corporation shall manually sign each certificate (other than a scrip certificate or a certificate representing a fractional share or a warrant or a promissory note that is not issued under a trust indenture) in the absence of a manual signature thereon of a duly appointed transfer agent, registrar, branch transfer agent or issuing or other authenticating agent of the Corporation or trustee who certifies it in accordance with a trust indenture. A security certificate executed as aforesaid shall be valid notwithstanding that an officer whose facsimile signature appears thereon no longer holds office at the date of issue of the certificate. 9.8 Replacement of Security Certificates -- Subject to the provisions of the Act, the board or any officer or agent designated by the board may in the discretion of the board or that person direct the issue of a new security certificate in lieu of and upon cancellation of a security certificate claimed to have been lost, apparently destroyed or wrongfully taken on payment of such fee, prescribed by or in accordance with the Act, and on such terms as to indemnity, reimbursement of expenses and evidence of loss and of title as the board may from time to time prescribe, whether generally or in any particular case. 9.9 Joint Shareholders -- If two or more persons are registered as joint holders of any share, the Corporation shall not be bound to issue more than one certificate in respect thereof, and delivery of such certificate to one of such persons shall be sufficient delivery to all of them. Any one of such persons may give effectual receipts for the certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warrant issuable in respect of such share. 9.10 Deceased Shareholders -- In the event of the death of a holder, or of one of the joint holders, of any share, the Corporation shall not be required to make any entry in the securities register in respect thereof or to make payment of any dividends thereon except upon production of all such documents as may be required by the Act and upon compliance with the reasonable requirements of the Corporation or transfer agent. 11 DIVIDENDS AND RIGHTS 10.0 Dividends -- Subject to the provisions of the Act, the articles and any unanimous shareholder agreement, the board may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid in money or property or by issuing fully paid shares or options or rights to acquire fully paid shares of the Corporation. 10.1 Dividend Cheques -- A dividend payable in cash shall be paid by cheque drawn on the Corporation's bankers or one of them to the order of each registered holder of shares of the class or series in respect of which it has been declared and mailed by prepaid ordinary mail to such registered holder at the address recorded in the Corporation's securities register, unless in each case such holder otherwise directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order of all of such joint holders and, if more than one address is recorded in the Corporation's security register in respect of such joint holding, the cheque shall be mailed to the first address so appearing. The mailing of such cheque as aforesaid, unless the same is not paid on due presentation shall satisfy and discharge the liability for the dividend to the extent of the sum represented thereby plus the amount of any tax which the Corporation is required to and does withhold. 10.2 Non-receipt or Loss of Cheques -- In the event of non-receipt or loss of any dividend cheque by the person to whom it is sent, the Corporation shall issue to such person a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and evidence of non-receipt and of title as the board may from time to time prescribe, whether generally or in any particular case. 10.3 Record Date for Dividends and Rights -- The board may fix in advance a date as the record date for the determination of the shareholders entitled to receive payment of a dividend, entitled to participate in a liquidation or distribution, or for any other purpose except to receive notice of or to vote at a meeting, but the record date shall not precede by more than 50 days the particular action to be taken. Notice of the record date shall be given, not less than 7 days before such record date, by advertisement in a newspaper published or distributed in the place where the Corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of the Corporation's shares may be recorded and, where applicable, by written notice to each stock exchange in Canada on which the Corporation's shares are listed for trading, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register of the Corporation at the close of business on the day the directors fix the record date. If no such record date is fixed, such record date shall be the close of business on the day on which the directors pass the resolutions relating thereto. 10.4 Unclaimed Dividends -- Any dividend unclaimed after a period of six years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the Corporation. NOTICES 11.0 Method of Giving Notices -- Any notice, communication or document ("notice") to be given or sent pursuant to the Act, the articles, the by-laws or otherwise to or on a shareholder, director, officer, auditor or member of a committee of the board shall be sufficiently given or sent if given or sent by prepaid mail, prepaid transmitted or recorded communication, or delivered personally to such persons' latest address as shown on the securities register of the Corporation or, in the case of a director, if more current, the address as shown in the most recent notice filed under the Corporations Information Act (Ontario). A notice shall be deemed to have been received on the date when it is delivered personally, or on the fifth day after mailing, or on the date of dispatch of a transmitted or recorded communication. The secretary may change or cause to be changed the recorded address of any shareholder, director, officer, auditor or member of a committee of the board in accordance with any information believed by the secretary to be reliable. 11.1 Notice to Joint Shareholders -- If two or more persons are registered as joint holders of any share, any notice shall be addressed to all of such joint holders but notice to one of such persons shall be sufficient notice to all of them. 12 11.2 Computation of Time -- In computing the date when notice must be sent under any provision requiring a specified period of days' notice of any meeting or other event, the period of days shall commence on the day following the sending of such notice and shall terminate on the day preceding the date of the meeting or other event provided that the last day of the period shall not be a non-business day. 11.3 Undelivered Notices -- If any notice given or sent to a shareholder pursuant to section 11.0 is returned on three consecutive occasions because the person cannot be found, the Corporation shall not be required to give or send any further notice to such shareholder until the Corporation is informed in writing of the new address for such person. 11.4 Omissions and Errors -- The accidental omission to give or send any notice to any shareholder, director, officer, auditor or member of a committee of the board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise based thereon. 11.5 Persons Entitled by Death or Operation of Law -- Every person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which shall have been duly given or sent to the shareholder from whom the person derives title to such share prior to that person's name and address being entered on the securities register (whether such notice was given or sent before or after the happening of the event upon which that person becomes so entitled) and prior to that person furnishing to the Corporation the proof of authority or evidence of entitlement prescribed by the Act. 11.6 Waiver of Notice -- Any shareholder (or shareholder's duly appointed proxyholder), director, officer, auditor or member of a committee of the board may at any time waive the giving or sending of any notice, or waive or abridge the time for any notice, required to be given to that person under any provision of the Act, the articles, the bylaws or otherwise and such waiver or abridgement shall cure any default in the giving or sending or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of shareholders or of the board which may be given in any manner. Attendance of a director at a meeting of directors or of a shareholder or any other person entitled to attend a meeting of shareholders is a waiver of notice of the meeting except where such director, shareholder or other person, as the case may be, attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. The foregoing By-law No. 1 is hereby passed as evidenced by the signature of the director of the Corporation pursuant to the provisions of the Business Corporations Act, 1982, (Ontario). DATED this 5th day of March, 1990. /s/ Brigitte C. Sayers --------------------------- Brigitte C. Sayers The foregoing By-law No. 1 is hereby confirmed as evidenced by the signature of the shareholder of the Corporation entitled to vote pursuant to the provisions of the Business Corporations Act, 1982, (Ontario). DATED this 5th day of March, 1990. /s/ Stephen V. Arnold --------------------------- Stephen V. Arnold 13 EX-3.10 11 l05578aexv3w10.txt EXHIBIT 3.10 EXHIBIT 3.10 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 10/23/1997 971358826 -- 0868812 RESTATED AND AMENDED CERTIFICATE OF INCORPORATION OF GENERAL CABLE INDUSTRIES, INC. The undersigned, a corporation duly organized and existing under the laws of the State of Delaware, in accordance with the provisions of Sections 245 and 242 of Title B of the Delaware Code, does hereby certify: 1. General Cable Industries, Inc. (the "Corporation") was incorporated on March 12, 1979 under the name "GK Technologies, Incorporated." 2. On April 25, 1979, the Corporation filed in the Office of the Secretary of State of the State of Delaware a Certificate of Amendment of Certificate of Incorporation Before Payment of Capital which changed the name of the Corporation to "General Cable Corporation." 3. On April 9,1992, the Corporation filed a Certificate of Amendment of Certificate of Incorporation of General Cable Corporation in the office of the Secretary of State of the State of Delaware, changing the name of the Corporation to "General Cable (Name Holding) Corporation." 4. On June 29, 1992, the Corporation filed a Certificate of Ownership and Merger in the office of the Secretary of State of the State of Delaware, (i) certifying that the Corporation owned all of the outstanding shares of stock of each of Carol Cable Company, Inc., a Delaware corporation, Guardian Products, Inc., a Delaware corporation, and Philadelphia Insulated Wire Company, Inc., a Delaware corporation; (ii) merging such corporations with and into the Corporation effective at noon on June 30, 1992; and (iii) changing the name of the Corporation to "General Cable Industries, Inc." 5. On July 6, 1992, the Corporation filed a Certificate of Ownership and Merger in the office of the Secretary of State of the State of Delaware (i) certifying that it owned all of the outstanding shares of stock of Capital Wire and Cable Corporation, a Texas corporation, and (ii) merging such corporation with and into the Corporation, effective July 6, 1992. 6. The Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety as set forth in the attached Exhibit A to change all references to the name of the Corporation to "General Cable Industries, Inc." 7. The Corporation has adopted resolutions setting forth the above-referenced amendment by action by joint unanimous written consent of its Board of Directors and sole shareholder pursuant to Section 242(b)(l) of Title 8 of the Delaware Code. IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed on its behalf this 16th day of October, 1997. General Cable Industries, Inc. By: /s/ Stephen Rabinowitz ------------------------------------ Stephen Rabinowitz, President ATTEST: /s/ Robert J. Siverd - --------------------------------- Robert J. Siverd, Secretary of General Cable Industries, Inc. 2 Exhibit A RESTATED CERTIFICATE OF INCORPORATION OF GENERAL CABLE INDUSTRIES, INC. FIRST: The name of the Corporation is GENERAL CABLE INDUSTRIES, INC. SECOND: The registered office of the Corporation in the State of Delaware is to be located at No. 100 West Tenth Street, Wilmington, New Castle County. Its registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful acts or activities for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is One Thousand (1,000) designated as common stock and the par value of each such share of common stock and is One Cent ($.01), amounting in the aggregate to Ten Dollars ($10). FIFTH: The name of the incorporator is Robert L. Marlow and his mailing address is 500 West Putnam Avenue, Greenwich, CT 06830. SIXTH: All corporate powers of the Corporation shall be exercised by or under the direction of the board of directors except as otherwise provided herein or by law. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the board of directors is expressly authorized to: a. adopt, amend and repeal the By-laws of the Corporation; provided, however, that no By-laws hereinafter adopted shall invalidate any prior act of the directors that would have been valid if such new By-laws had not been adopted; b. determine the rights, powers, duties, rules and procedures that affect the power of the Board of Directors to manage and direct the business and affairs of the Corporation, including the power to designate and empower committees of the Board of Directors, to elect, appoint and empower the officers and other agents of the Corporation, and to determine the time and place of, the notice requirements for, Board meetings, as well as quorum and voting requirements for, and the manner of taking, Board action; and c. exercise all such powers and do all such acts as may be exercised or done by the Corporation, subject to the provisions of the Delaware General Corporation Law, this Certificate of Incorporation, and the By-Laws of the Corporation. SEVENTH: No person shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, including without limitation, directors serving on committees of the Board of Directors; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law is amended hereafter to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Any amendment, repeal or modification of this Article Seventh shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to such amendment, repeal or modification. EIGHTH: Any contract, transaction or act of the Corporation or of the board of directors which shall be approved or ratified by a majority of a quorum of the stockholders entitled to vote at any meeting shall be as valid and binding as though approved or ratified by every stockholder of the Corporation; but any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the Corporation, its directors or officers of their right to proceed with such contract, transaction or act. NINTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. TENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now hereafter prescribed by statute, and all rights conferred upon stockholders, directors, and other persons herein are granted subject to this reservation. 2 IN WITNESS WHEREOF, the undersigned, being the President of the Corporation, does make this certificate this 16th day of October, 1997. /s/ Stephen Rabinowitz -------------------------------- Stephen Rabinowitz, President 3 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 01:00 PM 10/04/2000 001501806 -- 0868812 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF BICCGENERAL CABLE INDUSTRIES, INC. The undersigned, a corporation duly organized and existing under the laws of the State of Delaware, in accordance with the provisions of Section 242 of Title 8 of the Delaware Code 1953 as amended, does hereby certify: 1. The name of the corporation as it appears on the records of the Secretary of State of Delaware is BICCGeneral Cable Industries, Inc. (the "Corporation"). 2. The date of incorporation of the Corporation is March 12, 1979. 3. Paragraph One of the Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety as follows: 1. The name of the corporation is General Cable Industries, Inc. 4. The Corporation has adopted resolutions setting forth the above-referenced amendment by joint action by unanimous written consent of its Board of Directors and sole shareholder pursuant to Section 242(b)(l) of Title 8 of the Delaware Code 1953 as amended. IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed on its behalf 29th day of September, 2000. BICCGENERAL CABLE INDUSTRIES, INC. /s/ Robert J. Siverd -------------------------------------- Robert J. Siverd Executive Vice President ATTEST: /s/ Jeffrey Whelan - ------------------------------ Jeffrey Whelan, Secretary EX-3.11 12 l05578aexv3w11.txt EXHIBIT 3.11 EXHIBIT 3.11 ------------------------------------------------------------------------------ BY-LAWS OF GENERAL CABLE INDUSTRIES, INC. ------------------------------------------------------------------------------ TABLE OF CONTENTS
PAGE ---- ARTICLE I OFFICES........................................................................................ 3 SECTION 1.01. Registered Office.................................................................. 3 SECTION 1.02. Other Offices...................................................................... 3 ARTICLE II MEETING OF STOCKHOLDERS....................................................................... 3 SECTION 2.01. Annual Meetings.................................................................... 3 SECTION 2.02. Voting............................................................................. 3 SECTION 2.03. Quorum............................................................................. 3 SECTION 2.04. Special Meetings................................................................... 4 SECTION 2.05. Notice of Meetings................................................................. 4 SECTION 2.06. Action Without Meeting............................................................. 4 ARTICLE III DIRECTORS.................................................................................... 4 SECTION 3.01. Number and Term.................................................................... 4 SECTION 3.02. Resignation........................................................................ 4 SECTION 3.03. Vacancies.......................................................................... 4 SECTION 3.04. Removal............................................................................ 5 SECTION 3.05. Powers............................................................................. 5 SECTION 3.06. Committees of the Board............................................................ 5 SECTION 3.07. Meetings........................................................................... 5 SECTION 3.08. Quorum............................................................................. 5 SECTION 3.09. Compensation....................................................................... 5 SECTION 3.10. Action Without Meeting; Presence at Meetings....................................... 6 ARTICLE IV OFFICERS...................................................................................... 6 SECTION 4.01. Officers........................................................................... 6 SECTION 4.02. Other Officers and Agents.......................................................... 6 SECTION 4.03. Resignation; Removal............................................................... 6 SECTION 4.04. President.......................................................................... 6 SECTION 4.05. Vice Presidents.................................................................... 6 SECTION 4.06. Controller......................................................................... 6 SECTION 4.07. Treasurer.......................................................................... 7 SECTION 4.08. Secretary.......................................................................... 7
SECTION 4.09. Assistant Secretaries.............................................................. 7 SECTION 4.10. Assistant Treasurers............................................................... 7 SECTION 4.11. Compensation....................................................................... 7 ARTICLE V MISCELLANEOUS.................................................................................. 7 SECTION 5.01. Certificates of Stock.............................................................. 7 SECTION 5.02. Transfer Agents and Registrars..................................................... 7 SECTION 5.03. Lost Certificates.................................................................. 8 SECTION 5.04. Transfer of Shares................................................................. 8 SECTION 5.05. Stockholders Record Date........................................................... 8 SECTION 5.06. Dividends.......................................................................... 8 SECTION 5.07. Registered Stockholders............................................................ 8 SECTION 5.08. Seal............................................................................... 8 SECTION 5.09. Fiscal Year........................................................................ 8 SECTION 5.10. Checks............................................................................. 8 SECTION 5.11. Execution of Proxies............................................................... 8 SECTION 5.12. Notice and Waiver of Notice........................................................ 9 ARTICLE VI INDEMNIFICATION............................................................................... 9 SECTION 6.01. Right to Indemnification........................................................... 9 SECTION 6.02. Actions, Suits Or Proceedings Other Than Those By Or In The Right Of The Corporation............................................................................. 9 SECTION 6.03. Actions, Suits Or Proceedings By Or In The Right Of The Corporation................ 9 SECTION 6.04. Authorization of Indemnification................................................... 10 SECTION 6.05. Good Faith Defined................................................................. 10 SECTION 6.06. Proceedings Initiated By Indemnified Persons....................................... 10 SECTION 6.07. Indemnification By A Court......................................................... 10 SECTION 6.08. Losses Payable In Advance.......................................................... 10 SECTION 6.09. Non-exclusivity and Survival of Indemnification.................................... 11 SECTION 6.10. Meaning Of Certain Terms In Connection With Employee Benefit Plans, etc............ 11 SECTION 6.11. Insurance.......................................................................... 11 ARTICLE VII AMENDMENTS................................................................................... 11
BY-LAWS OF GENERAL CABLE INDUSTRIES, INC. ARTICLE I OFFICES SECTION 1.01. Registered Office. The registered office of the corporation in the State of Delaware shall be established and maintained at the office of The Corporation Trust Company, in the City of Wilmington, County of New Castle, and said corporation shall be the Registered Agent of the Corporation in charge thereof. SECTION 1.02. Other Offices. The principal place of business of the Corporation in the State of Delaware shall be the City of Wilmington, County of New Castle; and the Corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require. ARTICLE II MEETING OF STOCKHOLDERS SECTION 2.01. Annual Meetings. Annual meetings of stockholders for the election of directors and for the transaction of any proper business shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution shall determine and as set forth in the notice of the meeting. If the annual meeting of stockholders is not held on the date designated therefor, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as may properly be brought before the meeting. SECTION 2.02. Voting. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these By-Laws shall be entitled to one vote, in person or by proxy, for each share of stock outstanding and entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be written ballot. When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock outstanding and having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provisions of a statute or of the Certificate of Incorporation a different vote is required in which case such express provisions shall govern and control the decision of such question. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number shares registered in the name of each stockholder. Such a list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. SECTION 2.03. Quorum. At all meetings of stockholders, except as otherwise required by statute or by the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares of stock outstanding and entitled to vote thereat shall be requisite for, and shall constitute a quorum for, the transaction of business. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other announcement at the meeting, until the requisite amount of shares entitled to vote shall be present or represented. At any such adjourned meeting at which the requisite amount of shares entitled to vote shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2.04. Special Meetings. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President or the Secretary and shall be called by the President or Secretary at the request of the Board of Directors or at the request in writing of the stockholders of a majority of the shares of stock outstanding and having voting power. Such request shall state the purpose or purposes of the proposed meeting. Special meetings may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. SECTION 2.05. Notice of Meetings. Written notice, stating the place, date and time of any meeting, annual or special, and, if a special meeting, the purpose or purposes of which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten or more than sixty days before the date of the meeting. SECTION 2.06. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS SECTION 3.01. Number and Term. The number of directors shall be three or such other number as may be fixed from time to time by resolution of the Board of Directors or by action of the stockholders. The directors shall be elected at the annual meeting of the stockholders and each director shall be elected to hold office until his successor shall be elected and qualified. Directors need not be stockholders. SECTION 3.02. Resignation. Any director or member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, of no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective. SECTION 3.03. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors shall be elected and qualified. Unless otherwise provided by the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies. In the event that a vacancy or newly created directorship shall not have been filled by the Board of Directors, the additional director or directors nay be elected by the stockholders entitled to vote thereon, either at an annual meeting of stockholders or at a special meeting called for the purpose. The directors or directors so chosen shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualified. 4 SECTION 3.04. Removal. Any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the holders of such shares, and the vacancies thus created may be filled, at such meeting or at any subsequent meeting, by the affirmative vote of a majority in interest of the stockholders entitled to vote. SECTION 3.05. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors, which may exercise all the powers of the Corporation and do all lawful acts and things which are not conferred upon or reserved to the stockholders by law, by the Certificate of Incorporation or by these By-Laws. SECTION 3.06. Committees of the Board. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation; and, unless the resolution or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. SECTION 3.07. Meetings. Meetings of the Board of Directors shall be held at such place, either within or without the State of Delaware, as the Board of Directors shall from time to time designate or as may be specified in the notice of such meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President or the Secretary by notice to each director given not less than two days, or not less than three days in the case of notice given by mail, before such meeting. Special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. The first meeting of a newly elected Board of Directors shall be held without notice as soon as practicable after each annual meeting of the stockholders at the same place at which such meeting was held, provided a quorum is present. If a quorum is not present, such first meetings may be held at such time and such place as shall be specified in a notice given as herein provided for special meetings of the Board of Directors. SECTION 3.08. Quorum. Not less than a majority of the total number of directors shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless a statute or the Certificate of incorporation shall require a vote of a greater number. SECTION 3.09. Compensation. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any 5 director from serving the Corporation in any other capacity as an officer, agent or otherwise and receiving compensation therefor. SECTION 3.10. Action Without Meeting; Presence at Meetings. Unless otherwise restricted in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board Directors or the committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by such Board, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another, and such participation in a meeting shall constitute presence in person at such meeting. ARTICLE IV OFFICERS SECTION 4.01. Officers. The Officers of the Corporation shall be the President, a Secretary, a Treasurer and a Controller, each of whom shall be elected by the Board of Directors and shall hold office until his successor shall be elected and have qualified. The Board of Directors also may elect one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. The officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders and shall hold office until their successors are chosen and have qualified. Any number of offices may be held by the same person. SECTION 4.02. Other Officers and Agents. The Board of Directors may appoint such other officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. SECTION 4.03. Resignation; Removal. Any officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. Any officer may be removed, for or without cause, at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office shall be filled for the unexpired portion of the term by the Board of Directors. SECTION 4.04. President. The President shall be the Chief Executive Officer of the Corporation. The President shall have general and active control of the Corporation's business, finances and affairs, subject to the control of the Board of Directors. Except as may otherwise be provided by the Board of Directors from time to time, the President shall have general power to execute bonds, deeds, contracts, conveyances and other instruments in the name of the Corporation and to affix the corporate seal; to appoint all employees and agents of the Corporation whose appointment is not otherwise provided for and to fix the compensation thereof subject to the provisions of these By-laws and subject to the approval of the Board of Directors; to remove or suspend any employee or agent who shall not have been appointed by the Board of Directors; and to suspend for cause, pending final action by the body which shall have appointed him, any officer other than an elected officer, or any employee or agent who shall have been appointed by the Board of Directors. He shall have such further powers and duties as may be conferred on him by the Board of Directors. SECTION 4.05. Vice Presidents. The Vice Presidents, if any, shall have such powers and perform such duties as may be respectively assigned to them from time to time by the Board of Directors or the Chief Executive Officer. In the absence or the disability of the President, his duties shall be performed and his performance may be exercised by the Senior Vice President or other Vice President or Vice Presidents in the order determined by the Board of Directors or, failing such delegation, in the order of their last election to that office. SECTION 4.06. Controller. The Controller shall prescribe and have charge of the system of books and 6 accounts. He may require reports from the Treasurer and all other officers or agents of the Corporation who receive or disburse funds for its account at such times and in such forms as he may deem desirable. SECTION 4.07. Treasurer. The Treasurer shall have the care and custody of all the funds of the Corporation and shall deposit the same in such banks or other depositories as the Board of Directors, or any officer or officers, or any officer and agent jointly, duly authorized by the Board of Directors, shall, from time to time, direct or approve. He shall disburse the funds of the Corporation under the direction of the Board of Directors or the Chief Executive Officer. He shall keep full and accurate account of all moneys received and paid on account of the \ Corporation and shall render a statement of his accounts whenever the Board of Directors shall require. He shall perform all other necessary acts and duties in connection with the administration of the financial affairs of the Corporation and shall generally perform all the duties usually appertaining to the office of treasurer of a corporation. When required by the Board of Directors, he shall give bonds for the faithful discharge of his duties in such sums and with such sureties as the Board of Directors shall approve. SECTION 4.08. Secretary. The Secretary shall attend all meetings of the Board of Directors and the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall, when requested, perform like duties for all committees of the Board of Directors. He shall attend to the giving of notice of all meetings of the stockholders and, if notice is required, of meetings of the Board of Directors and of committees thereof; he shall have custody of the corporate seal and, when authorized by the Board of Directors, shall have authority to affix the same to any instrument and, when so affixed, it shall be attested by his signature or the signature of the Treasurer or an Assistant Secretary or an Assistant Treasurer. He shall keep and account for all documents, papers, and records of the Corporation, except those for which some other officer or agent is properly accountable. He shall generally perform all the duties appertaining to the office of secretary of a corporation. In the absence of the Secretary, such person as shall be designated by the Chief Executive Officer shall perform his duties. SECTION 4.09. Assistant Secretaries. Each Assistant Secretary shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Secretary, his duties shall be performed and his powers may be exercised by the Assistant Secretary or the Assistant Secretaries in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.10. Assistant Treasurers. Each Assistant Treasurer shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Treasurer, his duties shall be performed and his powers may be exercised by the Assistant Treasurer or the Assistant Treasurers in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.11. Compensation. The Board of Directors shall have the power to fix the compensation of all officers of the Corporation. ARTICLE V MISCELLANEOUS SECTION 5.01. Certificates of Stock. The shares of stock of the Corporation shall be represented by certificates in such forms as shall be determined by the Board of Directors and shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the Corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. SECTION 5.02. Transfer Agents and Registrars. The Board of Directors may, in its discretion appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation; and, upon such 7 appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars. SECTION 5.03. Lost Certificates. In case any certificate representing shares shall be lost, stolen or destroyed, the Board of Directors, or any officer or officers authorized by the Board of Directors, may authorize the issue of a substitute certificate in place of the certificate so lost, stolen or destroyed, and, if the Corporation shall have a Transfer Agent and Registrar, may cause or authorize such substitute certificate to be countersigned by the appropriate Transfer Agent and registered by the appropriate Registrar. In each such case, the applicant for a substitute certificate shall furnish to the Corporation and to such of its Transfer Agents and Registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft or destruction of such certificate and the ownership thereof, and also such security or indemnity as may by them be required. SECTION 5.04. Transfer of Shares. Transfer of shares shall be made on the books of the Corporation only by the person named in the certificates or by his attorney lawfully constituted in writing, and upon surrender and cancellation of the certificate or certificates of a like number of shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. SECTION 5.05. Stockholders Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjournment meeting. SECTION 5.06. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividends, there may be set apart, out of any funds of the Corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve a fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conductive to the interests of the Corporation; and in its discretion the Board of Directors may decrease or abolish any such reserve. SECTION 5.07. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and other distributions, and to vote as such owner, and to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not is shall have express or other notice thereof, except as otherwise provided by law. SECTION 5.08. Seal. The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its organization and the words "CORPORATE SEAL, DELAWARE." The deal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. SECTION 5.09. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors. SECTION 5.10. Checks. All checks, drafts or other orders for the payment of money, notes or other order evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall be determined from time to time by resolution of the Board of Directors. SECTION 5.11. Execution of Proxies. The President or, in the absence or disability of the President, a Vice President, may authorize from time to time the signature and issuance of proxies to vote upon shares of stock 8 of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such proxies and consents shall be signed in the name of the Corporation by the President or a Vice President and by the Secretary or an Assistant Secretary. SECTION 5.12. Notice and Waiver of Notice. Whenever any notice is required to be given under the provisions of any law, of the Certificate of Incorporation or of these By-Laws, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice to directors may also be given on the day of mailing. Notice to directors may also be given by telex, cable or telegram. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute. Whenever any notice whatever is required to be given under the provisions of any law or law or of the Certificate of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of Incorporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE VI INDEMNIFICATION SECTION 6.01. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact (a) that he or she is or was a director or officer of the Corporation, or (b) that he or she, being at the time a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (collectively, "another enterprise" or "other enterprise"), shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended (but, in the case of any such amendment, with respect to alleged action or inaction occurring prior to such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including, without limitation, attorneys' and other professionals' fees and expenses, claims, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such person in connection therewith ("Losses"). Without diminishing the scope of indemnification provided by this Section 6.01, such persons shall also be entitled to the further rights set forth below. SECTION 6.02. Actions, Suits Or Proceedings Other Than Those By or In The Right Of The Corporation. Subject to the terms and conditions of this Article, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer or employee of the Corporation, or, being at the time a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another enterprise, against all Losses, actually and reasonably incurred or suffered by such person in connection with such Proceeding if such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner reasonably believed to be or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was unlawful. SECTION 6.03. Actions, Suits Or Proceedings By Or In The Right Of The Corporation. Subject to the 9 terms and conditions of this Article, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer or employee of the Corporation, or being at the time a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another enterprise against all Losses actually and reasonably incurred or suffered by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. SECTION 6.04. Authorization of Indemnification. Any indemnification under this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of a person is proper in the circumstances because such person has met the applicable standard of conduct required by Section 6.01 or set forth in Section 6.02 or 6.03 of this Article, as the case may be. Such determination shall be made in reasonably prompt manner (i) by the Board of Directors by a majority vote of directors who were not parties to such action, suit or proceeding, whether or not they constitute a quorum of the Board of Directors, (ii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, (iii) by the stockholders or (iv) as the Delaware General Corporation Law may otherwise permit. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' and other professionals' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case. SECTION 6.05. Good Faith Defined. For purposes of any determination under Section 6.04 of this Article, a person shall be deemed to have acted in good faith if the action is based on (a) the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, (b) the advice of legal counsel for the Corporation or another enterprise, or (c) information or records given or reports made to the Corporation or another enterprise by an independent certified public account, independent financial adviser, appraiser or other expert selected with reasonable care by the Corporation or the other enterprise. The provisions of this Section 6.05 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct. SECTION 6.06. Proceedings Initiated By Indemnified Persons. Notwithstanding any provisions of this Article to the contrary, the Corporation shall not indemnify any personal or make advance payments in respect of Losses to any person pursuant to this Article in connection with any Proceeding (or portion thereof) initiated against the Corporation by such person unless such Proceeding (or portion thereof) is authorized by the Board of Directors or its designee; provided, however, that this prohibition shall not apply to a counterclaim, cross-claim or third-party claim brought in any Proceeding or to any claims provided for in Section 6.07 of this Article. SECTION 6.07. Indemnification By A Court. Notwithstanding any contrary determination in the specific case under Section 6.04 of this Article, and notwithstanding the absence of any determination thereunder, any director, officer or employee may apply to any court of competent jurisdiction for indemnification to the extent otherwise permissible under Section 6.01, 6.02 or 6.03 of this Article. Notice of any application for indemnification pursuant to this Section 6.07 shall be given to the Corporation promptly upon the filing of such application. SECTION 6.08. Losses Payable In Advance. Losses reasonably incurred by an officer or director in defending any threatened or pending Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article. Losses shall be reasonably documented by the officer or director and required payments shall be made promptly by the Corporation. Losses incurred by other employees may be so paid upon such terms and 10 conditions, if any, as the Board of Directors deems appropriate. SECTION 6.09. Non-exclusivity and Survival of Indemnification. The indemnification and advancement of expenses provided by or granted pursuant to this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any By-Law, agreement, contract, vote of Stockholders or of disinterested directors, or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise. The provisions of this Article shall not be deemed to preclude the indemnification of any person who is not specified in Section 6.01, 6.02 or 6.03 of this Article but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law, or otherwise. The rights conferred by this Article shall continue as to a person who has ceased to be a director, officer or employee and shall inure to the benefit of such person and the heirs, executors, administrators and other comparable legal representatives of such person. The rights conferred in this Article shall be enforceable as contract rights, and shall continue to exist after any rescission or restrictive modification hereof with respect to events occurring prior thereto. No rights are conferred in this Article for the benefit of any person (including, without limitation, officers, directors and employees subsidiaries of the Corporation ) in any capacity other than as explicitly set forth herein. SECTION 6.10. Meaning Of Certain Terms In Connection With Employee Benefit Plans, etc. For purposes of this Article, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; references to "serving at the request of the Corporation" shall include any service as a director, officer or employee of the Corporation which imposes duties on, or involves service by, such director, officer or employee, with respect to an employee benefit plan, its participants or beneficiaries; and a person who has act in good faith and in a manner reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article. SECTION 6.11. Insurance. The Corporation may, but shall not be required to, purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article. ARTICLE VII AMENDMENTS These By-Laws may be altered, amended or repealed, and new By-Laws may be adopted, by the stockholders or, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, by the Board of Directors, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of the proposed alteration, amendment, repeal or adoption be contained in the notice of such special meeting. 11 EX-3.12 13 l05578aexv3w12.txt EXHIBIT 3.12 EXHIBIT 3.12 CERTIFICATE OF FORMATION OF GENERAL CABLE INDUSTRIES LLC This Certificate of Formation of General Cable Industries LLC (the "LLC"), dated December 22, 1998, is being duly executed and filed by General Cable Industries, Inc., a Delaware corporation, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. Section 18-101, et seq.) FIRST. The name of the limited liability company formed hereby is General Cable Industries LLC. SECOND. The address of the registered office of the LLC in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. THIRD. The name and address of the registered agent for service of process on the LLC in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. FOURTH. The term of the LLC shall be perpetual, unless terminated earlier pursuant to the Operating Agreement entered into by and among the Members of the LLC. IN WITNESS WHEREOF, the undersigned have executed this Certificate of Formation as of the date first above written. GENERAL CABLE INDUSTRIES, INC. By: /s/ Robert J. Siverd -------------------------------- Name: Robert J. Siverd Title: Ex. Vice President CERTIFICATE OF AMENDMENT OF CERTIFICATE OF FORMATION OF GENERAL CABLE INDUSTRIES LLC Dated: May 28, 1999 The undersigned sole member of this limited liability company hereby certifies as follows: 1. The name of the limited liability company is General Cable Industries LLC. 2. The limited liability company's Certificate of Formation is amended by changing the limited liability company's name to BICCGeneral Cable Industries, LLC. IN WITNESS WHEREOF, the undersigned sole member has caused this certificate to be executed on its behalf by its duly authorized officer as of May 28, 1999. SOLE MEMBER: GENERAL CABLE INDUSTRIES, INC. By: /s/ Robert J. Siverd ----------------------------------- Name: Robert J. Siverd Title: Ex. Vice President CERTIFICATE OF AMENDMENT TO CERTIFICATE OF FORMATION OF BICCGENERAL CABLE INDUSTRIES, LLC It is hereby certified that: 1. The name of the limited liability company (hereinafter called the "limited liability company") is BICC General Cable Industries, LLC. 2. The certificate of formation of the limited liability company is hereby amended by striking out Article 1 hereof and by substituting in lieu of said Article the following new Article 1. "The name of the limited liability company is General Cable Industries LLC." Executed on October 17, 2000. /s/ Robert J. Siverd ----------------------------------- Robert J. Siverd, Authorized Person EX-3.13 14 l05578aexv3w13.txt EXHIBIT 3.13 EXHIBIT 3.13 OPERATING AGREEMENT OF GENERAL CABLE INDUSTRIES LLC A DELAWARE LIMITED LIABILITY COMPANY This OPERATING AGREEMENT ("Agreement") of GENERAL CABLE INDUSTRIES LLC (the "Company"), is entered into as of December 23, 1998, by and among the Company and General Cable Industries, Inc., a Delaware corporation (individually a "Member" and collectively with all members that join in and agree to be bound hereby after the date first written above, the "Members"). In consideration of the mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I FORMATION OF LIMITED LIABILITY COMPANY The Certificate of Formation for the Company has been filed and the Company has been formed pursuant to the Delaware Limited Liability Company Act (the "Act"). The Company shall be operated in accordance with the terms and conditions of this Agreement. The Member intends that the Company be subject to federal and state income taxation as a division of the Member. In the event additional Members join in, the Members expressly do not intend hereby to form a partnership (including, without limitation, a limited partnership) or joint venture. However, the Members intend that the Company be subject to federal and state taxation as a partnership. This Agreement shall not be construed to suggest otherwise. ARTICLE II NAME The business of the Company shall be conducted under the name GENERAL CABLE INDUSTRIES LLC, or such other name as the Members may hereafter designate. ARTICLE III PURPOSE The purpose of the Company is to engage in any business or activity that now or hereafter is not prohibited by the law of the jurisdiction in which the Company engages in that business. ARTICLE IV TERM The term of the Company shall commence on the date of filing of the Certificate of Formation and shall be perpetual, unless earlier terminated as provided in Article XVI of this Agreement. ARTICLE V REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL PLACE OF BUSINESS The registered agent of the Company in the State of Delaware shall be as designated on the Certificate of Formation, or such other person as the Members may hereafter designate in the manner provided by law. The initial registered agent, as listed on the Certificate of Formation, is The Corporation Trust Company. The registered office of the Company required by the Act to be maintained in the State of Delaware shall be as designated on the Certificate of Formation, or such other place in Delaware as the Members may hereafter designate in the manner provided by law. The initial registered office of the Company, as listed on the Certificate of Formation, is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington Delaware 19801. The principal place of business of the Company shall be located at such address as may be designated by the Members. - 1 - ARTICLE VI CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS (A) CAPITAL CONTRIBUTIONS. The Capital Contributions of a Member shall be the amount of cash and the fair market value of any property (net of any liability to which such property is subject) contributed by the Member to the Company. Each Member shall contribute to the Company as such Member's initial Capital Contribution the amount of cash and/or the property set forth next to such Member's name on Exhibit A attached hereto. No Member shall be obligated to make an additional Capital Contribution or a loan to the Company except as expressly provided herein. If additional funds are advanced to the Company by the Members, such funds shall be additional Capital Contributions to the extent such funds are advanced pro rata by the Members in accordance with their Membership Interests in the Company. Any funds advanced in excess of a Member's pro rata share shall be a loan from such Member, the terms of which shall be established at the time of such advance. (B) CAPITAL ACCOUNTS. An individual Capital Account shall be maintained for each Member. The Capital Account of each Member shall consist of such Member's initial Capital Contribution, increased by (1) any additional Capital Contributions made by such Member and (2) such Member's share of Profits and items of income and gain specially allocated pursuant to Article XVIII(C), and decreased by (3) distributions to such Member, and (4) such Member's share of Losses and items of loss and deduction specially allocated pursuant to Article XVIII(C). The Capital Account of each Member shall be further adjusted as provided in Article XVIII(A). No Member shall be liable to the Company or any other Member or any creditor of the Company solely because of the existence of a negative balance in such Member's Capital Account. ARTICLE VII DISTRIBUTIONS OF CASH AND ALLOCATIONS OF PROFIT AND LOSS (A) MEMBERSHIP INTEREST. "Membership Interest" means the percentage ownership interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which such Member may be entitled as provided in this Agreement and in the Act together with the obligations of such Member to comply with all of the provisions of this Agreement and of the Act. Each Member's Membership Interest shall be as set forth on Exhibit "A" opposite such Member's name. (B) ALLOCATIONS OF COMPANY PROFITS AND COMPANY LOSSES. (1) The terms "Profits" and "Losses" shall mean the net income and net losses, respectively, of the Company as determined for Federal income tax purposes in accordance with the accounting method followed by the Company for such purposes. Company Profits and Losses shall be adjusted as provided in Article XVIII(B). (2) Company Profits or Losses and items of income, gain, loss or deduction shall be allocated to the Members in accordance with their Membership Interests, except as provided in Article XVIII(C). (C) DISTRIBUTION OF CASH. (1) Net Cash Receipts of the Company shall be distributed to the Members in accordance with their respective Membership Interests at such times and in such amounts as shall be determined by the Members. (2) Net Cash Receipts shall be the sum of the amounts listed in paragraphs (a) through (d) below, minus any amounts determined by the Members to be held as reasonable reserves for the operation of the Company, for additional investment by the Company, and for the payment, when due, of the obligations of the Company. (a) All cash receipts derived from operations of the Company after provision for or payment of all liabilities and expenditures of the Company then due; - 2 - (b) Net cash proceeds derived from the sale of any assets, real or personal, of the Company after payment of all liabilities then due and expenses of sale, including, without limitation, brokerage commissions, legal fees and applicable transfer taxes; (c) Net proceeds of awards in condemnation, or payments or settlements in lieu thereof received by the Company, after payment of all liabilities then due and expenses relating thereto; provided, however, that no such net proceeds shall be included herein to the extent that such proceeds are applied to the replacement of any property which has been so taken by any public authority; and (d) Any cash derived from any source not included within the foregoing subsections, other than cash derived from Capital Contributions to the Company, or cash derived from Company borrowing. ARTICLE VIII COMPENSATION OF MEMBERS Reasonable compensation may be paid to any of the Members for services rendered by any of them to the Company. ARTICLE IX FISCAL YEAR The fiscal year of the Company shall end on the 31st day of December of each year. ARTICLE X COMPANY FUNDS AND ASSETS The funds of the Company shall be deposited in such bank account or accounts, and invested in such interest-bearing or non-interest bearing investments, as shall be designated by the Members. Withdrawals from any such accounts may be made by such person or persons designated from time to time by the Members. Company funds and assets shall not be commingled with those of any other person. ARTICLE XI LIMITED LIABILITY OF MEMBERS No Member, employee or agent of the Company shall have any personal liability whatever, whether to the Company, to any of the Members or to the creditors of the Company, for the debts, obligations or liabilities of the Company or any losses beyond the amount committed by the Members to the capital of the Company. ARTICLE XII MANAGEMENT OF THE COMPANY (A) MEETINGS AND VOTING OF MEMBERS. All decisions concerning the management or control of Company business shall be made by the vote of a majority of Membership Interests. No annual meetings of the Members shall be held. Special meetings of the Members for any proper purpose or purposes may be called at any time by any Member. Only business within the purpose or purposes described in the notice (or waiver thereof) may be conducted at a special meeting of the Members. Any action to be taken at any meeting of Members may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holder or holders of the requisite percentage of the Membership Interests necessary to approve such action. Every written consent shall bear the date of signature of each Member who signs the consent. (B) UNCERTIFICATED INTERESTS. The Membership Interests of the Company shall be Uncertificated and shall be in accordance with the Membership Interests listed on Exhibit "A" hereto, as such exhibit may be amended from time to time. - 3 - (C) COMPANY EXPENSES. All of the Company's expenses shall be billed directly to and be paid by the Company. Subject to the approval of all of the Members, (a) all reasonable expenses incurred by any Member, employee or agent in connection with the administration and operation of the Company shall be charged to the Company, and (b) to the extent any Member advances funds on behalf of the Company, all such advances shall be reimbursed by the Company. (D) OFFICERS. (1) GENERALLY. The officers of the Company shall consist of a President, a Secretary, a Treasurer and such other officers, including, for example, Vice Presidents, Assistant Treasurers and Assistant Secretaries, as may from time to time be appointed by the Members. Officers shall be elected by the Members. Each officer shall hold office until such officer's successor is elected and qualified or until such officer's earlier resignation or removal. One person may hold more than one of the offices specified in this section and may have such other titles as the Members may determine. (2) PRESIDENT. The President shall be the chief executive officer of the Company. Subject to the provisions of these bylaws and to the direction of the Members, the President shall have the responsibility for the general management and control of the business and affairs of the Company and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to the President by the Members. The President shall have power to sign all contracts and other instruments of the Company which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Company. (3) VICE PRESIDENT. There may be such number of Vice Presidents as the Members shall appoint. Any such Vice President shall have such powers and duties as may be delegated to the Vice President by the Members. A Vice President may be designated by the Members to perform the duties and exercise the powers of the President in the event of the President's absence or disability. (4) TREASURER/ASSISTANT TREASURER. The Treasurer shall have the responsibility for maintaining the financial records of the Company and shall have custody of all monies and securities of the Company. The Treasurer shall make such disbursements of the funds of the Company as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Company. The Treasurer shall also perform such other duties as the Members may from time to time prescribe. The Members may also elect an Assistant Treasurer, if deemed necessary or appropriate, who shall have such powers and duties of the Treasurer, as determined by the Members. (5) SECRETARY/ASSISTANT SECRETARY. The Secretary shall keep minutes of all meetings of the Members. The Secretary shall have charge of the corporate books and shall perform such other duties as the Members may from time to time prescribe. The Members may also elect an Assistant Secretary, if deemed necessary or appropriate, who shall have such powers and duties of the Secretary, as determined by the Members. (6) DELEGATION OF AUTHORITY. The Members may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof. (7) REMOVAL. Any officer of the Company may be removed at any time, with or without cause, by the Members. ARTICLE XIII BOOKS OF ACCOUNT AND RECORDS Proper and complete records and books of account shall be kept by the Company in which shall be entered fully and accurately all transactions and other matters relative to the Company's business as are usually entered into records and books of account maintained by persons engaged in a business of a like character. The Company's books and records shall be maintained in accordance with GAAP using the calendar year as its fiscal year. Financial statements shall be prepared not less than annually, and copies of the statements shall be available to each Member. The books and records shall at all times be open to reasonable inspection and examination by the Members or their - 4 - duly authorized representatives during reasonable business hours. As soon as is reasonably practicable following the end of each fiscal year of the Company, each Member shall be furnished with a statement showing the Profits, Losses, and distributions allocated to such Member. ARTICLE XIV TRANSFERABILITY OF INTERESTS A transferee may be admitted as a Member of the Company with all of the rights of a Member attributable to the transferred Membership Interest subject to the following conditions: (1) The transfer of the Membership Interest is accomplished by an instrument in writing which shall set forth the intentions of the transferee to acquire the Membership Interest; (2) A counterpart of the instrument of transfer, executed and acknowledged by the transferor is delivered to the Company; (3) The transfer is in compliance with applicable federal and state securities laws; (4) The transferor agrees to pay all reasonable legal fees and filing costs incurred by the Company in connection with the transaction; (5) The transferee agrees to be legally bound by this Agreement by executing and delivering to the Company any documents and instruments necessary in connection with the transferee becoming a Member; and (6) No other or later transfer of the transferred Membership Interest shall be made unless the procedures set forth herein are once again followed. ARTICLE XV DEATH, DISSOLUTION OR BANKRUPTCY OF A MEMBER; NO WITHDRAWAL In the event of the death, dissolution or bankruptcy of any Member, the Company shall terminate and shall be dissolved and liquidated as provided herein and as provided by law unless within ninety (90) days of the date of such event, the holders of a majority of the Membership Interests of all of the other Members, if any, agree to continue the Company. No Member shall be entitled to retire, resign, or otherwise voluntarily withdraw from the Company prior to the dissolution and winding up of the Company. ARTICLE XVI DISSOLUTION AND TERMINATION OF THE COMPANY; LIQUIDATION (A) EVENTS CAUSING DISSOLUTION. The happening of any one of the following events or any events as provided in the Act, shall result in an immediate dissolution of the Company: (1) The expiration of the term set forth in Article IV; (2) The termination of the Company pursuant to Article XV; or (3) The election of the holders of a majority of Membership Interests to dissolve the Company. (B) LIQUIDATION. Upon the dissolution of the Company, the Members shall, as soon as practicable, cause to be prepared a final statement setting forth the assets and liabilities of the Company. A copy of the statement shall be furnished to each Member within ninety (90) days after such dissolution. The Members shall commence to wind up the affairs of the Company and such assets of the Company as the Members or liquidator shall determine shall be liquidated as promptly as practicable, but in an orderly and businesslike manner so as not to involve undue sacrifice. Until final distribution, the Members shall continue to operate the Company. All Company - 5 - Profits and Losses shall be allocated to the Members in accordance with Article VII, and the proceeds shall be applied or distributed in cash or in kind in the following order of priority: (1) To the payment of creditors of the Company (other than Members) in the order of priority provided by law, and to the payment of the expenses of liquidation; (2) To the setting up of such reserves as the Members may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; (3) To each Member in repayment of the principal and accrued interest on any loans made by such Member to the Company; (4) To the Members in proportion to their positive Capital Account balances. ARTICLE XVII EXCULPATION AND INDEMNIFICATION (A) EXCULPATION. No Member shall be liable to the Company or to any Member for any loss suffered by the Company unless such loss is caused by the Member's gross negligence or willful misconduct. No Member shall be liable for errors in judgment or for any acts or omissions that do not constitute gross negligence or willful misconduct. (B) RIGHT TO INDEMNIFICATION. Subject to the limitations and conditions as provided in this Article, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative (hereinafter a "Proceeding"), or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that such person is or was a Member of the Company, or such person is or was the legal representative, director, officer, partner, trustee, employee, agent, or similar functionary of a Member of the Company ("Indemnified Person"), shall be indemnified by the Company to the fullest extent permitted by the 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 Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment) against judgments, penalties (including punitive damages), fines, settlements and reasonable expenses (including, without limitation, attorneys' fees) actually incurred by such Indemnified Person in connection with such Proceeding, provided it is not determined in such Proceeding that the liability of such Indemnified Person is due to gross negligence or willful misconduct, and indemnification under this Article shall continue as to an Indemnified Person who has ceased to serve in the capacity which initially entitled such Indemnified Person to indemnity hereunder. The rights granted pursuant to this Article shall be deemed contract rights, and no amendment, modification or repeal of this Article shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings arising prior to any amendment, modification or repeal. It is expressly acknowledged that the indemnification provided in this Article could involve indemnification for negligence or under theories of strict liability. (C) ADVANCE PAYMENT. The right to indemnification conferred in this Article shall include the right to be paid or reimbursed by the Company the reasonable expenses incurred by an Indemnified Person who was, is or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the Indemnified Person's ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such Indemnified Person in advance of the final disposition of a Proceeding, shall be made only upon delivery to the Company of a written affirmation by such Indemnified Person of such Indemnified Person's good faith belief that such Indemnified Person has met the standard of conduct necessary for indemnification under this Article and a written undertaking, by or on behalf of such Indemnified Person, to repay all amounts so advanced if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified under this Article or otherwise. (D) NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the advancement and payment of expenses conferred in this Article shall not be exclusive of any other right which an Indemnified Person may have or hereafter acquire under any law (common or statutory) or this Agreement. - 6 - (E) INSURANCE. The Company may purchase and maintain insurance, at its expense, to protect itself and any person who is or was an Indemnified Person against any amounts entitled to be indemnified under this Article. (F) SAVINGS CLAUSE. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnified Person to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE XVIII TAX MATTERS (A) MAINTENANCE OF CAPITAL ACCOUNTS. (1) Capital Accounts shall be maintained in accordance with the provisions of Section 704(b) of the Internal Revenue Code of 1986, as amended (the "Code") and the corresponding provisions of any future internal revenue law and Treasury Regulations promulgated thereunder, as amended from time to time, in order that allocations to Members of all items of income, gain, loss and deduction have "substantial economic effect" to the extent possible under such provisions and regulations. Accordingly, appropriate adjustments may be made to Capital Accounts in addition to those set forth in Article VI(B) of this Agreement, such adjustments to be made in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv). (2) If a Member contributes to the Company property to which Section 704(c) of the Code applies, or if a revaluation of Company property occurs under the circumstances described in (3) below, the Capital Accounts of the Members shall be adjusted as provided under Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations. (3) Upon the occurrence of one of the events described in Treasury Regulation section 1.704-1(b)(2)(iv)(f)(5), Capital Accounts shall be adjusted to reflect a revaluation of Company property. (B) ADJUSTMENTS TO PROFITS AND LOSSES. Profits and Losses, as determined for Federal income tax purposes in accordance with the accounting method followed by the Company for such purposes, shall be adjusted as follows: (1) Any income that is exempt from Federal income tax shall be added to such taxable income or loss. (2) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code (relating to expenditures that are not deductible for federal income tax purposes), or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(b), shall be subtracted from such taxable income or loss. (3) If property is reflected on the books of the Company at a book value that differs from the adjusted tax basis of such property, depreciation, income, gain, loss, and deductions with respect to such property shall be determined by reference to such book value in accordance with Treasury Regulation Section 1.704-1(b)(iv)(g). (4) Items that are specially allocated pursuant to Article XVIII(C) shall be excluded from Profits and Losses. (C) ADJUSTMENTS TO ALLOCATIONS OF PROFITS AND LOSSES. The allocations of Profits and Losses and items of income, gain, loss or deduction shall be subject to the following restrictions and adjustments: (1) Except for allocations of Partnership Nonrecourse Deductions and Partner Nonrecourse Deductions in accordance with subsections (2) and (3) below, no Losses or deductions may be allocated to any - 7 - Member to the extent such allocation would result in a Capital Account deficit balance for such Member that exceeds the amount such Member is obligated to restore to the Company or treated as obligated to restore to the Company within the meaning of Treasury Regulation section 1.704-1(b)(2)(ii)(c). (2) Partnership Nonrecourse Deductions as determined under Treasury Regulation section 1.704-2(c) shall be allocated in accordance with Membership Interests, and if there is a net decrease in Partnership Minimum Gain as determined in accordance with Treasury Regulation section 1.704-2(b)(2), then the Members shall be allocated the next available items of income and gain in accordance with the "minimum gain chargeback" requirement of Treasury Regulation Section 1.704-2(f). (3) Partner Nonrecourse Deductions as determined under Treasury Regulation Section 1.704-2(i)(2) shall be allocated to the Member who bears the economic risk of loss in accordance with Treasury Regulation Section 1.704-2(i)(1), and if there is a net decrease in Partner Nonrecourse Debt Minimum Gain as determined under Treasury Regulation section 1.704-2(i)(3), the Member shall be allocated items of income and gain in accordance with the "chargeback" provisions of Treasury Regulation Section 1.704-2(i)(4). (4) Any Member who unexpectedly receives, with respect to the Company, an adjustment, allocation, or distribution described in subsections (4), (5), or (6) of Treasury Regulation section 1.704-1(b)(2)(ii)(d)(3) shall be allocated items of income and gain in accordance with the "qualified income offset" provisions of Treasury Regulation section 1.704-1(b)(2)(ii)(d)(3). (5) If any items are specially allocated to a Member pursuant to this Subsection (C), such Member shall be allocated the next available offsetting items to the extent of such prior special allocation, provided such offsetting allocation is consistent with the restrictions and adjustments set forth in this Subsection (C), so that, to the extent possible, the net amount of Profits, Losses and items of income, gain, loss, and deduction allocated to each Member over the term of the Company is the same as the net amount that would have been allocated to such Member if there has been no special allocations made in accordance with this Subsection (C). (D) TAX ALLOCATIONS WHERE THERE IS A BOOK/TAX DISPARITY. In the event Company property is carried on the books of the Company at a book value that differs from its adjusted tax basis as a result of a contribution to the Company of property to which Section 704(c) of the Code applies, or a revaluation of Company property as described in Subsection (A)(3) of this Article, allocations to the Members of items of income, gain, loss, and deduction as computed for tax purposes with respect to such property shall be made in a manner that takes into account the variation between the adjusted tax basis of such property and its book value as determined under Section 1.704-3 of the Treasury Regulations. Allocations pursuant to this subsection (D) are for tax purposes only, and shall have no effect on Capital Accounts. (E) "TAX MATTERS PARTNER". General Cable Industries, Inc. is hereby designated as the "tax matters partner" under Section 6231(a)(7) of the Code to manage tax proceedings conducted at the Company level by the Internal Revenue Service with respect to Company matters. Expenses of such proceedings shall be paid by the Company. ARTICLE XIX INVESTMENT PURPOSES Each Member represents and warrants that it has acquired its Membership Interest for its own account as part of a transaction exempt from registration under the Securities Act of 1933, as amended, and applicable state law for investment purposes and not with a view to the resale or distribution thereof, and that it has had access to any and all information necessary to arrive at its decision to acquire its Membership Interest. In addition to the restrictions on transfer of Membership Interests otherwise set forth in this Agreement, no Membership Interest may be sold, transferred, assigned or otherwise disposed of by any Member in the absence of registration under the Securities Act of 1933, as amended, and applicable state law, or an opinion of counsel experienced in securities matters and satisfactory to the Company that such assignment or other disposition will not be in violation of said Act or state laws. No Member shall have any right to require registration of its Membership Interest under said Securities Act or applicable state law and, in view of the nature of the Company and its business, such registration is neither contemplated nor likely. Each Member further acknowledges that it understands that the effect of the - 8 - foregoing representation and warranty and restriction on assignment or other disposition is generally to require that such Membership Interest be held indefinitely unless it is registered or an exemption from registration is available. ARTICLE XX MISCELLANEOUS PROVISIONS (A) ENTIRE UNDERSTANDING. This Agreement constitutes the entire understanding among the parties and supersedes any prior arrangements or understandings among them, and may not be modified or amended in any manner other than as set forth herein. (B) GOVERNING LAW. This Agreement and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding any conflict-of-laws rule or principle that might refer the governance or the construction of this Agreement to the law of another jurisdiction. (C) CONSTRUCTION. When from the context it appears appropriate, each term stated either in the singular or the plural shall include the singular and the plural and the pronouns stated in the masculine, the feminine or the neuter shall include the masculine, feminine and the neuter. (D) HEADINGS AND CAPTIONS. The headings and captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of this Agreement or any provisions hereof. (E) INVALIDITY. If any of the provisions of this Agreement or the application of such provision to any person or circumstance shall be held invalid, the remainder of this Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid shall not be affected thereby. (F) COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument, and shall have the same force and effect as though all the signatories had signed a single signature page. (G) PARTIES BOUND. The provisions of this Agreement shall bind, benefit, and be enforceable by or against, the heirs, administrators, personal representatives and, as permitted herein, assigns of the parties hereto. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or of any Member. (H) NO WAIVER. No failure on the part of any Member to exercise and no delay in exercising any right, power or remedy shall be construed as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy preclude any other or further exercise thereof or of any other right, power or remedy. (I) NOTICES AND REPORTS. All notices and reports to the Members shall be addressed to the Member and sent to them at their addresses on file in the principal place of business of the Company. (J) PERSON. For purposes of this Agreement, the term "person" includes without limitation any natural person, joint venture, corporation, partnership, limited liability company, trust, estate, association, government, or governmental agency, or any other entity. (K) AMENDMENTS. This Agreement may be amended or modified from time to time by the vote of a majority of the Membership Interests. - 9 - IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement, intending to be legally bound hereby, on the date first written above. COMPANY: MEMBER: GENERAL CABLE INDUSTRIES LLC GENERAL CABLE INDUSTRIES, BY: GENERAL CABLE INDUSTRIES, INC. INC. BY: /s/ Christopher F. Virgulak BY: /s/ Robert J. Siverd ------------------------------ ----------------------- Name: Christopher F. Virgulak Name: Robert J. Siverd Title: CFO Title: Ex. Vice President - 10 - GENERAL CABLE INDUSTRIES LLC EXHIBIT "A"
CAPITAL CONTRIBUTION CAPITAL CONTRIBUTION AMOUNT MEMBERS MEMBERSHIP INTEREST DESCRIPTION AT NET BOOK VALUE - ------------------------- -------------------- ----------------------- --------------------------- General Cable Industries, 100% Sanger plant M&E $6,953,062 Inc. Lincoln plant M&E 7,117,796 Taunton plant M&E 2,331,259 Montoursville plant M&E 2,677,149
- 11 - EX-3.14 15 l05578aexv3w14.txt EXHIBIT 3.14 EXHIBIT 3.14 [Translation into English of the by-laws of General Cable de Latinoamerica, S.A. de C.V.] CHAPTER I NAME, PURPOSE, DOMICILE AND DURATION FIRST. CORPORATE NAME: The name of the corporation shall be General de Cable de Latinoamerica, which shall always be followed by the words "Sociedad Anonima de Capital Variable", or their abbreviation "S.A. de C.V." SECOND. PURPOSE: The purpose of the corporation shall be: 1. To manufacture, process, repair, install and adapt, to import, export, buy, sell, distribute and, in general, to trade with all kind of metallic and non-metallic products, including electric energy conductors and to carry out all commercial and civil acts deemed necessary or required to achieve the purposes of the corporation, whether executed with the government or with private parties, including the acquisition of real estate properties as may be deemed necessary to achieve the corporate purposes. 2. To manufacture, process, transform, export, import, purchase, sell and construct distribution and storage facilities and, in general, to sell all kind of products and articles, whether in its natural state or after its transformation, which are deemed necessary or required for the manufacturing, processing, sale and distribution of the products mentioned in the above paragraph. 3. The acquisition, by any legal title, exploitation, development, operation and administration of factories, plants, businesses, workshops, warehouses, offices, as well as the design, manufacture, install and adaptation of all kind of materials, machinery, equipment, tools, spare parts and any kind of instruments necessary to achieve the corporate purposes. 4. To buy, sell, lease, negotiate, import, export and carry out all kind of commercial acts over all kind of industrial and commercial equipments, machinery, tools, spare parts, vehicles, and in general, all kind of commercial articles except for those prohibited by law. 5. To acquire and sale all kind of shares, equity interests or any other kind of negotiable instruments related to companies engaged in industrial, tourism or commercial activities or in the rendering of services. 6. To invest in commercial or services companies engaged in the sale of products of, and in the performance of services to, those companies in which the Corporation is a shareholder. 7. To promote, organize and invest in the promotion of all kind of industrial and commercial activities carried out by any civil or commercial corporation, within the Mexican territory or abroad, as well as to acquire, administrate, purchase, lease or interfere in said companies, as shareholder or holder of equity interest, bonds, obligations, or through agreements or any kind of acts, related with the corporate purposes. 8. To receive or make any kind of loans, with or without a guaranty, granting or receiving the corresponding guaranties. 9. To guarantee third parties' obligations, and in general to individually, jointly or severally guarantee third parties obligations, with or without consideration, through the execution of pledge or mortgage agreements, or any other guaranties permitted by law, provided that, in relation to third parties' obligations, said third parties shall directly or indirectly participate in the capital stock of the corporation, or the corporation shall participate, directly or indirectly, in the capital stock of said third parties. Consequently the corporation shall subscribe all negotiable instruments, execute the corresponding agreements and other documents necessaries for the perfection of such guarantees. 10. To issue, accept, draw, endorse, guarantee, discount, certify and execute negotiable instruments and credit operations, with or without guaranty, and payment instruments, as well as all kind of agreements, contracts and legal acts and operations related thereto, whether directly or indirectly, in terms of article 9 of the Negotiable Instruments and Credit Operations Law or any applicable law. 11. To counsel individuals, commercial or civil companies, associations, national or foreign authorities, in connection with economic, financial, accountable, legal matters, as well as to hire technical and professionals services for the rendering of such counseling services. 12. To act as agent, representative, commission agent, broker or attorney-in-fact of industrial or commercial Mexican or non-Mexican companies, and to carry out in its name or in the name of their representatives, all acts or corporate purposes. 13. To acquire, purchase, sell, administrate, lease, promote, intervene, give in guaranty and to dispose of real estate property, personal property or any kind of investments or properties or any kind of industrial or commercial businesses, within the Mexican territory or abroad. 14. To obtain, acquire, possess, grant licenses or to grant the right to use, purchase, assign, lease, to give in guaranty and to use, by means of any legal title, any kind of concessions, permits, franchises, licenses, authorizations, assignments, commissions, inventions, patents, trademarks, commercial names, copyrights coming form or registered in any country, which contribute to the achievement of the corporate purposes. 15. In general, to carry out and execute all operations, agreement, contracts, businesses and legal acts, whether civil, commercial, labor or any other type of act related, directly or indirectly, with the purposes of the corporation or with an activity related to such purposes, in Mexico of abroad, which may be deemed necessary or convenient to achieve the purposes of the corporation. THIRD. DOMICILE: The domicile of the corporation shall be Mexico, Federal District, being able to establish agencies or branches of the corporation anywhere within the United Mexican States or abroad. FOURTH. DURATION: The corporation shall have a duration of 99 (ninety nine) years from the date of its incorporation. FIFTH. NATIONALITY: The corporation is a Mexican corporation. "The current and future non-Mexican shareholders of the corporation agree to be considered as Mexicans (nationals of the United Mexican States) as regards their interest or participation in the corporation, as well as all assets, rights, concessions, participations or interests which may be held by this corporation, or the rights and obligations arising from agreements with Mexican authorities to which this corporation may be a party, and not to invoke the protection of their governments under penalty, in case of failure to comply with this agreement, of forfeiting such interest or participation to the Mexican Nation". CHAPTER II CAPITAL AND SHARES SIXTH. CAPITAL STOCK: The capital of the corporation shall be variable with a minimum fixed portion of $501,000.00 (Five Hundred and One Thousand Pesos 00/100, currency of the United Mexican States), represented by 50,100 (Fifty thousand one hundred) ordinary, nominative Class I shares with a par value of $10.00 (Ten Pesos 00/100) each. The variable portion is unlimited and shall be represented by Class II shares with a par value of $10.00 (Ten Pesos 00/100) each. SEVENTH. DEFINITIVE SHARE CERTIFICATES: The share certificates shall include all data required by Article 125 of the General Law of Commercial Companies and the text of article Fifth of the by-laws. The share certificates shall be signed by the Chairman and the Secretary of the Board of directors and shall have attached to them coupons for the payment of dividends and to exercise the preemptive rights described in article 11. The board of directors shall determine the number of shares that must be covered by each share certificate and the number of coupons to be attached. The Corporation shall have a shareholders registry book as provided in article 128 (One Hundred and Twenty Eight) of the abovementioned law. EIGHTH. PROVISIONAL CERTIFICATES: Until share certificates are issued, provisional share certificates may be issued in order to represent the shares of the corporation as provided by the General Law of Commercial Companies. NINTH. ACCEPTANCE OF THE RIGHTS AND DUTIES INCORPORATED TO THE SHARES AND TO THESE BY-LAWS: The possession of one or more shares will imply the acceptance of the provisions contained in these bylaws, all amendments thereto and the resolutions adopted by the Shareholders Meetings or the board of directors within their corresponding competences, regardless of the opposition and separation rights established in articles 201 and 206 of the General Law of Commercial Companies. TENTH. RECORD IN THE REGISTRY SHARES BOOK OF ANY PURCHASE, TRANSMISSION OR SHARES TRANSFER: Any sale or transfer of shares, whether among shareholders or thirds parties, must be registered in the shareholders registry book of the Corporation. ELEVENTH. INCREASE AND REDUCTIONS IN THE CAPITAL STOCK: The capital stock may be increased or reduced pursuant to the following provisions: a) Increases or reductions in the minimum portion of the capital stock of the corporation shall be approved by the extraordinary shareholders meeting. b) Increases or reductions in the variable portion of the capital stock of the corporation shall be approved by the ordinary shareholders meeting. c) The terms and conditions under which the shares issued pursuant to an increase in the capital of the corporation must be subscribed and paid may be determined by the shareholders meeting that approved said increase in the capital or the Board of Directors or Sole Administrator, as the case may be. d) No new shares shall be issued unless and until all previously issued shares have been fully paid. e) Authorized but non-subscribed shares shall be kept at the corporate treasury of the corporation and shall be subscribed and paid pursuant to the terms and conditions determined by the shareholders meeting which authorized such increase, or in any successive shareholders meeting. If approved, such authorized but non-subscribed shares may be offered by the board of directors in the amount authorized by the ordinary or extraordinary shareholders meeting, for shares representing the variable or shares representing the minimum portion of the capital stock, respectively. f) Only the subscribed and fully paid shares may be reimbursed or withdrew. g) Except as otherwise agreed by the shareholders, the reimbursement and withdraw of shares shall be made proportionally to all shareholders. h) All increases or reductions in the capital stock, once implemented, shall be recorded in the capital stock registry book of the corporation. Each shareholder shall have the preemptive right to subscribe the shares resulting from any capital increase, in proportion to the number of shares owned by each shareholder prior to the capital increase, and without considering the shares owned by the shareholders not exercising their preemptive right. Said preemptive right shall be exercised within fifteen (15) days immediately following the date of the publication of the resolution declaring the capital increase in the official gazette of the corporate domicile, or, in the absence of such publication, of the date on which each shareholder acknowledges in writing that he has received notice of such resolution CHAPTER III MEETINGS OF SHAREHOLDERS TWELFTH. SHAREHOLDERS MEETINGS: The shareholders meeting is the supreme authority of the corporation; which shall resolve and confirm all its acts and operations and its resolutions shall be executed by the person designated by it and, if such designation is not made, by the board of directors. The resolutions approved by the shareholders out of a meeting, if approved by the unanimous vote of all shareholders entitled to vote or by all the shareholders within a specific category, shall have, for all legal purposes, the same validity as the resolutions adopted at a legally convened general or special meeting of shareholders, respectively, provided that said resolutions are confirmed in writing and transcribed in the shareholders meeting minutes book referred to in article 21 of the bylaws. Ordinary shareholders meetings shall be held in the corporate domicile at least once each year, on the date specified by the board of directors within the first 4 months immediately following the close of each fiscal year. Additionally, ordinary shareholders meetings shall be held whenever called pursuant these bylaws or law. Extraordinary shareholders meetings shall be held whenever called. THIRTEENTH. CALLS: Notices for ordinary or extraordinary shareholders meetings shall be made by the board of directors, except for the rights granted to the shareholders and examiners by these bylaws or the applicable laws. The notice shall be published in a daily newspaper of large circulation of the domicile of the corporation or, if decided by the board of directors, in the official gazette of the state of the domicile of the corporation is located. The notice for a meeting shall be published within at least 8 (eight) days prior to the date appointed for any meeting. The notice of a meeting shall contain all information required by law. Notices for a shareholders meeting to be held in second call shall be published within at least 3 days prior to the date appointed for such meeting. The notice shall not be necessary if all the shares entitled to vote at a meeting are present at such meeting. FOURTEENTH. SHAREHOLDERS ASSISTANCE RIGTH: Except for the provisions set forth in the General Law of Commercial Companies regarding the deposit of shares in order to assist and vote in the shareholders meetings, it would be sufficient for a shareholder to assist and vote in any shareholders meeting if such shareholder is recorded, within at least 24 hours before the meeting, in shareholders registry book of the Corporation pursuant to article 128 of the General Law of Commercial Companies and article 8 of these bylaws. Shareholders shall have the right to assist to any meeting of shareholders personally or through a representative, being sufficient for that purposes a proxy letter executed before two witnesses. FIFTEENTH. QUORUMS: I. For a quorum to exist at an ordinary meeting of shareholders held upon first call, the holders of at least Fifty percent (50%) of the shares entitled to vote at such meeting must be present personally or by proxy. A quorum shall exist at any ordinary meeting of shareholders held upon second or subsequent call regardless of the number of shares held by the Shareholders present personally or by proxy. II. For a quorum to exist at any extraordinary meeting of Shareholders held upon first call, the holders of at least Seventy Five percent (75%) of the shares entitled to vote at such meeting must be represented thereat. A quorum shall exist at any extraordinary meeting of Shareholders held upon second or subsequent call if at least 51% of the shares entitled to vote at such meeting are represented thereat. SIXTEENTH. MEETINGS: Shareholders meetings shall be presided by the chairman of the board of directors and assisted by the Secretary of such Board; provided that, in the event any of said persons is absent, the shareholders shall appoint by majority the persons acting as their substitutes. The meeting shall appoint two recount clerks who shall be elected, by majority of votes, from the shareholders or their representatives present at the meeting. The recount clerks shall prepare an attendance list and certify the existence of a quorum. If a quorum exists, the President shall declare the meeting legally convened and will proceed to attend the matters listed in the agenda. SEVENTEENTH. VOTINGS: Each share shall have the right to cast one vote at any meeting of shareholders. The voting shall be economic, unless the shareholders agree otherwise. I. To validly adopt resolutions at an ordinary meeting of shareholders, whether held upon first or subsequent call, the affirmative vote of shareholders representing at least majority of the shares present at the meeting shall be required. II. To validly adopt resolutions at any extraordinary meeting of shareholders, whether held upon first or subsequent call, the affirmative vote of shareholders representing at least fifty one percent (51%) of the corporate capital stock shall be required. EIGHTEENTH. GENERAL EXTRAORDINARY MEETINGS: Extraordinary meetings shall be those called by the board of directors to deal with any of the following matters: a) Extension of the duration of the corporation; b) Dissolution of the corporation prior to the duration stipulated in the charter and by-laws; c) Increase or reduction of the minimum part of the capital of the corporation; d) Change in the corporate purpose; e) Change in the nationality of the corporation; f) Change in the nature of the corporation; g) Merger of the corporation; h) Spin-off of the corporation; i) Amortization by the Corporation of their own shares and issuance of preferred shares; j) Issuance of bonds and obligations; k) Any amendments to the charter and by-laws; l) Any other matter for which a special quorum is established. NINETEENTH. MEETING MINUTES: A minute of all shareholders meetings shall be prepared and transcribed in shareholders meetings minutes book. The minute shall contain the date of the meeting and the matters discussed therein, and must be signed by the chairman and secretary of the meeting, and the examiner(s) that were present at the meeting. TWENTIETH. FORMALIZATION OF SHAREHOLDERS MEETINGS AND RESOLUTIONS: All extraordinary shareholders meetings minutes shall be formalized before a Notary Public and recorded in the Public Registry of Property and Commerce of the domicile of the corporation. Ordinary shareholders' meetings minutes and shareholders' resolutions not transcribed in the shareholders' meetings minutes book, shall be formalized before a Notary Public. CHAPTER IV MANAGEMENT OF THE CORPORATION TWENTIETH FIRST. ADMINISTRATION: The management of the corporation shall be vested in a board of directors, which shall be composed by the number of members and alternates determined by the shareholders meeting, pursuant to article 24 below. The members of the board may or may not be shareholders. The members of the board shall be elected for a one-year term from the date of their appointment and shall continue in office until their successors have been appointed and have taken office. TWENTIETH SECOND. APPOINTMENT OF THE CHAIRMAN AND THE SECRETARY: If the shareholders' meeting does not appoint the chairman and the secretary of the board of directors, said board of directors, within its first meeting, shall appoint a chairman among its members who shall also be the chairman of the corporation and shall have tie-breaking vote. The chairman shall be substituted during its absence by the member of the board of directors appointed by the shareholders' meeting or by the members of the board. During said first meeting, the board of directors shall appoint a secretary, who may or may not be a member of the board, and who shall be in office until the next shareholders' meeting appointing new members of the board of directors. TWENTIETH THIRD. CHAIRMAN OF THE BOARD OF DIRECTORS: The chairman of the board of directors shall represent to the corporation before all kind of corporations, authorities or individuals; it shall supervise the corporate operations and shall secure the compliance of the provisions of these bylaws and of the resolutions and provisions of the shareholders' meeting and the board of directors, as the case may be. TWENTIETH FOURTH. CONSIDERATION TO THE MEMBERS OF THE BOARD OF DIRECTORS: As consideration for their services, the members of the board shall receive the amount established by the ordinary shareholders meeting.. TWENTIETH FIFTH: GUARANTEE BY THE DIRECTORS AND OFFICERS: Each member of the board, as well as the Directors and/or Managers, shall deliver the guaranty approved by the shareholders' meeting in order to secure the fulfillment of their duties. TWENTIETH SIXTH: BOARD OF DIRECTORS' MEETINGS: The meetings of the board of directors shall be held in the domicile of the corporation or in any other place approved by said board of directors. The board of directors meetings shall be held at any time, whenever called by the chairman, secretary or two members of the board of directors, by means of special written notice addressed to the members or in any other manner considered adequate. The notice shall containing the hour, date, place and agenda for the meeting. Resolutions adopted outside of a meeting by the unanimous vote of all the members of the board of directors or their respective alternates, shall have all legal effects as if they had been adopted in a meeting of the board of directors, as long as they are confirmed in writing and transcribed in the respective minutes book referred to in article 29 of these bylaws. TWENTIETH SEVENTH: QUORUM AND VOTING: In order for the meetings of the board of directors and the resolutions adopted therein to be considered as valid, the attendance of the majority of the members of the board, or their corresponding alternates, shall be necessary. TWENTIETH EIGHTH: FACULTIES, OBLIGATIONS AND POWERS OF ATTORNEY OF THE BOARD OF DIRECTORS: The board of directors shall be the representative of the corporation. Except for the matters requiring a special quorum or voting and except for restrictions imposed by the shareholders' meeting, the board of directors shall have the following powers: 1. General power of attorney to open and cancel bank accounts in the name of the corporation, as well as to withdraw against such accounts, and to appoint the persons authorized to withdraw against such accounts. 2. General power of attorney to appoint and remove the Directors, General Manager, Managers, Attorneys-in-fact and Agents and employees of the corporation, and to determine their attributions, liabilities, working conditions and compensation. 3. To acquire participation in the capital of others companies, associations or any other kind of organizations. 4. To delegate its faculties to one or more of its members for specific purposes and with specific attributions in order to exercise said faculties. 5. To call to ordinary and extraordinary shareholders meetings, to execute the resolutions of the shareholders meetings and, in general, to carry out all acts and operations necessary or convenient to achieve the corporate purposes of the corporation, except for those expressly reserved to the shareholders meeting by these bylaws or the applicable laws. 6. GENERAL POWER OF ATTORNEY FOR LAWSUITS AND COLLECTIONS to represent the corporation, with all powers which, according to law, must be expressly set forth, as provided in the first paragraph of article 2,554 of the Civil Code for the Federal District and the corresponding articles of the Federal Civil Code and the Civil Codes of the States, and article 2,587 of the Civil Code for the Federal District and the corresponding articles of the Federal Civil Code and the Civil Codes of the States, and the first paragraph of the article 2,448, and article 2,481 of the Civil Code for the State of Nuevo Leon, and the corresponding articles of the Civil Codes of the States. Consequently, the ATTORNEY-IN FACT, board of directors of General Cable de Latinoamerica, S.A. de C.V., is hereby empowered to represent the corporation before individuals and legal persons and before all kind of authorities, whether judicially (civil or criminal), administrative or labor authorities, federal, state or municipal, within the Mexican Republic or abroad, within a judicial procedure or not; to file and desist from all kind of legal procedures, whether civil, commercial, administrative, criminal or labor actions, including the amparo procedure; to follow up in all legal procedures and to desist from them; to file appeals against records of court proceedings and interlocutory and final judgments; to file and withdraw criminal complaints, submit accusations, assist the Attorney General and grant pardons; to desist; to transact; to submit to arbitration; to make and answer questions; to recuse Judges and any other judicial authorities with or without a cause or under oath, as well as to appoint experts. 7. GENERAL POWER OF ATTORNEY FOR LABOR REPRESENTATION, to represent the Corporation in labor trails or proceedings in the terms and for the purposes referred to in articles 11, 46, 47, 134 paragraph III, 523, 692 paragraphs II and III, 694, 695, 786, 787, 873, 874, 876, 878, 880, 883, 884, 899, chapters XII and XVII of the title fourteen of the Federal Labor Law, with the attributions, obligations and rights referred to in said articles. Likewise, the board of directors shall represent he corporation pursuant to article 11 of said Federal Labor Law. In exercising the POWER OF ATTORNEY granted herein, the board of directors shall have the following powers and faculties: The board of directors shall be entitled to act before unions and in connection with any disputes or conflicts arising with said unions; to act before employees individually considered and in connection with all disputes arising with said employees; in general, to carry out all kind of labor acts and to exercise said acts before the labor authorities referred to in article 523 of the Federal Labor Law; the board of directors shall be entitled to appear before the labor courts, whether local or federal. Consequently, the board of directors shall be entitled to be part of any labor proceeding with all faculties mentioned herein, and shall have the legal representation of the corporation in terms of articles 11, 46, 47, article 692 paragraphs II and III, 787, 788 of the Federal Labor Law, being entitled to make and answer questions pursuant to article 876, to be part of the labor hearing described article 873, in term of articles 875, 876 paragraphs I and VI, 877, 878, 879 and 880, to appear to labor courts in order to offer proofs pursuant to article 873 and 874 of the Federal Labor Law, as well as the power to conciliate, transact and to take all kind of decisions, to negotiate and execute judicial or extrajudicial labor agreements. The board of directors shall represent the corporation in all kind of trials and individual or collectively labor proceedings before any kind of authorities; it may execute and rescind labor agreements, the reinstatement of employees, to answer all kind of law suits, claims or notices, ratifying herein all acts carried out by the board of directors on said hearings or proceedings. 8. GENERAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, with all general faculties to administrate the business and social assets, pursuant the second paragraph of article 2554 of the Civil Code for the Federal District and the corresponding articles of the Federal Civil Code and the Civil Codes of the States and article 2448 of the Civil Code for the State of Nuevo Leon, and the corresponding articles of the Civil Codes of the States. 9. GENERAL POWER OF ATTORNEY FOR ACTS OF OWNERSHIP, pursuant to the third paragraph of article 2554 of the Civil Code for the Federal District and of the Federal Civil Code, and the corresponding third paragraph of article 2448 of the Civil Code for the State of Nuevo Leon and the corresponding articles of the Civil Codes of the States. 10. GENERAL POWER OF ATTORNEY to issue, accept, draw, endorse, guarantee, certify, discount, and to validly subscribe all kind of negotiable instruments and credit transactions, with or without a guaranty, as well as all kind of agreements, contracts, businesses, legal acts and operations directly or indirectly related to said acts, pursuant the articles 9 section I final paragraph, 85, 174 and 196 of the General Law of Negotiable Instruments and Credit Transactions; to guarantee, in name of the corporation, obligations of the corporation or third parties' obligations, whether individually, jointly or severally, with or without a consideration, through mortgage, pledge or any kind of guarantee. The board of directors shall be entitled to subscribe and execute all negotiable instruments, agreements, contracts and all documents deemed necessary or convenient in order for the perfection of said guarantees, including the power to draw checks, to make use of the funds deposited in bank accounts or funds in other institutions and to oblige the corporation in any legally form deemed necessary within its authorized faculties and operations. 11. GENERAL POWER OF ATTORNEY to grant and revoke general and special powers of attorney; to delegate the powers granted to it, whether total or partially, by granting to the appointed attorneys-in-fact the faculties considered convenient by the board of directors within the powers granted to said board, without loosing the powers granted to said board of directors. The board of directors shall be entitled exercise its powers and duties within the Mexican Republic or abroad, and before all kind of individuals and legal persons, and before all kind of authorities without distinction, whether federal, local, municipal, judicial, administrative, legislative, tax or labor authorities, such as the Instituto Mexicano del Seguro Social, the Instituto del Fondo Nacional de Vivienda para los Trabajadores, del Fondo de Fomento y Garantia para el Consumo de los Trabajadores and before all kind of arbitrators, negotiators or mediators. TWENTIETH NINTH. BOARD OF DIRECTORS SESSION MINUTES: Minutes of all meetings of the board of directors shall be prepared and transcribed in the board of directors' meetings minutes book. Said minutes shall contain the date, the matters discussed and the resolutions adopted at the meeting. The minutes shall be signed by the chairman and secretary of the meeting, and all members and examiners that were present at the meeting shall sign the corresponding attendance list. THIRTIETH. GENERAL MANGER OF THE CORPORATION: The general manager of the corporation shall be of Mexican nationality or other any other nationality approved by the board of directors. CHAPTER V SURVEILLANCE OF THE CORPORATION THIRTIETH FIRST. EXAMINERS: The surveillance of the corporation shall be entrusted to 1 Examiner and its corresponding alternate, to be appointed by the shareholders meeting. The examiner shall remain in office for one year, or until its successor has been appointed and has taken office. The Examiner of the corporation may be re-elected. Notwithstanding the foregoing, dissenting shareholders shall have the right to appoint 1 examiner and its corresponding alternate, provided that the number of shares owned by said dissenting shareholders represent at least 25% of the capital stock. In such case, the surveillance of the corporation shall entrusted to the examiners appointed pursuant to this paragraph and their functions shall be carried out by each one of said examiners, and being entitled to the same consideration for their services. The examiners may or may not be partners of the Corporation. In the event no appointment of alternate examiners has been made and in the event an examiner passes away, resigns or is removed by the shareholders meeting, for any reason whatsoever, before the expiration of its term, then the ordinary shareholders meeting shall take all steps necessary in order to appoint a new examiner. THIRTIETH SECOND. OBLIGATIONS AND ATRIBUTIONS OF THE EXAMINERS: The examiners shall have obligations and attributions described in article 166 of the General Law of Commercial Companies. THIRTIETH THIRD. EXAMINERS REMUNERATION: The examiners shall been compensated for their services in the amount resolved by the ordinary shareholders meeting. The payment of such consideration shall be made during the corresponding fiscal year. THIRTIETH FOURTH. EXAMINERS GUARANTEE: The examiners shall deliver the guarantee required by the general shareholders meeting in order to secure the exact performance of their duties. CHAPTER VI FISCAL YEAR AND FINANCIAL STATEMENTS THIRTIETH FIFTH. FISCAL YEAR: The fiscal year of the corporation shall run together with each calendar year. THIRTIETH SIXTH. FINANCIAL STATEMENTS: Within the 4 months following the end of each fiscal year, a report reflecting the financial situation of the corporation pursuant to Mexican GAAPs and a balance sheet containing at least the information referred to in article 172 of the General Law of Commercial Companies shall be prepared. THIRTIETH SEVENTH. SHAREHOLDERS INFORMATION: The preparation of the balance sheet and the financial statements shall be entrusted to the board of directors. After its approval by the board of directors, the abovementioned documents, together with the supporting documentation, the management report and the Examiners report, shall be submitted to the shareholders at least 15 days prior to the date on which the ordinary shareholders will be held. THIRTIETH EIGHTH. PROFITS ALLOCATION: The annual net profits resulting after the amortization, depreciation and penalization, as well as the amount calculated to the payment of the add tax value, shall be applied as follows: a) Five percent of the net profits shall be separated to form the legal reserve, until such reserve equals at least one-fifth of the capital of the corporation. b) The amount necessary in order to comply with the corporation's duties imposed by the Federal Labor Law regarding distribution of profits among the employees shall be separated. c) The amount considered necessary by the shareholders meeting in order to constitute the reinvestment fund shall be separated. d) The amount considered necessary by the shareholders meeting in order to constitute the prevention fund shall be separated. e) The amount remaining shall be allocated among all shareholders, proportionally to the number of shares owned by each shareholder in the capital stock as provided by the shareholders meeting. THIRTIETH NINTH. PAYMENT OF DIVIDENDS: Dividends declared by the shareholders meeting shall be paid to the shareholders by the board of directors, in the manner and on the terms determined by the shareholders meeting, which determination may be delegated by the shareholders meeting to the board of directors. FORTIETH. LOSSES: Losses of the corporation shall been supported by the shareholders in proportion to their number of shares and limited to the nominal value of said shares. CHAPTER VII DISSOLUTION AND LIQUIDATION OF THE CORPORATION FORTIETH FIRST. DISSOLUTION: The corporation shall be dissolved in the cases set forth in Article 229 of the General Law of Commercial Companies. FORTIETH SECOND. LIQUIDATION: During the dissolution of the corporation, the general shareholders meeting shall appoint one or more liquidators, which may or may not be shareholders of the corporation, and shall determine their consideration and the term to finalize the dissolution of the corporation. In the event of more than one liquidator, such liquidators shall act jointly, except for the faculties granted by the shareholder meeting that may be exercised separately. FORTIETH THIRD. LIQUIDATION BASES: The liquidator or liquidators shall carry out the liquidation of the corporation under the following basis: 1) Pending operations of the corporation at the time of its dissolution shall be concluded. 2) All accounts payable shall be collected and all accounts payable shall be paid, being authorized to sale the assets of the corporation if necessary. 3) The liquidators shall prepare the final financial information, which shall be submitted to the approval of the shareholders meeting. 4) The liquidators shall pay to the shareholders their shares in the manner determined by the shareholders meeting. FORTIETH FOURTH. FACULTIES OF THE MEETING DURING LIQUIDATION: During the liquidation of the corporation, the shareholders meeting shall have all necessary faculties to determine, in addition to the legal provisions and norms contained in these bylaw, the rules that shall control the liquidators performance. During the liquidation process, the shareholders meeting may be called by any liquidator or examiner, since liquidators shall have the same authority and obligations as the managers and officers during the normal existence of the Company. FORTIETH FIFTH. APPLICATION OF THE BY-LAWS DURING THE LIQUIDATION: During the liquidation process, the provisions of these bylaws shall continue governing the corporation, except for those provisions regarding the board of directors, since the appointment of liquidators shall revoke all powers granted to such board of directors. The liquidator shall substitute the board of directors in their functions. CHAPTER VIII JURISDICTIONAL BINDING AND APLICABLE LAW FORTIETH SIXTH. For the resolution of any disputes arising between the corporation and its shareholders, or among the shareholders in such character, the shareholders of the corporation agree to submit themselves to the jurisdiction of the court of the first judicial district of the State of Nuevo Leon, United Mexican States, with residence in the City of Monterrey, and to the laws, regulations and other dispositions applicable in said state, expressly waiving their right to be submitted to any other courts or jurisdictions according to their present or future domiciles or for any other reason. EX-3.15 16 l05578aexv3w15.txt EXHIBIT 3.15 EXHIBIT 3.15 CERTIFICATE OF FORMATION STATE OF DELAWARE SECRETARY OF STATE OF DIVISION OF CORPORATIONS FILED 1):00 AM 11/26/2001 GENERAL CABLE MANAGEMENT LLC 010594178 -- 3459779 1. The name of me limited liability company is GENERAL CABLE MANAGEMENIT LLC. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of GENERAL CABLE MANAGEMENT LLC as of November 21, 2001. GENERAL CABLE MANAGEMENT LLC By: General Cable Industries, Inc. Its: Sole Member By: /s/Robert J. Siverd ----------------------------------- Name: Robert J. Siverd Title: Executive Vice President EX-3.16 17 l05578aexv3w16.txt EXHIBIT 3.16 EXHIBIT 3.16 OPERATING AGREEMENT OF GENERAL CABLE MANAGEMENT LLC A DELAWARE LIMITED LIABILITY COMPANY This OPERATING AGREEMENT ("Agreement") of GENERAL CABLE MANAGEMENT LLC (the "Company"), is entered into as of December 1, 2001, by and among the Company and General Cable Industries, Inc., a Delaware corporation (individually a "Member" and collectively with all members that join in and agree to be bound hereby after the date first written above, the "Members"). In consideration of the mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I FORMATION OF LIMITED LIABILITY COMPANY The Certificate of Formation for the Company has been filed and the Company has been formed pursuant to the Delaware Limited Liability Company Act (the "Act"). The Company shall be operated in accordance with the terms and conditions of this Agreement. The Member intends that the Company be subject to federal and state income taxation as a division of the Member. In the event additional Members join in, the Members expressly do not intend hereby to form a partnership (including, without limitation, a limited partnership) or joint venture. However, the Members intend that the Company be subject to federal and state taxation as a partnership. This Agreement shall not be construed to suggest otherwise. ARTICLE II NAME The business of the Company shall be conducted under the name GENERAL CABLE MANAGEMENT LLC, or such other name as the Members may hereafter designate. ARTICLE III PURPOSE The purpose of the Company is to engage in any business or activity that now or hereafter is not prohibited by the law of the jurisdiction in which the Company engages in that business. ARTICLE IV TERM The term of the Company shall commence on the date of filing of the Certificate of Formation and shall be perpetual, unless earlier terminated as provided in Article XVI of this Agreement. ARTICLE V REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL PLACE OF BUSINESS The registered agent of the Company in the State of Delaware shall be as designated on the Certificate of Formation, or such other person as the Members may hereafter designate in the manner provided by law. The initial registered agent, as listed on the Certificate of Formation, is The Corporation Trust Company. The registered office of the Company required by the Act to be maintained in the State of Delaware shall be as designated on the Certificate of Formation, or such other place in Delaware as the Members may hereafter designate in the manner provided bylaw. The initial registered office of the Company, as listed on the Certificate of Formation, is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington Delaware 19801. The principal place of business of the Company shall be located at such address as may be designated by the Members. 1 ARTICLE VI CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS (A) CAPITAL CONTRIBUTIONS. The Capital Contributions of a Member shall be the amount of cash and the fair market value of any property (net of any liability to which such property is subject) contributed by the Member to the Company. Each Member shall contribute to the Company as such Member's initial Capital Contribution the amount of cash and/or the property set forth next to such Member's name on Exhibit A attached hereto. No Member shall be obligated to make an additional Capital Contribution or a loan to the Company except as expressly provided herein. If additional finds are advanced to the Company by the Members, such funds shall be additional Capital Contributions to the extent such funds are advanced pro rata by the Members in accordance with their Membership Interests in the Company. Any funds advanced in excess of a Members pro rata share shall be a loan from such Member, the terms of which shall be established at the time of such advance. (B) CAPITAL ACCOUNTS, An individual Capital Account shall be maintained for each Member. The Capital Account of each Member shall consist of such Member's initial Capital Contribution, increased by (1) any additional Capital Contributions made by such Member and (2) such Member's share of Profits and items of income and gain specially allocated pursuant to Article XVIII(C), and decreased by (3) distributions to such Member, and (4) such Member's share of Losses and items of loss and deduction specially allocated pursuant to Article XVIII(C). The Capital Account of each Member shall be further adjusted as provided in Article XVIII(A). No Member shall be liable to the Company or any other Member or any creditor of the Company solely because of the existence of a negative balance in such Member's Capital Account. ARTICLE VII DISTRIBUTIONS OF CASH AND ALLOCATIONS OF PROFIT AND LOSS (A) MEMBERSHIP INTEREST. "MEMBERSHIP Interest" means the percentage ownership interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which such Member may be entitled as provided in this Agreement and in the Act together with the obligations of such Member to comply with all of the provisions of this Agreement and of the Act. Each Member's Membership Interest shall be as set forth on Exhibit `A" opposite such Member's name. (B) ALLOCATIONS OF COMPANY PROFITS ANTI COMPANY LOSSES. (I) The terms "Profits" and "Losses" shall mean the net income and net losses, respectively, of the Company as determined for Federal income tax purposes in accordance with the accounting method followed by the Company for such purposes. Company Profits and Losses shall be adjusted as provided in Article XVIII(B). (2) Company Profits or Losses and items of income, gain, loss or deduction shall be allocated to the Members in accordance with their Membership Interests, except as provided in Article XVIII(C). (C) DISTRIBUTION OF CASH. (1) Net Cash Receipts of the Company shall be distributed to the Members in accordance with their respective Membership Interests at such times and in such amounts as shall be determined by the Members. (2) Net Cash Receipts shall be the sum of the amounts listed in paragraphs (a) through (d) below, minus any amounts determined by the Members to be held as reasonable reserves for the operation of the Company, for additional investment by the Company, and for the payment, when due, of the obligations of the Company. (a) All cash receipts derived from operations of the Company after provision for or payment of all liabilities and expenditures of the Company then due; (b) Net cash proceeds derived from the sale of any assets, real or personal, of the Company after payment of all liabilities then due and expenses of sale, including, without limitation, brokerage commissions, legal fees and applicable transfer taxes; 2 (c) Net proceeds of awards in condemnation, or payments or settlements in lieu thereof received by the Company, after payment of all liabilities then due and expenses relating thereto; provided, however, that no such net proceeds shall be included herein to the extent that such proceeds are applied to the replacement of any property which has been so taken by any public authority; and (d) Any cash derived from any source not included within the foregoing subsections, other than cash derived from Capital Contributions to the Company, or cash derived from Company borrowing. ARTICLE VIII COMPENSATION OF MEMBERS Reasonable compensation may be paid to any of the Members for services rendered by any of them to the Company. ARTICLE IX FISCAL YEAR The fiscal year of the Company shall end on the 31st day of December of each year. ARTICLE X COMPANY FUNDS AND ASSETS The funds of the Company shall be deposited in such bank account or accounts, and invested in such interest-bearing or non-interest bearing investments, as shall he designated by the Members. Withdrawals from any such accounts may be made by such person or persons designated from time to time by the Members. Company finds and assets shall not be commingled with those of any other person. ARTICLE XI LIMITED LIABILITY OF MEMBERS No Member, employee or agent of the Company shall have any personal liability whatever, whether to the Company, to any of the Members or to the creditors of the Company, for the debts, obligations or liabilities of the Company or any losses beyond the amount committed by the Members to the capital of the Company. ARTICLE XII MANAGEMENT OF THE COMPANY (A) MEETINGS AND VOTING OF MEMBERS. All decisions concerning the management or control of Company business shall be made by the vote of a majority of Membership Interests. No annual meetings of the Members shall be held. Special meetings of the Members for any proper purpose or purposes may be called at any time by any Member. Only business within the purpose or purposes described in the notice (or waiver thereof may be conducted at a special meeting of the Members. Any action to be taken at any meeting of Members may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holder or holders of the requisite percentage of the Membership Interests necessary to approve such action. Every written consent shall bear the date of signature of each Member who signs the consent. (B) UNCERTIFICATED INTERESTS. The Membership Interests of the Company shall be Uncertificated and shall be in accordance with the Membership Interests listed on Exhibit A hereto, as such exhibit may be amended from time to time. (C) COMPANY EXPENSES. All of the Company's expenses shall be billed directly to and be paid by the Company. Subject to the approval of all of the Members, (a) all reasonable expenses incurred by any Member, 3 employee or agent in connection with the administration and operation of the Company shall be charged to the Company, and (b) to the extent any Member advances funds on behalf of the Company, all such advances shall be reimbursed by the Company. (D) OFFICERS. (1) GENERALLY. The officers of the Company shall consist of a President, a Secretary, a Treasurer and such other officers, including, for example, Vice Presidents, Assistant Treasurers and Assistant Secretaries, as may from time to time be appointed by the Members. Officers shall be elected by the Members. Each officer shall hold office until such officer's successor is elected and qualified or until such officer's earlier resignation or removal. One person may hold more than one of the offices specified in this section and may have such other titles as the Members may determine. (2) PRESIDENT. The President shall be the chief executive officer of the Company. Subject to the provisions of these bylaws and to the direction of the Members, the President shall have the responsibility for the general management and control of the business and affairs of the Company and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to the President by the Members. The President shall have power to sign all contracts and other instruments of the Company which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Company. (3) VICE PRESIDENT. There may be such number of Vice Presidents as the Members shall appoint. Any such Vice President shall have such powers and duties as may be delegated to the Vice President by the Members. A Vice President may be designated by the Members to perform the duties and exercise the powers of the President in the event of the President's absence or disability. (4) TREASURER/ASSISTANT TREASURER. The Treasurer shall have the responsibility for maintaining the financial records of the Company and shall have custody of all monies and securities of the Company. The Treasurer shall make such disbursements of the funds of the Company as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Company. The Treasurer shall also perform such other duties as the Members may from time to time prescribe. The Members may also elect an Assistant Treasurer, if deemed necessary or appropriate, who shall have such powers and duties of the Treasurer, as determined by the Members. (5) SECRETARY/ASSISTANT SECRETARY. The Secretary shall keep minutes of all meetings of the Members The Secretary shall have charge of the corporate books and shall perform such other duties as the Members may from time to time prescribe. The Members may also elect an Assistant Secretary, if deemed necessary or appropriate, who shall have such powers and duties of the Secretary, as determined by the Members. (6) DELEGATION OF AUTHORITY. The Members may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof. (7) REMOVAL. Any officer of the Company may be removed at any time, with or without cause, by the Members. ARTICLE XIII BOOKS OF ACCOUNT AND RECORDS Proper and complete records and books of account shall be kept by the Company in which shall be entered fully and accurately all transactions and other matters relative to the Company's business as are usually entered into records and books of account maintained by persons engaged in a business of a like character. The Company's books and records shall be maintained in accordance with GA.AP using the calendar year as its fiscal year. Financial statements shall be prepared not less than annually, and copies of the statements shall be available to each Member. The books and records shall at all times be open to reasonable inspection and examination by the Members or their duly authorized representatives during reasonable business hours. As soon as is reasonably practicable following the end of each 4 fiscal year of the Company, each Member shall be furnished with a statement showing the Profits, Losses, and distributions allocated to such Member. ARTICLE XIV TRANSFERABILITY OF INTERESTS A transferee may be admitted as a Member of the Company with all of the rights of a Member attributable to the transferred Membership Interest subject to the following conditions: (1) The transfer of the Membership Interest is accomplished by an instrument in writing which shall set forth the intentions of the transferee to acquire the Membership Interest; (2) A counterpart of the instrument of transfer, executed and acknowledged by the transferor is delivered to the Company; (3) The transfer is in compliance with applicable federal and state securities laws; (4) The transferor agrees to pay all reasonable legal fees and filing costs incurred by the Company in connection with the transaction; (5) The transferee agrees to be legally bound by this Agreement by executing and delivering to the Company any documents and instruments necessary in connection with the transferee becoming a Member; and (6) No other or later transfer of the transferred Membership Interest shall be made unless the procedures set forth herein are once again followed. ARTICLE XV DEATH, DISSOLUTION OR BANKRUPTCY OF A MEMBER; NO WITHDRAWAL In the event of the death, dissolution or bankruptcy of any Member, the Company shall terminate and shall be dissolved and liquidated as provided herein and as provided by law unless within ninety (90) days of the date of such event, the holders of a majority of the Membership Interests of all of the other Members, if any, agree to continue the Company. No Member shall be entitled to retire, resign, or otherwise voluntarily withdraw from the Company prior to the dissolution and winding up of the Company. ARTICLE XVI DISSOLUTION AND TERMINATION OF THE COMPANY; LIQUIDATION (A) EVENTS CAUSING DISSOLUTION. The happening of any one of the following events or any events as provided in the Act, shall result in an immediate dissolution of the Company: (1) The expiration of the term set forth in Article IV; (2) The termination of the Company pursuant to Article XV; or (3) The election of the holders of a majority of Membership Interests to dissolve the Company. (B) LIQUIDATION. Upon the dissolution of the Company, the Members shall, as soon as practicable, cause to be prepared a final statement setting forth the assets and liabilities of the Company. A copy of the statement shall be furnished to each Member within ninety (90) days after such dissolution. The Members shall commence to wind up the affairs of the Company and such assets of the Company as the Members or liquidator shall determine shall be liquidated as promptly as practicable, but in an orderly and businesslike manner so as not to involve undue 5 sacrifice. Until final distribution, the Members shall continue to operate the Company. All Company Profits and Losses shall be allocated to the Members in accordance with Article VII, and the proceeds shall be applied or distributed in cash or in kind in the following order of priority: (1) To the payment of creditors of the Company (other than Members) in the order of priority provided bylaw, and to the payment of the expenses of liquidation; (2) To the setting up of such reserves as the Members may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; (3) To each Member in repayment of the principal and accrued interest on any loans made by such Member to the Company; (4) To the Members in proportion to their positive Capital Account balances. ARTICLE XVII EXCULPATION AND INDEMNIFICATION (A) EXCULPATION. No Member shall be liable to the Company or to any Member for any loss suffered by the Company unless such loss is caused by the Member's gross negligence or willful misconduct. No Member shall be liable for errors in judgment or for any acts or omissions that do not constitute gross negligence or willful misconduct. (B) RIGHT TO INDEMNIFICATION. Subject to the limitations and conditions as provided in this Article, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative (hereinafter a "Proceeding"), or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that such person is or was a Member of the Company, or such person is or was the legal representative, director, officer, partner, trustee, employee, agent, or similar functionary of a Member of the Company ("Indemnified Person"), shall be indemnified by the Company to the fullest extent permitted by the 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 Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment) against judgments, penalties (including punitive damages), fines, settlements and reasonable expenses (including, without limitation, attorneys' fees) actually incurred by such Indemnified Person in connection with such Proceeding, provided it is not determined in such Proceeding that the liability of such Indemnified Person is due to gross negligence or willful misconduct, and indemnification under this Article shall continue as to an Indemnified Person who has ceased to serve in the capacity which initially entitled such Indemnified Perso9 to indemnity hereunder. The rights granted pursuant to this Article shall be deemed contract rights, and no amendment, modification or repeal of this Article shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings arising prior to any amendment, modification or repeal. It is expressly acknowledged that the indemnification provided in this Article could involve indemnification for negligence or under theories of strict liability. (C) ADVANCE PAYMENT. The right to indemnification conferred in this Article shall include the right to be paid or reimbursed by the Company the reasonable expenses incurred by an Indemnified Person who was, is or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the Indemnified Person's ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such Indemnified Person in advance of the final disposition of a Proceeding, shall be made only upon delivery to the Company of a written affirmation by such Indemnified Person of such Indemnified Person's good faith belief that such Indemnified Person has met the standard of conduct necessary for indemnification under this Article and a written undertaking, by or on behalf of such Indemnified Person, to repay all amounts so advanced if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified under this Article or otherwise. 6 (D) NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the advancement and payment of expenses conferred in this Article shall not be exclusive of any other right which an Indemnified Person may have or hereafter acquire under any law (common or statutory) or this Agreement. (E) INSURANCE. The Company may purchase and maintain insurance, at its expense, to protect itself and any person who is or was an Indemnified Person against any amounts entitled to be indemnified under this Article. (F) SAVINGS CLAUSE. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnified Person to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE XVIII TAX MATTERS (A) MAINTENANCE OF CAPITAL ACCOUNTS. (1) Capital Accounts shall be maintained in accordance with the provisions of Section 704(b) of the Internal Revenue Code of 1986, as amended (the "Code") and the corresponding provisions of any future internal revenue law and Treasury Regulations promulgated thereunder, as amended from time to time, in order that allocations to Members of all items of income, gain, loss and deduction have "substantial economic effect" to the extent possible under such provisions and regulations. Accordingly, appropriate adjustments may be made to Capital Accounts in addition to those set forth in Article VI(B) of this Agreement, such adjustments to be made in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv). (2) If a Member contributes to the Company property to which Section 704(c) of the Code applies, or if a revaluation of Company property occurs under the circumstances described in (3) below, the Capital Accounts of the Members shall be adjusted as provided under Section I.704-1(b)(2)(iv)(g) of the Treasury Regulations. (3) Upon the occurrence of one of the events described in Treasury Regulation section 1.704-l(b)(2)(iv)(f)(5), Capital Accounts shall be adjusted to reflect a revaluation of Company property. (B) ADLUSTMENTS TO PROFITS AND LOSSES. Profits and Losses, as determined for Federal Income tax purposes in accordance with the accounting method followed by the Company for such purposes, shall be adjusted as follows: (1) Any income that is exempt from Federal income tax shall be added to such taxable income or loss. (2) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code (relating to expenditures that are not deductible for federal income tax purposes), or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(b), shall be subtracted from such taxable income or loss. (3) If property is reflected on the books of the Company at a book value that differs from the adjusted tax basis of such property, depreciation, income, gain, loss, and deductions with respect to such property shall be determined by reference to such book value in accordance with Treasury Regulation Section 1.704-1(b)(iv)(g). (4) Items that are specially allocated pursuant to Article XVIII(C) shall be excluded from Profits and Losses. (C) ADJUSTMENTS TO ALLOCATIONS OF PROFITS AND LOSSES. The allocations of Profits and Losses and items of income, gain, loss or deduction shall be subject to the following restrictions and adjustments: 7 (1) Except foc allocations of Partnership Nonrecourse Deductions and Partner Nonrecourse Deductions in accordance with subsections (2) and (3) below, no Losses or deductions may be allocated to any Member to the extent such allocation would result in a Capital Account deficit balance for such Member that exceeds the amount such Member is obligated to restore to the Company or treated as obligated to restore to the Company within the meaning of Treasury Regulation section l.704-1(b)(2)(ii)(c). (2) Partnership Nonrecourse Deductions as determined under Treasury Regulation section 1.704-2(c) shall be allocated in accordance with Membership Interests, and if there is a net decrease in Partnership Minimum Gain as determined in accordance with Treasury Regulation section 1 ..704-2(b)(2), then the Members shall be allocated the next available items of income and gain in accordance with the "minimum gain chargeback" requirement of Treasury Regulation Section 1.704-2(f). (3) Partner Nonrecourse Deductions as determined under Treasury Regulation Section 1.704-2(i)(2) shall be allocated to the Member who bears the economic risk of loss in accordance with Treasury Regulation Section l.704-2(i)(1), and if there is a net decrease in Partner Nonrecourse Debt Minimum Gain as determined under Treasury Regulation section l.704-2(i)(3), the Member shall be allocated items of income and gain in accordance with the "chargeback" provisions of Treasury Regulation Section 1 .704-2(i)(4). (4) Any Member who unexpectedly receives, with respect to the Company, an adjustment, allocation, or distribution described in subsections (4), (5), or (6) of Treasury Regulation section 1.704-1(b)(2)(ii)(d)(3) shall be allocated items of income and gain in accordance with the "qualified income offset" provisions of Treasury Regulation section 1.704-1 (b)(2)(ii)(d)(3). (5) If any items are specially allocated to a Member pursuant to this Subsection (C), such Member shall be allocated the next available offsetting items to the extent of such prior special allocation, provided such offsetting allocation is consistent with the restrictions and adjustments set forth in this Subsection (C), so that, to the extent possible, the net amount of Profits, Losses and items of income, gain, loss, and deduction allocated to each Member over the term of the Company is the same as the net amount that would have been allocated to such Member if there has been no special allocations made in accordance with this Subsection (C). (D) TAX ALLOCATIONS WHERE THERE IS A BOOK/TAX DISPARITY. In the event Company property is carried on the books of the Company at a book value that differs from its adjusted tax basis as a result of a contribution to the Company of property to which Section 704(c) of the Code applies, or a revaluation of Company property as described in Subsection (A)(3) of this Article, allocations to the Members of items of income, gain, loss, and deduction as computed for tax purposes with respect to such property shall be made in a manner that takes into account the variation between the adjusted tax basis of such property and its book value as determined under Section 1.704-3 of the Treasury Regulations. Allocations pursuant to this subsection (0) are for tax purposes only, and shall have no effect on Capital Accounts. (E) TAX MATTERS PARTNER. General Cable Industries, Inc. is hereby designated as the "tax matters partner" under Section 623 I(a)(7) of the Code to manage tax proceedings conducted at the Company level by the Internal Revenue Service with respect to Company matters. Expenses of such proceedings shall be paid by the Company. ARTICLE XIX INVESTMENT PURPOSES Each Member represents and warrants that it has acquired its Membership Interest for its own account as part of a transaction exempt from registration under the Securities Act of 1933, as amended, and applicable state law for investment purposes and not with a view to the resale or distribution thereof, and that it has had access to any and all information necessary to arrive at its decision to acquire its Membership Interest. In addition to the restrictions on transfer of Membership Interests otherwise set forth in this Agreement, no Membership Interest may be sold, transferred, assigned or otherwise disposed of by any Member in the absence of registration under the Securities Act of 1933, as amended, and applicable state law, or an opinion of counsel experienced in securities matters and satisfactory to the Company that such assignment or other disposition will not be in violation of said Act 8 or state laws. No Member shall have any right to require registration of its Membership Interest under said Securities Act or applicable state law and, in view of the nature of the Company and its business, such registration is neither contemplated nor likely. Each Member further acknowledges that it understands that the effect of the foregoing representation and warranty and restriction on assignment or other disposition is generally to require that such Membership Interest be held indefinitely unless it is registered or an exemption from registration is available. ARTICLE XX MISCELLANEOUS PROVISIONS (A) ENTIRE UNDERSTANDING. This Agreement constitutes the entire understanding among the parties and supersedes any prior arrangements or understandings among them, and may not be modified or amended in any manner other than as set forth herein. (B) GOVERNING LAW. This Agreement and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding any conflict-of-laws rule or principle that might refer the governance or the construction of this Agreement to the law of another jurisdiction. (C) CONSTRUCTION. When from the context it appears appropriate, each term stated either in the singular or the plural shall include the singular and the plural and the pronouns stated in the masculine, the feminine or the neuter shall include the masculine, feminine and the neuter. (D) HEADINGS AND CAPTIONS. The headings and captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of this Agreement or any provisions hereof. (E) INVALIDITY. If any of the provisions of this Agreement or the application of such provision to any person or circumstance shall be held invalid, the remainder of this Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid shall not be affected thereby. (F) COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument, and shall have the same force and effect as though all the signatories had signed a single signature page. (G) PARTIES BOUND. The provisions of this Agreement shall bind, benefit, and be enforceable by or against, the heirs, administrators, personal representatives and, as permitted herein, assigns of the parties hereto None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or of any Member. (H) NO WAIVER. No failure on the part of' any Member to exercise and no delay in exercising any right, power or remedy shall be construed as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy preclude any other or further exercise thereof or of any other right, power or remedy. (I) NOTICES AND REPORTS. All notices and reports to the Members shall be addressed to the Member and sent to them at their addresses on file in the principal place of business of the Company. (J) PERSON. For purposes of this Agreement, the term "person" includes without limitation any natural person, joint venture, corporation, partnership, limited liability company, trust, estate, association, government, or governmental agency, or any other entity. (K) AMENDMENTS. This Agreement may be amended or modified from time to time by the vote of a majority of the Membership Interests. 9 IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement, intending to be legally bound hereby, on the date first written above. COMPANY: MEMBER: GENERAL CABLE MANAGEMENT LLC GENERAL CABLE INDUSTRIES, INC. BY: GENERAL CABLE INDUSTRIES, INC. BY: /s/Christopher F. Virgulak BY: /s/Robert J. Siverd -------------------------------------- ----------------------------- Name: Christopher F. Virgulak Name: Robert Siverd Title: CFO Title: Exec. Vice President 10 EXHIBIT A GENERAL CABLE MANAGEMENT LLC DATE: DECEMBER 1, 2001 Member: General Cable Industries, Inc. Membership Interest: 100% Nature of Capital Contribution: Certain fixed assets of the Marshall, Texas Tech Center (see Schedule I attached). Net Book Value of Contribution: $700,000 11 AMENDMENT NO. 1 TO THE OPERATING AGREEMENT OF GENERAL CABLE MANAGEMENT LLC A DELAWARE LIMITED LIABILITY COMPANY This Amendment No. 1 to the OPERATING AGREEMENT ("Agreement") of GENERAL CABLE MANAGEMENT LLC (the "Company") dated December 1, 2001, is entered into as of January 2, 2002, by and among the Company and Genera! Cable Industries, Inc., a Delaware corporation and sole member of the Company ("UCI"). 1. The parties hereby supplement Exhibit A to the Agreement as follows, to reflect additional capital contributions made by GCI to the Company as of the date hereof: Member: General Cable Industries, Inc. Membership Interest: 100% Nature of Capital Contribution: Certain machinery and equipment located at General Cable Industries, Inc.'s Marshall, Texas manufacturing facility (see schedule 1 attached) Fair Market Value of Contribution: $12,000,000 2. References to "Net Book Value" in Exhibit A to the Agreement (dated December 1, 2001) are hereby amended to "Fair Market Value". 3. GCI shall have the right to grant Chase Manhattan Bank ("Chase") a security interest in and lien on all of GCI's right, title and interest in and to its membership interests in the Company in order to secure the repayment of indebtedness to Chase incurred by various affiliates of the Company pursuant to a Credit Agreement dated May 28, 1999. 4. Except as provided herein, the Agreement shall remain in full force and effect. GENERAL CABLE MANAGEMENT LLC By: /s/ Christopher Virgulak Name: Christopher Virgulak Title: Chief Financial Officer GENERAL CABLE INDUSTRIES, INC. By: /s/ Robert J. Siverd Name: Robert J. Siverd Title: Executive Vice President EX-3.17 18 l05578aexv3w17.txt EXHIBIT 3.17 EXHIBIT 3.17 [Translation into English of the by-laws of General de Cable de Mexico del Norte, S.A. de C.V.] CLAUSES FIRST. The parties organize a variable capital corporation pursuant to the General Law of Commercial Companies (Ley General de Sociedades Mercantiles) whose name shall be "GENERAL DE CABLE DE MEXICO DEL NORTE, S.A. DE C.V." or their abbreviation "S.A. de C.V." SECOND. The company shall have as its purpose: To buy, sell, import, export, the manufacture, assembly, production, attachment, welding, modeling, joining, separation and repair of covered or uncovered cable harness, different types of connectors for the radio telecommunications industry, telecommunication automotive industry, electric connectors, integrated circuits, diodes, transistors, fuses, the manufacturing of copper, aluminum and plastic cables and cables made from other materials. The acquisition of personal and/or real property necessary for the achievement of the corporate purposes of the company. The execution and performance of all acts, agreements and other type of steps necessary in order for the company to fulfill its functions and to achieve its corporate purposes. The company may grant, draw, issue, accept, endorse, certify or, by any other legal manner, to subscribe, including as jointly obligor, all kind of negotiable instruments provided by law, including the issuance of obligations or any other kind of securities. Likewise, the company may receive or grant loans and may enter into all kind of loan agreements and may grant all kind of collaterals, including real or personal guaranties, being able to carry out all kind of acts, within Mexico or abroad, including acts of domain, civil, commercial or any kind of agreements, whether principal or accessory, or any other kind of agreements permitted by law. The company shall be able to secure obligations of the company and third parties' obligations, whether as guarantor or in any other form, including as joint obligor. THIRD. The domicile of the company shall be Piedras Negras, Coahuila. FOURTH. The duration of the company shall be ninety nine (99) years from the date hereof. FIFTH. "Any alien who upon the incorporation or at any time thereafter acquires an interest or participation in the company, shall thereby be considered as a Mexican (national of Mexico) as regards such interest or participation, and agrees not to invoke the protection of its government under penalty, in case of failure to comply with this agreement, of forfeiting such interest or participation to the Mexican nation." SIXTH. The fixed minimum portion of the corporate capital of the corporation shall be the amount of Mx$10,000,000.00 (Ten million Pesos 00/100 lawful currency of Mexico) represented by 1,000 (One thousand) shares, with a par value of $10,000.00 (Ten thousand Pesos 00/100, lawful currency of Mexico) each. The maximum portion of the capital of the corporation shall be unlimited. The capital has been subscribed and paid in the following manner:
Shareholder Shares Value GK Technologies Incorporated 996 $ 9,960,000.00 Philadelphia Insulated Wire Comp. 1 $ 10,000.00 General Cable Corporation 1 $ 10,000.00 General Cable International 1 $ 10,000.00 Operations Limited GK Trucking Corp. 1 $ 10,000.00 Total: 1,000 $10,000,000.00
1 The price of the shares which are subscribed and paid herein, is received by the Treasurer of the Company. SEVENTH. The corporate capital may be increased and reduced pursuant to the provisions of these bylaws, in the event of an increase, the shareholders of the company shall have the preemptive right to subscribe the new shares. EIGHTH. The share certificates shall be signed by the President and Treasurer of the Board of Directors of the company, shall include the information required by Article 125 (One Hundred and Twenty Five) of the General Law of Commercial Companies, and shall have dividend coupons attached for the payment of dividends and shall include a transcription of Clause Fifth of this bylaws. NINTH. The Board of Directors or its President shall be entitled to issue provisional and definite share certificates, covering one or more shares, as well as to exchange any certificates previously issued and to issue 1 (one) or more new certificates, provided that the total number of shares covered by such 1 (one) or more new certificates equals the total number of shares covered by the certificates exchanged. TENTH. In case of loss, misplacement or destruction of any permanent share certificate, the Board of Directors or the President of the Board of Directors may, at its sole discretion, resolve the issuance of a duplicate certificate or a subsequent certificate, subject to delivery of a Guaranty in the amount and on the terms considered necessary by the Board of Directors pursuant to the applicable laws. The duplicates of the share certificates issued shall state that in the event the original replaced share certificate is found, then such duplicates shall become invalid. In case of loss, misplacement or destruction of any dividends coupon, the Board of Directors or its President may resolve the payment of the corresponding dividends subject to the fulfillment of the requirements set forth in this clause for the replacement of share certificates. ELEVENTH. The management of the company shall be entrusted to a Board of Directors, composed by individuals who may or may be not shareholders of the Company, and who shall occupy the following positions: President, Vice-President, Secretary, Treasurer and three Assistants. Members and alternates of the Board of Directors shall be appointed for each of those positions. In the absence of any member of the Board of Directors, alternates may take care of those issues considered by these bylaws as reserved to the Board of Directors, by adopting the corresponding resolutions without any limitation. Said Board of Directors shall have the broadest legal authority corresponding to attorneys-in-fact with faculties for lawsuits and collections and acts of administration, pursuant to articles 2,448 of the Civil Code for the State of Coahuila and article 2,554 of the Civil Code for the Federal District which reads as follows: "In all general powers of attorney for lawsuits and collections, a recital that it is granted with all general and special powers which by law require a special grant, shall be sufficient so that the power of attorney shall be understood to have been granted without limitation. In general powers of attorney for the administration and management of property, a recital that it is conferred for this purpose shall be sufficient to confer upon the attorney-in-fact full and ample power of administration. In general powers of attorney for the execution of acts of domain (ownership), a recital that it is granted for this purpose shall be sufficient to confer upon the attorney in fact all of the powers of the owner over the property in question, including the power to take all measures necessary for the protection and defense thereof. When it is desired to limit the power of attorney in the above mentioned three instances, such limitation shall be expressly set forth, or a special power of attorney shall be granted. The notaries shall insert this article in the public instruments containing the power of attorney granted before them." TWELFTH. The President of the Board of Directors shall represent the company before all kind of authorities. 2 THIRTEENTH. The President of the Board of Directors shall be the executive body of said Board, and shall have as its duty to supervise the execution of the Board of Directors' resolutions; shall act as president of the ordinary and extraordinary shareholders' meetings with the assistance of the Secretary; shall represent the company with the same faculties granted to the Board of Directors; the President may subscribe, endorse and negotiate all kind of negotiable instruments on behalf of the Company and to carry out all transactions, within the same gender, described in article 3 of the General Law of Negotiable Instruments and Credit Transactions (Ley General de Titulos y Operaciones de Credito). To execute, together with the Secretary of the Board, the minutes of the Board and shareholders' meetings, as well as any certificates or statements in connection with the company. FOURTEENTH. The Secretary of the Company shall be responsible for the board of directors' meetings minutes book and documents related to these bylaws, its amendments and additions; to draft the minutes of the Board of Directors meetings and the ordinary and extraordinary shareholders' meetings; to draft the attendance list for each of the shareholders' and Board of Directors' meetings; to maintain under its custody all documents regarding the Board of Directors and Shareholders meetings and execute the notices for said meetings and shall carry out all steps necessary in order to hold all shareholders' meetings, whether ordinary or extraordinary. FIFTEENTH. The Treasures of the Company shall have the following duties: I. To receive and make the payments corresponding to the Company and to the shareholders; II. To supervise all funds received by the Company and to keep the accounting records required; and III. All other duties pursuant to the law and these bylaws. SIXTEENTH. The absence or inability of the President shall be covered by the Secretary, whose absence or inability shall be covered by the Treasures, whose absence or inability shall be covered by the person appointed by the shareholders' meeting, which persona shall have all the powers and obligations corresponding to the covered member of the Board pursuant to these bylaws. SEVENTEENTH. The Board of Directors shall adopt its resolutions by majority, and the President shall have tie-breaking vote. In any Board of Directors' meeting a quorum shall exist with the presence of at least 3 of its members. EIGHTEENTH. The shareholder(s) holding twenty five percent (25%) of the outstanding shares of the company shall have the right to appoint one member of the Board of Directors in accordance with the terms contained in article 144 (one hundred and forty four) of the General Law of Commercial Companies. NINTEENTH. The direct administration of the Company shall be entrusted to 1 or 2 Managers, who shall have the powers conferred upon them in their appointment. TWENTIETH. The members of the Board of Directors, upon their appointment, shall deposit a share in the company's treasury to secure the faithful performance of their duties or, if not possible, the price corresponding to one share. Either the price corresponding to 1 share or one share has been deposited in the Treasury of the company by the members of the Board of Directors in order to secure the faithful performance of their duties. SURVEILLANCE OF THE COMPANY TWENTY FIST. The surveillance of the company shall be entrusted to 1 (one) Examiner to be appointed by the General Shareholders Meeting. The Examiner may or may not be shareholder of the Company. Upon its appointment, an in order to guarantee the faithful performance of their respective duties, the Examiner shall deposit in the treasury of the Company one share or its corresponding nominal value in 3 cash, or may deliver a bond for said amount. The Examiner shall remain in office for two years and may be reelected. TWENTY SECOND. In case of absence of the Examiner, the person appointed by the Shareholders Meeting as alternate examiner shall substitute the Examiner. TWENTY THIRD. The Examiner shall have the powers and obligations set forth in article 166 of the General for Commercial Companies and the consideration approved by the Shareholders Meeting. TWENTY FOURTH. The Shareholders Meeting is the supreme governing authority of the company and legally convened shall represent all shareholders, and its resolutions shall be binding on all shareholders, including absent or dissenting shareholders. TWENTY FIFTH. The decisions and resolutions of the Shareholders Meetings shall be transcribed in minutes which shall be prepared by the President and the Secretary of the Shareholders Meetings. TWENTY SIXTH. The Shareholders Meetings shall be ordinary and extraordinary. Extraordinary Shareholders Meetings shall be those called to deal with any of the matters contained in article 182 of the General Law of Commercial Companies, and ordinary Shareholders Meetings shall be those called to deal with any other matter. TWENTY SEVENTH. Ordinary Shareholders Meetings shall be called at least once each year within the first 3 months immediately following the close of the fiscal year of the company, and pursuant to article 181 of the General Law of Commercial Companies and shall address the following matters: I. To discuss, approve or modify the Board of Directors' report, after being read by the Examiner and after all necessary measures have been taken. II. The appointment of the members of the Board of Directors and the Examiner. III. The determination of the consideration to be paid to the officers of the Company. IV. The distribution of dividends. TWENTY NINTH. The first fiscal year shall commence on the date of incorporation of the company and shall end on December 31, 1990 and all subsequent fiscal years shall commence on January 1, and shall end on December 31 of each year. TWENTY NINTH. The Shareholders Meetings shall be called by the Board of Directors or by the Examiner, however; the shareholder or shareholders representing at least 40% of the outstanding capital stock of the Company may request, in writing, the Board of Directors or the Examiner to call for a General Shareholders Meeting in order to address the matters contained in their petition. The holder of 1 share may be entitled to make the same request in the events described in article 185 of the General Law of Commercial Companies. THIRTIETH. Any notice convening a shareholders<180> meeting shall include an agenda for the meeting, shall be published in one occasion in a daily newspaper of large circulation of the domicile of the corporation and shall be signed by the person who made it. THIRTY FIRST. The notice's publication requirement may be dispensed and its absence shall not cause the nullity of the meeting in the following events: I. If the shareholders meeting is convened in continuance of a previous meeting, provided that the day and hour for said meeting were agreed during the first meeting, and provided that only the matters included in the original agenda are discussed. 4 II. If shareholders owing all of the stock entitled to vote at such meeting are present at the moment of voting and the attendance list is signed by all shareholders present at the Meeting. THIRTY SECOND. The members of the Board of Directors and the Examiner shall abstain from voting in the events provided by the applicable laws, provided that if their votes are necessary in order for a quorum to exist, the resolutions shall be validly adopted if approved by the majority of the shares represented with voting rights. THIRTY THIRD. For a quorum to exist at Shareholders Meeting held upon first call, at least 90% of the capital stock must be represented. If on the date appointed for the meeting said number of shareholders are not present, the call must be repeated, and the meeting shall be validly convened with the presence of any number of shares, and the resolutions shall be adopted with the affirmative vote of any number of shares, provided that matters not included in the agenda for the first call may not be addressed in the meeting held on second call. THIRTY FOURTH. The provisions contained in clause Thirty Third are not applicable to Extraordinary Shareholders Meetings, in which case, the presence of a number of shareholders necessary in order for resolutions to be adopted with the affirmative vote of at least 75% (seventy-five percent) at first or subsequent call must be required. THIRTY FIFTH. The meetings shall be presided by the President of the Board of Directors or, in his absence, by the person elected by the meeting. Balance THIRTY SIXTH. A balance sheet shall be prepared each year pursuant to the following general basis: I. The balance shall indicate the capital stock of the Company. II. The balance shall indicate the accounts indicating the assets and liabilities of the Company. THIRTY SEVENTH. The balance sheet shall be prepared by the Board of Directors within 2 (two) months following the termination of each fiscal year. The balance sheet shall be submitted to the Examiner for its review. The Examiner shall return the balance sheet, after making all pertinent observations, within the next 15 (fifteen) days. Once the Examiner returns the balance sheet, the Board of Directors shall deliver the Examiner and shall submit to the shareholders meeting the supporting information together with a management report. THIRTY EIGHTH. The earnings of the Company shall be distributed as follows: I. Five percent of the earnings shall be separated in order to constitute the legal reserve fund until such reserve equals at least one-fifth of the corporate capital. II. The amount determined by the Shareholders Meeting shall be applied as consideration to the members of the Board of Directors and Examiner. III. The amount determined by the Shareholders Meeting shall be applied to constitute one or more reserve funds. IV. The amount remaining shall be distributed among all the shareholders of the Company. The dividends shall be paid at when the Company has funds. THIRTY NINTH. Losses, if any, shall be offset with the reserve funds; and if necessary against all shares proportionally to the limit of their nominal value. FORTY. The corporation shall be dissolved in the following cases: I. By resolution of the Shareholders Meeting adopted in an Extraordinary Shareholders Meeting. 5 II. In the event the Company loses half of its corporate capital stock. FORTY FIRST. The founder shareholders do not reserve themselves any participation in the company in their character as founders. FORTY SECOND. The Shareholders Meeting approving the dissolution of the Company shall appoint the liquidators by majority, and if such appointment is not made by the Meeting, the liquidators shall be appointed by the competent Civil Judge upon request of any shareholder. FORTY THIRD. Subject to the specific instructions of the Shareholders Meeting, the liquidation process shall be subject to the following basis: I. General Report and Inventory. II. Termination of all pending agreements of the Company in terms beneficial to the creditors and shareholders. III. Collect all credits and payment of all debts. IV. The sale of all the real estate properties of the Company, and the use of all proceeds obtain to the liquidation purposes. Bylaws FORTY FOURTH. The provisions contained in the preceding clauses, and all applicable provisions of the General Law of Commercial Companies shall constitute the bylaws of the Company which shall be governed by said bylaws. 6 EX-3.18 19 l05578aexv3w18.txt EXHIBIT 3.18 EXHIBIT 3.18 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 01:30 PM 05/06/1999 991180536 - 3039501 CERTIFICATE OF INCORPORATION OF GENERAL CABLE OVERSEAS HOLDINGS, INC. The undersigned, a natural person, for the purpose of organization of a corporation for conducting the business and promoting the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts amendator thereof and supplemental thereto, and known, identified, and referred to as the "General Corporation Law of the State of Delaware"), hereby certifies that: FIRST: The name of the corporation is General Cable Overseas Holdings, Inc. SECOND: The address, including street, number city and county of the registered office of the corporation in the State of Delaware is the Corporation Trust Center, 1209 Orange Street, City of Wilmington 19801, County of New Castle; and the name of the registered agent of the corporation in the State of Delaware at such address is The Corporation Trust Company. THIRD: The nature of the business and the purposes to be conducted and promoted by the corporation are as follows: Any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The total number of shares of stock the corporation is authorized to issue is 1,000 at $0.01 par value. FIFTH: The name of the directors are as follows: Robert J. Siverd 4 Tesseneer Drive, Highland Heights, KY 41076 Christopher F. Virgulak 4 Tesseneer Drive, Highland Heights, KY 41076 SIXTH: The name and the mailing address of the incorporator are as follows: L. J. Vitalo The Corporation Trust Company, Corporation Trust Center 1209 Orange Street, Wilmington, Delaware 19801 SEVENTH: The corporation is to have perpetual existence. Date: May 6, 1999 /s/ L.J. Vitalo ------------------------------- By: L. J. Vitalo, Incorporator EX-3.19 20 l05578aexv3w19.txt EXHIBIT 3.19 EXHIBIT 3.19 BY-LAWS OF GENERAL CABLE OVERSEAS HOLDINGS, INC. . . . TABLE OF CONTENTS
PAGE ---- ARTICLE I OFFICES............................................................................................... 3 SECTION 1.01. Registered Office......................................................................... 3 SECTION 1.02. Other Offices............................................................................. 3 ARTICLE II MEETING OF STOCKHOLDERS.............................................................................. 3 SECTION 2.01. Annual Meetings........................................................................... 3 SECTION 2.02. Voting.................................................................................... 3 SECTION 2.03. Quorum.................................................................................... 3 SECTION 2.04. Special Meetings.......................................................................... 4 SECTION 2.05. Notice of Meetings........................................................................ 4 SECTION 2.06. Action Without Meeting.................................................................... 4 ARTICLE III DIRECTORS........................................................................................... 4 SECTION 3.01. Number and Term........................................................................... 4 SECTION 3.02. Resignation............................................................................... 4 SECTION 3.03. Vacancies................................................................................. 4 SECTION 3.04. Removal................................................................................... 5 SECTION 3.05. Powers.................................................................................... 5 SECTION 3.06. Committees of the Board................................................................... 5 SECTION 3.07. Meetings.................................................................................. 5 SECTION 3.08. Quorum.................................................................................... 5 SECTION 3.09. Compensation.............................................................................. 6 SECTION 3.10. Action Without Meeting; Presence at Meetings.............................................. 6 ARTICLE IV OFFICERS............................................................................................. 6 SECTION 4.01. Officers.................................................................................. 6 SECTION 4.02. Other Officers and Agents................................................................. 6 SECTION 4.03. Resignation; Removal...................................................................... 6 SECTION 4.04. President................................................................................. 6 SECTION 4.05. Vice Presidents........................................................................... 6 SECTION 4.06. Controller................................................................................ 7 SECTION 4.07. Treasurer................................................................................. 7 SECTION 4.08. Secretary................................................................................. 7
1 SECTION 4.09. Assistant Secretaries..................................................................... 7 SECTION 4.10. Assistant Treasurers...................................................................... 7 SECTION 4.11. Compensation.............................................................................. 7 ARTICLE V MISCELLANEOUS......................................................................................... 7 SECTION 5.01. Certificates of Stock..................................................................... 7 SECTION 5.02. Transfer Agents and Registrars............................................................ 8 SECTION 5.03. Lost Certificates......................................................................... 8 SECTION 5.04. Transfer of Shares........................................................................ 8 SECTION 5.05. Stockholders Record Date.................................................................. 8 SECTION 5.06. Dividends................................................................................. 8 SECTION 5.07. Registered Stockholders................................................................... 8 SECTION 5.08. Seal...................................................................................... 8 SECTION 5.09. Fiscal Year............................................................................... 8 SECTION 5.10. Checks.................................................................................... 9 SECTION 5.11. Execution of Proxies...................................................................... 9 SECTION 5.12. Notice and Waiver of Notice............................................................... 9 ARTICLE VI INDEMNIFICATION...................................................................................... 9 SECTION 6.01. Right to Indemnification.................................................................. 9 SECTION 6.02. Actions, Suits Or Proceedings Other Than Those By Or In The Right Of The Corporation...... 9 SECTION 6.03. Actions, Suits Or Proceedings By Or In The Right Of The Corporation....................... 10 SECTION 6.04. Authorization of Indemnification.......................................................... 10 SECTION 6.05. Good Faith Defined........................................................................ 10 SECTION 6.06. Proceedings Initiated By Indemnified Persons.............................................. 10 SECTION 6.07. Indemnification By A Court................................................................ 10 SECTION 6.08. Losses Payable In Advance................................................................. 11 SECTION 6.09. Non-exclusivity and Survival of Indemnification........................................... 11 SECTION 6.10. Meaning Of Certain Terms In Connection With Employee Benefit Plans, etc................... 11 SECTION 6.11. Insurance................................................................................. 11 ARTICLE VII AMENDMENTS.......................................................................................... 11
2 BY-LAWS OF GENERAL CABLE OVERSEAS HOLDINGS, INC. ARTICLE I OFFICES SECTION 1.01. Registered Office. The registered office of the corporation in the State of Delaware shall be established and maintained at the office of The Corporation Trust Company, in the City of Wilmington, County of New Castle, and said corporation shall be the Registered Agent of the Corporation in charge thereof. SECTION 1.02. Other Offices. The principal place of business of the Corporation in the State of Delaware shall be the City of Wilmington, County of New Castle; and the Corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require. ARTICLE II MEETING OF STOCKHOLDERS SECTION 2.01. Annual Meetings. Annual meetings of stockholders for the election of directors and for the transaction of any proper business shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution shall determine and as set forth in the notice of the meeting. If the annual meeting of stockholders is not held on the date designated therefor, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as may properly be brought before the meeting. SECTION 2.02. Voting. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these By-Laws shall be entitled to one vote, in person or by proxy, for each share of stock outstanding and entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be written ballot. When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock outstanding and having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provisions of a statute or of the Certificate of Incorporation a different vote is required in which case such express provisions shall govern and control the decision of such question. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number shares registered in the name of each stockholder. Such a list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. SECTION 2.03. Quorum. At all meetings of stockholders, except as otherwise required by statute or by the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares of stock outstanding and entitled to vote thereat shall be requisite for, and shall constitute a quorum for, the transaction of business. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without 3 notice other announcement at the meeting, until the requisite amount of shares entitled to vote shall be present or represented. At any such adjourned meeting at which the requisite amount of shares entitled to vote shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2.04. Special Meetings. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President or the Secretary and shall be called by the President or Secretary at the request of the Board of Directors or at the request in writing of the stockholders of a majority of the shares of stock outstanding and having voting power. Such request shall state the purpose or purposes of the proposed meeting. Special meetings may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. SECTION 2.05. Notice of Meetings. Written notice, stating the place, date and time of any meeting, annual or special, and, if a special meeting, the purpose or purposes of which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten or more than sixty days before the date of the meeting. SECTION 2.06. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS SECTION 3.01. Number and Term. The number of directors shall be two or such other number as may be fixed from time to time by resolution of the Board of Directors or by action of the stockholders. The directors shall be elected at the annual meeting of the stockholders and each director shall be elected to hold office until his successor shall be elected and qualified. Directors need not be stockholders. SECTION 3.02. Resignation. Any director or member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, of no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective. SECTION 3.03. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors shall be elected and qualified. Unless otherwise provided by the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies. In the event that a vacancy or newly created directorship shall not have been filled by the Board of Directors, the additional director or directors nay be elected by the stockholders entitled to vote thereon, either at an annual meeting of stockholders or at a special meeting called for the purpose. The directors or directors so chosen 4 shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualified. SECTION 3.04. Removal. Any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the holders of such shares, and the vacancies thus created may be filled, at such meeting or at any subsequent meeting, by the affirmative vote of a majority in interest of the stockholders entitled to vote. SECTION 3.05. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors, which may exercise all the powers of the Corporation and do all lawful acts and things which are not conferred upon or reserved to the stockholders by law, by the Certificate of Incorporation or by these By-Laws. SECTION 3.06. Committees of the Board. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation; and, unless the resolution or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. SECTION 3.07. Meetings. Meetings of the Board of Directors shall be held at such place, either within or without the State of Delaware, as the Board of Directors shall from time to time designate or as may be specified in the notice of such meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President or the Secretary by notice to each director given not less than two days, or not less than three days in the case of notice given by mail, before such meeting. Special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. The first meeting of a newly elected Board of Directors shall be held without notice as soon as practicable after each annual meeting of the stockholders at the same place at which such meeting was held, provided a quorum is present. If a quorum is not present, such first meetings may be held at such time and such place as shall be specified in a notice given as herein provided for special meetings of the Board of Directors. SECTION 3.08. Quorum. Not less than a majority of the total number of directors shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless a statute or the Certificate of incorporation shall require a vote of a greater number. 5 SECTION 3.09. Compensation. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent or otherwise and receiving compensation therefor. SECTION 3.10. Action Without Meeting; Presence at Meetings. Unless otherwise restricted in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board Directors or the committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by such Board, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another, and such participation in a meeting shall constitute presence in person at such meeting. ARTICLE IV OFFICERS SECTION 4.01. Officers. The Officers of the Corporation shall be the President, a Secretary, a Treasurer and a Controller, each of whom shall be elected by the Board of Directors and shall hold office until his successor shall be elected and have qualified. The Board of Directors also may elect one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. The officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders and shall hold office until their successors are chosen and have qualified. Any number of offices may be held by the same person. SECTION 4.02. Other Officers and Agents. The Board of Directors may appoint such other officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. SECTION 4.03. Resignation; Removal. Any officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. Any officer may be removed, for or without cause, at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office shall be filled for the unexpired portion of the term by the Board of Directors. SECTION 4.04. President. The President shall be the Chief Executive Officer of the Corporation. The President shall have general and active control of the Corporation's business, finances and affairs, subject to the control of the Board of Directors. Except as may otherwise be provided by the Board of Directors from time to time, the President shall have general power to execute bonds, deeds, contracts, conveyances and other instruments in the name of the Corporation and to affix the corporate seal; to appoint all employees and agents of the Corporation whose appointment is not otherwise provided for and to fix the compensation thereof subject to the provisions of these By-laws and subject to the approval of the Board of Directors; to remove or suspend any employee or agent who shall not have been appointed by the Board of Directors; and to suspend for cause, pending final action by the body which shall have appointed him, any officer other than an elected officer, or any employee or agent who shall have been appointed by the Board of Directors. He shall have such further powers and duties as may be conferred on him by the Board of Directors. SECTION 4.05. Vice Presidents. The Vice Presidents, if any, shall have such powers and perform such duties as may be respectively assigned to them from time to time by the Board of Directors or the Chief Executive 6 Officer. In the absence or the disability of the President, his duties shall be performed and his performance may be exercised by the Executive Vice President or other Vice President or Vice Presidents in the order determined by the Board of Directors or, failing such delegation, in the order of their last election to that office. SECTION 4.06. Controller. The Controller shall prescribe and have charge of the system of books and accounts. He may require reports from the Treasurer and all other officers or agents of the Corporation who receive or disburse funds for its account at such times and in such forms as he may deem desirable. SECTION 4.07. Treasurer. The Treasurer shall have the care and custody of all the funds of the Corporation and shall deposit the same in such banks or other depositories as the Board of Directors, or any officer or officers, or any officer and agent jointly, duly authorized by the Board of Directors, shall, from time to time, direct or approve. He shall disburse the funds of the Corporation under the direction of the Board of Directors or the Chief Executive Officer. He shall keep full and accurate account of all moneys received and paid on account of the \ Corporation and shall render a statement of his accounts whenever the Board of Directors shall require. He shall perform all other necessary acts and duties in connection with the administration of the financial affairs of the Corporation and shall generally perform all the duties usually appertaining to the office of treasurer of a corporation. When required by the Board of Directors, he shall give bonds for the faithful discharge of his duties in such sums and with such sureties as the Board of Directors shall approve. SECTION 4.08. Secretary. The Secretary shall attend all meetings of the Board of Directors and the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall, when requested, perform like duties for all committees of the Board of Directors. He shall attend to the giving of notice of all meetings of the stockholders and, if notice is required, of meetings of the Board of Directors and of committees thereof; he shall have custody of the corporate seal and, when authorized by the Board of Directors, shall have authority to affix the same to any instrument and, when so affixed, it shall be attested by his signature or the signature of the Treasurer or an Assistant Secretary or an Assistant Treasurer. He shall keep and account for all documents, papers, and records of the Corporation, except those for which some other officer or agent is properly accountable. He shall generally perform all the duties appertaining to the office of secretary of a corporation. In the absence of the Secretary, such person as shall be designated by the Chief Executive Officer shall perform his duties. SECTION 4.09. Assistant Secretaries. Each Assistant Secretary shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Secretary, his duties shall be performed and his powers may be exercised by the Assistant Secretary or the Assistant Secretaries in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.10. Assistant Treasurers. Each Assistant Treasurer shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Treasurer, his duties shall be performed and his powers may be exercised by the Assistant Treasurer or the Assistant Treasurers in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.11. Compensation. The Board of Directors shall have the power to fix the compensation of all officers of the Corporation. ARTICLE V MISCELLANEOUS SECTION 5.01. Certificates of Stock. The shares of stock of the Corporation shall be represented by certificates in such forms as shall be determined by the Board of Directors and shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the Corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall 7 have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. SECTION 5.02. Transfer Agents and Registrars. The Board of Directors may, in its discretion appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation; and, upon such appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars. SECTION 5.03. Lost Certificates. In case any certificate representing shares shall be lost, stolen or destroyed, the Board of Directors, or any officer or officers authorized by the Board of Directors, may authorize the issue of a substitute certificate in place of the certificate so lost, stolen or destroyed, and, if the Corporation shall have a Transfer Agent and Registrar, may cause or authorize such substitute certificate to be countersigned by the appropriate Transfer Agent and registered by the appropriate Registrar. In each such case, the applicant for a substitute certificate shall furnish to the Corporation and to such of its Transfer Agents and Registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft or destruction of such certificate and the ownership thereof, and also such security or indemnity as may by them be required. SECTION 5.04. Transfer of Shares. Transfer of shares shall be made on the books of the Corporation only by the person named in the certificates or by his attorney lawfully constituted in writing, and upon surrender and cancellation of the certificate or certificates of a like number of shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. SECTION 5.05. Stockholders Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjournment meeting. SECTION 5.06. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividends, there may be set apart, out of any funds of the Corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve a fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conductive to the interests of the Corporation; and in its discretion the Board of Directors may decrease or abolish any such reserve. SECTION 5.07. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and other distributions, and to vote as such owner, and to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not is shall have express or other notice thereof, except as otherwise provided by law. SECTION 5.08. Seal. The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its organization and the words "CORPORATE SEAL, DELAWARE." The deal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. SECTION 5.09. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors. 8 SECTION 5.10. Checks. All checks, drafts or other orders for the payment of money, notes or other order evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall be determined from time to time by resolution of the Board of Directors. SECTION 5.11. Execution of Proxies. The President or, in the absence or disability of the President, a Vice President, may authorize from time to time the signature and issuance of proxies to vote upon shares of stock of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such proxies and consents shall be signed in the name of the Corporation by the President or a Vice President and by the Secretary or an Assistant Secretary. SECTION 5.12. Notice and Waiver of Notice. Whenever any notice is required to be given under the provisions of any law, of the Certificate of Incorporation or of these By-Laws, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice to directors may also be given on the day of mailing. Notice to directors may also be given by telex, cable or telegram. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute. Whenever any notice whatever is required to be given under the provisions of any law or law or of the Certificate of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of Incorporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE VI INDEMNIFICATION SECTION 6.01. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact (a) that he or she is or was a director or officer of the Corporation, or (b) that he or she, being at the time a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (collectively, "another enterprise" or "other enterprise"), shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended (but, in the case of any such amendment, with respect to alleged action or inaction occurring prior to such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including, without limitation, attorneys' and other professionals' fees and expenses, claims, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such person in connection therewith ("Losses"). Without diminishing the scope of indemnification provided by this Section 6.01, such persons shall also be entitled to the further rights set forth below. SECTION 6.02. Actions, Suits Or Proceedings Other Than Those By Or In The Right Of The Corporation. Subject to the terms and conditions of this Article, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer or employee of the Corporation, or, being at the time a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another enterprise, against all Losses, actually and reasonably incurred or suffered by such person in connection with such Proceeding if such person acted in good faith and in a 9 manner reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner reasonably believed to be or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was unlawful. SECTION 6.03. Actions, Suits Or Proceedings By Or In The Right Of The Corporation. Subject to the terms and conditions of this Article, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer or employee of the Corporation, or being at the time a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another enterprise against all Losses actually and reasonably incurred or suffered by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. SECTION 6.04. Authorization of Indemnification. Any indemnification under this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of a person is proper in the circumstances because such person has met the applicable standard of conduct required by Section 6.01 or set forth in Section 6.02 or 6.03 of this Article, as the case may be. Such determination shall be made in reasonably prompt manner (i) by the Board of Directors by a majority vote of directors who were not parties to such action, suit or proceeding, whether or not they constitute a quorum of the Board of Directors, (ii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, (iii) by the stockholders or (iv) as the Delaware General Corporation Law may otherwise permit. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' and other professionals' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case. SECTION 6.05. Good Faith Defined. For purposes of any determination under Section 6.04 of this Article, a person shall be deemed to have acted in good faith if the action is based on (a) the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, (b) the advice of legal counsel for the Corporation or another enterprise, or (c) information or records given or reports made to the Corporation or another enterprise by an independent certified public account, independent financial adviser, appraiser or other expert selected with reasonable care by the Corporation or the other enterprise. The provisions of this Section 6.05 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct. SECTION 6.06. Proceedings Initiated By Indemnified Persons. Notwithstanding any provisions of this Article to the contrary, the Corporation shall not indemnify any personal or make advance payments in respect of Losses to any person pursuant to this Article in connection with any Proceeding (or portion thereof) initiated against the Corporation by such person unless such Proceeding (or portion thereof) is authorized by the Board of Directors or its designee; provided, however, that this prohibition shall not apply to a counterclaim, cross-claim or third-party claim brought in any Proceeding or to any claims provided for in Section 6.07 of this Article. SECTION 6.07. Indemnification By A Court. Notwithstanding any contrary determination in the specific case under Section 6.04 of this Article, and notwithstanding the absence of any determination thereunder, any director, officer or employee may apply to any court of competent jurisdiction for indemnification to the extent 10 otherwise permissible under Section 6.01, 6.02 or 6.03 of this Article. Notice of any application for indemnification pursuant to this Section 6.07 shall be given to the Corporation promptly upon the filing of such application. SECTION 6.08. Losses Payable In Advance. Losses reasonably incurred by an officer or director in defending any threatened or pending Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article. Losses shall be reasonably documented by the officer or director and required payments shall be made promptly by the Corporation. Losses incurred by other employees may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. SECTION 6.09. Non-exclusivity and Survival of Indemnification. The indemnification and advancement of expenses provided by or granted pursuant to this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any By-Law, agreement, contract, vote of Stockholders or of disinterested directors, or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise. The provisions of this Article shall not be deemed to preclude the indemnification of any person who is not specified in Section 6.01, 6.02 or 6.03 of this Article but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law, or otherwise. The rights conferred by this Article shall continue as to a person who has ceased to be a director, officer or employee and shall inure to the benefit of such person and the heirs, executors, administrators and other comparable legal representatives of such person. The rights conferred in this Article shall be enforceable as contract rights, and shall continue to exist after any rescission or restrictive modification hereof with respect to events occurring prior thereto. No rights are conferred in this Article for the benefit of any person (including, without limitation, officers, directors and employees subsidiaries of the Corporation ) in any capacity other than as explicitly set forth herein. SECTION 6.10. Meaning Of Certain Terms In Connection With Employee Benefit Plans, etc. For purposes of this Article, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; references to "serving at the request of the Corporation" shall include any service as a director, officer or employee of the Corporation which imposes duties on, or involves service by, such director, officer or employee, with respect to an employee benefit plan, its participants or beneficiaries; and a person who has act in good faith and in a manner reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article. SECTION 6.11. Insurance. The Corporation may, but shall not be required to, purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article. ARTICLE VII AMENDMENTS These By-Laws may be altered, amended or repealed, and new By-Laws may be adopted, by the stockholders or, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, by the Board of Directors, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of the proposed alteration, amendment, repeal or adoption be contained in the notice of such special meeting. 11 EX-3.20 21 l05578aexv3w20.txt EXHIBIT 3.20 EXHIBIT 3.20 CERTIFICATE OF INCORPORATION OF GENERAL CABLE IP CORPORATION The undersigned, in order to form a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows: FIRST: The name of the corporation is General Cable IP Corporation. SECOND: The address of the corporation's registered office in the State of Delaware is the Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the name of its registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the corporation is confined to the maintenance arid management of the corporation's intangible investments and the collection and distribution of the income from such investments or from tangible property physically located outside the State of Delaware; provided, however, that the corporation shall not engage in any activity contrary to Section 1902(b) (8) of Title 30 of the Delaware Code, as the same exists or may hereafter be amended from time to time. For purposes of this Article, "intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations (including debt obligations of affiliated corporations) patents, patent applications, trademarks, trademark applications, trade names, copyrights and similar types of intangible assets. FOURTH: The total number of shares of stock which the corporation shall have authority to issue is 1,000 shares of common stock having a par value of $1.00 per share. FIFTH: The name and mailing address of the Incorporator is as follows: Name Mailing Address L. J. Vitalo The Corporation Trust Company 1209 Orange Street Wilmington, DE 19801 SIXTH: In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the corporation is expressly authorized and empowered to make, alter or repeal the bylaws of the corporation, subject to the power of the stockholders of the corporation to alter or repeal any bylaw made by the board of directors. SEVENTH: The corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provisions contained in this Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article. EIGHTH: The election of directors need not be by written ballot, unless the bylaws of the corporation shall so provide. NINTH: To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that this Article shall not eliminate or limit the liability of a director for U) any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. IN WITNESS WHEREOF, the undersigned has caused this Certificate of Incorporation to be executed this 18th day of December, 1995. By: /s/ L.J. Vitalo CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION General Cable IP Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation: RESOLVED, that the first paragraph of the Certificate of Incorporation of General Cable IP Corporation shall be deleted in its entirety and replaced with the following: "FIRST: The name of the corporation is General Cable Technologies Corporation." SECOND: The sole stockholder has given its written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the Stats of Delaware. THIRD: That the aforesaid amendment was duly adapted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the Sate of Delaware. IN WITNESS WHEREOF, said General Cable IP Corporation has caused this certificate to be signed by its President, this 28th day of August, 1998. General Cable Corporation By: /s/ Christopher F. Virgulak ---------------------------- Christopher F. Virgulak President CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION General Cable IP Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation: RESOLVED, that the this paragraph of the Certificate of Incorporation of General Cable Technologies Corporation shall be deleted in its entirety and replaced with the following: "THIRD: The nature of the business or purposes to be conducted or promoted is limited to the maintenance arid management of the corporation's intangible investments and the collection and distribution of the income from such investments or from tangible property physically located outside the State of Delaware (including, without limitation, guaranteeing the obligations of any affiliate(s) and pledging its assets to secure such obligations) and any other activity which is not contrary to Section 1902(b) (8) of Title 30 of the Delaware Code, as the same exists or may hereafter be amended from time to time. For purposes of this Article, "intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations (including debt obligations of affiliated corporations) patents, patent applications, trademarks, trademark applications, trade names, copyrights and similar types of intangible assets." SECOND: The sole stockholder has given its written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the Stats of Delaware. THIRD: That the aforesaid amendment was duly adapted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the Sate of Delaware. IN WITNESS WHEREOF, said General Cable Technologies Corporation has caused this certificate to be signed by its President, this 21st day of November, 2003. GENERAL CABLE TECHNOLOGIES CORPORATION By: /s/ Christopher F. Virgulak ----------------------------- Christopher F. Virgulak President EX-3.21 22 l05578aexv3w21.txt EXHIBIT 3.21 EXHIBIT 3.21 GENERAL CABLE TECHNOLOGIES CORPORATION BYLAWS August 28, 1998 ARTICLE I - STOCKHOLDERS SECTION 1. ANNUAL MEETING. An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place within Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes prescribed in the notice of the meeting, may be called by the Board of Directors, the Chairperson or the President or as otherwise provided by law or the Certificate of Incorporation and shall be held at such place within Delaware, on such date, and at such time as they or he or she shall fix. The stockholders holding a majority of the outstanding voting stock of the Corporation may call a special meeting in accordance with Section 4 of Article II of these Bylaws. SECTION 3. NOTICE OF MEETINGS. Written notice of the place, date and time of all meetings of the stockholders shall be given, not less than ten nor more than sixty days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation law or the Certificate of Incorporation or Bylaws of the Corporation). When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. SECTION 4. QUORUM. At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. If a quorum shall fail to attend any meeting, the Chairperson of the meeting or the holders of a majority of the shares of the stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place within Delaware, date, or time. If a notice of any adjourned special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held with those present constituting a quorum, then except as otherwise required by law, those present at such adjourned meeting shall constitute a quorum, and all matters shall be determined by a majority of the votes cast at such meeting. SECTION 5. ORGANIZATION. The Chairperson of the Board or, in the absence of such Chairperson, the President of the Corporation or, in the President's absence, such person as may be chosen by the Board, or if not so chosen, as selected by holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as Chairperson of the meeting. In the absence of the Secretary of the Corporation, the Secretary of the meeting shall be such person as the Chairperson of the meeting appoints. SECTION 6. CONDUCT OF BUSINESS. The Chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. SECTION 7. PROXIES AND VOTING. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting. Each stockholder shall have one vote for every share of stock entitled to vote which is registered in such stockholder's name on the record date for the meeting, except as otherwise provided herein or required by law. All voting, including on the election of directors, but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or such stockholder's proxy, a stock vote shall be taken. Every stock vote shall be taken by ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. Every vote taken by ballot shall be counted by an inspector or inspectors appointed by the Chairperson of the meeting. All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast. SECTION 8. STOCK LIST. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in such stockholder's name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of a least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them. SECTION 9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. 2 ARTICLE II - BOARD OF DIRECTORS SECTION 1. NUMBER AND TERM OF OFFICE. The number of directors who shall constitute the whole board shall be such number as the Board of Directors shall have designated from time to time and at any time, except that in the absence of any such designation, such number shall be three (3). Each director shall be elected for a term of one year and until such director's successor is elected and qualified, except as otherwise provided herein or required by law. Whenever the authorized number of directors is increased between annual meetings of the stockholders, a majority of the directors then in office shall have the power to elect such new directors for the balance of a term and until their successors are elected and qualified. Any decrease in the authorized number of directors shall not become effective until the expiration of the term of the directors then in office unless, at the time of such decrease, there shall be vacancies on the board which are being eliminated by the decrease. SECTION 2. VACANCIES. If the office of any director becomes vacant by reason of death, resignation, disqualification, removal or other cause, a majority of the directors remaining in office, although less than a quorum, may elect a successor for the unexpired term and until such director's successor is elected and qualified. SECTION 3. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such place or places within Delaware, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required. SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called only by the Chairperson, the President, or their respective delegates, a majority of the directors or a majority of the stockholders and shall be held at such place within Delaware, on such date, and at such time as the authorized person(s) calling such meeting shall fix. Notice of the place, date, and time of each such special meeting shall be given each director by whom it is not waived by mailing written notice not less than five days before the meeting or by telegraphing, telecopying or sending by overnight courier the same not less than twenty-four hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. SECTION 5. QUORUM. At any meeting of the Board of Directors, a majority of the total number of the whole board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to any place within Delaware, date, or time, without further notice or waiver thereof. SECTION 6. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Notwithstanding any provision of these bylaws to the contrary, members of the Board of Directors, or of any committee thereof, may participate in meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting. SECTION 7. CHAIRPERSON OF THE BOARD. The Board of Directors shall elect, at its organization meeting and each annual meeting thereafter, a Chairperson of the Board (the "Chairperson") who shall be a director and who shall hold office until the next annual meeting of the Board and until such Chairperson's successor is elected and qualified or until such Chairperson's earlier resignation or removal by act of the Board. The Chairperson shall preside at meetings of the 3 stockholders and the Board. In the absence of the Chairperson, the President shall preside at meetings of the stockholders and the Board, or in the President's absence, such person as designated by the Board of Directors in accordance with these Bylaws. SECTION 8. CONDUCT OF BUSINESS. At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law. Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors. SECTION 9. COMPENSATION OF DIRECTORS. Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board of Directors. SECTION 10. REMOVAL OF DIRECTORS. Any director of the Corporation may be removed at any time, with or without cause, by a majority vote of the stockholders. ARTICLE III - COMMITTEES SECTION 1. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors, by a vote of a majority of the whole Board, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any committee so designated may exercise the power and authority of the Board of Directors to declare a dividend or to authorize the issuance of stock if the resolution which designates the committee or a supplemental resolution of the Board of Directors shall so provide. In the absence or disqualification of any member of any committee and any alternate member in such member's place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. The Board of Directors may, from time to time, suspend, alter, continue or terminate any committee or the power and functions thereof. SECTION 2. OFFICER'S COMMITTEES. Subject to the approval of the Board, the Chairperson may appoint, or may provide for the appointment of, committees consisting of officers or other persons, with chairpersonship's, vice chairpersonships and secretaryships and such duties and powers as the Chairperson may, from time to time, designate and prescribe. The Board or the Chairperson may, from time to time, suspend, alter, continue or terminate any of such committees or the powers and functions thereof. SECTION 3. CONDUCT OF BUSINESS. Each Committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee 4 without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee. ARTICLE IV - OFFICERS SECTION 1. GENERALLY. The officers of the Corporation shall consist of a President, a Secretary, a Treasurer and such other officers, including, for example, Vice Presidents, Assistant Treasurers and Assistant Secretaries, as may from time to time be appointed by the Board of Directors. Officers shall be elected by the Board of Directors which shall consider that subject at its first meeting after every annual meeting of stockholders. Each officer shall hold office until such officer's successor is elected and qualified or until such officer's earlier resignation or removal. One person may hold more than one of the offices specified in this section and may have such other titles as the Board of Directors may determine. SECTION 2. PRESIDENT. The President shall be the chief executive officer of the Corporation. Subject to the provisions of these bylaws and to the direction of the Board of Directors, the President shall have the responsibility for the general management and control of the business and affairs of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to the President by the Board of Directors. The President shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation. SECTION 3. VICE PRESIDENT. There may be such number of Vice Presidents as the Board of Directors shall appoint. Any such Vice President shall have such powers and duties as may be delegated to the Vice President by the Board of Directors. A Vice President may be designated by the Board of Directors to perform the duties and exercise the powers of the President in the event of the President's absence or disability. In the absence of the Chairperson and the President, one Vice President so designated by the Board of Directors shall preside at meetings of the stockholders and the Board of Directors. SECTION 4. TREASURER/ASSISTANT TREASURER. The Treasurer shall have the responsibility for maintaining the financial records of the Corporation and shall have custody of all monies and securities of the Corporation. The Treasurer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Treasurer shall also perform such other duties as the Board of Directors may from time to time prescribe. Without limiting the provisions of Sections 1 or 6 of this Article IV, the Board of Directors may also elect an Assistant Treasurer, if deemed necessary or appropriate, who shall have such powers and duties of the Treasurer, as determined by the Board of Directors. SECTION 5. SECRETARY/ASSISTANT SECRETARY. The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the stockholders and the Board of Directors. The Secretary shall have charge of the corporate books and shall perform such other duties as the Board of Directors may from time to time prescribe. Without limiting the provisions of Sections 1 or 6 of this Article IV, the Board of Directors may also elect an Assistant Secretary, if deemed necessary or appropriate, who shall have such powers and duties of the Secretary, as determined by the Board of Directors. 5 SECTION 6. DELEGATION OF AUTHORITY. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof. SECTION 7. REMOVAL. Any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors. SECTION 8. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS. Unless otherwise directed by the Board of Directors, the President or any Vice President, or their respective delegates, shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation. ARTICLE V - STOCK SECTION 1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the President and the Secretary, or such other officers as authorized by the Board, certifying the number of shares owned by such stockholder. SECTION 2. TRANSFERS OF STOCK. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of this Article V, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor. SECTION 3. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. 6 SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity. SECTION 5. REGULATIONS. The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish. ARTICLE VI - PURPOSES AND POWERS SECTION 1. PURPOSES AND POWERS. The purpose of the Corporation is confined to the maintenance and management of the Corporation's intangible investments and the collection and distribution of the income from such investments or from tangible property physically located outside the State of Delaware; provided, however, that the Corporation shall not engage in any activity contrary to Section 1902(b)(8) of Title 30 of the Delaware Code, as the same exists or may hereafter be amended from time to time. For purposes of this Article, "intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations (including debt obligations of affiliated Corporations), patents, patent applications, trademarks, trademark applications, trade names, copyrights and similar types of intangible assets. ARTICLE VII - INDEMNIFICATION AND INSURANCE SECTION 1. SCOPE. Except as prohibited by law, every person shall be entitled as of right to be indemnified by the Corporation against reasonable expenses and any liability paid or incurred by such person in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Corporation or otherwise, by reason of such person being or having been a director or officer of the Corporation or by reason of the fact that such officer or director of the Corporation is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other entity (such claim, action, suit or proceeding hereinafter being referred to as "action") if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable grounds to believe his conduct was unlawful. Such indemnification shall include the right to have expenses incurred by such person in connection with an action paid in advance by the Corporation prior to final disposition of such action upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall be ultimately determined that he was not entitled to be indemnified as provided herein. Persons who are not directors or officers of the Corporation may be similarly indemnified in respect or service to the Corporation or to another such entity at the request of the Corporation to the extent the Board of Directors at any time determines that such person is entitled to the benefits of this Article VII. As used herein, "expense" shall include reasonable fees and expenses of counsel selected by such person; and "liability" shall include amounts of judgments, excise taxes, fines and penalties, and amounts paid in settlement. SECTION 2. MEANS OF INDEMNIFICATION. The Corporation may purchase and maintain insurance to protect itself and any person eligible to be indemnified hereunder against any liability or expense asserted or incurred by such person in connection with any action, whether or not the Corporation would have the power to indemnify such person against such liability or expense by law or under this Article VII. The Corporation may (but shall not be required to) create a trust fund, grant a security interest, cause a letter of credit to be issued or use other means (whether or not similar to the foregoing) to ensure the payment of such sums as may become necessary to effect indemnification as provided herein. 7 SECTION 3. AGREEMENT FOR INDEMNIFICATION. The Corporation shall have the express authority to enter into such agreements as the Board of Directors deems appropriate for the indemnification, including advancement of expenses, of present or future directors and officers of the Corporation and other persons in connection with their service to, or status with, the Corporation or any other corporation, partnership, joint venture, trust, employee benefit plan or other entity with whom such director, officer or other person is serving at the request of the Corporation. SECTION 4. NATURE OF RIGHT OF INDEMNIFICATION. The right of indemnification provided for herein (i) shall not be deemed exclusive of any other rights to which those seeking indemnification hereunder may be entitled, (ii) shall be deemed to create contractual rights in favor of persons entitled to indemnification hereunder, (iii) shall continue as to persons who have ceased to have the status pursuant to which they were entitled or were determined to be entitled to indemnification hereunder and shall inure to the benefit of the heirs and legal representatives of persons entitled to indemnification hereunder and (iv) shall be applicable to actions, suits or proceedings commenced after the adoption hereof, whether arising from acts or omissions occurring before or after the adoption hereof. The rights of indemnification provided for herein may not be amended, modified or repealed so as to limit in any way the indemnification provided for herein with respect to any acts or omissions occurring prior to the effective date of any such amendment, modification or repeal. SECTION 5. NON-PAYMENT BY CORPORATION. In the event any indemnification or advance of expenses to which a person is entitled under paragraph (a) of this Article VII is not paid in full by the Corporation with in 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. The Corporation shall promptly reimburse the claimant for all costs and expenses, including attorney's fees, incurred in bringing and pursuing such action, subject to the Corporation's right to recover the amount of such reimbursement in the event and to the extent that it is ultimately determined by the final judgment of a court of competent jurisdiction that the claimant is not entitled to indemnification under this Article. ARTICLE VIII - NOTICES SECTION 1. NOTICE. Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, director, officer, employee or agent, shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, by sending such notice by Federal Express or similar overnight courier, by sending such notice be prepaid telegram or mailgram or by sending such notice by telecopy or similar facsimile transmission. Any such notice shall be addressed to such stockholder, director, officer, employee, or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered, or dispatched, if delivered through the mails, by overnight courier, by telegram or mailgram, or by telecopy or similar facsimile shall be the time of the giving of the notice. SECTION 2. WAIVERS. A written waiver of any notice, signed by a stockholder, director, officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver. 8 ARTICLE IX - MISCELLANEOUS SECTION 1. CORPORATE SEAL. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. Duplicates of the seal may be kept and used by the Treasurer or Secretary or by an Assistant Secretary or Assistant Treasurer. SECTION 2. RELIANCE UPON BOOKS, REPORTS AND RECORDS. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation, including reports made to the Corporation by any of its officers, by an independent certified public accountant, or by an appraiser selected with reasonable care. SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall be as fixed by the Board of Directors. SECTION 4. TIME PERIODS. In applying any provision of these bylaws which require that an act be done or not done a specified number of days prior to an event of that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included. ARTICLE X - AMENDMENTS SECTION 1. AMENDMENTS. These Bylaws may be amended, suspended or repealed in a manner consistent with law at any regular or special meeting of the Board of Directors by vote of a majority of the entire board or at any stockholders meeting called and maintained in accordance with Article I of these bylaws. Such amendment, suspension or repeal may be evidenced by resolution or as the Board may otherwise deem appropriate. The undersigned, Secretary of General Cable Technologies Corporation, does hereby certify that the foregoing is a true copy of the Bylaws of General Cable Technologies Corporation, and that the same are in full force and effect at this date. Dated: August 28, 1998 /s/ Robert J. Siverd ---------------------------- Robert J. Siverd, Secretary 9 EX-3.22 23 l05578aexv3w22.txt EXHIBIT 3.22 EXHIBIT 3.22 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 01:30 PM 05/06/1999 991180536 - 3039501 CERTIFICATE OF LIMITED PARTNERSHIP OF GENERAL CABLE TEXAS OPERATIONS L.P. The undersigned, desiring to form a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter 17, do hereby certify as follows: FIRST. The name of the limited partnership is GENERAL CABLE TEXAS OPERATIONS L.P. SECOND. The address of the partnership's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle. The name of the Partnership's registered agent for service of process in the State of Delaware at such address is The Corporation Trust Company. THIRD. The name and mailing address of the general partner is as follows: Name Mailing Address General Cable Industries, Inc. 4 Tesseneer Drive Highland Heights, Kentucky 41076-9753 IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited Partnership of GENERAL CABLE TEXAS OPERATIONS L.P. as of November 28, 2001. GENERAL CABLE TEXAS OPERATIONS L.P. By: General Cable Industries, Inc. Its: General Partnership Industries, Inc. By: /s/ Christopher Virgulak ------------------------------------- Name: Christopher Virgulak Title: Executive Vice President EX-3.23 24 l05578aexv3w23.txt EXHIBIT 3.23 EXHIBIT 3.23 AMENDMENT NO. 2 TO THE LIMITED PARTNERSHIP AGREEMENT OF GENERAL CABLE TEXAS OPERATIONS L.P. A DELAWARE LIMITED PARTNERSHIP This Amendment No. 2 to the LIMITED PARTNERSHIP AGREEMENT ("Agreement") of GENERAL CABLE TEXAS OPERATIONS L.P. (the "Partnership") dated December 1, 2001, is entered into as of December 20, 2002, by and among the Partnership; General Cable Industries, Inc., a Delaware corporation and sole general partner of the Partnership ("GCI"); and General Cable Management LLC, a Delaware limited liability company and sole limited partner of the Partnership ("GCM"). 1. The parties hereto acknowledge that on the date hereof, GCM distributed to its sole member, GCI, a 98% Percentage Interest (as defined in the Agreement) in the Partnership, thus resulting in GCI holding an aggregate 99% Percentage Interest as the sole general partner of the Partnership and GCM retaining a 1% Percentage Interest as the sole limited partner. The parties hereby modify Exhibit A to the Agreement as follows, to reflect this adjustment of Percentage Interests in the Partnership as of the date hereof: GENERAL PARTNER: General Cable Industries, Inc. Partnership Interest: 99% LIMITED PARTNER: General Cable Management LLC Partnership Interest: 1% 2. Except as provided herein, the Agreement shall remain in full force and effect. GENERAL CABLE MANAGEMENT LLC By: /s/ Christopher Virgulak ----------------------------------- Name: Christopher Virgulak Title: Chief Financial Officer GENERAL CABLE INDUSTRIES, INC. By: /s/ Robert Siverd ----------------------------------- Name: Robert Siverd Title: Executive Vice President GENERAL CABLE TEXAS OPERATIONS L.P. By: /s/ David Hills ----------------------------------- Name: David Hills Title: Assistant Secretary GENERAL CABLE TEXAS OPERATIONS L.P. LIMITED PARTNERSHIP AGREEMENT This LIMITED PARTNERSHIP AGREEMENT made as of December 1, 2001 (the "Agreement Date"), by and between GENERAL CABLE MANAGEMENT LLC, a Delaware limited liability company (the "Limited Partner"), and GENERAL CABLE INDUSTRIES, INC., a Delaware corporation (the "General Partner"). The General Partner and the Limited Partner are hereinafter sometimes referred to collectively as the "Partners". ARTICLE I DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided, or unless the context otherwise requires, (i) the terms defined in this Section, when capitalized, have the meanings specified in this Section, (ii) all accounting terms not otherwise defined in this Section or elsewhere in this Agreement have the meanings attributed to them under generally accepted accounting principles as in effect on the Agreement Date, (iii) the word "including" does not limit the words which precede it or follow it, and (iv) the words "herein", "hereof", "hereto", "hereunder", "hereinafter", and words of similar import, refer to this Agreement as a whole and not to any particular Section or other subdivision. 1.1 "Act" means the Delaware Revised Uniform Limited Partnership Act as set forth in Title 6, Chapter 17 of the Delaware Code, as from time to time amended. 1.2 "Affiliate" means, with respect to a specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the specified Person. 1.3 "Agreement" means this Limited Partnership Agreement as it may be amended from time to time. 1.4 "Board of Directors" or "Board" means the Board of Directors of the Partnership consisting of those persons who are appointed as directors from time to time by the General Partner as provided in Section 3.1 hereof. 1.5 "Capital Account" means the Capital Account of each of the Partners determined and adjusted from time to time in accordance with the Regulations Section 1.704-1(b), as the same may be amended or revised. In the event that the treatment called for in such Regulations is likely to have a material effect on the amounts distributed to a Partner pursuant to Section 7.2 hereof, then the provisions of this Agreement shall control. 1.6 "Capital Contribution" means any contribution of cash or any other asset contributed to the Partnership by a Partner. 1.7 "Cash Flow" means with respect to any Partnership Fiscal Year, or portion thereof, all cash receipts of the Partnership from whatever source derived (including from a disposition of assets of the Partnership) less all disbursements of cash during the Fiscal Year (excluding distributions to the Partners) including, without limitation, the payment of all operating expenses and the establishment of all reserves as determined by the General Partner or the Board of Directors. 1.8 "Code" means the Internal Revenue Code of 1986, as amended from time to time. 1.9 "Dissolution Event" means the happening of any of the following events which shall cause a dissolution of the Partnership: (a) The expiration of the term of the Partnership under Section 2.8 hereof; (b) The bankruptcy or the dissolution of a General Partner, unless, within ninety (90) days after such event, the remaining Partners unanimously agree in writing to continue the business of the Partnership; (c) The sale or other disposition of all or substantially all of the assets of the Partnership and the collection of all of the net proceeds therefrom; (d) The bankruptcy of the Partnership; or (e) A determination by the General Partner that the Partnership should be dissolved. 1.10 "General Partner" means GENERAL CABLE INDUSTRIES, INC., and such successors, assigns or additional general partners as may be admitted to the Partnership, from time to time, pursuant to the terms of this Agreement. 1.11 "Interest" means the interest of each Partner in the Partnership, including the rights granted to each Partner under this Agreement, subject to the responsibilities of each Partner imposed under this Agreement. 1.12 "Limited Partner" means GENERAL CABLE MANAGEMENT LLC, and such successors, assigns or additional limited partners as may be admitted to the Partnership, from time to time, pursuant to the terms of this Agreement. 1.13 "Partnership" means the Partnership formed by and governed pursuant to this Agreement as such Partnership may, from time to time, be constituted and amended. 1.14 "Percentage Interests" means the relative Interest of the Partners in the Partnership, which initially shall be a 1% Interest as a General Partner for GENERAL CABLE INDUSTRIES, INC and a 99% Interest as a Limited Partner for GENERAL CABLE MANAGEMENT LLC. The Percentage Interests shall be adjusted to reflect any transfers of interests or admission of additional partners as permitted in this Agreement. 1.15 "Person" means any individual, sole proprietorship, joint venture, general partnership, limited partnership, limited liability partnership, corporation (including any not-for-profit corporation), limited liability company, business trust, association, joint-stock company, unincorporated organization, cooperative, trust, estate, governmental body, government entity or authority (including any branch, subdivision or agency thereof), administrative or regulatory authority, or any other entity of any kind or nature whatsoever. 1.16 "Regulations" means the Income Tax Regulations promulgated under the Code, as such Regulations may be amended from time to time, including corresponding provisions of succeeding regulations. 1.17 "Related Entity" means any of the General Partner or the Limited Partner or any of their Affiliates. 1.18 "Secretary of State" means the Secretary of State of the State of Delaware. 1.19 "State" means the State of Delaware. ARTICLE II THE PARTNERSHIP 2.1 Formation. On November 28th, 2001, the Partners formed the Partnership and caused a Certificate of Limited Partnership for the Partnership to be filed with the Secretary of State pursuant to the Act. The respective rights and liabilities of the Partners and any other partners (general or limited) hereafter admitted shall be governed by the Act and the terms and conditions of this Agreement. 2.2 Continuation. The parties agree to continue the Partnership as a limited partnership under the Act for the purposes and upon the terms and conditions hereinafter set forth in this Agreement. 2 2.3 Name. The business of the Partnership shall be conducted under the name of "GENERAL CABLE TEXAS OPERATIONS L.P." or such other name or names as the General Partner may hereafter designate by written notice to the Limited Partner and the Secretary of State. 2.4 Principal Business Office and Registered Office. The principal business office of the Partnership shall be 4 Tesseneer Drive, Highland Heights, Kentucky, or at such other place as may be designated from time to time by the Board of Directors. In addition, the Board of Directors may cause the Partnership to establish such other offices and places of business within and without the State as it may determine. The registered agent and registered office of the Partnership shall be The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware, or such other Person or at such other place as may be designated from time to time by the Board of Directors. 2.5 Purpose. (a) The purpose of the Partnership shall be to directly and indirectly conduct business activities that further the legal and economic interests of the Partners, whether or not for profit, provided such activities are not now or hereinafter prohibited by the Act or by the law of the State or of any jurisdiction in which the Partnership conducts business. Incident to such purpose and as part of its business, the Partnership is authorized to do all things necessary or appropriate to carry out the foregoing purpose. (b) The Partnership shall be a partnership only for the purpose specified hereinabove, and this Agreement shall not be deemed to create a partnership among the Partners with respect to any activities whatsoever other than the activities within the purpose specified immediately above. (c) The credit and assets of the Partnership shall be used solely for the benefit of the Partnership and shall not be used to further the personal gain of any Partner. 2.6 Other Business and Activities. Except as otherwise expressly provided in this Agreement, nothing in this Agreement shall be deemed to restrict in any way the rights of any Partner, or any of its shareholders, partners or Affiliates, to conduct any business or activity whatsoever, whether or not such business or activity is competitive with the business or interests of the Partnership, without any accountability to the Partnership or to any other Partners. 2.7 Statutory Compliance. (a) The Partnership shall exist under and be governed by, and this Agreement shall be construed in accordance with, the applicable laws of the State of Delaware, including the Act. The Partnership shall make all filings and disclosures required by, and shall otherwise comply with all such laws. All property, whether real or personal, tangible or intangible, owned by the Partnership shall be deemed owned by the Partnership as an entity, in its name, and no Partner shall have any ownership interest in such property in its individual name or right. (b) The Partners shall execute and file in the appropriate records any assumed or fictitious name certificate or certificate required by law to be filed in connection with the formation of, or conduct of business by, the Partnership, and shall execute and file such other documents and instruments as may be necessary or appropriate with respect to the formation of, and conduct of business by, the Partnership. 2.8 Term. The term of the Partnership shall commence on the date of this Agreement and will continue until the Partnership is dissolved pursuant to Article XI hereof. ARTICLE III CONTROL AND MANAGEMENT 3.1 Board of Directors. Except as otherwise expressly provided in this Agreement, the Partnership shall be managed by a Board of Directors consisting of not less than two nor more than nine individuals appointed to serve as directors from time to time by the General Partner. Each director appointed by the General Partner shall 3 continue to serve at the pleasure of the General Partner. Any director appointed by the General Partner may be removed by the General Partner at any time. If any director is removed, resigns, dies, becomes disabled or otherwise becomes unable to serve for any reason, he or she shall be replaced by another individual appointed by the General Partner. Notice of any removal or replacement of any director shall be promptly given by the General Partner to all directors and to the Limited Partner. 3.2 Meetings. The Board of Directors shall meet as frequently as necessary to properly conduct the business of the Partnership and shall use its best efforts to meet no less frequently than on an annual basis. All meetings shall be held on such dates and times, and at such places, as determined by the President upon at least one days prior written notice to all of the directors, which notice may be waived in writing by any director at any time before or after any such meeting. A quorum for all meetings of the Board shall consist of a majority of directors then in office, and the acts of a majority of the directors present and voting at a meeting at which a quorum is present shall be the acts of the Board of Directors. One or more directors may participate in any meeting of the Board, or any committee thereof, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting. Any action by the Board of Directors may be taken without a meeting if, prior or subsequent to the action, a consent or consents thereto signed by a majority of the directors as of the date the action was taken is filed with the Secretary. 3.3 Executive Committee and Other Committees. The Board of Directors, by resolution adopted by a majority of the full Board, may designate from among its members one or more committees, each of which shall be comprised of one or more directors. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. The Executive Committee, if there be one, shall have the authority, by unanimous vote at a meeting or by written consent, to take any action within the authority of the Board of Directors that the Executive Committee concludes, in its sole discretion, should be taken in the best interests of the Partnership during any interim periods between meetings of the Board. Any such action so taken by the Executive Committee shall be deemed to have been taken by the Board of Directors. 3.4 Officers. The officers of the Partnership shall consist of a President, oneor more Vice Presidents, a Secretary and a Treasurer, all as determined by the Board of Directors. The officers shall be appointed from time to time by the Board to serve for such terms as determined by the Board. Except for the President, Secretary and Treasurer, the Board may refrain from filling any offices at any time and from time to time. Any or all of the officers may be, but need not be, directors of the Partnership. Except for the offices of President and Secretary, any person may hold up to two offices at once. The Board may also appoint assistant officers from time to time. (a) The President shall be the chief executive officer of the Partnership; shall preside at all meetings of the Board of Directors and all meetings of Partners, and shall exercise and perform such other powers and duties as may be prescribed by the Board; shall be responsible for carrying out the general and active management of the business and affairs of the Partnership under the direction of the Board of Directors; and shall see that all resolutions of the Board are put into effect. (b) The Vice President or, if there be more than one, the Vice Presidents in the order, if any, established by the Board of Directors, shall have such authority and perform such duties as may be determined by the Board or the President. (c) The Treasurer shall act under the direction of the President. Subject to the direction of the President, the Treasurer shall have custody of the Partnership funds and shall keep full and accurate accounts and books of record for the Partnership. (d) The Secretary shall act under the direction of the President. Unless a designation to the contrary is made at a meeting, the Secretary shall attend all meetings of the Board of Directors and shall record and maintain the minutes and records of such meetings. The Secretary shall give, or cause to be given, notice of all meetings of the Board as prescribed by the President. 4 3.5 Limited Partner. The Limited Partner, in its capacity as such, shall not have a vote on any Partnership matter except as provided herein; shall not participate in the management of the Partnership business and affairs in any manner whatsoever except as provided herein; shall have all the powers, rights, duties and protections of a limited partner as prescribed in the Act; and shall not be liable for any debt, claim, demand, judgment, decree or other obligation of any nature whatsoever of, against or incurred by the Partnership or any Partner, creditor, employee or agent except to the extent set forth in the Act. The General Partner shall use all reasonable means to assure that all persons, firms, corporations and other entities having dealings with the Partnership, or any Partner, employee or agent, shall be informed of the limited partnership status of the Partnership. 3.6 General Partner. (a) The General Partner shall have the sole and exclusive right to manage the business of the Partnership, directly or through the Board of Directors or the officers appointed by the Board, and is hereby authorized to take any action of any kind and to do anything and everything it deems necessary to manage the business of the Partnership. The General Partner shall have the necessary powers to carry out the purposes, business and objectives of the Partnership and shall possess and enjoy all the rights and powers of partners of a partnership without limited partners, except as otherwise provided in this Agreement or by applicable law. (b) All of the Partnership's expenses shall be billed directly to and be paid by the Partnership. All expenses incurred by the General Partner in connection with the administration and operation of the Partnership shall be charged to the Partnership. (c) Except to the extent otherwise provided by applicable law and in this Agreement, the General Partner, for and in the name and on behalf of the Partnership, is hereby authorized: (i) to execute and deliver any and all agreements, contracts, documents, certifications and instruments necessary or convenient in connection with the management of the Partnership and the operation of its business; (ii) to engage in all kinds of activity and to perform and carry out all contracts of any kind necessary to, in connection with or incidental to the accomplishment of the purpose of the Partnership as may be lawfully carried on or performed by partnerships under applicable law; and (iii) to cause the Partnership to borrow funds from any lending source, including banks, other financial institutions and any Related Entity; (iv) to lend funds or assets to any Related Entity; and (v) to permit confession of judgment against the Partnership in connection with financing or otherwise. (d) Without the consent of the Limited Partner, the General Partner shall not have the authority: (i) to do any act in contravention of this Agreement or the Certificate of Limited Partnership; (ii) to do any act which would make it impossible to carry on the ordinary business of the Partnership; and (iii) to knowingly perform any act which would subject any Limited Partner to liability as a general partner in any jurisdiction. (e) The General Partner shall: (i) take all action which may be necessary or appropriate for the continuation of the Partnership's valid existence as a limited partnership under the laws of the State; (ii) devote to the Partnership such time as may be deemed necessary by the General Partner for the proper performance of its duties hereunder; (iii) prepare or cause to be prepared and shall file on or before the due date (or any extensions thereof) all federal, state and local tax returns required to be filed by the Partnership, and shall cause the Partnership to pay all taxes payable by the Partnership; and (iv) perform all duties imposed on a general partner by Sections 6221 through 6232 of the Code as "tax matters partner" of the Partnership, including the following: (A) the power to conduct all audits and other administrative proceedings with respect to Partnership tax items; (B) the power to extend the statute of limitations for all Partners with respect to Partnership tax items; and (C) the power to file a petition with an appropriate federal court for review of a final partnership administrative adjustment. (f) The General Partner shall obtain, and keep in force during the term of the Partnership, insurance in favor of the Partnership with such insurers and in such amounts as the General Partner shall deem advisable. (g) The General Partner may, on behalf of the Partnership, employ, engage, retain or deal with any Persons to act as managing agents, leasing agents, brokers, accountants or lawyers, or in such other capacities as the General Partner may determine, and the Partnership shall reimburse the General Partner for all direct expenses incurred thereby. 5 (h) All decisions made by the General Partner in accordance with the powers granted hereunder shall be binding upon the Partnership and the Partners without the need of any further approval or ratification. (i) The General Partner shall not be liable, responsible or accountable in damages or otherwise to the Partnership or the Limited Partner for any act or omission by the General Partner performed in good faith pursuant to the authority granted to the General Partner by this Agreement, or in accordance with its provisions, and in a manner reasonably believed by the General Partner to be within the scope of the authority granted the General Partner and in the best interest of the Partnership, provided that such act or omission did not constitute fraud, misconduct, bad faith or gross negligence. The Partnership shall indemnify and hold harmless the General Partner against any liability, loss, damage, cost or expense (including attorneys' fees) incurred by the General Partner on behalf of the Partnership or in furtherance of the Partnership's interest without relieving the General Partner of liability for fraud, misconduct, bad faith or gross negligence. In addition, to the full extent permitted by applicable law, the Partnership shall indemnify and save harmless the General Partner from, and reimburse the General Partner for, all judgments, penalties, including excise and similar taxes, fines, settlements and reasonable expenses, if the General Partner was, is or is threatened to be a named defendant or respondent in a proceeding because the Person is or was a General Partner. The foregoing shall, without limitation, be deemed to make mandatory the indemnification permitted under the Act and to authorize advance payment of expenses to the full extent permitted by applicable law. These indemnification rights are in addition to any other rights the General Partner may have, including, but not, limited to, rights against third parties. (j) The Partnership will reimburse the General Partner from time to time for, or the Partnership will pay directly, all out-of-pocket costs relating to the organization and administration of the Partnership and in connection with the operation of the business of the Partnership, including the actual cost of travel expenses. (k) Once decisions are made by the General Partner, the Chief Executive Officer of the General Partner, the President or any Vice President of the General Partner and the Treasurer or the Secretary of the General Partner may jointly execute agreements, instruments or documents or jointly take actions on the General Partner's behalf 3.7 Compensation and Reimbursement of the General Partner. (a) Except as provided in this Section 3.7 or elsewhere in this Agreement, the General Partner shall not be compensated for its services as General Partner to the Partnership. (b) The General Partner shall be reimbursed for all expenses, disbursements and advances incurred or made in connection with the organization of the Partnership and the qualification of the Partnership to do business in any state. (c) The General Partner shall be reimbursed on a periodic basis, as determined by the General Partner, for all direct expenses it incurs or makes on behalf of the Partnership, including amounts paid to any Person to provide goods or services to the Partnership. 3.8 General Partner Net Worth. The General Partner covenants and agrees that so long as it is the General Partner of the Partnership, it will use all reasonable efforts to maintain a net worth (exclusive of its interests in, or claims against, the Partnership) of an amount required by the Code and Regulations, provided that neither the General Partner nor any other Partner shall have any obligation to contribute assets to the Partnership after the Agreement Date. The General Partner covenants and agrees that it will use all reasonable efforts to establish and maintain the classification of the Partnership as a "partnership" for federal income tax purposes and not as an "association" taxable as a corporation. 6 ARTICLE IV ACCOUNTING RECORDS 4.1 Tax Elections. The Partnership shall make all tax elections which it is required or permitted to make under the Code in accordance with the advices and recommendations made by the Partnership's accountants to the Board of Directors. 4.2 Tax Returns. Each tax return and other statement to be filed by the Partnership with the Internal Revenue Service or any other taxing authority, shall be prepared by the Partnership's accountants and copies of each such return and statement shall be made available to the Partners. 4.3 Books. Proper books of account shall be kept for the Partnership, and entries shall be made therein of all monies expended and received by the Partnership as well as all other matters relating to the Partnership usually or properly entered in books of account. The Partnership's books and records shall be kept in accordance with generally accepted accounting practices consistently applied, and may be kept on a cash or accrual basis as the General Partner may determine. Such books and all papers, correspondence and other instruments relating or belonging to the Partnership shall be kept at the principal office of the Partnership or at such other location or locations as may be determined by the General Partner, and each Partner shall have the right to examine and inspect the books, records, accounts and other papers of the Partnership at any reasonable time during normal business hours. 4.4 Fiscal Year. The Fiscal Year of the Partnership shall end on the 31st day of December of each year. As used in this Agreement, a Fiscal Year shall include any partial Fiscal Year at the beginning and ending of the Partnership. 4.5 Partnership Funds. Except as may otherwise be determined by the General Partner, all funds of the Partnership shall be kept in segregated accounts or investments in the name of the Partnership and shall not be commingled with any other funds other than those of one or more Related Entities where the purpose of such commingling is to increase the investment income of the Partnership. The establishment of, and all withdrawals from, bank accounts or other depositary accounts shall be made upon the signatures of those officers of the Partnership and other persons designated from time to time by the General Partner as authorized signatories. ARTICLE V CAPITAL ACCOUNTS AND CAPITAL CONTRIBUTIONS 5.1 Capital Accounts. (a) The Partnership shall maintain a Capital Account for each Partner which shall be increased by each such Partner's capital contributions and distributive share of Partnership income and shall be decreased by each such Partner's withdrawals of capital and distributive share of Partnership losses. No interest shall be paid on any capital contributed to the Partnership. (b) The Capital Account of any Partner shall be appropriately adjusted to reflect its entry into or withdrawal from the Partnership or its acquisition of the Interest of any Partner. (c) Any loans by a Partner to the Partnership shall not be considered Capital Contributions, and shall not increase the Capital Account of the lending Partner. The terms and conditions of any loans by a Partner to the Partnership shall be determined by the Board of Directors. (d) No Partner shall have the right to withdraw or reduce its contribution to the capital of the Partnership except as specifically provided in this Agreement or otherwise by law. 7 5.2 Initial Capital Contributions. As of the Agreement Date, the Partners have each contributed an amount to the capital of the Partnership as their respective capital contributions as indicated on Exhibit "A", and they have interests in the Partnership as indicated on Exhibit "A". 5.3 Additional Capital Contributions. No Partner shall be required or permitted to make any additional capital contributions to the Partnership without the unanimous prior written consent of all Partners. ARTICLE VI ALLOCATION OF PROFIT AND LOSSES; TAX ALLOCATIONS 6.1 Profits and Losses from Operations. The Profits and Losses incurred by the Partnership during each Fiscal Year, other than from a Dissolution Event, shall be credited or charged on a pro rata basis, as the case may be, at the close of such Fiscal Year (or on such earlier date(s) as there is an adjustment of the Percentage Interests of the Partners) to the Capital Accounts of the Partners in accordance with the Percentage Interests of the Partners. 6.2 Profits and Losses from Dissolution Events. Profits and Losses resulting from Dissolution Events shall be allocated to the Partners so as to produce positive Capital Account balances for the Partners which will result in the assets available for distribution from such Dissolution Event pursuant to Section 7.2 hereof being distributed to the Partners pro rata in accordance with the Percentage Interests of the Partners. 6.3 Tax Allocation of Partner's Distributive Share. Notwithstanding anything to the contrary in this Agreement, any allocation of income, gain, loss, deduction and credit (or item thereof) with respect to the Partnership shall be made on a basis consistent with Section 704 of the Code, and the Regulations applicable with respect thereto. ARTICLE VII CASH DISTRIBUTIONS 7.1 Distribution of Cash Flow. Cash Flow, other than the proceeds attributable to a Dissolution Event, and other than such reserves as may be established from time to time by the General Partner or the Board of Directors or by the officers of the Partnership acting in accordance with directives or policies or practices established from time to time by the General Partner or the Board of Directors, shall be distributed to the Partners pro rata in accordance with the Percentage Interests of the Partners. Distributions of Cash Flow to the Partners shall be made annually or at such shorter intervals as the Board of Directors may decide. 7.2 Application of Proceeds of Dissolution Event. (a) In the event of a sale or other disposition of all or substantially all the assets of the Partnership and/or the termination and winding up of the Partnership pursuant to a Dissolution Event, the assets of the Partnership, after payment of all debts and liabilities of the Partnership and the expenses of liquidation, and the establishment of any necessary or required reserves shall be distributed to the Partners in accordance with the positive balances in their respective Capital Accounts, after such Capital Accounts have been adjusted pursuant to Article VI hereof to reflect the profits and losses realized or incurred on the sales or disposition of the assets of the Partnership. (b) For purposes of determining the Capital Accounts of the Partners under this Section 7.2, if any of the assets of the Partnership are to be distributed in-kind, the Gross Asset Value of each such asset shall be determined by the General Partner as of the time of such distribution (or at such other date reasonably close to the date of such distribution as the General Partner shall determine). There shall be allocated among the Partners, in accordance with Article VI hereof, the amount of Profits and Losses, if any, which would have been realized by the Partnership if each such asset had been sold by the Partnership for a price equal to its respective Gross Asset Value as so determined. If the General Partner are unable to agree upon the Gross Asset Value of such assets, such Gross 8 Asset Value shall be determined by a qualified independent appraiser selected by the General Partner, and such determination shall be binding upon all of the Partners. ARTICLE VIII TRANSFERABILITY OF PARTNERSHIP INTERESTS 8.1 General Restrictions on Transfer. Except with the prior written consent of all Partners (which consent may be given or withheld in each Partner's sole discretion) and except as and to the extent expressly permitted in this Article VII, no Partner may sell, convey, transfer, syndicate, assign, mortgage, pledge, hypothecate or otherwise encumber in any way (hereinafter referred to as a "transfer") all or any portion of its Interest, or withdraw or retire from the Partnership, and any such attempted transfer, withdrawal or retirement not permitted hereunder shall be null and void. Further, no Partner shall sell its interest to a third party whose status as a partner will cause the Partnership's federal or state licenses to be revoked or not to be renewed and/or who is a competitor of the Partnership, or any of the Partners. 8.2 Additional Partners. Additional Partners may be admitted to the Partnership only upon the written consent of all Partners, except as otherwise provided in this Article VIII. 8.3 First Refusal and Tag-Along Rights. (a) If a Partner receives a bona fide written offer from a third party whose status as a partner will not cause the Partnership's federal and state licenses to be revoked or not to be renewed and who is not a competitor of the Partnership, or any of the Partners, to purchase all or any portion of such Interest, and if such Partner wishes to sell its Interest to the third party pursuant to such offer, the selling Partner shall promptly give written notice of such proposed transfer to the Partnership and to the other Partners. Such notice shall contain all material terms and conditions of the written offer, and the name and address of the third party, and shall be accompanied by an offer to sell such Interest of the selling Partner to the Partnership and the other Partners upon the same terms and conditions contained in the written offer tendered by the third party. (b) The Partnership shall have the first right to purchase, at the price and upon the same terms and conditions contained in the written offer, all, and not less than all, of the Interest of the selling Partner being so offered. This election to purchase shall be exercised by delivery of written notice of such election to the selling Partner and to the Partnership within thirty (30) days after receipt of the selling Partner's notice and offer. If the Partnership does not elect to purchase the Interest of the selling Partner, the other Partner(s) shall thereafter have the right to purchase, at the price and upon the same terms and conditions contained in the written offer, all, and not less than all, of the Interest of the selling Partner being so offered. The other Partner's (or Partners') election to purchase shall be exercised by delivery of written notice of such election to the selling Partner within sixty (60) days after receipt of the selling Partner's notice and offer. If more than one Partner exercises the right to purchase the Interest of the Selling Partner, they shall do so on a pro rata basis according to their Percentage Interests, unless the purchasing Partners otherwise agree among themselves. (c) If neither the Partnership nor the other Partners receiving the written offer make a timely election to purchase the Interest of the selling Partner, the selling Partner shall have the right to sell all, and not less than all, of its Interest being so offered to the third party on the terms and conditions as set forth in such written offer by sending a written notice thereof to the third party; provided however, (i) the sale by the selling Partner must be completed within ninety (90) days of such written notification to the third party; and (ii) the selling Partner must timely notify the third party and all other Partners of the right of all other Partners to offer to sell all or any portion of their Interests in the Partnership to such third party on the same terms and conditions, with the purchase price adjusted, however, for any differences in the Percentage Interests of the other Partners. Any other Partner(s) wishing to transfer all or any portion of its Interest pursuant to such "tag-along" right must send, within fifteen (15) days of such notification, a written election to the third party to sell all or any portion of its Interest to the third party. At least thirty (30) days prior to the closing date on the sale by the selling Partner, the third party must respond to the written elections(s) of the other Partner(s) to purchase all, and not less than all, of its Interest being so offered at an equivalent price and upon equivalent terms and conditions contained in the written offer tendered by the third party to the selling Partner, taking into account any differences in the Percentage Interests of the Partners. Such 9 other Partner(s) shall then sell the Interest(s) being so offered to the third party on the same closing date as the selling Partner sells its Interest to the third party. (d) If a sale is concluded to a third party purchaser, but such third party purchaser acquires less than 100% of the interests in the Partnership from all of the Partners, the third party purchaser must agree to be bound by all of the terms and conditions of this Agreement (including this Article VII) with the same force and effect as if the third party purchaser had been an original party to the Agreement. (e) In the event of any change in the identity of the third party purchaser, or in the price, terms and conditions of the written offer, or in the event the sale to the third party purchaser is not completed in the manner and within the time provided in this Section 8.3, the selling Partner may not sell or otherwise transfer its Interest unless and until a new offering notice shall be given by the selling Partner to the Partnership and the other Partners, and the other requirements of this Section 8.3 shall have been complied with. ARTICLE IX MANDATORY OFFERS OF ENTIRE PARTNERSHIP INTERESTS 9.1 Triggering Events. The occurrence of any of the following events constitutes an offer by the Partner to whom the event relates ("Affected Partner") to sell its Interest to the Partnership, in accordance with the procedures set forth in this Article IX: (a) The making of an assignment for the benefit of creditors, which assignment includes the Partner's Interest; (b) Bankruptcy, reorganization, arrangement or liquidation proceedings, state or federal, are commenced by or against a Partner and a trustee, receiver, conservator or other judicial representative, similar or dissimilar, is appointed for a Partner or a Partner's Interest (whether alone or with other assets) and such appointment is not terminated within ninety (90) days; (c) Breach of any provision of this Agreement, which breach causes damage, loss or liability to the Partnership or the other Partners and such breach is not cured and such damage, loss or liability is not indemnified within ninety (90) days after receipt of notice of such breach; (d) Attachment of, execution against, levy upon, or other seizure of a Partner's Interest (other than an attachment which is solely for jurisdictional purposes) unless (and for only so long as) counsel for the Partnership determines that the Partner is in good faith contesting such attachment, execution, levy or other seizure; or (e) A Partner attempts to Transfer its Interest in violation of this Agreement. 9.2 Procedure. (a) Within fifteen (15) days after the occurrence of any of the events set forth in Section 9.1 above, the Affected Partner shall and any other Partners must notify the Partnership and the other Partners of such occurrence; failure to give such notice (the "Offer Notice") shall not prevent the Partnership and the other Partners from exercising their rights granted pursuant to this Article IX. (b) Upon the occurrence of any event set forth in Section 9.1, first the other Partner(s) and then the Partnership, until twenty (20) days after receipt of the notice required pursuant to this Section 9.2, may purchase all (but not less than all) of the offered Interest from the Affected Partner at the price and on the other terms and conditions set forth in this Article IX (collectively the "Agreement Terms"). The other Partner(s)' option must be exercised within ten (10) days of such notice, and the Partnership's option must be exercised within twenty (20) days of such notice. For purposes of this Article IX, the offered Interests in the case of a deceased Partner shall be that part of his or her Interest which has not been properly transferred pursuant to Article VIII. 10 (c) The Affected Partner shall not be obligated to sell his Interest unless all of such Interest shall be purchased. If the offered Interest is not purchased, then such Interest shall remain subject to this Agreement and any holder thereof shall be legally bound hereby and be a Partner for all purposes hereunder. (d) The purchase price for the offered Interest shall be payable in cash and shall be equal to the then "Partnership Value" multiplied by the Affected Partner's Interest on the date of purchase ("Purchase Price"). For the purposes of this Section 9.2, the Partnership Value shall be determined by an appraisal to be performed by an independent and reputable appraiser to be chosen by the Partners other than the Affected Partner. The Partnership shall bear the cost and expense of any such appraisal. (e) Upon the purchase of an Interest pursuant to Articles VIII or IX hereof any indebtedness then owing by a selling Partner to the purchaser (whether the Partnership or the other Partner(s)) shall, at the election of such purchaser, become immediately due and payable and shall be deducted from and set-off against the unpaid balance of the Purchase Price plus accrued interest. ARTICLE X WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER ADMISSION OF ADDITIONAL OR SUCCESSOR GENERAL PARTNER(S) 10.1 Withdrawal. If the General Partner shall voluntarily or involuntarily for any reason (including Bankruptcy) withdraw from the Partnership or cease to be General Partner, it shall be and remain liable for all obligations and liabilities incurred as General Partner prior to the time such withdrawal or cessation shall become effective, but shall be free of any obligation or liability incurred on account of the activities of the Partnership from and after the time such withdrawal or cessations shall become effective. 10.2 Removal. The General Partner may be removed for good cause shown by a majority in interest of the Limited Partners. "Good Cause," for the purposes of this Section 10.2, shall not include a reasonable mistake of judgment made in good faith and based upon the facts as they were known at the time the decision was made, but shall include, without limitation, gross negligence or recklessness, acts taken in willful disregard of the best interests of the Partnership or violation of any provision of this Agreement. 10.3 Additional or Successor General Partner. Upon receipt of the written approval of the existing General Partner and a majority in interest of the Limited Partners based upon their percentage Partnership Interest, the General Partner may designate one or more Persons to be an additional General Partner, with such participation in the General Partner's Interest as the General Partner and such additional General Partner may agree upon; provided that the Interest of the other Partners shall not be affected thereby. The General Partner may withdraw or be removed from the Partnership as specified in Sections 10.1 and 10.2, respectively. If such General Partner is not then the sole General Partner, the Partnership shall continue only upon the approval of the remaining General Partner(s) and a majority in interest of the Limited Partners. If the General Partner is the sole General Partner, the Partnership shall only continue upon the vote of a majority in interest of the Limited Partners to do so and the designation of a successor General Partner by the written consent of a majority in interest of the Limited Partners. Should the General Partner desire to withdraw from the Partnership and transfer its Partnership Interest to any Person or Person(s), the General Partner's Interest shall immediately be converted into a Limited Partnership Interest in the Partnership upon the transfer to such Person unless a majority in interest of the Limited Partners consent. ARTICLE XI DISSOLUTION AND LIQUIDATION 11.1 Dissolution Events. (a) Dissolution of the Partnership shall be effective the day on which a Dissolution Event occurs, but the Partnership shall not terminate until all of the assets of the Partnership shall have been distributed as 11 provided in this Agreement. Notwithstanding the dissolution of the Partnership prior to the termination of the Partnership, as aforesaid, the business of the Partnership and the affairs of the Partners as such shall continue to be governed by this Agreement. (b) Notwithstanding anything in this Agreement to the contrary, upon a sale of all or substantially all of the assets of the Partnership where all or any portion of the consideration payable to the Partnership is to be received by the Partnership more than ninety (90) days after the date on which such sale occurs, the Partnership shall continue solely for purposes of collecting the deferred payments and making distributions to the Partners. 11.2 Liquidation. (a) As soon as possible after the Dissolution Event, a full account of the assets and liabilities of the Partnership shall be taken, and a statement shall be prepared by the Partnership's accountants setting forth the assets and liabilities of the Partnership. A copy of such statement shall be furnished to each of the Partners within ninety (90) days after such Dissolution Event. Those assets of the Partnership that can be liquidated without undue loss shall be liquidated as promptly as possible, and the expenses of the liquidation and the debts of the Partnership shall be paid. The net proceeds of the liquidation and any assets to be distributed to the Partners in-kind shall be distributed in accordance with Section 7.2 hereof. Any assets of the Partnership that are not liquidated and are not to be distributed in-kind shall be retained by the Partnership and the Partnership, shall continue to preserve such assets until such time as it is prudent to liquidate or distribute in-kind such assets. (b) Any reserves shall be established or continued which the Board of Directors deems reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership. Such reserves shall be held by the Partnership for the payment of any of the aforementioned contingencies, and at the expiration of such period as the Board of Directors shall deem advisable, the Partnership shall distribute the balance thereafter remaining to the Partners in accordance with Section 7.2 hereof. (c) Upon dissolution and liquidation of the Partnership, each Partner shall look solely to the assets of the Partnership for the return of and on its investment, and if the Partnership's assets remaining after payment and discharge of debts and liabilities of the Partnership, including any debts and liabilities owed, is not sufficient to satisfy the rights of a Partner, it shall have no recourse or further right or claim against the Partnership, or any other Partner, except to the extent that a Partner may have a right of contribution (or similar right) against another Partner under the laws of the State. ARTICLE XII AMENDMENTS TO THE AGREEMENT 12.1 By Majority of Interests. Amendments may be made to this Agreement from time to time by a majority of the holders of the Partnership Interests; provided, however, that without the written consent of the Partners to be adversely affected thereby, this Agreement may not be amended so as to: (a) Convert a Limited Partner's Interest into a General Partner's Interest; (b) Modify the tax liability of a Limited Partner; (c) Alter the interest of a Partner in profits and losses; and (d) Reduce or limit the powers of the General Partner. 12.2 By General Partner. In addition to any other amendments authorized herein, amendments may be made to this Agreement from time to time by the General Partner without the consent of the Limited Partner(s): 12 (a) to add to the representations, duties or obligations of the General Partner, or surrender any right or power granted to the General Partner herein for the benefit of the Limited Partner(s); or (b) to cure any ambiguity, to correct or supplement any provision which may be inconsistent with any other provision herein or to make any other provisions with respect to matters or questions arising under this Agreement which will not be inconsistent with the provisions of this Agreement. ARTICLE XIII ADDITIONAL PROVISIONS 13.1 Right to Partition. The Partners agree that any property or properties now or hereafter owned by the Partnership are not and will not be suitable for partition. Accordingly, each of the Partners hereby irrevocably waives any and all rights that it may have to maintain any action for partition of any of the Partnership property. 13.2 Enforceability of Agreement. Except as otherwise expressly provided in this Agreement, all provisions of this Agreement shall bind, benefit, and be enforceable by or against, the heirs, successors, administrators, executors, personal representatives and assigns of the Partners. None of the provisions of this Agreement shall be for the benefit of or be enforceable by any creditor of the Partnership or of any Partner. 13.3 Headings and Captions. Any headings or captions preceding the text of any of the Articles, Sections or Subsections of this Agreement are inserted for convenience of reference only, and shall in no way be held or construed to define, limit, describe, explain, modify, amplify, or add to the interpretation, construction or meaning of any provision of, or scope or intent of, this Agreement nor in any way affect this Agreement. 13.4 Context of Terms. All words used in this Agreement shall be construed to be of such number and gender as the context requires or permits. When from the context if appears appropriate, each term stated either in the singular or the plural shall include the singular and the plural and the pronouns stated either in the masculine, the feminine or the neuter shall include the masculine, feminine and the neuter. 13.5 Governing Law. This Agreement and the rights of the parties hereunder shall be governed and construed in accordance with the domestic laws of the State without giving effect to any choice or conflict of law provision or rule, whether of the State or of any other jurisdiction, that would cause the application of the laws of any jurisdiction other than the State. 13.6 Severability. In the event any one or more of the provisions of this Agreement or the application of such provision to any Person or circumstance shall be held to be invalid, illegal or unenforceable the remainder of this Agreement or the application of such provision to Persons or circumstances other than those to which it is held to be invalid, illegal or unenforceable shall not be affected thereby. 13.7 Rights and Remedies. All rights and remedies provided herein are cumulative and are in addition to and not in lieu of any other rights and remedies now or hereafter existing at law, in equity or otherwise, except as otherwise limited herein, and may be enforced concurrently or from time to time. Without limiting the generality of the foregoing, the Partners agree that in addition to all other rights and remedies available at law or in equity, each of the Partners shall be entitled to obtain specific performance of the obligations of each other under this Agreement and immediate injunctive relief and that in the event any action or proceeding is brought in equity to enforce the same, no Partner shall urge as a defense that there is an adequate remedy at law. 13.8 Waivers. Except as otherwise expressly provided herein, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any Partner, and no course of dealing between the Partners, shall constitute a waiver of any such right, power or remedy. A waiver by any of the Partners of any of the covenants, conditions, or agreements to be performed by any of the other Partners or any breach thereof shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant, condition, or agreement herein contained. No waiver shall be valid unless in writing and signed by the Partner against which such waiver is sought to be enforced. 13 13.9 Merger Clause. This Agreement, including any Exhibits and documents referred to in this Agreement or attached hereto, all of which are incorporated herein, contains the entire and exclusive statement of the agreement among the Partners with respect to the subject matter hereof and supersedes all prior agreements, and all prior understandings, writings, proposals, negotiations, representations or any other communications, oral or written, of any of the Partners with respect to the subject matter hereof which are not fully expressed herein. 13.10 Execution of Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. In addition, this Agreement may contain more than one counterpart of the signature page and this Agreement may be executed by the affixing of the signatures of each of the Partners to one of such counterpart signature pages; all such counterpart signatures shall be read as though and shall have the same force and effect as though all the signatories had signed a single signature page. IN WITNESS WHEREOF, and intending to be legally bound, the Partners have executed this Agreement as of the Agreement Date. GENERAL PARTNER: GENERAL CABLE INDUSTRIES, INC. Attest: /s/ Christopher F. Virgulak By: /s/ Robert J. Siverd ------------------------ Its: Executive Vice President LIMITED PARTNER: GENERAL CABLE MANAGEMENT LLC Attest: /s/ Christopher F. Virgulak By: /s/ David Hills ------------------------ Its: Assistant Secretary 14 EXHIBIT "A" Capital Contributions
NAME CAPITAL CONTRIBUTION PERCENTAGE INTEREST LIMITED PARTNER: GENERAL CABLE MANAGEMENT LLC $700,000 99% GENERAL PARTNER: GENERAL CABLE INDUSTRIES, INC. $ 7,070 1%
EX-3.24 25 l05578aexv3w24.txt EXHIBIT 3.24 EXHIBIT 3.24 RESTATED CERTIFICATE OF INCORPORATION OF GK TECHNOLOGIES, INCORPORATED (AS AMENDED MARCH 26, 1982) GK Technologies, Incorporated, a corporation organized and existing under the laws of the State of New Jersey, restates and integrates and further amends its Certificate of Incorporation as herein set forth. ARTICLE I CORPORATE NAME The name of the corporation is GK TECHNOLOGIES, INCORPORATED (hereinafter called the "Corporation"). ARTICLE II PURPOSES The purpose of the Corporation is to engage in any activity within the purposes for which corporations may be organized under the New Jersey Business Corporation Act. ARTICLE III REGISTERED OFFICE AND AGENT The current registered office of the Corporation is c/o The Corporation Trust Company, 28 West State Street, Trenton, New Jersey 08608. The name of the Corporation's current registered agent at that office is The Corporation Trust Company. ARTICLE IV CAPITAL STOCK The total authorized capital stock of the Corporation shall be 251,000 shares, consisting of 250,000 shares of Preferred Stock issuable in one or more classes and series of any class, and 1,000 shares of Common Stock. The shares of Preferred Stock of each class shall be without nominal or par value, except the class established as provided in Section C of this Article IV, and except that the amendment authorizing the initial issuance of any other class or series of a class of such shares, adopted by the Board of Directors as provided in Section A of this Article IV, may designate the shares of such class as shares of a specified par value per share, in which event all of the shares of such class shall be of the par value per share so specified. The shares of Common Stock shall constitute a single class and shall be of the par value of $1 per share. The designations, relative voting, dividend, liquidation and other rights, preferences and Imitations of the Preferred Stock and Common Stock of the Corporation are as follows: A. PREFERRED STOCK The Board of Directors of the Corporation is expressly authorized (subject to any restrictions then applicable pursuant to clause (h) of this Section A or pursuant to Section C of this Article IV) to adopt and to cause to be executed and filed without further approval of the shareholders an amendment or amendments to this Restated Certificate of Incorporation to authorize the issuance of shares of Preferred Stock from time to time as shares of one or more classes or series of any class or classes of Preferred Stock for such consideration or considerations, not less than the par value in the case of shares having a par value, as the Board of Directors may fix. In the amendment authorizing any class or series of any class of Preferred Stock, the Board of Directors is expressly authorized to determine: (a) the distinctive designation of such class or series and the number of shares comprising such class or series, which number may be increased (except where otherwise provided by the Board of Directors in creating such class or series) or decreased (but not below the number of shares thereof then outstanding) from time to time by like action of the Board of Directors; (b) the rate of dividends payable on shares of such class or series and the preferences with respect to dividends (including the preferences, if any, over any other class or series or of any other class or series over such class or series), the terms and conditions upon which and the periods in respect of which dividends shall be payable, whether and upon what conditions such dividends shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate; (c) whether or not the shares of such class or series shall be redeemable, and it so redeemable the terms on which shares of such class or series may be redeemed, including, without limitation, the time or times when, the redemption price or prices at which and the manner in which such shares shall be redeemable including the manner in which such shares shall be selected for redemption if less than all shares are to be redeemed; (d) the terms and amount of any sinking fund provided for the purchase or redemption of shares of such class or series; (e) the rights of the holders of shares of such class or series, including the preferences, if any, over any other class or series (or of any other class or series over such class or series), in case of the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, which rights may vary depending on whether such liquidation, dissolution or winding up is voluntary or involuntary, and if voluntary may vary at different dates; (f) the terms, if any, upon which the holders of shares of such class or series may convert shares thereof into shares of stock of any other class or classes, or of any other series of the same class or of another class or classes; (g) the voting powers, full and/or limited, if any, of the shares of such class or series; and, subject to the provisions of Article V, whether or not and under what conditions the shares of such class or series (alone or together with the shares of one or more other classes or series having similar provisions) shall be entitled to vote separately as a single class for the election of not more than two additional directors of the Corporation in case of dividend arrearages or other specified events (which shares shall not, by reason of such right to vote as a class to elect not more than two additional directors in accordance with this clause be deemed shares entitled to vote for the election of directors for purposes of any other provision of this Restated Certificate of Incorporation) and/or to vote separately as a single class upon any other matters; and to determine the voting requirements for any such separate class of votes so provided for, or which may be required by law, which voting requirements, unless and except as otherwise so determined by the Board of Directors, shall be a plurality of the votes cast in the case of an election of additional directors as aforesaid and shall be a majority of the votes cast in any other case; (h) whether or not the issuance of any additional shares of such class or series, or of any shares of any other class or series, shall be subject to restrictions as to issuance, or as to the rights, preferences or limitations of any such other class or series; and (i) such other relative rights, preferences and limitations as may be permitted to be determined by the Board of Directors of the Corporation in accordance with the laws of the State of New Jersey as in effect at the time of the creation of such class or series. With respect to any class or series of Preferred Stock authorized by the Board of Directors in accordance with the foregoing provisions of this Section A, no shares of which have been issued, the Board of Directors is expressly authorized to change the designation and number of shares, and the relative rights, preferences and limitations of such class or series to the same extent as the Board of Directors is authorized by the foregoing provisions of this Section A initially to determine such designation and number of shares, and such relative rights, preferences and limitations. B. COMMON STOCK (1) Except with respect to matters as to which the holders of the Preferred Stock or any class or series thereof shall be entitled to vote separately as a single class as authorized in Sections A, C and D of this Article IV or as may be required by law, each holder of Common Stock of the Corporation from time to time issued and outstanding shall be entitled to vote and shall have one vote for each share of Common Stock standing in his name on the books of the Corporation. (2) Subject to the provisions of Sections A and C of this Article IV, the Board of Directors in its discretion may, from the surplus or net profits of the Corporation legally available for the payment of dividends and at such times and in such manner as determined by the Board of Directors, declare and pay, whether in cash, property, stock or otherwise, dividends on the Common Stock of the Corporation, and may use the surplus or net profits of the Corporation for the purpose of acquiring any of the capital stock of the Corporation, and `nay reissue and sell any of the capital stock so acquired. (3) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, subject to the preferential or other rights of the holders of the Preferred Stock pursuant to Sections A and C of this Article IV, the holders of the Common Stock shall be entitled to receive ratably any and all assets remaining to be paid or distributed. C. CUMULATIVE PREFERRED STOCK A class of Preferred Stock, designated "Cumulative Preferred Stock", is hereby established, Consisting of a series designated "$8.75 Cumulative Preferred Stock, Series A", and such other series as the Board of Directors of the Corporation may later establish and include in such class in accordance with the provisions of Section A of this Article IV. The Cumulative Preferred Stock shall have a par value of $100 per share, and the shares thereof, when issued, shall be fully-paid and non-assessable. (1) $8.75 Cumulative Preferred Stock, Series A. The $8.75 Cumulative Preferred Stock, Series A (hereinafter in this Section C.1 referred to as the "Shares") shall consist of 250,000 Shares. Upon the reacquisition of any of the Shares, through redemption or otherwise, such reacquired Shares shall be cancelled and shall become part of the authorized and unissued Preferred Stock but shall not be authorized and unissued Shares, The Shares shall be deemed to be for all purposes the same shares as the shares of $8.75 Cumulative Preferred Stock, Series A, of the Corporation's predecessor, GK Technologies, Incorporated, which were converted into the Shares pursuant to the Agreement and Plan of Merger, dated as of March 22, 1982, between such predecessor and the Corporation. The rights, preferences and limitations of the Shares shall be as follows: (a) Dividends on the Shares. The dividends on the Shares shall be $8.75 per Share per annum, payable quarterly (when, as and if declared by the Board of Directors out of funds at the time legally available for payment of dividends) on the first business day in the months of January, April, July and October of each year, commencing on the first business day of October 1977. Dividends on the Shares shall commence to accrue and shall be cumulative from the date of issuance thereof. The dividends payable on the first business day of October 1977 shall be for the period from the date of the original issuance of the Shares through September 30, 1977, both dates inclusive. Dividends payable on the first business day of October 1977, and dividends payable on dates not constituting a regular dividend payment date as provided herein, shall be calculated on the basis of the actual number of days elapsed over a 365-day year. Accumulated but unpaid dividends on any of the Shares shall not bear interest. As long as any of the Shares are outstanding, all dividends declared by the Board of Directors on any of the Shares shall be declared ratably on all the Shares. Cash dividends on the Shares shall be paid by wire transfer through the facilities of the Federal Reserve System to any registered holder who shall provide to the Corporation appropriate written instructions a reasonable time prior to any payment date. In order to facilitate timely payment, the Board of Directors may fix a record date for the determination of the holders of the Shares or may cause the transfer books of the Corporation to be closed to transfer of the Shares, not more than 60 days prior to the payment date for any Distribution on the Shares. (b) Distributions on Capital Stock Generally. The Board of Directors shall not: (i) declare any dividend on any shares of any class or series of stock ranking on a parity with the Shares in respect of the payment of dividends for any dividend period unless there shall have been or shall be paid or declared on all Shares then outstanding, for the same dividend period or for the dividend period of the Shares terminating within the dividend period of such parity stock, like dividends ratably in proportion to the respective dividend rates fixed for the Shares and all such other classes or series (determined in each case by dividing the annual amount of the required dividend per share by the involuntary liquidation preference per share); or (ii) directly or indirectly pay or incur any liability to pay any Distribution (as such term is defined in clause (j)(ii) of this Section C. 1) with respect to any shares of any class of capital stock of the Corporation ranking junior to the Shares with respect to the payment of dividends or redemption or payment upon dissolution, liquidation or winding up, unless, at the time of and after giving effect to such payment or liability, (1) all cumulative and all mandatory Distributions at such time required to have been made with respect to the Shares have been or are simultaneously being fully paid and the Corporation shall be in compliance with all provisions of this Section C.1, and (2) the aggregate amount of all Distributions with respect to all classes of capital stock of the Corporation for all periods subsequent to December 31, 1976 shall not exceed $15,000,000 plus 75% of Consolidated Net Earnings (as such term is defined in clause (j)(i) of this Section C.1) for the period from January 1, 1977 through the end of the last full fiscal quarter. The Corporation shall not authorize any dividend that is not payable within sixty days of authorization. Any of the foregoing restrictions imposed by this clause (b) may be waived by the affirmative vote or consent of the holders of at least a majority of the Shares at the time outstanding, given in writing or by resolution adopted at a meeting called for that purpose. Any Distribution which shall be validly declared by the Board of Directors in accordance with the provisions of this clause (b) may be paid whether or not it would otherwise be permissible at the time of payment. (c) Dissolution, Liquidation or Winding Up. In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, the holders of the Shares then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to shareholders, (i) if such dissolution, liquidation or winding up is voluntary, the same amount per Share that such holders would have received had the Corporation redeemed the Shares pursuant to the provisions of clause (d) below immediately prior to the date on which payment is due to such holders, or (ii) if such dissolution, liquidation or winding up is involuntary, $100 per Share, plus in either case an amount equal to all dividends accrued and unpaid on each Share to the date fixed for distribution, and no more, before any distribution shall be made to the holders of any class of capital stock or series thereof ranking junior to the Shares with respect to the distribution of assets. If the net assets of the Corporation available therefor shall be insufficient for payment of the aforesaid full distributive amounts to the holders of the Shares, or to the holders of the Shares and of shares of each class or series ranking on a parity with the Shares with respect to the distribution of assets, such holders shall be entitled to share such net assets ratably in proportion to their respective full distributive amounts. Written notice of any voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, stating a payment date and the place where the distributive amounts shall be payable, shall be sent by first class mail, postage prepaid, not later than 30 days prior to the payment date stated therein, to the holders of record of the Shares at their respective addresses as the same shall appear on the books of the Corporation. Neither the merger nor consolidation of the Corporation into or with any other corporation or of any other corporation into or with the Corporation, nor a sale, transfer or lease of all or any part of the assets of the Corporation, shall be deemed to be a dissolution, liquidation or winding up of the Corporation within the meaning of this clause (c). (d) Optional Redemption with Premium. The Corporation may redeem, in the manner provided in clause (f), all or, from time to time, part of the Shares at the prices per Share set forth below, plus in each case an amount equal to all accrued and unpaid dividends thereon:
IF THE REDEMPTION DATE IS DURING THE 12 MONTH PERIOD BEGINNING JULY 1: REDEMPTION PRICE - ------------------------------------------------------- ---------------- 1977................................................... $108,750 1978................................................... 108,125 1979................................................... 107,500 1980................................................... 106,875 1981................................................... 106,250 1982................................................... 105,625 1983................................................... 105,000 1984................................................... 104,375 1985................................................... 103,750 1986................................................... 103,125 1987................................................... 102,500 1988................................................... 101,875 1989................................................... 101,250 1990................................................... 100,625 1991................................................... 100,000
except that prior to July 1, 1987 none of the Shares may be so redeemed if the funds for such redemption are obtained by the Corporation directly or indirectly from or in anticipation of the proceeds of any borrowings by or for the account of the Corporation or of any issue of Preferred Stock or of any issue of capital stock of any Subsidiary (as defined in clause (j)(vi) of this Section C.1) other than common stock, which, in each case, has a Weighted Average Life (as defined in clause (j)(vii) of this Section C.1) less than the then Weighted Average Life of the Shares or involves a net cost to the Corporation (calculated after adjustment for any premium received or discount granted (determined in accordance with generally accepted accounting principles) and for any tax benefit to the Corporation resulting from the deductibility of interest and/or premium or any other similar expense not deductible with respect to the Shares) of less than 8.75% per annum. (e) Mandatory Redemption; Optional Redemption Without Premium. (i) On each July I from 1983 through 1992 inclusive, the Corporation shall redeem 25,000 of the Shares at a price of $100 per share plus accrued and unpaid dividends, out of assets that are by law available for such purpose and in the manner provided in clause (f). At or prior to the time of each such redemption the Corporation shall pay or make provision for payment of all accrued and unpaid dividends on the Shares and all other shares of any class or series ranking senior to or on a parity with the Shares in respect of the right to receive dividends and for any mandatory redemption, required to be made on or before such July 1, of shares of all classes ranking senior to the Shares in respect of mandatory redemption. In the event the assets available for such purpose are not adequate to satisfy the mandatory redemption payments at any time in respect of the Shares and all other shares of Preferred Stock ranking on a parity with the Shares in respect of redemption, the amount so available shall be allocated pro rata, based on the respective aggregate redemption payments then required to he made in respect of the Shares and in respect of each other class or series of such other shares, to redeem the largest number of whole shares of each class or series redeemable out of the available assets allocated to it. (ii) The Corporation may, at its option, redeem, contemporaneously with any redemption under paragraph (i) above, up to an additional 25,000 Shares at a price of $100 per Share plus all accrued and unpaid dividends, in the manner provided in clause (f). Any portion of such option unexercised after any such July 1 shall automatically terminate forthwith (such options not being cumulative). Any exercise of such option (whether total or partial) shall be applied against the Corporation's mandatory redemption obligations under clause (e)(i) in inverse chronological order, so as not to reduce the next-accruing mandatory redemption obligations until the Shares are fully redeemed. (f) Manner of Redemption. (i) The total amount payable upon any such redemption of any Shares is herein referred to as the "Redemption Price" of such Shares, and the payment date designated in clause (e) hereof in the case of a redemption pursuant thereto or in the notice of redemption in the case of a redemption pursuant to clause (d) hereof is herein referred to as the "Redemption Date". Notice of each redemption shall be mailed, at least 30 days but not more than 60 days prior to the Redemption Date, to the holders of record of the Shares to be redeemed, at their respective addresses as they appear upon the books of the Corporation. If fewer than all the Shares are to be redeemed, the number of the Shares to be redeemed shall be redeemed pro rata from Shares held by all the registered holders of the Shares. In order to facilitate the redemption of Shares, the Board of Directors may fix a record date for the determination of holders of the Shares or may cause the transfer books of the Corporation to be closed to transfer of the Shares, not more than 60 days prior to a Redemption Date. (ii) Unless the Corporation shall have defaulted in the payment of the Redemption Price, from and after each Redemption Date all dividends on the Shares designated for redemption in the notice of redemption (the "Designated Shares") shall cease to accrue and on such Redemption Date or on any prior date on which the Redemption Price may be deposited in trust pursuant to clause (iii) below: (1) all rights of the holders of the Designated Shares shall cease and terminate, except the right to receive the Redemption Price of the Designated Shares upon the surrender to the Corporation of the certificates representing the same, but without interest; (2) the Designated Shares shall not thereafter be transferred (except with the consent of the Corporation) on the books of the Corporation; and (3) the Designated Shares shall not be deemed to be outstanding for any purpose whatsoever. (iii) At its election, the Corporation may specify in its notice of a redemption that it will deposit the Redemption Price of the Designated Shares in trust for the holders of the Designated Shares with a bank or trust company (having a capital and surplus of not less than $25,000,000) in the Borough of Manhattan, City and State of New York, or in any other city in which the Corporation at the time shall maintain a transfer agency with respect to the Shares, in which case such notice shall (1) state the date of such deposit (which shall be not earlier than twenty days after the date of such redemption notice and not later than the Redemption Date), (2) specify the office of such bank or trust company as the place of payment of the Redemption Price, and (3) if and to the extent that any Designated Shares constitute all of the Shares represented by a certificate, call upon the holder of such certificate to surrender such certificate on or after such date of deposit against payment of the Redemption Price. Any funds so deposited that shall not be required for such redemption shall be returned to the Corporation forthwith. Any interest accrued on such funds shall be paid to the Corporation from time to time. Any money so deposited that shall represent the claim of a holder of Designated Shares and shall remain unclaimed at the end of one year after the Redemption Date shall be returned by such bank or trust company to the Corporation, after which such bank or trust company shall be relieved of all responsibility in respect thereof to such holder and such holder shall have no further interest in such money (but shall retain its right to receive the Redemption Price of such Shares, without any interest thereon, directly from the Corporation upon surrendering the certificates representing the same). (iv) Cash payments for redemption payable by the Corporation shall be paid by wire transfer through the facilities of the Federal Reserve System to any registered holder who shall have provided to the Corporation appropriate written instructions a reasonable time prior to the Redemption Date or, if the Corporation has elected to proceed under clause (iii) above, prior to the date of deposit designated in its notice of such election. By taking delivery of any certificate evidencing Shares, each holder of said Shares shall be conclusively deemed to have agreed that, upon any payment made to such holder of the Shares in respect of redemption or upon liquidation, which payment relates to fewer than all the Shares represented by such certificate, such holder will duly make notation on such certificate of the number of such Shares that have been so redeemed or otherwise paid for. All such payments in respect of redemption or upon liquidation of fewer than all the Shares represented by any certificate evidencing Shares shall be made to any registered holder thereof as provided above without requiring the presentation or surrender of such certificate. (g) Restrictions. As long as any of the Shares are outstanding: (i) The Corporation will not, without the affirmative vote or consent of the holders of at least 66-2/3% of the Shares given in writing or by resolution adopted at a meeting called for the purpose, create, authorize or issue any shares of Preferred Stock ranking senior to the Shares with respect to the payment of dividends or redemption or payment upon the dissolution, liquidation or winding up of the Corporation, or amend, alter or repeal any provision of the Corporation's Restated Certificate of Incorporation or By-Laws so as to affect adversely the relative rights or preferences of the Shares or enter into any agreement or take any other action, including any of the foregoing actions effected by merger or similar transaction in which the Corporation is the surviving corporation, so as to affect adversely the relative rights or preferences of the Shares. (ii) The Corporation will not without the affirmative vote or consent of the holders of at least a majority of the Shares at the time outstanding, given in writing or by resolution adopted at a meeting called for the purpose: (1) issue any additional shares of Preferred Stock unless the Corporation's Fixed Charges Ratio (as defined below) during any period of 12 consecutive calendar months in the 15 calendar months immediately preceding such issue was at least 2:1 and the Corporation's Liquidation Preference Ratio (as defined below) at a month-end not more than 45 days prior to such issue was at least 4:1. For this purpose, "Fixed Charges Ratio" shall mean the ratio of the sum of the Corporation's Consolidated Net Earnings (before any distributions in respect of capital stock), income taxes and interest expense (excluding any amortization of debt discount) to the sum of the Corporation's interest expense (excluding any amortization of debt discount) and pro forma dividends on all Preferred Stock (for purposes of such pro forma dividend calculation, Preferred Stock shall be deemed to include the Preferred Stock proposed to be issued as well as all Preferred Stock outstanding at the time of such proposed issuance, all such Preferred Stock shall be deemed to have been outstanding throughout the applicable period of 12 consecutive calendar months and all dividends which would have accrued on all such Preferred Stock during such period shall be multiplied by the ratio that Consolidated Net Earnings before income taxes bears to Consolidated Net Earnings during such period of 12 consecutive calendar months), and the term "Liquidation Preference Ratio" shall mean the ratio of the sum of the Corporation's retained earnings, capital stock and additional paid-in capital, less the involuntary liquidation preference of the Shares and all other shares of Preferred Stock ranking senior to or on a parity with the Shares with respect to payment upon dissolution, liquidation or winding up of the Corporation, to the involuntary liquidation preference of the Shares and all such other shares of Preferred Stock; or (2) sell, lease or dispose of substantially all the assets of the Corporation or enter into a consolidation or merger in which the Corporation is not the surviving corporation, unless immediately after such consolidation or merger (x) none of the relative rights or preferences of the Shares (including without limitation dividend, redemption, liquidation and voting rights) would he adversely affected thereby and (y) the surviving corporation does not have, authorized or outstanding, shares of capital stock ranking prior to the shares issued by it in connection with such consolidation or merger to the holders of the Shares in respect of the payment of dividends or redemption or the dissolution, liquidation or winding up of such surviving corporation other than shares issued to the holders of shares of the Corporation which had such prior ranking to the Shares immediately before such consolidation or merger. Not less than 30 days prior to the occurrence of any event specified in clause (g)(ii)(1) as to which the Corporation determines the vote of the holders of the Shares is not required, the Corporation shall provide each holder of Shares with a calculation certified by the chief financial officer of the Corporation evidencing the satisfaction of the conditions specified in clause (g)(ii)(1), based on the figures derived from financial statements previously certified by the independent certified public accountants then retained by the Corporation, to the extent practicable, and otherwise on figures derived from financial statements which the chief financial officer of the Corporation shall certify as fairly presenting the information purported to be shown, subject to changes resulting from year-end adjustments, and as having been prepared in accordance with generally accepted accounting principles consistently applied or, in the event of a change in such accounting principles, indicating the effect of such change. (h) Voting Rights. The holders of the Shares shall not be entitled to vote at any election of directors or on any other matter submitted to the shareholders except as otherwise provided in clause (g) of this Section C.l and except that, whenever accrued dividends, mandatory redemption payments (determined as though all the assets necessary for such purpose were legally available) or any combination of accrued dividends and such mandatory redemption payments on the Shares shall no have been paid when due in an aggregate amount equal to the aggregate amount of the six most recent quarterly dividends required to be paid on the Shares then outstanding (whether or not paid), the holders of the Shares outstanding at the time shall become entitled to exercise, or to participate in the exercise of, the voting rights provided in Section D of this Article IV. (i) General. The Shares shall not have any relative participating, optional or other special rights or powers other than those specifically set forth in this Section C.1 or elsewhere in this Restated Certificate of Incorporation of the Corporation, as such Restated Certificate (including Section C.1) may be amended from time to time, or as provided by New Jersey law. (j) Definitions. As used in this Section C.1 the following terms have the following respective meanings: (i) "Consolidated Net Earnings" for any period shall mean the consolidated net earnings for such period of the Corporation and its Subsidiaries as reflected in the consolidated financial statements of the Corporation and its Subsidiaries (1) certified by the independent certified public accountants then retained by the Corporation with respect to a fiscal year or (2) as reported by the Corporation to its shareholders for periods after the close of the most recent fiscal year, provided that, in each case, there shall be excluded net gains or losses in such period from the write-up or write-down of capital assets or on the sale or other disposition, not in the ordinary course of business, of capital assets or on the acquisition or retirement or sale of stock or securities of the Corporation or any Subsidiary. (ii) "Distribution" on any class of capital stock of the Corporation shall mean: (1) any dividend or other distribution on account of the shares of such class (except a distribution payable solely in Junior Stock); and (2) any payment in redemption, retirement, purchase or other acquisition of such stock except out of the net proceeds of a substantially concurrent sale of shares of capital stock having no greater preferences in respect of dividends or redemption or liquidation, dissolution or winding up of the Corporation than any stock acquired by the Corporation through such payment and retired. (iii) "Junior Stock" shall mean shares of common stock or any other class or series of capital stock of the Corporation ranking junior to the Shares as to each of (1) payment of dividends, (2) redemption, and (3) payment upon dissolution, liquidation or winding up. (iv) "Preferred Stock" shall mean any capital stock of the Corporation which has a preference over common stock of the Corporation as to one or more of (1) payment of dividends, (2) redemption, and (3) payment upon dissolution, liquidation or winding up. (v) "Remaining Dollar-years", as to any indebtedness of the Corporation or as to any class of stock, shall mean at any date the sum of the amounts obtained by multiplying the amount of each then remaining mandatory sinking fund, serial maturity or other required principal payment on account of such indebtedness or each mandatory redemption payment on account of such stock, as the case may be (in either event assuming no optional prepayments, either with or without premium, will be made), by the number of years (calculated to the nearest 1/12) which will have elapsed between such date and the date at which such payment becomes due. (vi) "Subsidiary" shall mean a corporation more than 50% (by number of votes) of the voting stock of which in the aggregate is owned by the Corporation and its Subsidiaries. (vii) "Weighted Average Life" of any indebtedness or any class of stock shall mean at any time the number of years obtained by dividing the Remaining Dollar-years of such indebtedness or class of stock at that time, as the case may be, by the then outstanding principal amount of such indebtedness or involuntary redemption price of such class of stock, as the case may be. (k) Non-amendability of Certain Provisions, No amendment of this Restated Certificate of Incorporation shall be made the effect of which is (1) to reduce the dividends payable on the Shares or to alter the restrictions with respect to Distributions on capital stock, (ii) to change the date or reduce the amount of any mandatory redemption payment, (iii) to reduce the Redemption Price or to alter the restriction on the source of funds for an optional redemption of Shares with premium, (iv) to alter the terms upon which the Corporation may make an optional redemption of Shares without premium, (v) to decrease the amount to which the holders of the Shares are entitled upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, (vi) to alter the restrictions contained in clause (g) above, or (vii) to alter the voting rights of the holders of the Shares under the circumstances described in clause (h) above, without the unanimous consent of the holders of the Shares outstanding at that time. (l) Notices. All communications provided for in this Section C.1 shall be in writing and shall be mailed by first class mail, postage prepaid and addressed: (i) if to a holder of the Shares, to the address registered on the books of the Corporation or to such other address as the holder shall have furnished to the Corporation by a communication so mailed, or (ii) if to the Corporation, to GK Technologies Building, 500 West Putnam Avenue, Greenwich, Connecticut 06830 or to such other address as the Corporation shall have furnished to the holders by a communication so mailed, Every communication so addressed and mailed by registered or certified mail, return receipt requested (except a communication designating a new address for mailing purposes, which shall be deemed given or served upon actual receipt thereof by the addressee) shall be deemed given or served on the fifth business day after the postmark date borne by such communication. All other communications shall be deemed given or served upon actual receipt thereof by the addressee. D. SPECIAL VOTING RIGHTS OF PREFERRED STOCK (1) Vesting of Rights. Upon the occurrence of an event which, by virtue of any provision of this Article IV, vests in the holders of a class or series of Preferred Stock the right to exercise the voting rights specified in this Section D, such holders and the holders of shares of all other classes and series of Preferred Stock as to which such voting rights shall similarly have vested, voting as a single class, shall be entitled to elect two directors of the Corporation, in addition to those elected by the holders of the class or classes of capital stock ordinarily entitled to elect the directors of the Corporation in accordance with the provisions of this Restated Certificate of Incorporation and the Corporation's By-Laws. Each person elected as a director of the Corporation in accordance with the provisions of this Section D shall serve until the next annual meeting of the shareholders of the Corporation and until his successor shall have been elected and shall duly qualify. (2) Manner of Exercise. Whenever the right referred to in Section 1 above shall have vested in the holders of shares of any class or series of Preferred Stock at a time when such right shall not be vested in the holders of shares of any other class or series of Preferred Stock, such right may be exercised initially either at a special meeting of the holders of shares with respect to which such right shall be so vested at the time of such meeting, called as provided in this Section 2, or at the next annual meeting of shareholders held for the purpose of electing directors and shall be exercised thereafter at such annual meeting. Such initial special meeting may be called in any manner provided in the By-Laws for the calling of special meetings of shareholders. If such initial meeting shall not have been so called and if the holders of record of at least 20% of the shares then outstanding with respect to which such voting right shall have vested serve a written request for such meeting upon the Corporation (marked to the attention of the Secretary) not later than 75 days immediately preceding the date fixed for the next annual meeting of shareholders, the Corporation shall call a special meeting of the holders of shares with respect to which such voting right shall have vested, to be held at the earliest practicable date upon the notice required for annual meetings of shareholders. In either event, such initial meeting shall be called for the purpose of electing two directors of the Corporation and shall be held at a place in the Borough of Manhattan, City and State of New York or the city where the principal office of the Corporation is then located, to be specified in the notice of such meeting. if such meeting shall not be called by the Corporation within 20 days after timely service of the holders' request, any holder that had joined in such request may call such meeting at the expense of the Corporation, in the manner and at the place above stated. Any holder that had joined in such request shall have access to the stock ledger of the Corporation showing the names and addresses of the registered holders of all shares with respect to which such voting right shall have vested for the purpose of causing a meeting of such holders to be called pursuant to this Section 2. (3) Quorum and Voting. At any meeting held for the purpose of electing directors at which the holders of shares of Preferred Stock shall have the right (voting together as a single class) to elect directors as provided in Section 1 above, the presence, in person or by proxy, of the holders of a majority by number of votes of such shares at the time outstanding shall constitute a quorum. In any election pursuant to the provisions of this Section D, the holder of each share of Preferred Stock with respect to which such voting right shall have vested shall be entitled to at least one vote in respect thereof and the number of votes per share allocated to each class or series of Preferred Stock so entitled to vote shall be based on the ratio of the involuntary liquidation preference of such share to the aggregate of the involuntary liquidation preferences of all shares of Preferred Stock entitled to vote in such election. At any such meeting or any adjournment thereof: (a) The absence of a quorum of such holders shall not prevent the election of the directors other than those to be elected by such holders, and the absence of a quorum of holders of the stock entitled to vote for directors ordinarily as provided in this Restated Certificate of Incorporation and the By-Laws of the Corporation shall not prevent the election of the directors to be elected by such holders of Preferred Stock. (b) In the absence of a quorum of such holders, the holders of a majority by number of votes of the shares in which such voting right is vested present in person or by proxy shall have power to adjourn from time to time the meeting for the election of directors whom such holders are entitled to elect, without notice other than announcement at the meeting, until a quorum shall be present. (4) Vacancies. If the office of any director elected by the holders of the shares with respect to which the voting rights provided for in Section 1 shall have vested becomes vacant by reason of death, resignation, retirement, disqualification removal from office or otherwise, the remaining director elected by such holders may designate a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. If the offices of both such directors become so vacant before such a successor is so designated, within 50 days after such second vacancy occurs the Corporation shall call a special election pursuant to Section 2 to fill such vacancies. (5) Cessation of Voting Rights. The voting rights provided for in Section 1 shall continue until all dividends accrued on the shares with respect to which such rights shall have vested and all mandatory redemption payments required to be made thereon shall have been made, at which time such rights shall terminate, subject to revesting in the event of each and every subsequent recurrence of an event which causes such voting rights to vest. Upon any termination of such right, the term of office of all directors then in office elected solely by holders of shares of Preferred Stock shall terminate immediately. ARTICLE V BOARD OF DIRECTORS The number of directors of the Corporation shall be fixed from time to time as provided in the By-Laws. The current board of directors of the Corporation consists of 14 persons whose names and addresses are as follows:
NAME ADDRESS ---- ------- Robert P. Jensen .................... 500 West Putnam Avenue Greenwich, Connecticut 06830 Arthur G. Boardman, Jr............... 61 Adams Avenue Short Hills, New Jersey 07078 Frederick A. Collins, Jr............. 330 Madison Avenue New York, New York 10017 George V. Comfort.................... 200 Madison Avenue New York, New York 10016 Richard Dicker....................... 245 Park Avenue New York, New York 10167 William H. Donaldson................. 200 Park Avenue, Suite 3024 New York, New York 10017 A. Leon Fergenson.................... 375 Park Avenue New York, New York 10022 Gerald R. Ford....................... P. 0. Box 927 Rancho Mirage, California 92270 Berkeley D. Johnson.................. 12167 Turtle Beach Road Lost Tree Village North Palm Beach, Florida 33408 Francis A. Kareken................... 245 Park Avenue New York, New York 10167 John E. Kircher...................... 6 Winding Lane Greenwich, Connecticut 06830 Dennis G. Little..................... 500 West Putnam Avenue Greenwich, Connecticut 06830 Neal W. Welch........................ 87 Marshall Street North Adams, Massachusetts 01247 Alan T. Wenzell...................... 1221 Avenue of the Americas New York, New York 10036
Directors shall hold office until the expiration of their respective terms of office or until their respective successors have been elected and qualified, provided that one or more or all of the directors may be removed from office with or without cause (i) by the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote for the election of directors at a meeting of shareholders or (ii) without a meeting upon the written consent of shareholders who would have been entitled to cast a majority of the votes which would be necessary to authorize such removal at a meeting at which all shareholders entitled to vote thereon were present and voting. In addition to the number of directors of the Corporation that may be fixed from time to time, no more than a total of two additional directors may be authorized as provided in paragraph (g) of Section A and in Section D of Article IV of this Restated Certificate of Incorporation, to be elected for terms of not more than one year by vote of the holders of one or more classes or series of Preferred Stock in case of dividend arrearages or other specified events, if so provided by the terms of such class or series and as provided in Section D of Article IV, and to be subject to removal only as provided therein or as authorized by law, notwithstanding the provisions of the next preceding paragraph. ARTICLE VI INDEMNIFICATION The Corporation shall indemnify to the full extent from time to rime permitted by Jaw any person made, or threatened to be made, a party to any pending, threatened or completed civil, criminal, administrative or arbitrative action, suit or proceeding, or any appeal therein, or any inquiry or investigation which could lead to such action, suit or proceeding, by reason of the fact that he is or was a director or officer of the Corporation or serves or served any other enterprise as a director or officer at the request of the Corporation or, while a director or officer of the Corporation, serves or served any other enterprise in any capacity at the request of the Corporation or acted or failed to act with respect to any pension or other employee benefit plan of the Corporation. Such right of indemnification shall inure to the benefit of the legal representative of any such person. In addition to and not in limitation of the foregoing, the Board of Directors may provide for the purchase and maintenance by the Corporation of insurance on behalf of all or any of its directors and officers and any other person or persons against any expenses incurred in any proceeding and any liabilities asserted against any such person by reason of his being or having been a director or officer of the Corporation or by reason of his serving or having served any other enterprise as a director or officer at the request of the Corporation or by reason of his serving or having served, while a director or officer of the Corporation, any other enterprise in any capacity at the request of the Corporation, or by reason of his acting or having failed to act, while a director or officer of the Corporation, with respect to any pension or other employee benefit plan of the Corporation, in such amounts and on such terms as the Board of Directors may determine, to the full extent from time to time permitted by law or to such, lesser extent as the Board of Directors may from time to time determine. Nothing herein shall limit the power of the Corporation to indemnify, or to provide insurance on behalf of, employees, agents or other persons, or limit any rights under any by-law, agreement, vote of shareholders or otherwise. EX-3.25 26 l05578aexv3w25.txt EXHIBIT 3.25 EXHIBIT 3.25 BY-LAWS of GK TECHNOLOGIES, INCORPORATED as amended through January 24, 1984 BY-LAWS OF GK TECHNOLOGIES, INCORPORATED (hereinafter called the "Company") ARTICLE ONE MEETING OF SHAREHOLDERS: SHAREHOLDER CONSENTS IN LIEU OF MEETING Section 1. Any meeting of shareholders shall be held at such place, within or without the State of New Jersey, as shall be fixed by the Board of Directors. Every shareholder entitled to vote may vote at any meeting either in person or by proxy appointed by an instrument in writing. Each shareholder shall be entitled to one vote for each share of stock registered in his name and entitled to be voted. At any meeting, the holders of a majority of the shares outstanding and entitled to be voted being present in person or by proxy shall be a quorum for all purposes except where otherwise provided by statute. Section 2. Except as otherwise provided by statute, any action required or permitted to be taken at a meeting of shareholders by statute, the Certificate of Incorporation of the Company or these By-Laws, other than the annual election of directors, may be taken without a meeting upon the written consent of shareholders who would have been entitled to cast the minimum number of votes which would be necessary to authorize such action at a meeting at which all shareholders entitled to vote thereon were present and voting. The annual election of directors may be effected without a meeting of shareholders if all the shareholders entitled to vote thereon consent thereto in writing. All such written consents shall be filed with the minutes of proceedings of shareholders. ARTICLE TWO ANNUAL MEETING OF SHAREHOLDERS Section 1. The annual meeting of shareholders shall be held on the first Tuesday in May in each year or on such other date as the Board of Directors in their discretion may determine. Section 2. Notice of the annual meeting stating the time and place of such meeting shall be mailed at least ten days before such meeting to each shareholder entitled to vote thereat, such notice to be sent to his address as the same appears on the stock book of the Company. ARTICLE THREE SPECIAL MEETINGS OF SHAREHOLDERS Section 1. Special meetings (a) may be called (i) by the Chairman of the Board, President and Chief Executive Officer or (ii) by the holders of a majority of the outstanding shares of the Company ordinarily entitled to vote for the election of directors at a meeting of shareholders and (b) shall be called by the Chairman of the Board, President and Chief Executive Officer at the request in writing of the Board of Directors. Section 2. Notice of each special meeting stating the time and place of such meeting, and in general terms the purpose or purposes thereof, shall be mailed at least ten days before such meeting to each shareholder entitled to vote thereat, such notice to be sent to his address as the same appears on the stock book of the Company. ARTICLE FOUR DIRECTORS Section 1. The management of the business and affairs of the Company shall be under the direction of its Board of Directors, except as otherwise provided by statute or the Certificate of Incorporation of the Company. The number of Directors shall be not less than three nor more than seventeen, the exact number within said limits to be fixed from time to time by action of the shareholders of the Company taken either at a meeting of shareholders or without a meeting upon the written consent of shareholders pursuant to Article One, Section 2 of these By-Laws. Section 2. Regular meetings of the Board of Directors shall be held on such dates and at such times and in such places as may be fixed from time to time by resolution of the Board of Directors and no further notice thereof need be given. Notwithstanding the foregoing, the Chairman of the Board, President and Chief Executive Officer may cancel any regular meeting of the Board of Directors or change its time, date or place upon four days' notice given by him or at his direction to each Director either personally or by mail, radiogram, telegraph, telephone or other means of communication generally used in business. Section 3. Special meetings of the Board of Directors may be called at the direction of the Chairman of the Board, President and Chief Executive Officer or upon written request by any two Directors delivered to the Secretary. Notice of special meetings of the Board of Directors shall be given to each Director at least three (3) days before the meeting if by mail or at least twenty-four (24) hours before the meeting if given in person or by telephone, telex, radiogram, telegraph or telecopier. Unless otherwise specified in the notice thereof, any business may be transacted at a special meeting. Section 4. A majority of the entire Board of Directors shall constitute a quorum except where otherwise provided by statute, or by the Certificate of Incorporation of the Company, but a majority of those present at any meeting from time to time, although less than a quorum, without notice may adjourn the meeting until a quorum be had. Section 5. Any vacancy in the Board of Directors through death, resignation, disqualification, increase in the number of Directors, or other cause may be filled by the remaining members of the Board of Directors, though less than a quorum, taken either at a meeting of the Board of Directors or without a meeting upon the written consent of all of the members of the Board of Directors pursuant to Article Four, Section 7 of these By-Laws. Any director elected to fill a vacancy shall hold office until the next Annual Meeting of Shareholders and until the election and qualification of his successor. Section 6. The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may appoint from among its members an Executive Committee and/or one or more other standing or special committees which it may deem appropriate. Each such committee shall have at least one member (including the Chairman of the Board, President and Chief Executive Officer) and, to the extent provided in the resolution appointing such committee, shall have and may exercise all the authority of the Board, subject to the limitations set forth in the New Jersey Business Corporation Act. Any such committee shall hold its meetings in accordance with law and with such procedures as it may deem appropriate, and actions taken thereat shall be reported to the Board of Directors at its next meeting. Section 7. Any action required or permitted to be taken pursuant to authorization voted at a meeting of the Board of Directors or any committee thereof may be taken without a meeting if, prior or subsequent to such action, all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the Board of Directors or committee, as the case may be. Section 8. Any or all Directors may participate in a meeting of the Board of Directors or a committee of the Board of Directors by means of conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other. ARTICLE FIVE OFFICERS Section 1. The officers of the Company shall consist of a Chairman of the Board, President and Chief Executive Officer, a Treasurer, a Secretary, a Controller and such number of Vice Presidents, Assistant Vice Presidents, Assistant Treasurers, Assistant Secretaries and Assistant Controllers as the Board of Directors may from time to time elect. One or more Vice Presidents may be given and shall use as part of his title such other designations,. including, without limitation, the designations "Executive", "Senior", "Group", "Staff", "Corporate", "Divisional" and "Regional", as the Board of Directors may designate at the time of election of any such Vice Presidents or thereafter; the Board may at any time change or remove any such designation. Any two or more offices may be held by the same person. Section 2. The Chairman of the Board, President and Chief Executive Officer shall be elected from among the members of the Board of Directors promptly following the annual election of directors. The Treasurer, the Secretary and the Controller, who need not be members of the Board, shall likewise be elected promptly following the annual election of directors. Other officers, who need not be members of the Board, may be elected at such time or at any other time. Section 3. Subject to Section 4 below, each officer shall hold office for the term for which he is elected which, if not otherwise stated, shall be until the next succeeding annual election of officers by the Board of Directors. Section 4. All officers shall be subject to removal by resolution of the Board of Directors at any time, with or without cause. Any officer may resign at any time by written notice to the Company. The resignation shall be effective upon receipt thereof by the Company without further action by it or at such subsequent time as shall be specified in the notice of resignation, subject always to the first sentence of this Section. Section 5. Any vacancy in any office may be filled by the Board of Directors or left unfilled. Section 6. The Chairman of the Board shall be the chief executive officer of the Company and shall see that orders and resolutions of the Board of Directors and any Committee thereof are carried into effect. The Chairman of the Board shall preside at all meetings of the Board of Directors, any Committee thereof, and shareholders. Section 7. Without limiting in any way the powers of the Board of Directors from time to time either to add to the persons hereinafter authorized or to expand or restrict the following authorization or any additional authorizations, the following officers may execute and deliver on behalf of the Company any and all bonds, mortgages, powers of attorney, proxies, contracts, agreements, leases, guarantees, certificates, reports and other instruments, documents and obligations of every kind, and may affix the seal (or a facsimile of the seal) of the Company thereto, namely, the Chairman of the Board, President and Chief Executive Officer, any Vice President, the Treasurer, the Secretary and the Controller. Section 8. In the absence of the Chairman of the Board, President and Chief Executive Officer, all his powers and duties, except those of presiding and voting at meetings of the Board of Directors and any. Committee thereof, shall be vested in and performed by such Vice Presidents as have the designation "Senior Vice President", priority among such Senior Vice Presidents in the exercise of such powers and duties to be in accordance with the order of their designation as Senior Vice President, or by such other officer as the Chairman of the Board, President and Chief Executive Officer, or the Board of Directors shall have most recently designated for that purpose in a writing filed with the Secretary prior to or during such absence. Vice Presidents and Assistant Vice Presidents shall otherwise be vested with only such powers and shall perform such duties as may be conferred upon them or assigned to them from time to time by the Chairman of the Board, President and Chief Executive Officer. Section 9. The Treasurer shall have charge of the receipt of all payments made to the Company and the deposit thereof in the name of the Company with such depositaries as may be designated by the Board of Directors. He shall have charge of the disbursement of the funds of the Company in accordance with the financial obligations of the Company subject to the direction of the Board of Directors. He shall render an account to the Board of Directors whenever called upon, of all such receipts, deposits and disbursements. He shall, if required by the Board of Directors, furnish a bond to the Company which shall be in the form and amount and with a surety or sure ties satisfactory to the Board of Directors. Section 10. The Secretary shall attend all meetings of shareholders and of the Board of Directors and shall record the minutes of every such meeting; and he shall act likewise for any standing committee when required. He shall give notice of every meeting of shareholders and of the Board of Directors, and shall have the custody of the seal of the Company. Section 11. The Controller shall have charge of the accounting of the Company including the preparation of reports and statements based on the books of account of the Company. Section 12. The Assistant Treasurers shall assist the Treasurer and shall be vested with all the powers and shall perform all the duties of the Treasurer in the absence of the latter. Section 13. The Assistant Secretaries shall assist the Secretary, may affix the seal (or a facsimile of the seal) of the Company to all documents requiring the same and shall be vested with all the powers and shall perform all the duties of the Secretary in the absence of the latter. Section 14. The Assistant Controllers shall assist the Controller and shall be vested with all the powers and shall perform all the duties of the Controller in the absence of the latter. Section 15. If no action shall have been taken by the Board of Directors or any Committee thereof to authorize or appoint an officer, representative or proxy of the Company to attend, act and vote on behalf of the Company at any meeting of shareholders of any corporation in which the Company holds stock or to execute on behalf of the Company as a shareholder of such a corporation any proxy, waiver of notice, action in writing or other instrument relating to, or written consent in lieu of, a meeting of such shareholders, then the Chairman of the Board, President and Chief Executive Officer or any Vice President may so attend, act and vote, or may execute any such proxy, waiver,. action in writing, consent or instrument (and, by means of such execution, vote, or withhold the vote of, the stock held by the Company on matters coming before any such meeting), or may authorize or appoint any such officer, representative or proxy, all without the necessity of any action by the Board of Directors. Section 16. By acceptance of this office, each officer of the Company irrevocably authorizes the use by or in behalf of the Company during his term of office or after he shall cease to hold such office of his facsimile signature as such officer upon all bonds and other obligations or evidence of indebtedness, stock certificates, warrants or other evidence of rights to purchase and subscribe to stock. ARTICLE SIX CAPITAL STOCK Section 1. Certificates for the stock of the Company and warrants or other evidence of rights to purchase and subscribe to stock issued by the Company shall be in such form as the Board of Directors may from time to time prescribe and shall be signed by the Chairman of the Board, President and Chief Executive Officer or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. ARTICLE SEVEN FISCAL YEAR Section 1. The fiscal year shall coincide with the calendar year. ARTICLE EIGHT BY-LAWS Section 1. The power to make, alter and repeal By-Laws shall be vested exclusively in the holders of shares of the Company ordinarily entitled to vote for the election of directors at a meeting of shareholders. ARTICLE NINE SEAL Section 1. The Seal of the Company shall be circular in form and shall bear the words "GK Technologies, Incorporated * New Jersey". EX-3.26 27 l05578aexv3w26.txt EXHIBIT 3.26 EXHIBIT 3.26 CERTIFICATE OF INCORPORATION OF MARATHON LeTOURNEAU HOLDINGS, INC. FIRST. The name of the corporation is Marathon LeTourneau Holdings, Inc. SECOND. The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Center. THIRD. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares of stock which the corporation shall have authority to issue is 1,000 shares, and the par value of each of such shares is One Dollar ($1.00). FIFTH. The name and mailing address of the incorporator is S. Maria Narisi, 600 Jefferson Building, 19th Floor, Houston, Texas 77002. SIXTH. The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and qualified are as follows:
Name Mailing Address Ray R. Seegmiller Marathon Manufacturing Company 600 Jefferson Building 19th Floor Houston, Texas 77002 J. Earl Beckman Marathon LeTourneau Company 3400 West Marshall Avenue Longview, Texas 75604 Glynn W. Stewart Marathon LeTourneau Company 3400 West Marshall Avenue Longview, Texas 75604
SEVENTH. The private property of the stockholders of the corporation shall not be subject to the payment of corporate debts to any extent whatsoever. EIGHTH. The following provisions are inserted for the management of the business and for the conduct of the affairs of the corporation and for further definition, limitation, and regulation of the powers of the corporation and of its directors and stockholders. (1) The number of directors of the corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the Bylaws. Election of directors need not be by ballot unless the Bylaws so provide. (2) The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the corporation, whether or not the contract or act would otherwise be open to legal attack because of directors' interest, or for any other reason. (3) In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, or repeal the Bylaws of the corporation. NINTH. Meetings of stockholders may be held within or without the State of Delaware, as provided in the Bylaws. TENTH. The corporation shall, to the full extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time, indemnify all persons whom it may indemnify pursuant thereto. ELEVENTH. Whenever a compromise or arrangement is proposed between the corporation and its creditors or any class of them and/or between the corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the corporation under the provisions of Section 291 of Title 8 of the Delaware Code, or on the application of trustees in dissolution or of any receiver or receivers appointed for the corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the, stockholders or class of stockholders of the corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the corporation, as the case may be, and also on the corporation. TWELFTH. The corporation reserves the right to amend, alter, change, or repeal any provisions contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. THIRTEENTH. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended hereafter to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Any repeal or modification of this Article Thirteenth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. FOURTEENTH. Indemnification. (a) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he is or was a director, officer or employee of the Corporation, or an agent of the Corporation designated as an "indemnitee" for purposes of this Article by the Board of Directors of the Corporation, or is or was any such director, officer, employee or designated agent serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law, 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 such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, penalties, excise taxes assessed with respect to an employee benefit plan and amounts paid in 2 settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators; provided, however, that except with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. (b) Advancement of Expenses. The right to indemnification conferred in this Article Fourteenth shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Article Fourteenth or otherwise. (c) Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article Fourteenth shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation or any statute, by-law, agreement, vote of stockholders or disinterested directors or otherwise. (d) Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any 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 Delaware General Corporation Law. The undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate, hereby declaring and certifying that this is her act and deed and that the facts herein stated are true, and accordingly has hereunto set her hand this 16th day of September, 1987. /s/ S. Maria Narisi ------------------------------------ S. Maria Narisi 3 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF MARATHON LeTOURNEAU HOLDINGS, INC. I, the undersigned Ray R. Seegmiller, President of Marathon LeTourneau Holdings, Inc. (the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby certify as follows: FIRST: The Board of Directors of the Company by unanimous written consent pursuant to Section 141(f) of the Delaware General Corporation Law adopted a resolution that in its judgment it is advisable to change the name of the Company and that therefore Article FIRST shall be amended to read as follows: FIRST: The corporate name is Marathon Manufacturing Holdings, Inc. SECOND: Thereafter, the stockholders of all of the issued and outstanding voting stock of the Company, by written consent pursuant to Section 228 of the Delaware General Corporation Law consented to and approved the said amendment. THIRD: The said amendment was duly adopted in accordance with the provisions of Section 242 of the Delaware General Law. IN WITNESS WHEREOF, this Certificate has been made under the corporate seal of MARATHON LeTOURNEAU HOLDINGS, INC. by Ray R. Seegmiller, its President, who hereunto signed his name this 11th day of December, 1987. MARATHON LeTOURNEAU HOLDINGS, INC. By: /s/ Ray R. Seegmiller ------------------------------- President EX-3.27 28 l05578aexv3w27.txt EXHIBIT 3.27 EXHIBIT 3.27 BYLAWS of MARATHON MANUFACTURING HOLDINGS, INC. ARTICLE I Offices Section 1.01. Registered Office. The registered office of the Corporation in the State of Delaware shall be established and maintained at the office of The Corporation Trust Company, 100 West Tenth Street, in the City of Wilmington, County of New Castle, and said corporation shall be the Registered Agent of the Corporation in charge thereof. Section 1.02. Other Offices. The principal place of business of the Corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle, or such other place in the State of Delaware as the Board of Directors may from time to time select, and the Corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require. ARTICLE II Meetings of Stockholders Section 2.01. Annual Meetings. Annual Meetings of stockholders for the election of directors and for the transaction of any proper business shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution shall determine and as set forth in the notice of the meeting. If the annual meeting of stockholders is not held on the date designated therefor, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as may properly be brought before the meeting. Section 2.02. Voting. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these Bylaws shall be entitled to one vote, in person or by proxy, for each share of stock outstanding and entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any questions before the meeting shall be by written ballot. When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock outstanding and having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of a statute or of the Certificate of Incorporation a different vote is required in which case such express provision shall govern and control the decision of such question. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. Section 2.03. Quorum. At all meetings of stockholders, except as otherwise required by statute or by the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares of stock outstanding and entitled to vote thereat shall be requisite for, and shall constitute a quorum for, the transaction of business. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of shares entitled to vote shall be present or represented. At any such adjourned meeting at which the requisite amount of shares entitled to vote shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 2.04. Special Meetings. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President or the Secretary and shall be called by the President or the Secretary at the request of the Board of Directors or at the request in writing of the holders of a majority of the shares of stock outstanding and having voting power. Such request shall state the purpose or purposes of the proposed meeting. Special meetings may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. Section 2.05. Notice of Meetings. Written notice stating the place, date and time of any meeting, annual or special, and, if a special meeting, the, purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten nor more than sixty days before the date of the meeting. Section 2.06. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than a minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III Directors Section 3.01. Number and Term. The number of directors shall be three or such other number as may be fixed from time to time by resolution of the Board of Directors or by action of the stockholders. The directors shall be elected at the annual meeting of the stockholders and each director shall be elected to hold office until his successor shall be elected and qualified. Directors need not be stockholders. Section 3.02. Resignation. Any director or member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. Section 3.03. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors shall be elected and qualified. Unless otherwise provided by the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon 2 to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies. In the event that a vacancy or newly created directorship shall not have been filled by the Board of Directors, the additional director or directors may be elected by the stockholders entitled to vote thereon, either at an annual meeting of stockholders or at a special meeting called for the purpose. The director or directors so chosen shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualified. Section 3.04. Removal. Any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the holders of such shares, and the vacancies thus created may be filled, at such meeting or at any subsequent meeting, by the affirmative vote of a majority in interest of the stockholders entitled to vote. Section 3.05. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors, which may exercise all the powers of the Corporation and do all lawful acts and things which are not conferred upon or reserved to the stockholders by law, by the Certificate of Incorporation or by these Bylaws. Section 3.06. Meetings. Meetings of the Board of Directors shall be held at such place, either within or without the State of Delaware, as the Board of Directors shall from time to time designate or as may be specified in the notice of such meeting. Special Meeting of the Board of Directors may be held at any, time upon the call of the President or the Secretary by notice to each director given not less than two days, or not less than three days in the case of notice given by mail, before such meeting. Special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors. Regular Meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. The first meeting of a newly elected Board of Directors shall be held without notice as soon as practicable after each annual meeting of the stockholders at the same place at which such meeting was held, provided a quorum is present. If a quorum is not present, such first meetings may be held at such time and such place as shall be specified in a notice given as herein provided for special meetings of the Board of Directors. Section 3.07. Quorum. Not less than a majority of the total number of directors shall constitute a quorum for the transaction of business by the Board and not less than a majority of the total number of members of any committee of the Board shall constitute a quorum for the transaction of business by such committee. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless a statute or the Certificate of Incorporation shall require a vote of a greater number. Section 3.08. Chairman of the Board. The Board of Directors may appoint from their number a Chairman of the Board who shall have such powers and duties as may be prescribed from time to time by the Board of Directors. The Chairman of the Board, or in his absence or disability the President, shall preside at all meetings of the Board of Directors. In the absence of both the Chairman of the Board and the President, the Board of Directors shall select one of their number to preside at the meeting. Section 3.09. Executive Committee. The Board of Directors may, by resolution passed by a majority of the whole Board, designate members of the Board to constitute an Executive Committee which shall consist of not less than three (3) directors. The Board may designate one or more directors as 3 alternate members of the Executive Committee, who may replace any absent or disqualified member at any meeting of such committee. The Executive Committee shall make recommendations to the Board, and may, when the Board is not in session and to the extent that the Committee deems necessary, exercise the powers and authority of the Board in the management of the business and affairs of the Corporation; provided, however, that the Executive Committee shall have no such powers and authority in respect of (i) matters the delegation of which to a committee shall be limited by, or contrary to, law, the Certificate of Incorporation or Bylaws of the Corporation, (ii) amending the Certificate of Incorporation or Bylaws of the Corporation, (iii) filling vacancies in the Board of Directors of the Corporation (iv) declaring a dividend, (v) electing or removing officers of the Corporation, (vi) adopting or approving a plan of merger, consolidation or sale of a substantial portion of the assets of the Corporation or the dissolution or reorganization of the Corporation or (vii) such other matters as may be specified by the Board of Directors; and it may authorize the seal of the Corporation to be affixed to all papers which may require it. The Executive Committee shall keep records of all of its proceedings and shall report the same to the Board of Directors. Section 3.10. Other Committees of the Board. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate members of the Board to constitute one or more other committees, each committee to consist of two (2) or more directors of the Corporation. The Board may designate one or more directors as alternate members of such committees, who may replace any absent or disqualified member of such committees. Such committees shall have such duties and powers as the Board may determine and shall keep records of their proceedings and report the same to the Board of Directors when required. The Board of Directors, by resolution passed by a majority vote of the whole Board, at any time may change the members of, may fill vacancies in, or may discharge, any such committee. In the absence or disqualification of any members of any committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Section 3.11. Rules of Procedure. A majority of all the members of any committee, including the Executive Committee, may fix its rules of procedure, determine its action, fix the time and place, whether within or without the State of Delaware, of its meetings and specify what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise by resolution provide. Section 3.12. Compensation. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer agent or otherwise and receiving compensation therefor. Section 3.13. Action Without Meeting; Presence at Meetings. Unless otherwise restricted in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or the committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by such Board, may participate in a meeting of such, Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another, and such participation in a meeting shall constitute presence in person at such meeting. 4 ARTICLE IV Officers Section 4.01. Officers. The Board of Directors as soon as may be practicable after the election of directors each year shall appoint from their number the President of the Corporation. The Board of Directors may also appoint the Chairman of the Board, one or more Executive Vice Presidents, Senior Vice Presidents and Vice Presidents, and shall appoint a Secretary, Treasurer and a Controller, who need not be members of the Board, and may from time to time appoint such other officers' as they deem proper. Section 4.02. Term of Office. The officers of the Corporation shall hold office at the pleasure of the Board of Directors and each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. Any officer elected or appointed by the Board may be removed from office at any time by an affirmative vote of a majority of the whole Board, for or without cause. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board. Section 4.03. Other Officers and Agents. The Board of Directors may appoint such other officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 4.04. Resignation. Any officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. Section 4.05. President. The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall have designated the Chairman of the Board as Chief Executive Officer and as such shall have the general control and management of the business and affairs of the Corporation subject, however, to the control of the Board of Directors. The President shall preside at all meetings of the Board of Directors in the absence of the Chairman of the Board of Directors. The President shall have power, subject to the control of the Board of Directors, to appoint and to prescribe the duties and to fix the compensation of such agents and employees of the Corporation as he may deem necessary. Section 4.06. Executive Vice Presidents. Each Executive Vice President shall have such powers and perform such duties as may be assigned to him from time to time by the Board of Directors or the President. In case of the absence or inability to act of the President, unless and until the Board or the Executive Committee shall otherwise determine, the duties of his office shall be performed by an Executive Vice President in order of seniority or priority established by the Board or by the President, and when so acting, the Executive Vice President shall have all the powers of and be subject to all the restrictions upon the President. Section 4.07. Senior Vice Presidents and Vice Presidents. Each Senior Vice President and Vice President shall have such powers and perform such duties as may be assigned to him form time to time by the President or the Board of Directors. Section 4.08. The Secretary. The Secretary or the officer performing his duties shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President, under whose supervision he shall be. He shall keep in safe custody the seal of the Corporation and shall see that it is affixed to all documents the execution of which on behalf of the Corporation, under its seal, is necessary or proper, and when so affixed may attest the same. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. 5 Section 4.09. The Treasurer. The Treasurer shall, if required by the Board of Directors, give a bond for the faithful discharge of his duties in such sums and with such surety or sureties as the Board of Directors may determine; the cost of ny such bond, and any expenses incurred in connection therewith, shall be borne by the Corporation. He shall have the custody of the corporate funds and securities and shall cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and the directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transaction as Treasurer and of the financial condition of the Corporation. Section 4.10. The Controller. The Controller shall from time to time perform such functions and have such responsibilities as may be determined by the Board of Directors. Section 4.11. Duties of Officers may be Delegated. In the case of the absence of any officer of the Corporation, or for any other reason that the Board may deem sufficient, the Board may delegate for the time being the powers or duties of such officer to any other officer or to any director. Section 4.12. Compensation. The Board of Directors shall have the power to fix the compensation of all officers of the Corporation. ARTICLE V Miscellaneous Section 5.01. Certificates of Stock. The shares of stock of the Corporation shall be represented by certificates in such form as shall be determined by the Board of Directors and shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the Corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. Section 5.02. Transfer Agents and Registrars. The Board of Directors may, in its discretion, appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation; and, upon such appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars. Section 5.03. Lost Certificates. In case any certificate representing shares shall be lost, stolen or destroyed, the Board of Directors, or any officer or officers authorized by the Board of Directors, may authorize the issue of a substitute certificate in place of the certificate so lost, stolen or destroyed, and, if the Corporation shall have a Transfer Agent and Registrar, may cause or authorized such substitute certificate to be countersigned by the appropriate Transfer Agent and registered by the appropriate Registrar. In each such case, the applicant for a substitute certificate shall furnish to the Corporation and to such of its Transfer Agents and Registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft or destruction of such certificate and of the ownership thereof, and also such security or indemnity as may by them be required. Section 5.04. Transfer of Shares. Transfers of shares shall be made on the books of the Corporation only by the person named in the certificates or by his attorney lawfully constituted in writing, and upon surrender and cancellation of a certificate or certificates of a like number of shares, with duly 6 executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. Section 5.05. Stockholders Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of, or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjournment meeting. Section 5.06. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividends there may be set apart, out of any funds of the Corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conducive to the interests of the Corporation; and in its discretion the Board of Directors may decrease or abolish any such reserve. Section 5.07. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and other distributions, and to vote as such owner, and to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. Section 5.08. Seal. The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its organization and the words "CORPORATE SEAL, DELAWARE." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 5.09. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors. Section 5.10. Checks. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall be determined from time to time by resolution of the Board of Directors. Section 5.11. Execution of Proxies. The President, or in the absence or disability of the President, a Vice President, may authorize from time to time the signature and issuance of proxies to vote upon shares of stock of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such proxies and consents shall be signed in the name of the Corporation by the President or a Vice President and by the Secretary or an Assistant Secretary. Section 5.12. Notice and Waiver of Notice. Whenever any notice is required to be given under the provisions of the law, of the Certificate of Incorporation or of these Bylaws, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice to directors may also be given on the day of such mailing. Notice 7 to directors may also be given by telex, cable or telegram. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute. Whenever any notice whatever is required to be given under the provisions of any law or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE VI Amendments These Bylaws may be altered, amended or repealed, and new Bylaws may be adopted, by the stockholders or, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, by the Board of Directors, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of the proposed alteration, amendment, repeal or adoption be contained in the notice of such special meeting. 8 EX-3.28 29 l05578aexv3w28.txt EXHIBIT 3.28 EXHIBIT 3.28 ARTICLES OF INCORPORATION Of ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That we, whose names, residences and post office addresses are as follows: Frank L. Snell Joseph T. Melczer, Jr. Phoenix, Arizona Phoenix, Arizona 928 West Palm Lane 317 East Glenn Drive Phoenix, Arizona Phoenix, Arizona have this day associated ourselves for the purpose of forming a corporation under the laws of the State of Arizona, and for that purpose do hereby adopt the following Articles of Incorporation. ARTICLE I The name of this corporation shall be ALLISON STEEL MANUFACTURING CO. ARTICLE II The principal place of business of this corporation shall be at Phoenix, Maricopa County, State of Arizona, and this corporation shall have such other place or places of business either within or without the State of Arizona as may be established from time to time by the Board of Directors. ARTICLE III The objects and purposes of this corporation and the general nature of the business it proposes to transact are: (a) To manufacture and fabricate articles of metal, lumber, and other materials, and all or any articles consisting or partly consisting of metals, wood, or other materials; to buy and sell or otherwise to deal or traffic in metals, coal, wood, lumber, and other materials and any of the products thereof, and any articles consisting or partly consisting thereof; (b) To manufacture, fabricate and sell alloys; (c) To manufacture and fabricate from any kind of metal, wood, or other material or combination of materials, any and all kinds of castings, implements, tools, fixtures, and machinery, and any other articles of commerce ordinarily made by steel manufacturers, machine shops and foundries; (d) To buy and sell all kinds of merchandise, material, tools, machinery and appliances, and to carry on a general merchandise business of buying and selling; to act as manufacturers, or other agents in the buying and selling of all kinds of articles both manufactured and unmanufactured and in the process of manufacture; (e) To take contracts for the erection and repair of buildings and equipment; (f) To manufacture vehicles and parts thereof; (g) To acquire, hold, sell, reissue or cancel any shares of its own capital stock; provided, however, that this corporation may not use any of its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of the capital of this corporation, and provided further that the shares of its own capital stock belonging to this corporation shall not be voted, directly or indirectly; (h) To acquire by means of lease, contract, purchase, conveyance, special use permits or otherwise, and to own, hold, possess, enjoy, and to sell, lease, rent, encumber, mortgage, pledge and otherwise dispose of any and all classes of property whatsoever, whether real, personal or mixed, or any interest therein; and to construct buildings, structures or improvements necessary or convenient for its corporate purposes; (i) To borrow money for any of the purposes of this corporation and to issue bonds, debentures, notes or other obligations therefor, and to secure the same by pledge or mortgage of the whole or any part of the property of this corporation, whether real or personal, or to issue bonds, debentures, notes or other obligations without any such security; (j) To act as trustee, or in any fiduciary capacity; to become surety for others and to endorse commercial paper; (k) To promote or to aid in any manner, financially or otherwise, any person, corporation or association of which any shares, bonds, notes, debentures, or other securities or evidences of indebtedness are held directly or indirectly by this corporation; and for this purpose to guarantee the contracts, dividends, shares, bonds, debentures, notes and other obligations of such other persons, corporations or associations; and to do any other acts or things designed to protect, preserve, improve, or enhance the value of such shares, bonds, notes, debentures or other securities or evidences of indebtedness; (l) To buy, contract for, lease and in any and all other ways acquire, take, hold and own, and to sell, mortgage, pledge, lease and otherwise dispose of, patents, licenses, trade-marks, trade names and processes or rights thereunder, and franchise rights and governmental, state, territorial, county and municipal grants and concessions of 2 every character which this corporation may deem advantageous in the prosecution of its business or in the maintenance, operation, development or extension of its properties; (m) To enter into, make, perform or carry out contracts of any and every kind, necessary, requisite or advantageous in respect to the business operations of this corporation with any government, state, county, municipality, person, firm, association, or corporation, domestic or foreign; (n) To acquire, by purchase or otherwise, the goodwill, business, property rights, franchises and assets of every kind, with or without undertaking either wholly or in part the liabilities of any person, firm, association, or corporation; and to acquire any business as a going concern or otherwise (i) by purchase of the assets thereof wholly or in part, (ii) by acquisition of the shares or any part thereof, or (iii) in any other manner, and to pay for the same in cash or in the shares or bonds or other evidences of indebtedness of this corporation, or otherwise; to hold, maintain and operate, or in any manner dispose of, the whole or any part of the goodwill, business, rights and property so acquired, and to conduct in any lawful manner the whole or any part of any business so acquired; and to exercise all the powers necessary or convenient in and about the management of such business; (o) To do all and every thing necessary, suitable or proper for the accomplishment of any of the purposes or attainment of any of the objects hereinbefore enumerated, either alone or in association with other corporations, firms and individuals, as principals, agents, brokers, contractors, trustees or otherwise, and in general to engage in any and all lawful business that may be necessary or convenient in carrying on the business of said corporation and for the purposes pertaining thereto, and to do any and every other act or acts, thing or things, incidental to, growing out of, or connected with said business, or any part or parts thereof. The designation of any object or purpose herein shall not be construed to be a limitation or qualification or in any manner to limit or restrict the purposes and objects of the corporations. ARTICLE IV The authorized capital stock of this corporation shall be 550,000 shares, consisting of 50,000 shares of Convertible Preferred Stock of a par value of $10.00 per share, and 500,000 shares of Common Stock of a par value of $5.00 per share. The authorized Convertible Preferred Stock (hereinafter referred to as "Preferred Stock") may be issued for not less than the par value thereof as fully paid and nonassessable stock, and the authorized Common Stock may be issued for not less than the par value thereof as fully paid and nonassessable stock, and subject to the foregoing, both the authorized Preferred and Common Stock may be issued from time to time upon such terms and 3 conditions as the Board of Directors may determine and under such rules and regulations as may be prescribed by the Arizona Corporation Commission. The powers, preferences and rights of the Preferred Stock and of the Common Stock and the qualifications, limitations and restriction thereof are as follows: (1) The holders of the Preferred Stock shall be entitled to receive when and as declared by the Board of Directors of the corporation out of the annual net profits of the corporation, or its earned surplus, preferential dividends at the rate of $.75 per share per annum and no more, payable quarterly on the 1st days of January, April, July and October of each year, before any moneys shall be paid to or set apart for the sinking fund as hereinafter provided, and before any dividends shall be declared or paid upon or set apart for the Common Stock. Such dividends upon the Preferred Stock shall be cumulative from the date of issue thereof so that if dividends for any past dividend period at the rate of $.75 per share per annum shall not have been paid thereon or declared and sum sufficient for payment thereof set apart, the deficiency shall be fully paid or set apart but without interest before any payment shall be made to the sinking fund as hereinafter provided and before any dividend shall be paid upon or set apart for the Common Stock. (2) Commencing on the 1st day of June, 1965, and annually thereafter on the same date, while the Preferred Stock or any part thereof remains issued and outstanding, the corporation shall set apart for and credit to a sinking fund, out of the net profits of the corporation for the fiscal year next preceding, a sum sufficient to retire 1,000 shares of Preferred Stock on or before the first day of January, 1966, and thereafter annually on the first day of January in each year out of the net profits of the corporation for the fiscal year next preceding, a sum sufficient to retire 1,500 shares of Preferred Stock, provided that in lieu of setting apart cash the corporation may set apart and retire Preferred Stock purchased by it in the open market for retirement and thereby reduce the amount of cash to be set apart. No amount, however, shall be set apart for and credited to the sinking fund in any year unless and until the full dividend upon the Preferred Stock for all past dividend periods shall have been paid and the full dividend for the then current dividend period shall have been paid or declared and a sum sufficient for the payment thereof set apart, but the required amount shall be set apart for and credited to the sinking fund in each year after the year 1965 before any dividends shall be declared or paid upon or set apart for the Common Stock. Said sinking fund payments shall be cumulative and no dividends shall be declared or paid upon the Common Stock unless or until all sinking fund payments for previous years shall have been paid in full, or Preferred Stock shall have been set aside and retired in 4 lieu of any sinking fund payments not so made, as above provided. Said sinking funds shall be applied by the Board of Directors from time to time first within 150 days from the date that the same shall have been set apart to the purchase of Preferred Stock as hereinafter provided, and second in the event that Preferred Stock shall not be available for purchase at or below the redemption price as hereinafter provided, then to the redemption thereof as soon as possible, as hereinafter provided, the first call for redemption to be made for the next dividend payment date after the expiration of said 150 days. (3) Whenever the full dividend upon the Preferred Stock for all past dividend periods shall have been paid, and the full dividend thereon for the then current dividend period shall have been paid or declared and a sum sufficient for the payment thereof set apart, and after payment has been made to the sinking fund in full for all previous years, and a sum sufficient for the sinking fund payment for the current year shall have been set apart or shares of Preferred Stock purchased or set aside in lieu thereof, as hereinbefore provided, any remaining net profits or earned surplus available for dividends for the then current fiscal year which the Board of Directors may in its discretion see fit to distribute by way of dividends, shall be distributed as dividends upon the Common Stock; provided, however, that no cash dividends shall be paid upon the Common Stock out of net profits or earned surplus of the corporation which shall reduce the net current assets of the corporation to less than $900,000, net current assets for the purposes hereof being the excess of current assets (as hereinafter defined) over current liabilities (as hereinafter defined); The term current assets shall mean only the following assets of the corporation, namely: (i) Cash on hand and in banks subject to immediate withdrawal (excluding cash on deposit for a specific purpose unless such purpose is for the payment of current liabilities as hereinafter defined or constitutes an advance on purchase commitments made in the ordinary course of business), notes, accounts and bills receivable acquired in the ordinary course of business and due not more than twelve (12) months from the date as of which current assets are being ascertained, less adequate reserves to cover all bad and doubtful items, but not including among current assets any obligations owed by an officer, director, employee or shareholder of the corporation, any spouse, parent or child of any of the foregoing, and any corporation, or other business enterprise controlled, directly or indirectly, by the corporation or by any one or more of such persons; 5 (ii) All marketable obligations issued or unconditionally guaranteed as to payment of principal and interest by the United States of America, valued at the current market value thereof, and all other obligations issued by the United States of America, even though not marketable, if in twelve (12) months or less from the date as of which current assets are being ascertained such obligations are subject to redemption at the option of the holder thereof or to tender by the holder thereof in payment of Federal taxes, valued at such redemption price or the amount at which such obligations may be tendered for payment of such taxes, as the case may be; (iii) All inventories of raw material, work in process and finished goods which are current and not obsolete, valued at cost or market value thereof, which is lower. The term current liabilities shall include the following liabilities of the corporation, namely: (i) All indebtedness, direct or contingent, secured or unsecured, payable on demand or maturing in not more than twelve (12) months from the date of the determination of current liabilities; (ii) A proper reserve for all Federal and State taxes and all other taxes for which the corporation is liable, all computed on an accrual basis; (iii) All interest, both due and accrued. (4) The Preferred Stock shall be preferred over the Common Stock as to both earnings and assets and in the event of any liquidation, dissolution or winding up of this corporation, whether voluntary or involuntary, or any reduction of its capital stock resulting in a distribution of its assets to its stockholders, the holders of the Preferred Stock shall be entitled to receive for each share thereof an amount equal to Thirteen Dollars ($13.00) per share in the case of voluntary liquidation, and Twelve Dollars and Fifty Cents ($12.50) per share in case of involuntary liquidation, together with a sum of money in either case equivalent to the amount of unpaid cumulative dividends accrued thereon, before any distribution of the assets shall be made to the holders of the Common Stock; but the holders of the Preferred Stock shall be entitled to no further participation in such distribution; and the holders of the Common Stock shall be entitled to receive, share and share alike without preference or priority, to the exclusion of the holders of the Preferred Stock, all assets of this corporation remaining after payment to the holders of the Preferred Stock of the full preferential amount aforesaid. If upon any such liquidation, dissolution or winding up of this corporation, or reduction of its capital stock, the assets distributable among the holders of the Preferred Stock shall be insufficient to permit the payment in full to such holders of the preferential amounts aforesaid, then 6 the entire assets of this corporation to be distributed shall be distributed among the holders of the Preferred Stock then outstanding ratably in proportion to the full preferential amounts to which they are respectively entitled. Nothing in this paragraph shall be deemed to prevent the purchase and/or redemption of the Preferred Stock in any manner permitted by this Article. A consolidation or merger of this corporation with any other corporation or corporations shall not be regarded as a liquidation, dissolution or winding up of this corporation within the meaning of this paragraph, but no such consolidation or merger shall be made except in accordance with the provisions of this Article. (5) The Preferred Stock shall be subject to redemption and the corporation may, at its election, expressed by resolution of the Board of Directors, redeem the whole of the outstanding Preferred Stock on any dividend-payment date by paying Thirteen Dollars ($13.00) for each share thereof, and redeem any part of the outstanding Preferred Stock out of the sinking fund in any year by paying Twelve Dollars and Seventy-five Cents ($12.75) for each share thereof, together in each case with a sum of money equivalent to the amount of unpaid cumulative dividends accrued thereon. In case of partial redemption the shares to be redeemed shall be chosen by lot in any manner determined by the Board of Directors. Notice of any proposed redemption of Preferred Stock shall be given by this corporation by mailing a copy of such notice at least thirty (30) days prior to the date fixed for such redemption to the holders of record of the Preferred Stock to be redeemed at their respective addresses appearing upon the books of this corporation, and also, if so provided in the by-laws of this corporation or by resolution of the Board of Directors, by publication in such manner as shall have been provided in the by-laws or in such resolution. From and after the date fixed in any such notice as the date of redemption (unless default shall be made by this corporation in providing moneys at the time and place specified for the payment of the redemption price pursuant to such notice), all dividends on the Preferred Stock so called for redemption shall cease to accrue, and all rights of the holders thereof as stockholders of this corporation, except the right to receive the redemption price, shall cease and determine. The privilege shall continue available, however, the holders of Preferred Stock, up to and including the tenth day prior to the date fixed for redemption, to convert such shares of Preferred Stock called for redemption into shares of Common Stock as hereinafter in this Article provided. This corporation shall also have power from time to time to purchase, in the open market, the whole or any part of the Preferred Stock upon the best terms reasonably obtainable but in no event at a price in respect of any shares of Preferred Stock greater than $12.75 per share, provided that no such purchase of Preferred Stock shall be made (a) out of the capital of the 7 corporation or (b) unless there is no default in the payment of cumulative dividends upon the Preferred Stock or in sinking fund requirements or (c) which would reduce the net current assets of the corporation, as defined in Section (3) hereof, to less than $900,000. Preferred Stock so redeemed or purchased shall not be reissued and shall be retired from time to time in the manner provided by law. (6) Each holder of Preferred Stock shall have the option at any time and from time to time, upon ten (10) days' written notice to the corporation, to convert any or all shares of Preferred Stock held by him into fully paid and nonassessable shares of Common Stock of the corporation at the rate of one (1) share of Preferred Stock for one (1) share of Common Stock; provided, however, that the certificates representing the Preferred Stock to be converted are received by the corporation properly endorsed concurrently with such notice, and provided further that such conversion rate shall be subject to adjustment or change in certain cases as hereinafter provided in this Section (6). The stockholder making such conversion shall thereby conclusively waive and release the corporation from the payment to him of all unpaid cumulative dividends, if any, accrued on the Preferred Stock converted. The stockholder making such conversion shall cease to be a holder of Preferred Stock and shall be a holder of Common Stock to the extent of the shares converted, upon the delivery to the corporation by such stockholder of such notice and the certificate or certificates representing the Preferred Stock to be converted, whether or not such Common Stock is then issued or delivered. Such conversion shall be consummated by the corporation within ten (10) days after receipt by the corporation from the stockholder of such notice and the certificate or certificates representing the Preferred Stock to be converted. The Company shall at all times have authorized but unissued, or in its treasury, a number of shares of Common Stock sufficient for the conversion of all shares of Preferred Stock from time to time outstanding. It is expressly provided that the rate of conversion between shares of Preferred Stock and shares of Common Stock hereinabove set forth shall be subject to adjustment or change as follows: A. For the purpose of determining adjustments in the rate of conversion of Preferred Stock into Common Stock as herein set forth the initial conversion value of a share of Preferred Stock shall be $10.00 per share, and the initial conversion value of a share of Common Stock shall be $10.00 per share, and in all adjustments of the conversion rate the resulting conversion value of a share of Common Stock shall be calculated to the nearest 8 (or if there shall be no nearest, then the next higher) multiple of 10(cent) to be taken as representing 1/100 of a share of Common Stock. B. In case the shares of Common Stock at any time outstanding shall be subdivided by reclassification or otherwise, into a greater number of shares, the per share conversion value of the Common Stock then effective shall be reduced proportionately. In case the shares of the Common Stock at any time outstanding shall be combined by reclassification or otherwise into a lesser number of shares, the per share conversion value of the Common Stock then effective shall be increased proportionately. C. In case any shares of Common Stock shall be issued by the corporation as a dividend on the then outstanding Common Stock of the corporation, then the conversion value of the Preferred Stock shall be increased by the percentage of such Common Stock dividend. D. In case the corporation shall at any time, or from time to time, issue any shares of Common Stock, in excess of the first 100,000 shares, for a consideration either in cash or in property of less than $10.00 per share, or the adjusted conversion value expressed in dollars effective immediately prior to the time of such issue, then upon such issue the conversion value of a share of Common Stock shall be determined by dividing (1) an amount equal to the sum of (a) the number of shares of Common Stock outstanding immediately prior to such issue, multiplied by the per share conversion value of the Common Stock then effective, plus (b) the consideration received by the corporation upon such issue, by (2) the total number of shares of Common Stock outstanding immediately after such issue. E. The corporation shall not be required to issue a fraction of a share of Common Stock upon any conversion of shares of Preferred Stock, but in lieu thereof may at its option make payment in cash in the amount obtained by multiplying the number of shares of Preferred Stock by the per share conversion value of the Common Stock expressed in dollars then effective, or issue and deliver a scrip certificate in respect of such fraction. Such scrip certificates, if issued, shall be in bearer form and when surrendered within a specified time fixed by the Board of Directors with other scrip certificates evidencing in the aggregate rights to receive one or more full shares of Common Stock, shall be exchangeable for a certificate representing such full share or shares. Such scrip certificate shall not entitle the bearer thereof to exercise any voting rights, to receive dividends, to participate in any distribution of assets of the corporation, or to exercise any other rights as a stockholder of the corporation. Such 9 scrip certificates shall otherwise be in such form and shall contain such provisions as shall be determined by the Board of Directors consistently with the provisions of applicable law. F. Whenever, at any time and from time to time, there shall occur any event calling for an adjustment of conversion value, then, and in each such case, the corporation shall forthwith: (i) file with each transfer agent a certificate executed by the President or Vice President and attested by the Secretary or an Assistant Secretary of the corporation setting forth in detail the computation of such adjustment, the value and consideration therefore, and the new adjusted conversion values for the then current and subsequent conversion periods; and (ii) cause a notice stating the fact of such adjustment to be mailed to the holders of all outstanding Preferred Stock affected by such adjustment. No transfer agent shall be under any duty to make any inquiry or investigation as to the statements contained in any such certificate or as to the manner in which any computation was made but may accept such certificate as conclusive evidence of the statements therein contained, and each transfer agent shall be fully protected with respect to any and all acts done or action taken or suffered by it in reliance thereon. No transfer agent, in its capacity as such, shall be deemed to have any knowledge with respect to any change of capital structure of the corporation unless and until it receives a notice thereof pursuant to the provisions of this Section (6) and, in the absence of any such notice, each transfer agent may conclusively assume that there has been no such change. Any certificates filed by the corporation with any transfer agent pursuant to the provisions hereof may be inspected at the office of such transfer agent during business hours by any holder of record of Preferred Stock or by his duly authorized agent. (7) Except as otherwise expressly provided by law, and except as otherwise expressly provided in this Section (7) and in Section (8) hereof, the holders of the Preferred Stock shall have no voting power, all rights to vote and all voting power being vested exclusively in the holders of the outstanding Common Stock, a holder of Common Stock being entitled to one vote for each share of Common Stock standing in his name on the books of the corporation. In all elections for directors each holder of Preferred and/or Common Stock shall have the right to cast as many votes in the aggregate as he shall have shares of stock in his name, multiplied by the number of directors to be elected at such election, and each shareholder may cast the whole number of votes either in person or by proxy for one candidate or distribute such votes among two or more such candidates. 10 (8) Unless with the affirmative vote or written consent of the holders of at least two-thirds of the shares of Preferred Stock then outstanding (in addition to any other vote or consent at the time required by law) the corporation shall not (a) increase the authorized amount of Preferred Stock or authorize the issue of any stock or class of stock having preference or priority over or equality with the Preferred Stock, or create or issue any indebtedness or any class of stock convertible into Common Stock of the corporation; (b) amend the provisions of the Articles of Incorporation so as to alter or change in any manner the rights, preferences, limitations and terms of the Preferred Stock; (c) enter into any merger or consolidation with any other corporation or corporations (not including the acquisition by this corporation of all the assets or issued capital stock of any other corporation); (d) sell, lease, or exchange all or substantially all of its property and assets, including good will and corporate franchises; (e) voluntarily liquidate, dissolve or wind-up its affairs. (9) No holders of stock of this corporation of any class shall have preemptive or preferential right of subscription to any shares of any class of the stock of the corporation which is now or hereafter authorized, or to any obligations convertible into the authorized stock of this corporation other than such, if any, as the Board of Directors in its discretion may from time to time determine and at such price as the Board of Directors may from time to time fix pursuant to the authority conferred by the Articles of Incorporation and under such rules and regulations as may be prescribed by the Arizona Corporation Commission. ARTICLE V The time of the commencement of this corporation shall be the date of the issuance to it of a certificate of incorporation by the Arizona Corporation Commission, and the termination thereof shall be twenty-five (25) years thereafter, with the privilege of renewal as provided by law. ARTICLE VI The business and affairs of this corporation shall be conducted by a Board of Directors of not less than three (3) nor more than thirteen (13) members. The Board of Directors shall have the power to increase or decrease the Board within the limits above provided. The Board of Directors may also fill any vacancies which may occur in the Board of Directors resulting from an increase in the number of the Board of Directors or otherwise, pending the next annual meeting of the stockholders. William L. Allison, William L. Allison, Jr., J. August Rau, Dorothy E. Richter, Walter R. Bimson, Frank L. Snell, Charles A. Capek and Daniel C. Plummer shall constitute the first Board of Directors. Thereafter, the Board 11 of Directors shall be elected at the regular annual meeting of the stockholders which shall be held in Phoenix, Arizona, on the second Tuesday of May of each year, commencing with the year 1956, unless said day be a legal holiday, in which event the annual meeting of the stockholders shall be held on the next succeeding business day. The Board of Directors shall each year upon their election organize into a Board of Directors and elect a President, one or more Vice Presidents, a Secretary and a Treasurer, any two of which offices, except the offices of the President and Vice President or President and Secretary, may be held by the same person. All officers shall serve for one year or until their successors are elected and qualified. The Board of Directors, by a resolution passed by a majority of the whole Board, may designate three or more of their number to constitute an Executive Committee, which Committee, to the extent provided in said resolution or in the By-laws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation. The Board of Directors of this corporation shall have power without any action on the part of the stockholders to make, alter, amend or repeal by-laws of the corporation. The By-laws may provide for the creation of additional offices by the Board of Directors or the Executive Committee and the filling of such created offices by the Board of Directors or the Executive Committee. Without limiting the generality of the foregoing, additional offices may include a Chairman of the Board of Directors, one or more Assistant Secretaries, one or more Assistant Treasurers and any other executive or administrative office which the Board of Directors deems to be necessary for the conduct of the business of the corporation. Any office so created shall continue from year to year until annulled by the Board of Directors or the Executive Committee. ARTICLE VII In the absence of fraud, no contract or transaction between this corporation and any other association or corporation shall be affected by the fact that any of the directors or officers of this corporation are interested in or are directors or officers of such other association or corporation, and any director or officer of this corporation individually may be a party to or may be interested in any such contract or transaction of this corporation; and no such contract or transaction of this corporation with any person or persons, firm, association or corporation shall be affected by the fact that any director or officer of this corporation is a party to or interested in such contract or transaction or in any way connected with such person or persons, firm, association or corporation; provided that 12 such contract or other transaction shall be authorized or ratified by the vote of a majority of the directors of this corporation not so interested; and each and every person who may become a director or officer of this corporation is hereby relieved from any liability that might otherwise exist from thus contracting with this corporation for the benefit of himself or any person, firm, association or corporation in which he may be in anywise interested. ARTICLE VIII The highest amount of indebtedness or liability, direct or contingent, to which this corporation may be subject at any one time shall be Two Million Dollars ($2,000,000), provided such limitation shall not apply to indebtedness authorized by three-fourths (3/4) of the votes cast with respect thereto at any lawfully held meeting of the stockholders of the corporation if such action is approved by the Arizona Corporation Commission. ARTICLE IX The private property of the stockholders, directors and officers of this corporation shall be exempt from all corporate debts and liabilities of whatsoever kind and nature. ARTICLE X This corporation does hereby appoint Frank L. Snell, of Phoenix, Arizona, who has been a bona fide resident of Arizona for at least three years, its lawful agent in and for the State of Arizona for and on behalf of said corporation to accept and acknowledge service of, and upon whom may be served, all necessary process or processes in any action, suit or proceeding that may be had or brought against said corporation in any of the courts of the State of Arizona, such service of process or notice, or the acceptance thereof by said agent endorsed thereon, to have the same force and effect as if served upon the President and Secretary of the corporation. IN WITNESS WHEREOF, we, the undersigned, have hereunto signed our names this 7th day of February, 1955. /s/ Frank L. Snell ---------------------------------------- Frank L. Snell /s/ Joseph T. Melczer, Jr. ----------------------------------------- Joseph T. Melczer, Jr. 13 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That at a special meeting of the stockholders of Allison Steel Manufacturing Co., a corporation duly organized and existing under and by virtue of the laws of the State of Arizona, duly called and held at Phoenix, Arizona, on the 14th day of January, 1957, the Articles of Incorporation of said corporation were amended as hereinafter set forth by the majority vote of all the issued and outstanding stock of said corporation. That prior to the holding of said meeting all of the stockholders of said corporation were duly and regularly given thirty (30) days' notice in writing of the proposed amendment to the Articles of Incorporation. That the first paragraph of ARTICLE IV of the Articles of Incorporation of Allison Steel Manufacturing Co. was changed and amended to read hereafter as follows: "ARTICLE IV The authorized capital stock of this corporation shall be 1,950,000 shares, consisting of 50,000 shares of Convertible Preferred Stock of a par value of $10.00 per share, and 1,900,000 shares of Common Stock of a par value of $5.00 per share. The authorized Convertible Preferred Stock (hereinafter referred to as "Preferred Stock") may be issued for not less than the par value thereof as fully paid and non-assessable stock, and the authorized Common Stock may be issued for not less than the par value thereof as fully paid and non-assessable stock, and subject to the foregoing, both the authorized Preferred and Common Stock may be issued from time to time upon such terms and conditions as the Board of Directors may determine and under such rules and regulations as may be prescribed by the Arizona Corporation Commission." and the second paragraph of ARTICLE VI of the said Articles of Incorporation of Allison Steel Manufacturing Co. was changed and amended to read hereafter as follows: "From the effective date of this amendment the Board of Directors shall be elected at the regular annual meeting of stockholders which shall be held in Phoenix, Arizona, on the first Tuesday of June of each year, commencing with the year 1957, unless said day be a legal holiday, in which event the annual meeting of the stockholders shall be held on the next succeeding business day." and ARTICLE VIII of the said Articles of Incorporation of Allison Steel Manufacturing Co. was changed and amended to read hereafter as follows: "ARTICLE VIII The highest amount of indebtedness or liability, direct or contingent, to which this corporation may be subject at any one time shall be Six Million Six Hundred Sixty-six Thousand Six Hundred Sixty-six Dollars ($6,666,666.00), provided such limitation shall not apply to indebtedness authorized by three-fourths (3/4) of the vote cast with respect thereto at any lawfully held meeting of the stockholders of the corporation if such action is approved by the Arizona Corporation Commission." IN WITNESS WHEREOF, the President and Secretary of Allison Steel Manufacturing Co. have hereunto set their hands and affixed the corporate seal of said corporation this 14th day of January, 1957. ALLISON STEEL MANUFACTURING CO. By: /s/ William L. Allison ------------------------------------ President ATTEST: /s/ D.A. Leahy - -------------------------- Secretary CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That at a special meeting of the stockholders of Allison Steel Manufacturing Co., a corporation duly organized and existing under and by virtue of the laws of the State of Arizona, duly called and held at Phoenix, Arizona on the 23rd day of October, 1959, 30 days notice of which meeting was duly and regularly given in writing to all of the stockholders of record of said corporation, the first paragraph of ARTICLE IV of the Articles of Incorporation of said corporation was, by a resolution duly adopted by the affirmative vote of a majority of the issued and outstanding shares of the capital stock of said corporation including the affirmative vote of more than two-thirds of the shares of Preferred Stock outstanding, amended to read as follows: "ARTICLE IV The authorized capital stock of this corporation shall be 1,975,000 shares, consisting of 75,000 shares of Convertible Preferred Stock of a par value of $10.00 per share, and 1,900,000 shares of Common Stock of a par value of $5.00 per share. The authorized Convertible Preferred Stock (hereinafter referred to as "Preferred Stock") may be issued for not less than the par value thereof as fully paid and nonassessable stock, and the authorized Common Stock may be issued for not less than the par value thereof as fully paid and nonassessable stock, and subject to the foregoing, both the authorized Preferred and Common stock may be issued from time to time upon such terms and conditions as the Board of Directors may determine and under such rules and regulations as may be prescribed by the Arizona Corporation Commission." IN WITNESS WHEREOF, the President and Secretary of Allison Steel Manufacturing Co. have hereunto set their hands and have affixed the seal of said corporation as of the 23rd day of October, 1959. ALLISON STEEL MANUFACTURING CO. By: /s/ William L. Allison -------------------------------------- President ATTEST: /s/ D.A. Leahy - ----------------------------- Secretary CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That at the Deferred Annual Meeting of Stockholders of ALLISON STEEL MANUFACTURING CO., a corporation duly organized and existing under and by virtue of the laws of the State of Arizona, on the 26th day of June, 1962, 30 days notice of which meeting was duly and regularly given in writing to all of the stockholders of record of said corporation, the first paragraph of ARTICLE IV, and ARTICLE VIII, of the Articles of Incorporation of said corporation were, by a resolution duly adopted by the affirmative vote of a majority of the issued and outstanding shares of the capital stock of said corporation, including the affirmative vote of more than two-thirds of the shares of Preferred Stock outstanding, amended to read as follows: "ARTICLE IV "The authorized capital stock of this corporation shall be 3,075,000 shares, consisting of 75,000 shares of Convertible Preferred Stock of a par value of $10.00 per share, and 3,000,000 shares of Common Stock of a par value of $5.00 per share. The authorized Convertible Preferred Stock (hereinafter referred to as "Preferred Stock") may be issued for not less than the par value thereof as fully paid and nonassessable stock, and the authorized Common Stock may be issued for not less than the par value thereof as fully paid and nonassessable stock, and subject to the foregoing, both the authorized Preferred and Common Stock may be issued from time to time upon such terms and conditions as the Board of Directors may determine and under such rules and regulations as may be prescribed by the Arizona Corporation Commission." "ARTICLE VIII "The highest amount of indebtedness or liability, direct or contingent, to which this corporation may be subject, at any one time shall be Ten Million Five Hundred Thousand Dollars ($10,500,000), provided such limitation shall not apply to indebtedness authorized by three-fourths (3/4) of the votes cast with respect thereto at any lawfully held meeting of the stockholders of Corporation if such action is approved by the Arizona Corporation Commission." IN WITNESS WHEREOF, the President and Secretary of ALLISON STEEL MANUFACTURING CO. have hereunto set their hands and have affixed the seal of said corporation as of the 29th day of June, 1962. ALLISON STEEL MANUFACTURING CO. By /s/ Charles H. Hallett ------------------------------------- President ATTEST: /s/ T.P. Connally - ----------------------------- Secretary CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That at a Special Meeting of Stockholders of ALLISON STEEL MANUFACTURING CO., an Arizona corporation, duly held at Phoenix, Arizona, on the 5th day of November, 1965, thirty days' notice of which meeting was duly and regularly given in writing to all of the stockholders of record of said corporation stating the day, hour and place of such meeting and the nature of the business to be transacted, by the affirmative vote of more than two-thirds of all of the issued and outstanding shares of capital stock of the corporation, including the affirmative vote of more than two-thirds of all of the issued and outstanding shares of Preferred Stock of the corporation, and a resolution was adopted amending Section (2) of ARTICLE IV of the Articles of Incorporation of the corporation by deleting the word "first" from the third line from the end of Section (2) on Page 9 of the Articles of Incorporation, and by adding immediately after the end of the said Section (2) a new sentence (without paragraph break) reading as follows: "If any shares of Preferred Stock so called for redemption are converted into Common Stock pursuant to Section (6) hereof prior to the date which, pursuant to Section (5) hereof, has been fixed for the redemption of such shares out of the sinking fund, and if funds for the payment of such shares have been set apart and credited to the sinking fund as aforesaid, then the corporation may, at any time after the date so fixed for redemption, withdraw the funds so set apart and credited for the redemption of the shares so converted." IN WITNESS WHEREOF, the President and the Secretary of ALLISON STEEL MANUFACTURING CO. have hereunto set their hands and have affixed the seal of said corporation this 5th day of November 1965. IN WITNESS THEREOF, I hereunto set my hand and official seal. ALLISON STEEL MANUFACTURING CO. By /s/ Charles H. Hallett -------------------------------------- President ATTEST: /s/ Tim P. Connally - --------------------------------- Secretary CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That at the annual meeting of the stockholders of ALLISON STEEL MANUFACTURING CO., an Arizona corporation, duly held at Phoenix Arizona, on the 1st day of June, 1965, thirty days' written notice of the meeting having been duly given, by the affirmative vote of a majority of all of the issued and outstanding shares of stock of the corporation, a resolution was adopted amending the second paragraph of Article VI of the Articles of Incorporation of the corporation to be hereafter as follows: "From the effective date of this agreement the Board of Directors shall be elected at the regular annual meeting of stockholders which shall be held in Phoenix, Arizona on the first Friday in April of each year commencing with the year 1966; unless said day be a legal holiday, in which event, the annual meeting of the stockholders shall be held on the next succeeding business day." IN WITNESS WHEREOF, the President and Secretary of said ALLISON STEEL MANUFACTURING CO. have hereunto set their hands and have affixed the seal of said corporation this 29th day of June, 1965. ALLISON STEEL MANUFACTURING CO. By /s/ Charles H. Hallett --------------------------------------- President ATTEST: /s/ Tim P. Connally - ---------------------------------- Secretary CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BY THESE PRESENTS: That at the annual meeting of the stockholders of ALLISON STEEL MANUFACTURING CO., an Arizona corporation, duly held at Phoenix Arizona, on the 1st day of April, 1966, thirty days' notice of which meeting was duly and regularly given in writing to all of the stockholders of record of said corporation stating the day, hour and place of such meeting and the nature of the business to be transacted, by the affirmative vote of more than a majority of all of the issued and outstanding share of capital stock of the corporation, a resolution was adopted amending the first paragraph of ARTICLE IV of the Articles of Incorporation of the corporation to be hereafter as follows: ARTICLE IV "The authorized capital stock of this corporation shall be 7,575,000 shares, consisting of 75,000 shares of Convertible Preferred Stock of a par value of $10.00 per share, and 7,500,000 shares of Common Stock of a par value of $2.00 per share. The authorized Convertible Preferred Stock (hereinafter referred to as `Preferred Stock') may be issued for not less than the par value thereof as fully paid and nonassessable stock, and the authorized Common Stock may be issued for not less than the par value thereof as fully paid and nonassessable stock, and subject to the foregoing, both the authorized Preferred and Common Stock may be issued from time to time upon such terms and conditions as the Board of Directors may determine and under such rules and regulations as may be prescribed by the Arizona Corporation Commission. At the close of business on the day that this Amendment becomes effective, each share of Common Stock with a par value of $3.00 per share then issued and outstanding or reserved for issuance shall be changed into two and one-half fully paid and non-assessable shares of Common Stock with a par value of $2.00 per share as the number of shares represented by the certificate or certificates so surrendered by him. Certificates for fractional shares will be issued to the extent necessary." IN WITNESS WHEREOF, the President and Secretary of said ALLISON STEEL MANUFACTURING CO. have hereunto set their hands and have affixed the seal of said corporation this 1st day of April, 1966. ALLISON STEEL MANUFACTURING CO. By /s/ Charles H. Hallett --------------------------------------- President ATTEST: /s/ Tim P. Connally - ------------------------------ Secretary CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ALLISON STEEL MANUFACTURING CO. KNOW ALL MEN BE THESE PRESENTS: That at the 1967 annual meeting of the stockholders of Allison Steel Manufacturing Co., an Arizona corporation, duly convened and held in Phoenix, Arizona on April 7, 1967, the Articles of Incorporation of said corporation were amended as hereinafter set forth. That prior to the holding of said meeting, due and proper notice in writing with respect to the proposed amendments had been given as required by law to all of the stockholders of said corporation of record on the March 1, 1967 record date fixed by the Board of Directors. That Articles IV and VIII of said Articles of Incorporation were, by the affirmative vote at said meeting of at least a majority of the issued and outstanding shares of capital stock of said corporation, changed and amended to be hereafter as follows: "ARTICLE IV "The authorized capital stock of this corporation shall be 15,000,000 shares of common Stock of a par value of $2 per share. "All or any portion of the said Common Stock may be issued in consideration of real or personal property, services or any other things of value for the uses and purposes of the corporation and when so issued shall become and be fully paid, the same as though paid for in cash at par, and the Board of Directors shall be the sole judge of the value of any property, services, right or thing acquired in exchange for Common Stock. Payments for the Common Stock shall be made at such time or times and upon such conditions as the Board of Directors may from time to time designate. The shares of Common Stock of the corporation shall be non-assessable. No holders of the Common Stock of the corporation shall have any preemptive or preferential right to subscribe for any issue of stock or other securities of the corporation except as may from time to tie be fixed by the Board of Directors." "ARTICLE VIII "The highest amount of indebtedness or liability, direct or contingent, to which this corporation may be subject at any one time shall be $20,000,000, provided such limitation shall not apply to indebtedness authorized by three-fourths of the votes cast with respect thereto at any lawfully held meeting of the stockholders of the corporation if such action is approved by the Arizona Corporation Commission." That Article V of said Articles of Incorporation was, by the affirmative vote at said meeting of at least a majority of the issued and outstanding shares of capital stock of said corporation and also by the affirmative vote of at least three-fourths of those of said shares which were voted thereon at said meeting, changed and amended to be hereafter as follows: "ARTICLE V The time of the commencement of this corporation shall be the date of the issuance to it of a certificate of incorporation by the Arizona Corporation Commission, and the termination thereof shall be twenty-five (25) years from April 1, 1967, with the privilege of renewal as provided by law.": and that Article VII of said Articles of Incorporation was by the affirmative vote at said meeting of at least a majority of the issued and outstanding shares of capital stock of said corporation, changed and amended by the addition of a new second paragraph thereto reading as follows: "The corporation may indemnify any and all of its directors and officers, or former directors and officers, against expenses incurred by them, including legal fees, or judgments or penalties rendered or levied against any such person in a legal action brought against any such person for actions or omissions alleged to have been committed by any such person while acting within the scope of his employment as a director or officer of the corporation, provided that the Board of Directors shall determine in good faith that such person did not act, fail to act, or refuse to act willfully or with gross negligence or with fraudulent or criminal intent in regard to the matter involved in the action or omission." IN WITNESS WHEREOF, the President and Secretary of the Company have hereunto set their hands and affixed its seal this 7th day of April, 1967. ALLISON STEEL MANUFACTURING CO. By /s/ Charles H. Hallett -------------------------------------- President ATTEST: /s/ Tim P. Connally - ----------------------------------- Secretary AGREEMENT OF MERGER AGREEMENT OF MERGER made and entered into as of the 30 day of June, 1972, by and between Allison Steel Manufacturing Co., a corporation of the State of Arizona (herein referred to as the "Surviving Corporation"), and Marathon Steel Company, a corporation of the State of Delaware (herein referred to as the "Subsidiary"), being a wholly-owned subsidiary of Marathon Manufacturing Company, a Delaware corporation ("Marathon"). WHEREAS, the Surviving Corporation, under its Articles of Incorporation filed in the office of the Corporation Commission of the State of Arizona on February 7, 1955, has an authorized capital stock of 15,000,000 shares of Common Stock of the par value of $2.00 each, of which 684,920 shares of Common Stock have been issued and are outstanding. WHEREAS, the Subsidiary, under its Certificate of Incorporation filed in the office of the Secretary of State of the State of Delaware on June 29, 1972, has an authorized capital stock of 1,000 shares of Common Stock of the par value of $1.00 each, of which 1,000 shares of Common Stock have been issued and are outstanding. WHEREAS, the respective boards of said corporations deemed it advisable to the end that greater efficiency and economy of management may be accomplished and otherwise generally to the advantage and welfare of said corporations and their several and respective shareholders, to merge said Subsidiary into said Surviving Corporation, under and pursuant to the provisions of the Arizona Revised Statutes, as amended, relating to business corporations of the State of Arizona, and particularly in accordance with Sections 10-341 et seq. of the Arizona Revised Statutes, as amended, and the General Corporation Law of Delaware. NOW, THEREFORE, in consideration of the premises and the mutual agreements, provisions, covenants and grants herein contained, it is hereby agreed by and between the said parties hereto, and in accordance with the provisions of the said Laws of the State of Arizona, that the said Subsidiary shall be and the same is hereby merged into the said Surviving Corporation, and the said Surviving Corporation does hereby merge into itself the said Subsidiary. And the parties hereto by and between a majority of their respective boards of directors, by these presents agree to and prescribe the terms and conditions of said merger and the mode of carrying the same into effect, which terms and conditions and mode of carrying the same into effect the said parties hereto do mutually and severally agree and covenant to observe, keep and perform, that is to say: Article I: The Articles of Incorporation, as amended, of the Surviving Corporation shall be the present Articles of Incorporation of Allison Steel Manufacturing Co. except that upon the merger becoming effective Article I thereof shall be amended to change the name of the Surviving Corporation and said Article I shall thereafter read as follows: "ARTICLE I The name of this corporation shall be Marathon Steel Company." Article II: The manner of converting the capital stock of the corporations, parties hereto, into the capital stock of Marathon shall be as follows: (a) The total number of shares of Subsidiary issued and outstanding on the effective date of the merger shall automatically be converted into and shall become, without any further action whatsoever, a total number of shares of Common Stock, $2 par value, of the Surviving Corporation equal to the number of shares of the Surviving Corporation outstanding immediately prior to the consummation of the merger. (b) Each share of the Surviving Corporation issued and outstanding on the effective date of the merger (excluding shares owned by Marathon, which shares shall cease to exist) shall be automatically converted into a fraction of a share of Common Stock of Marathon determined by dividing $12 into the average closing price of the shares of Common Stock of Marathon on the Exchange on which such shares are listed for the five (5) trading days preceding the effective date of the merger. Each outstanding qualified stock option to purchase shares of Common Stock of the Surviving Corporation shall on the effective date of the merger automatically be converted into and become an option (without any change in the benefits granted the holder of any such option that would cause such option not to qualify as a qualified stock option under the Internal Revenue Code) to purchase a fraction of a share or Common Stock of Marathon determined by dividing $12 into the average closing price of the shares of Common Stock of Marathon on the Exchange on which such shares are listed for the five (5) trading days preceding the effective date of the merger for each one share of common stock of the Surviving Corporation which the holder of such option would otherwise be entitled to purchase at the purchase price specified in such option agreement. No fractional share of Common Stock of Marathon will be issued to any holder of common stock or the Surviving Corporation who would otherwise be entitled to receive a fraction of a share of Common Stock of Marathon, but each such holder shall in lieu thereof be paid an amount in cash equal to the value of such fraction based upon the closing price of Common Stock of Marathon on the Exchange on which such shares of Marathon are listed on the effective date of the merger. Article III: The By-laws of said Surviving Corporation shall be the present By-laws of Allison Steel Manufacturing Co. until the same shall be altered or amended according to the provisions thereof either by the board of directors or by the Stockholders of the Surviving Corporation. Article IV: Upon the consummation of the act of merger herein provided for, the Surviving Corporation shall Possess all the rights, privileges, powers, franchises and immunities, as well of a public as of a private nature, and be subject to all the liabilities, restrictions and duties of each of the constituent corporations and all and singular the rights, privileges, powers, franchises and immunities of each of said constituent corporations, and all property, real, personal and mixed, wheresoever located and all debts due to any of said constituent corporations on whatever account, and all other things in action of or belonging to each of said constituent corporations, shall be vested in the Surviving Corporation; and all property, rights, privileges, powers, franchises and immunities, and all and every other interest shall be thereafter as effectually the property of the Surviving Corporation as they were of the several and respective constituent corporations, and the title to any real estate, whether by deed or otherwise vested in any of said constituent corporations, shall not revert or be in any way impaired by reason of this merger provided, that all rights of creditors and all liens upon the property of any of said constituent corporations shall be preserved unimpaired, limited to the property affected by such liens at the time of this merger and all debts, liabilities and duties of the respective constituent corporations shall henceforth attach to the Surviving corporation and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it. If at any time said Surviving Corporation shall deem or be advised that any further assignments, assurances in the law, or things are necessary or desirable to vest in the said Surviving Corporation the title to any property of the Subsidiary, or the Surviving Corporation, the said Subsidiary or the said Surviving Corporation (as the case may be) and its proper officers and directors shall and will execute all the proper assignments and assurances in the law, and do all things necessary or proper to vest title to such property in the said Surviving Corporation, and otherwise to carry out the purposes of this agreement. It is expressly declared that the said Surviving Corporation shall be, and the said Surviving Corporation hereby covenants that, as merged, it, shall be subject to the remedies and liabilities in such case prescribed in the said Arizona Revised Statutes, as amended, relating to business corporations and to the several supplements to and amendments thereof. Article V: The Surviving Corporation shall pay all expenses of the merger. Article VI: This agreement shall be submitted to the shareholders of each of the corporations, parties hereto, as provided by law and shall be deemed and taken to be the agreement and act of merger of said corporations, upon the adoption thereof by the votes of the shareholders, and upon the doing of all such other acts and things as shall be required by the Arizona Revised Statutes, as amended. Article VII: The effective date of this agreement of merger is the date the same is filed with the Corporation Commission of the State of Arizona and with, the Secretary of State of Delaware. IN WITNESS WHEREOF, a majority of the board of directors of the Surviving Corporation and a majority of the board of directors of the Subsidiary, said corporations being each of the parties to this agreement, have pursuant to a resolution adopted by a majority of the respective boards of directors of said corporations at meetings thereof duly an regularly held, at which quorums were present, sign this Agreement on behalf of and under the seals of said corporations, as of the day and year first above mentioned. (CORPORATE SEAL) Signed, sealed and _________________________________ delivered in the _________________________________ presence of _________________________________ _______________________________ _________________________________ A Majority of the Directors of Allison Steel Manufacturing Co. (CORPORATE SEAL) Signed, sealed and _________________________________ delivered in the _________________________________ presence of _________________________________ _________________________________ _________________________________ I, James F. O'Haren, Secretary of Marathon Steel Company, a corporation of the State of Delaware, DO HEREBY CERTIFY, as such Secretary and under the seal of said corporation, in accordance with the provisions of the Delaware General Corporation Law, that the Agreement of Merger of said Marathon Steel Company and Allison Steel Manufacturing Co. to which this certificate is attached, after having been first duly signed on behalf of said Marathon Steel Company, by a majority of the directors thereof, and having been signed by a majority of the directors of Allison Steel Manufacturing Co., was approved by the unanimous written consent of its sole stockholder in accordance with the provisions of the General Corporation Law of Delaware and was duly adopted as the act of the stockholders of said Marathon Steel Company and the duly adopted agreement and act of the said corporation. IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of said Marathon Steel Company this 30th day of June, 1972. (Corporate Seal) /s/ James F. O'Haren --------------------------------- Secretary I, James O'Haren, Secretary of Allison Steel Manufacturing Co., a corporation of the State of Arizona, DO HEREBY CERTIFY as such Secretary and under the seal of said corporation in accordance with the provisions of the Arizona Revised Statutes, as amended that the Agreement of Merger of said Allison Steel Manufacturing Co. and Marathon Steel Company, to which this certificate is attached, after having been first duly signed on behalf of said Allison Steel Manufacturing Co. by a majority of the directors thereof and having been signed by a majority of the directors of Marathon Steel Company, was submitted to the Stockholders of said Allison Steel Manufacturing Co. at a meeting thereof called and held separately from any meeting of the stockholders of said Marathon Steel Company for the purpose of taking the same into consideration, after at least thirty (30) days' notice by mail, and notice by publication as provided by Section 10-343 of the Arizona Revised Statutes, as amended, on the 12th day of July, 1972, that at the date of said meeting 684,920 shares of stock of said corporation were issued and outstanding; that at said meeting the holders of 670,524 shares voted in person or by proxy and the holders of no shares voted in person or by proxy, against the approval of said agreement, the said affirmative vote representing at least [ ] of the total number of shares of outstanding stock of said corporation, and that thereby the Agreement of Merger was at said meeting duly adopted as the act of the stockholders of said Allison Steel Manufacturing Co. and the duly adopted agreement and act of the said [ ]. IN WITNESS WHEREOF, I have hereto signed my name and affixed the seal of said Allison Steel Manufacturing Co. on this 7th day of August, 1972. /s/ James F. O'Haren ----------------------------------- Secretary (Corporate Seal) THE ABOVE AGREEMENT OF MERGER, having been executed by a majority of the board of directors of each of the corporations, parties thereto, and having been adopted separately by the stockholders of each of said corporations, in accordance with the provisions of the Arizona Revised Statutes, as amended, and the General Corporation Law of Delaware, and that fact having been certified on the Agreement of Merger by the secretary of each corporate party thereto, the President and Secretary of each corporate party thereto, do now hereby execute this Agreement of Merger under the corporate seals of their respective corporations, by authority of the directors and stockholders thereof, as the respective act, deed and agreement of each of said corporations, on this 7th day of AUGUST, 1972. ALLISON STEEL MANUFACTURING CO. By: /s/ D.L. Greengard ------------------------------------------- Vice President /s/ James F. O'Haren --------------------------------------------- Secretary (Corporate Seal) MARATHON STEEL COMPANY By: /s/ D.L. Greengard ------------------------------------------- Vice President /s/ James F. O'Haren --------------------------------------------- Secretary (Corporate Seal) STATE OF ARIZONA ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF MARATHON STEEL COMPANY Pursuant to the provisions of Section 10-061, Arizona Business Corporation Act, the undersigned corporation adopts the attached Articles of Amendment to its Articles of Incorporation: FIRST: The name of the corporation is Marathon Steel Company. SECOND: The document attached hereto as Exhibit A sets forth amendments to the Articles of Incorporation which were adopted by the shareholders of the corporation on September 12, 1978, in the manner prescribed by the Arizona Business Corporation Act. THIRD: The number of shares of the corporation outstanding at the time of such adoption was 712,920; and the number of shares entitled to vote thereon was 712,920. FOURTH: The designation and number of outstanding shares of each class or series entitled to vote thereon as a class or series were as follows:
CLASS OR SERIES NUMBER OF SHARES - --------------- ---------------- Common 712,920
FIFTH: The number of shares of each class or series entitled to vote thereon as a class or series voted for or against such amendment, respectively, was:
CLASS NUMBER OF NUMBER OF OR SERIES SHARES FOR SHARES AGAINST - --------- ---------- -------------- Common 712,920 -0-
SIXTH: The amendments attached hereto do not result in any exchange, reclassification, or cancellation of issued shares. SEVENTH: The amendments attached hereto do not result in any change in the amount of stated capital. DATED: June 14, 1984. MARATHON STEEL COMPANY By: /s/ D.L. Greengard -------------------------- D. L. Greengard Title: President By: /s/ Bary B. Hutsell -------------------------- Bary B. Hutsell Title: Assistant Secretary (Acknowledgment - Form No. 48) Statutory Reference: A.R.S. 10-061 ABCA Form No. 14 - 7/76 Signed by President or Vice President and Secretary or Assistant Secretary. EXHIBIT A MARATHON STEEL COMPANY ARTICLES of AMENDMENT The Articles of Incorporation of Marathon Steel Company shall be amended as follows: 1. Article III shall be amended in its entirety to read hereafter as follows: "The purposes for which the corporation is organized include the transaction of any or all lawful business for which corporations may be incorporated under Chapter I of Title 10, Arizona Revised Statutes, at any time, including specifically but without limitation the purpose of engaging in the steel fabrication business. The character of business which the corporation intends actually to conduct in the State of Arizona is designing, producing, fabricating, and erecting metal products and material handling systems. 2. The first sentence of the second paragraph of Article IV shall be amended to read as follows: "All or any portion of the said Common Stock may be issued in consideration of real or personal property, services or any other things of value for the uses and purposes of the corporation, except that neither promissory notes nor future services shall constitute payment or part payment for the issuance of shares, and when so issued shall become and be fully paid, the same as though paid for in cash at par, and the Board of Directors shall be the sole judge of the value of any property, services, right or thing acquired in exchange for Common Stock." 3. Article V shall be amended in its entirety to read hereafter as follows: "ARTICLE V The corporation shall have perpetual succession by its corporate name," 4. The following sentence shall be added to the second paragraph of Article VI: "There are presently three directors of the corporation, as follows: Daniel L. Greengard 77 East Missouri Phoenix, Arizona 85012 Ray R. Seegmiller 1411 Pine Gap Drive Houston, Texas 77090 Gene N. Woodfin 506 Shadywood Houston, Texas 77057" 5. The first paragraph of Article VII shall be deleted. 6. Article VIII shall be deleted in its entirety. 7. Article IX shall be renumbered as Article VIII. 8. Article X shall be renumbered as Article IX and be amended to read in its entirety as follows: "ARTICLE IX This corporation does hereby appoint CT Corporation System, 14 North 18th Avenue, Phoenix, Maricopa County, Arizona 85007 who has been a bona fide resident of Arizona for at least three years, its lawful agent in and for the State of Arizona for and on behalf of said corporation to accept and acknowledge service of, and upon who may be served, all necessary process or processes in any action, suit or proceeding that may be had or brought against said corporation in any of the courts of the State of Arizona, such service of process or notice, or the acceptance thereof by said agent endorsed thereon, to have the same force and effect as if served upon the President and Secretary of the corporation." EX-3.29 30 l05578aexv3w29.txt EXHIBIT 3.29 EXHIBIT 3.29 ALLISON STEEL MANUFACTURING CO. BY-LAWS Offices 1. The principal place of business shall be at Phoenix, Maricopa County, Arizona. The corporation may also have offices at such other places as the Board of Directors may from time to time determine or the business of the corporation may require. Meetings of Stockholders 2. All meetings of the stockholders for the election of directors shall be held at the office of the corporation in the City of Phoenix, Arizona, or such other place as the Board of Directors may from time to time designate. 3. The annual meeting of stockholders, commencing with the year 1956, shall be held on the second Tuesday of May in each year, if not a legal holiday, and if a legal holiday, then on the next secular day following, at which meeting the stockholders shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting. 4. Written notice of the annual meeting and of the time and place at which it is to be held shall be served upon or mailed to each stockholder at his address as the same appears on the books of the corporation, at least ten days prior to the meeting. 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the President, and shall be called by the President or Secretary at the request in writing or by vote of a majority of the Board of Directors, or at the request in writing of stockholders of record owning a majority in amount of the shares of capital stock of the corporation issued and outstanding. Such request shall state the purpose or purpose of the proposed meeting. 6. Written notice of every special meeting of stockholders stating the day, hour and place of the meeting and the general nature of the business to be transacted, shall be served upon or mailed, postage prepaid, to each stockholder of record entitled to vote on the business to be transacted at such meeting, at such address as appears on the books of the corporation, at least ten days prior to the date of such meeting. 7. Business transacted at all special meetings shall be confined to the objects stated in the call. 8. At all meetings of the stockholders, the holders of a majority of the stock issued and outstanding and entitled to vote on all business to be transacted at such meeting, present in person or represented by proxy, shall be requisite and shall constitute a quorum, for the transaction of business, except as otherwise provided by statute, by the articles of incorporation or by those by-laws. If, however, a quorum shall not be present or represented at any meeting, the stockholders, present or represented by proxy, may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At any adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. 9. When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having voting power in regard to each question presented at such meeting, present in person or represented by proxy, shall decide each such question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the Articles of Incorporation or of these by-laws, a different vote is required in which case such express provision shall govern and control the decision of such questions 10. No stockholder shall be entitled to vote at any regular or special meeting of stockholders unless the shares of stock so to be voted shall stand regularly in his name on the twentieth day preceding the date of the meeting (exclusive of the day of such mooting) or an such other day preceding the date of the meeting as the Board of Directors by resolution may fix. 11. At any meeting of the stockholders every stockholder having the right to vote may vote either in person or by proxy appointed by an instrument in writing subscribed by such stockholder and filed with the Secretary of the meeting before being voted upon. Each stockholder shall have one vote for each share of stock having voting power in regard to the matter being voted upon, registered in his name on the books of the corporation, except that in every election of directors, each stockholder shall have the right to cast as many votes in the aggregate as shall equal the number of shares having voting power standing in his name on the books of the corporation, multiplied by the number of directors to be elected and each stockholder may cast the whole number of votes for one candidate, or distribute such votes among two or more candidates. No person to whom stock has been transferred for money advanced thereon or for any other indebtedness shall be entitled to vote such shares of stock so pledged, but such shares may be voted only in person or by proxy, by the registered owner. 2 DIRECTORS 12. The Board of Directors shall consist of not less than three (3) nor more than thirteen (13) members. The number of directors may within the limits fixed in the Articles of Incorporation, be from time to time increased or decreased by resolution adopted by the majority of the Board of Directors then in office. The directors shall be elected by the stockholders at the annual meeting of the stockholders, and each director shall be elected to serve until his successor shall be elected and shall qualify. Directors need not be stockholders. 13. If the office of any director becomes vacant by reason of an increase of the number of directors constituting the Board, or by death, resignation, retirement, disqualification, removal from office, or otherwise, a majority of the directors then serving, although less than a quorum, may choose a successor or successors who shall hold office for the unexpired term in respect of which such vacancy occurred or until the next annual meeting of stockholders. 14. The property, affairs and business of the corporation shall be managed by the Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-laws directed or required to be exercised or done by he stockholders. MEETING OF DIRECTORS 15. The directors may hold their meetings and keep the books of the corporation in the City of Phoenix, State of Arizona, or at such other place or places as they may from time to time determine. 16. The first meeting of each newly elected board shall be held immediately following the annual stockholders meeting, and no notice shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present, or they may meet at such place and time as shall be fixed by the consent in writing of all such directors. 17. Regular meetings of the Board may be held without notice at such time and place either within or without the State of Arizona as shall from time to time be determined by the Board. 18. Special meetings of the Board of Directors may be held at any time on call of the Secretary under the direction of the president or Vice President, or any two Directors then in office, of which meeting two days' notice either personally, or by mail or by telegram shall be given to each Director, the time and place for holding the meeting to be designated in the notice. Such meetings may be held at any time without notice if all members of the Board consent thereto or are present at the meeting. 3 19. At all meetings of the Board a majority of the whole Board of Directors shall be necessary and sufficient to constitute a quorum for the transaction of business and the act or a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise provided by statute or by the Articles of Incorporation or by these By-laws. If a quorum shall not be present at any meeting of Directors the Directors present thereat may adjourn the meeting from tire o time, without notice other than announcement at the meeting until a quorum shall be present. EXECUTIVE COMMITTEE 20. The Board of Directors may, by resolution or resolutions of at least a majority of the whole Boards appoint an executive committee, to consist of three or more of the Directors, which committee, to the extent provided in said resolution or resolutions, shall have and may exercise the powers or the Board of Directors in the management of the business and affairs of the corporation. The Executive Committee shall keep regular minutes of its proceedings and report the same to the Board when required. COMPENSATION OF DIRECTORS 21. Directors, as such, shall not receive any stated salary for their services but by resolution of the Board a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefore. NOTICE 22. Whenever under the provisions of the statutes or of the Articles of Incorporation or of these By-laws, notice is required to be given to any Director or stockholder, it shall not be construed to mean personal notice unless expressly so stated, but such notice may be given by depositing the same in a post office or letter box in a sealed post-paid wrapper, addressed to such Director or stockholder at such address as appears on the books of the corporation, or, in default of other address, to such Director or stockholder at the General Post Office in Phoenix, Arizona; and such notice shall be deemed to have been given at the time of such mailing, except where notice is given by wire, in which case notice shall be deemed to be given at the time the same is delivered to the telegraph company. 4 23. Whenever any notice is required to be given under the provisions of the Articles of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. OFFICERS 24. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect a President, one or more Vice Presidents, a Secretary and a Treasurer. Any two of the aforesaid offices, except those of President and Vice President or President and Secretary, may be held by the same person. Each such officer shall have the duties and powers usually incident to the office held. 25. The Board may appoint such other officers and agents as it shall deem necessary, including a Chairman of the Board, one or more Assistant Secretaries, one or more Assistant Treasurers, a Comptroller, or any other executive or administrative officers deemed necessary, who shall respectively hold their offices for such terms and have such authority and perform such duties as from time to time shall be prescribed by the Board. 26. The salaries of all officers and agents of the corporation shall be fixed by the Board of Directors. 27. The officers of the corporation shall hold office for one year and until their successors are chosen and shall have qualified. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy shall be filled by the Board of Directors. CERTIFICATES OF STOCK 28. The certificates of stock shall be numbered and entered in the books of the corporations as they are issued. They shall exhibit the holder's name and the number of share and shall be signed by or bear the facsimile signature of the President or a Vice President and the Secretary or an Assistant Secretary and shall bear the corporate seal or a facsimile thereof. For the aforesaid purposes, the corporation adopts such facsimile signatures and seal as evidencing the act of the corporation in the issuance of such certificates, with the same effect as if manually signed and impressed. 29. The Board of Directors may authorize new certificates to be issued in place of any certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed, provided that the owner of such lost or destroyed certificate or certificates, or his legal representative shall give the corporation a bond in such sum as it 5 may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. TRANSFERS OF STOCK 30. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and enter on the books of the corporation the names of the persons by whom and to whom the transfer is made, the number or other designation of the shares and the date of the transfer. CLOSING OF TRANSFER OF BOOKS 31. The Board of Directors may close the transfer books in their discretion for a period not exceeding twenty days preceding the date fixed for holding any meeting, annual or special, of the stockholders, or the day appointed for the payment of a dividend. REGISTERED STOCKHOLDERS 32. The corporation shall be entitled to treat the registered holder of any share or shares of stock as the holder in fact and absolute owner thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not if shall have express or other notice thereof, except as expressly provided by the laws of Arizona. DIVIDENDS 33. Dividends on the capital stock of the corporation, subject to the provisions of the Articles of Incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. 34. Before payment of any dividend or making any distribution of profits, there may be set aside out of funds of the corporation available for dividends, such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for any such other purpose as the Directors shall think conducive to the interest of the corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created. 6 CORPORATE SEAL 35. The corporate seal shall have inscribed thereon the name of the corporation, the year of its creation and the words "Corporate Seal, Arizona". 7 EX-3.30 31 l05578aexv3w30.txt EXHIBIT 3.30 EXHIBIT 3.30 CERTIFICATE OF INCORPORATION OF MARATHON LETOURNEAU COMPANY FIRST. The name of the corporation is MARATHON LeTOURNEAU COMPANY. SECOND. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares of stock which the corporation shall have authority to issue is Ten Thousand (10,000) and the par value of each of such shares is One Dollar ($1.00). FIFTH. The name and mailing address of the incorporator is Robert H. Whilden, Jr., 2200 First City National Bank Building, Houston, Texas 77002. SIXTH. The name and mailing address each person who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows:
NAMES ADDRESSES - ----------------- -------------------------------- Wayne I. Harbin 801 Houston Natural Gas Building Houston, Texas 77002 Eldor P. Nuss 801 Houston Natural Gas Building Houston, Texas 77002 James F. O'Haren 801 Houston Natural Gas Building Houston, Texas 77002
SEVENTH. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the bylaws of the corporation. EIGHTH. Meetings of stockholders may be held within or without the State of Delaware, as provided in the Bylaws. Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide. NINTH. The corporation reserves the right to amend, alter, change or repeal any provisions contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate, hereby declaring and certifying that this is his act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 11th day of June, 1971. /s/ Robert H. Whilden, Jr. ----------------------------------- Robert H. Whilden, Jr. STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 10:00 AM 02/15/1994 944019355 - 772923 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION - - Marathon LeTourneau Company ___________________________________________________________________________ a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware. DOES HEREBY CERTIFY: - - FIRST: That at a meeting of the Board of Directors of Marathon LeTourneau Company resolutions were duty adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered "First" so that, as amended, said Article shall be and read as follows: "The name of the corporation is MLTC Company__________________________ ______________________________________________________________________ ______________________________________________________________________ ____________" - - SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholder of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. - - THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. - - FOURTH: That the capital of said corporation shall not be reduced under or by reason of said amendment. - - IN WITNESS WHEREOF, said Marathon LeTourneau Company has caused this certificate to be signed by J. Earl Beckman, its President and S. Maria Narisi, its Secretary this 11th day of February, 1994. BY: /s/ J. Earl Beckham ------------------------------------------- J. Earl Beckman President ATTEST: /s/ S. Maria Narisi --------------------------------------- S. Maria Narisi Secretary EX-3.31 32 l05578aexv3w31.txt EXHIBIT 3.31 EXHIBIT 3.31 BY-LAWS OF MLTC COMPANY ARTICLE I OFFICES SECTION 1.01. Registered Office. The registered office of the corporation in the State of Delaware shall be established and maintained at the office of The Corporation Trust Company, in the City of Wilmington, County of New Castle, and said corporation shall be the Registered Agent of the Corporation in charge thereof. SECTION 1.02. Other Offices. The principal place of business of the Corporation in the State of Delaware shall be the City of Wilmington, County of New Castle; and the Corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require. ARTICLE II MEETING OF STOCKHOLDERS SECTION 2.01. Annual Meetings. Annual meetings of stockholders for the election of directors and for the transaction of any proper business shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution shall determine and as set forth in the notice of the meeting. If the annual meeting of stockholders is not held on the date designated therefor, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as may properly be brought before the meeting. SECTION 2.02. Voting. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these By-Laws shall be entitled to one vote, in person or by proxy, for each share of stock outstanding and entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be written ballot. When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock outstanding and having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provisions of a statute or of the Certificate of Incorporation a different vote is required in which case such express provisions shall govern and control the decision of such question. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number shares registered in the name of each stockholder. Such a list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. SECTION 2.03. Quorum. At all meetings of stockholders, except as otherwise required by statute or by the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares of stock outstanding and entitled to vote thereat shall be requisite for, and shall constitute a quorum for, the transaction of business. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other announcement at the meeting, until the requisite amount of shares entitled to vote shall be present or represented. At any such adjourned meeting at which the requisite amount of shares entitled to vote shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2.04. Special Meetings. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President or the Secretary and shall be called by the President or Secretary at the request of the Board of Directors or at the request in writing of the stockholders of a majority of the shares of stock outstanding and having voting power. Such request shall state the purpose or purposes of the proposed meeting. Special meetings may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. SECTION 2.05. Notice of Meetings. Written notice, stating the place, date and time of any meeting, annual or special, and, if a special meeting, the purpose or purposes of which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten or more than sixty days before the date of the meeting. SECTION 2.06. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS SECTION 3.01. Number and Term. The number of directors shall be three or such other number as may be fixed from time to time by resolution of the Board of Directors or by action of the stockholders. The directors shall be elected at the annual meeting of the stockholders and each director shall be elected to hold office until his successor shall be elected and qualified. Directors need not be stockholders. SECTION 3.02. Resignation. Any director or member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, of no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective. SECTION 3.03. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors shall be elected and qualified. Unless otherwise provided by the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies. In the event that a vacancy or newly created directorship shall not have been filled by the Board of Directors, the additional director or directors may be elected by the stockholders entitled to vote thereon, either at an 2 annual meeting of stockholders or at a special meeting called for the purpose. The directors or directors so chosen shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualified. SECTION 3.04. Removal. Any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the holders of such shares, and the vacancies thus created may be filled, at such meeting or at any subsequent meeting, by the affirmative vote of a majority in interest of the stockholders entitled to vote. SECTION 3.05. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors, which may exercise all the powers of the Corporation and do all lawful acts and things which are not conferred upon or reserved to the stockholders by law, by the Certificate of Incorporation or by these By-Laws. SECTION 3.06. Committees of the Board. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation; and, unless the resolution or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. SECTION 3.07. Meeting. Meetings of the Board of Directors shall be held at such place, either within or without the State of Delaware, as the Board of Directors shall from time to time designate or as may be specified in the notice of such meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President or the Secretary by notice to each director given not less than two days, or not less than three days in the case of notice given by mail, before such meeting. Special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. The first meeting of a newly elected Board of Directors shall be held without notice as soon as practicable after each annual meeting of the stockholders at the same place at which such meeting was held, provided a quorum is present. If a quorum is not present, such first meetings may be held at such time and such place as shall be specified in a notice given as herein provided for special meetings of the Board of Directors. SECTION 3.08. Quorum. Not less than a majority of the total number of directors shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless a statute or the Certificate of Incorporation shall require a vote of a greater number. 3 SECTION 3.09. Compensation. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent or otherwise and receiving compensation therefor. SECTION 3.10. Action Without Meeting; Presence at Meetings. Unless otherwise restricted in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board Directors or the committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by such Board, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another, and such participation in a meeting shall constitute presence in person at such meeting. ARTICLE IV OFFICERS SECTION 4.01. Officers. The Officers of the Corporation shall be the President, a Secretary, a Treasurer and a Controller, each of whom shall be elected by the Board of Directors and shall hold office until his successor shall be elected and have qualified. The Board of Directors also may elect one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. The officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders and shall hold office until their successors are chosen and have qualified. Any number of offices may be held by the same person. SECTION 4.02. Other Officers and Agents. The Board of Directors may appoint such other officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. SECTION 4.03. Resignation Removal. Any officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. Any officer may be removed, for or without cause, at anytime by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office shall be filled for the unexpired portion of the term by the Board of Directors. SECTION 4.04. President. The President shall be the Chief Executive Officer of the Corporation. The President shall have general and active control of the Corporation's business, finances and affairs, subject to the control of the Board of Directors. Except as may otherwise be provided by the Board of Directors from time to time, the President shall have general power to execute bonds, deeds, contracts, conveyances and other instruments in the name of the Corporation and to affix the corporate seal; to appoint all employees and agents of the Corporation whose appointment is not otherwise provided for and to fix the compensation thereof subject to the provisions of these By-laws and subject to the approval of the Board of Directors; to remove or suspend any employee or agent who shall not have been appointed by the Board of Directors; and to suspend for cause, pending final action by the body which shall have appointed him, any officer other than an elected officer, or any employee or agent who shall have been appointed by the Board of Directors. He shall have such further powers and duties as may be conferred on him by the Board of Directors. SECTION 4.05. Vice Presidents. The Vice Presidents, if any, shall have such powers and perform such duties as may be respectively assigned to them from time to time by the Board of Directors or the Chief Executive Officer. In the absence or the disability of the President, his duties shall be performed and his performance may be 4 exercised by the Senior Vice President or other Vice President or Vice Presidents in the order determined by the Board of Directors or, failing such delegation, in the order of their last election to that office. SECTION 4.06. Controller. The Controller shall prescribe and have charge of the system of books and accounts. He may require reports from the Treasurer and all other officers or agents of the Corporation who receive or disburse funds for its account at such times and in such forms as he may deem desirable. SECTION 4.07. Treasurer. The Treasurer shall have the care and custody of all the funds of the Corporation and shall deposit the same in such banks or other depositories as the Board of Directors, or any officer or officers, or any officer and agent jointly, duly authorized by the Board of Directors, shall, from time to time, direct or approve. He shall disburse the funds of the Corporation under the direction of the Board of Directors or the Chief Executive Officer. He shall keep full and accurate account of all moneys received and paid on account of the Corporation and shall render a statement of his accounts whenever the Board of Directors shall require. He shall perform all other necessary acts and duties in connection with the administration of the financial affairs of the Corporation and shall generally perform all the duties usually appertaining to the office of treasurer of a corporation. When required by the Board of Directors, he shall give bonds for the faithful discharge of his duties in such sums and with such sureties as the Board of Directors shall approve. SECTION 4.08. Secretary. The Secretary shall attend all meetings of the Board of Directors and the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall, when requested, perform like duties for all committees of the Board of Directors. He shall attend to the giving of notice of all meetings of the stockholders and, if notice is required, of meetings of the Board of Directors and of committees thereof; he shall have custody of the corporate seal and, when authorized by the Board of Directors, shall have authority to affix the same to any instrument and, when so affixed, it shall be attested by his signature or the signature of the Treasurer or an Assistant Secretary or an Assistant Treasurer. He shall keep and account for all documents, papers, and records of the Corporation, except those for which some other officer or agent is properly accountable. He shall generally perform all the duties appertaining to the office of secretary of a corporation. In the absence of the Secretary, such person as shall be designated by the Chief Executive Officer shall perform his duties. SECTION 4.09. Assistant Secretaries. Each Assistant Secretary shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Secretary, his duties shall be performed and his powers may be exercised by the Assistant Secretary or the Assistant Secretaries in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.10. Assistant Treasurers. Each Assistant Treasurer shall perform such duties and have such powers as may from time to time be assigned to him by the Board of Directors. In the absence or disability of the Treasurer, his duties shall be performed and his powers may be exercised by the Assistant Treasurer or the Assistant Treasurers in the order determined by the Board of Directors or, failing such designation, in the order of their last election to that office. SECTION 4.11. Compensation. The Board of Directors shall have the power to fix the compensation of all officers of the Corporation. ARTICLE V MISCELLANEOUS SECTION 5.01. Certificates of Stock. The shares of stock of the Corporation shall be represented by certificates in such forms as shall be determined by the Board of Directors and shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the Corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. 5 SECTION 5.02. Transfer Agents and Registrars. The Board of Directors may, in its discretion appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation; and, upon such appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars. SECTION 5.03. Lost Certificates. In case any certificate representing shares shall be lost, stolen or destroyed, the Board of Directors, or any officer or officers authorized by the Board of Directors, may authorize the issue of a substitute certificate in place of the certificate so lost, stolen or destroyed, and, if the Corporation shall have a Transfer Agent and Registrar, may cause or authorize such substitute certificate to be countersigned by the appropriate Transfer Agent and registered by the appropriate Registrar. In each such case, the applicant for a substitute certificate shall furnish to the Corporation and to such of its Transfer Agents and Registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft or destruction of such certificate and the ownership thereof, and also such security or indemnity as may by them be required. SECTION 5.04. Transfer of Shares. Transfer of shares shall be made on the books of the Corporation only by the person named in the certificates or by his attorney lawfully constituted in writing, and upon surrender and cancellation of the certificate or certificates of a like number of shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. SECTION 5.05. Stockholders Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjournment meeting. SECTION 5.06. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividends, there may be set apart, out of any funds of the Corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve a fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conductive to the interests of the Corporation; and in its discretion the Board of Directors may decrease or abolish any such reserve. SECTION 5.07. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and other distributions, and to vote as such owner, and to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not is shall have express or other notice thereof, except as otherwise provided by law. SECTION 5.08. Seal. The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its organization and the words "CORPORATE SEAL, DELAWARE." The deal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. SECTION 5.09. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors. SECTION 5.10. Checks. All checks, drafts or other orders for the payment of money, notes or other order evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall be determined from time to time by resolution of the Board of Directors. 6 SECTION 5.11. Execution of Proxies. The President or, in the absence or disability of the President, a Vice President, may authorize from time to time the signature and issuance of proxies to vote upon shares of stock of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such proxies and consents shall be signed in the name of the Corporation by the President or a Vice President and by the Secretary or an Assistant Secretary. SECTION 5.12. Notice and Waiver of Notice. Whenever any notice is required to be given under the provisions of any law, of the Certificate of Incorporation or of these By-Laws, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice to directors may also be given on the day of mailing. Notice to directors may also be given by telex, cable or telegram. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute. Whenever any notice whatever is required to be given under the provisions of any law or law or of the Certificate of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of Incorporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE VI INDEMNIFICATION SECTION 6.01. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact (a) that he or she is or was a director or officer of the Corporation, or (b) that he or she, being at the time a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (collectively, "another enterprise" or "other enterprise"), shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended (but, in the case of any such amendment, with respect to alleged action or inaction occurring prior to such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including, without limitation, attorneys' and other professionals' fees and expenses, claims, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such person in connection therewith ("Losses"). Without diminishing the scope of indemnification provided by this Section 6.01, such persons shall also be entitled to the further rights set forth below. SECTION 6.02. Actions, Suits Or Proceedings Other Than Those By Or In The Right Of The Corporation. Subject to the terms and conditions of this Article, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer or employee of the Corporation, or, being at the time a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another enterprise, against all Losses, actually and reasonably incurred or suffered by such person in connection with such Proceeding if such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner 7 reasonably believed to be or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was unlawful. SECTION 6.03. Actions, Suits Or Proceedings By Or In The Right Of The Corporation. Subject to the terms and conditions of this Article, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer or employee of the Corporation, or being at the time a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another enterprise against all Losses actually and reasonably incurred or suffered by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. SECTION 6.04. Authorization of Indemnification. Any indemnification under this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of a person is proper in the circumstances because such person has met the applicable standard of conduct required by Section 6.01 or set forth in Section 6.02 or 6.03 of this Article, as the case may be. Such determination shall be made in reasonably prompt manner (i) by the Board of Directors by a majority vote of directors who were not parties to such action, suit or proceeding, whether or not they constitute a quorum of the Board of Directors, (ii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, (iii) by the stockholders or (iv) as the Delaware General Corporation Law may otherwise permit. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' and other professionals' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case. SECTION 6.05. Good Faith Defined. For purposes of any determination under Section 6.04 of this Article, a person shall be deemed to have acted in good faith if the action is based on (a) the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, (b) the advice of legal counsel for the Corporation or another enterprise, or (c) information or records given or reports made to the Corporation or another enterprise by an independent certified public account, independent financial adviser, appraiser or other expert selected with reasonable care by the Corporation or the other enterprise. The provisions of this Section 6.05 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct. SECTION 6.06. Proceedings Initiated By Indemnified Persons. Notwithstanding any provisions of this Article to the contrary, the Corporation shall not indemnify any personal or make advance payments in respect of Losses to any person pursuant to this Article in connection with any Proceeding (or portion thereof) initiated against the Corporation by such person unless such Proceeding (or portion thereof) is authorized by the Board of Directors or its designee; provided, however, that this prohibition shall not apply to a counterclaim, cross-claim or third-party claim brought in any Proceeding or to any claims provided for in Section 6.07 of this Article. SECTION 6.07. Indemnification By A Court. Notwithstanding any contrary determination in the specific case under Section 6.04 of this Article, and notwithstanding the absence of any determination thereunder, any director, officer or employee may apply to any court of competent jurisdiction for indemnification to the extent otherwise permissible under Section 6.01, 6.02 or 6.03 of this Article. Notice of any application for indemnification pursuant to this Section 6.07 shall be given to the Corporation promptly upon the filing of such application. SECTION 6.08. Losses Payable In Advance. Losses reasonably incurred by an officer or director in defending any threatened or pending Proceeding shall be paid by the Corporation in advance of the final disposition 8 of such Proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article. Losses shall be reasonably documented by the officer or director and required payments shall be made promptly by the Corporation. Losses incurred by other employees may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. SECTION 6.09. Non-exclusivity and Survival of Indemnification. The indemnification and advancement of expenses provided by or granted pursuant to this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any By-Law, agreement, contract, vote of Stockholders or of disinterested directors, or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise. The provisions of this Article shall not be deemed to preclude the indemnification of any person who is not specified in Section 6.01, 6.02 or 6.03 of this Article but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law, or otherwise. The rights conferred by this Article shall continue as to a person who has ceased to be a director, officer or employee and shall inure to the benefit of such person and the heirs, executors, administrators and other comparable legal representatives of such person. The rights conferred in this Article shall be enforceable as contract rights, and shall continue to exist after any rescission or restrictive modification hereof with respect to events occurring prior thereto. No rights are conferred in this Article for the benefit of any person (including, without limitation, officers, directors and employees subsidiaries of the Corporation) in any capacity other than as explicitly set forth herein. SECTION 6.10. Meaning Of Certain Terms In Connection With Employee Benefit Plans, etc. For purposes of this Article, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; references to "serving at the request of the Corporation" shall include any service as a director, officer or employee of the Corporation which imposes duties on, or involves service by, such director, officer or employee, with respect to an employee benefit plan, its participants or beneficiaries; and a person who has act in good faith and in a manner reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article. SECTION 6.11. Insurance. The Corporation may, but shall not be required to, purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, member, employee, fiduciary or agent of another against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article. ARTICLE VII AMENDMENTS These By-Laws may be altered, amended or repealed, and new By-Laws may be adopted, by the stockholders or, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, by the Board of Directors, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of the proposed alteration, amendment, repeal or adoption be contained in the notice of such special meeting. 9 EX-12.1 33 l05578aexv12w1.txt EXHIBIT 12.1 . . . EXHIBIT 12.1 GENERAL CABLE CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES MILLIONS OF DOLLARS
YEARS ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30, --------------------------------------------- ------------------------------- 2002 2001 2000 1999 1998 2002 2003 ------- -------- ------- ------- ------- ------- ------- EARNINGS AS DEFINED Earnings (loss) from operations before income taxes and before adjustments for minority interests in consolidated subsidiaries and after eliminating undistributed earnings of equity method investees $ (27.6) $ 58.1 $ (28.9) $ 55.4 $ 68.4 $ (16.5) $ 8.0 Fixed Charges 47.1 51.5 67.8 43.4 12.4 33.7 34.9 ------- -------- ------- ------- ------- ------- ------- TOTAL EARNINGS, AS DEFINED $ 19.5 $ 109.6 $ 38.9 $ 98.8 $ 80.8 $ 17.2 $ 42.9 ======= ======== ======= ======= ======= ======= ======= FIXED CHARGES, AS DEFINED Interest expense $ 40.9 $ 43.2 $ 61.4 $ 39.0 $ 10.5 $ 30.1 $ 29.8 Amortization of capitalized expenses related to debt 3.7 4.4 4.2 1.1 - 1.8 3.3 Interest component of rent expense 2.5 3.9 2.2 3.3 1.9 1.8 1.8 ------- -------- ------- ------- ------- ------- ------- TOTAL FIXED CHARGES, AS DEFINED $ 47.1 $ 51.5 $ 67.8 $ 43.4 $ 12.4 $ 33.7 $ 34.9 ======= ======== ======= ======= ======= ======= ======= RATIO OF EARNINGS TO FIXED CHARGES 0.4 2.1 0.6 2.3 6.5 0.5 1.2
For the years ended December 31, 2000 and 2002 and the nine months ended September 30, 2002, earnings were insufficient to cover fixed charges by $28.9 million, $27.6 million and $16.5 million, respectively. EX-23.1 34 l05578aexv23w1.txt EXHIBIT 23.1 Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of General Cable Corporation on Form S-4 of our report dated January 29, 2003 (November 4, 2003 as to Note 25), appearing in the Registration Statement (which report expresses an unqualified opinion and includes an explanatory paragraph referring to a change in the Company's method of accounting for certain inventory). We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/ DELOITTE & TOUCHE LLP Cincinnati, Ohio February 12, 2004 EX-25.1 35 l05578aexv25w1.txt EXHIBIT 25.1 EXHIBIT 25.1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2) ------------------------------------------------------- U.S. BANK NATIONAL ASSOCIATION (Exact name of Trustee as specified in its charter) A U.S. NATIONAL BANKING ASSOCIATION 31-0841368 (Jurisdiction of incorporation or (I.R.S. Employer Identification No.) organization if not a U.S. National Bank) 800 NICOLLET MALL MINNEAPOLIS, MINNESOTA 55402 (Address of principal executive offices) (Zip Code) Robert Jones U.S. Bank National Association 425 Walnut, ML # CNWN06CT Cincinnati, OH 45202 (513) 632-4427 (Name, address and telephone number of agent for service) GENERAL CABLE CORPORATION (Exact name of Obligor as specified in its charter) DELAWARE 06-1398235 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4 TESSENEER DRIVE, HIGHLAND HEIGHTS, KY 41076 (Address of Principal Executive Offices) (Zip Code) 9.5% SENIOR NOTES DUE 2010, SERIES B (Title of the Indenture Securities) ================================================================================ FORM T-1 ITEM 1. GENERAL INFORMATION. Furnish the following information as to the Trustee. a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency Washington, D.C. b) Whether it is authorized to exercise corporate trust powers. Yes ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None ITEMS 3-15 Items 3-15 are not applicable because to the best of the Trustee's knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee. ITEM 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification. 1. A copy of the Articles of Association of the Trustee.* 2. A copy of the certificate of authority of the Trustee to commence business.* 3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers.* 4. A copy of the existing bylaws of the Trustee.* 5. A copy of each Indenture referred to in Item 4. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6. 7. Report of Condition of the Trustee as of September 30, 2003, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7. * Incorporated by reference to Registration Number 333-67188. 2 NOTE The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 12th day of February, 2004. U.S. BANK NATIONAL ASSOCIATION By: /s/ Robert T. Jones -------------------------------- Robert T. Jones Vice President By: /s/ Jack C. Hannah ------------------------------ Jack C. Hannah Assistant Vice President 3 EXHIBIT 6 CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: February 12, 2004 U.S. BANK NATIONAL ASSOCIATION By: /s/ Robert T. Jones -------------------------------- Robert T. Jones Vice President By: /s/ Jack C. Hannah ------------------------------ Jack C. Hannah Assistant Vice President 4 EXHIBIT 7 U.S. BANK NATIONAL ASSOCIATION STATEMENT OF FINANCIAL CONDITION AS OF 9/30/2003 ($000'S)
9/30/2003 ------------ ASSETS Cash and Due From Depository Institutions $ 9,363,408 Federal Reserve Stock 0 Securities 34,719,100 Federal Funds 2,322,794 Loans & Lease Financing Receivables 118,943,010 Fixed Assets 1,915,381 Intangible Assets 9,648,952 Other Assets 9,551,844 ------------ TOTAL ASSETS $186,464,489 LIABILITIES Deposits $122,910,311 Fed Funds 6,285,092 Treasury Demand Notes 3,226,368 Trading Liabilities 246,528 Other Borrowed Money 21,879,472 Acceptances 145,666 Subordinated Notes and Debentures 6,148,678 Other Liabilities 5,383,119 ------------ TOTAL LIABILITIES $166,225,234 EQUITY Minority Interest in Subsidiaries $ 1,003,166 Common and Preferred Stock 18,200 Surplus 11,676,398 Undivided Profits 7,541,491 ------------ TOTAL EQUITY CAPITAL $ 20,239,255 TOTAL LIABILITIES AND EQUITY CAPITAL $186,464,489
- -------------------------------------- To the best of the undersigned's determination, as of the date hereof, the above financial information is true and correct. U.S. BANK NATIONAL ASSOCIATION By: /s/ Robert T. Jones ------------------------------ Vice President Date: February 12, 2004 5 EX-99.1 36 l05578aexv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 LETTER OF TRANSMITTAL GENERAL CABLE CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING 9.5% SENIOR NOTES DUE 2010 FOR ITS NEWLY ISSUED 9.5% SENIOR NOTES DUE 2010, SERIES B WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). The Exchange Agent for the Exchange Offer is: U. S. BANK NATIONAL ASSOCIATION By Regular, Registered or Certified Mail, By Facsimile Overnight Courier or Hand Delivery: (Eligible Institutions Only): U.S. Bank National Association (651) 495-8158 60 Livingston Ave. Confirm by Telephone: Attn: Specialized Finance (800) 934-6802 St. Paul, MN 55107 TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE OR DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges receipt of the Prospectus, dated , 2004 (the "Prospectus"), of General Cable Corporation, a Delaware corporation (the "Company"), and this Letter of Transmittal (the "Letter"), which together constitute the Company's offer (the "Exchange Offer") to exchange an aggregate principal amount of up to $285,000,000 of its 9.5% Senior Notes due 2010, Series B (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus is a part, for a like principal amount of the Company's issued and outstanding 9.5% Senior Notes due 2010 (the "Outstanding Notes"). The term "Holder" with respect to the Exchange Offer means any person in whose name Outstanding Notes are registered on the books of the Company, any other person who has obtained a properly completed bond power from the registered holder or any person whose Outstanding Notes are held of record at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility"). For each Outstanding Note accepted for exchange, the Holder of such Outstanding Note will receive an Exchange Note having a principal amount equal to that of the surrendered Outstanding Note. Outstanding Notes tendered must be in denominations of principal amount of $1,000 and any integral multiple thereof. The Exchange Notes will bear interest from the most recent date to which interest has been paid on the Outstanding Notes exchanged therefor or, if no interest has been paid on such Outstanding Notes, from November 24, 2003. Accordingly, registered holders of Exchange Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date on which interest has been paid or, if no interest has been paid, from November 24, 2003. Outstanding Notes accepted for exchange will cease to accrue interest from and after such date. Holders of Outstanding Notes whose Outstanding Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Outstanding Notes. To participate in the Exchange Offer, Holders must tender by (1) book-entry transfer to the account maintained by the Exchange Agent at DTC pursuant to the procedures set forth in "The Exchange Offer -- Procedures for Tendering" section of the Prospectus or (2) forwarding certificates for the Outstanding Notes herewith. Holders of Outstanding Notes whose certificates are not immediately available, or who are unable to deliver their certificates, this Letter and all other documents required by this Letter, or confirmation of the book-entry tender of their Outstanding Notes into the Exchange Agent's account at DTC (a "Book-Entry Confirmation"), to the Exchange Agent on or prior to the Expiration Date, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer - Procedures for Tendering" section of the Prospectus. See Instruction 1. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The undersigned has completed the appropriate boxes below and signed this Letter to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Outstanding Notes must complete this Letter in its entirety. 2 List below the Outstanding Notes to which this Letter relates. If the space provided below is inadequate, the certificate numbers and principal amount of Outstanding Notes should be listed on a separate signed schedule affixed hereto. DESCRIPTION OF OUTSTANDING NOTES
AGGREGATE PRINCIPAL AMOUNT NAME(S) AND ADDRESS(ES) OF HOLDER(S) CERTIFICATE REPRESENTED BY PRINCIPAL AMOUNT (PLEASE FILL IN, IF BLANK) NUMBER(S)* NOTES TENDERED** - ------------------------------------ ----------- ---------------- ---------------- ____________________________________________________ ____________________________________________________ ____________________________________________________ Total ____________________________________
*Need not be completed if Outstanding Notes are being tendered by book-entry transfer. **Unless otherwise indicated in this column, a Holder will be deemed to have tendered the full aggregate principal amount of Outstanding Notes indicated in the "Aggregate Principal Amount Represented by Notes" column. See Instruction 2. Outstanding Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1. ________________________________________________________________________________ [ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution:__________________________________________________ DTC Account Number:_____________________________________________________________ Transaction Code Number:________________________________________________________ [ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder:___________________________________________________ Window Ticket Number (if any):__________________________________________________ Date of Execution of Notice of Guaranteed Delivery:_____________________________ Name of Institution Which Guaranteed Delivery:__________________________________ 3 If Guaranteed Delivery is to be Made by Book-Entry Transfer: Name of Tendering Institution: ________________________________________________________________________________ DTC Account Number: ________________________________________________________________________________ Transaction Code Number: ________________________________________________________________________________ [ ] Check here if tendered Outstanding Notes are enclosed herewith. [ ] Check here if you are a broker-dealer and wish to receive 10 additional copies of the prospectus and 10 copies of any amendments or supplements thereto. Name:___________________________________________________________________________ Address:________________________________________________________________________ 4 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of Outstanding Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Outstanding Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of the Company, all right, title and interest in and to such Outstanding Notes as are being tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the undersigned's true and lawful agent and attorney-in-fact with respect to such tendered Outstanding Notes, with full power of substitution, among other things, to cause the Outstanding Notes to be assigned, transferred and exchanged. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Outstanding Notes and to acquire Exchange Notes issuable upon the exchange of such tendered Outstanding Notes, and that, when the same are accepted for exchange, the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Company. The undersigned hereby further represents that (1) any Exchange Notes acquired in exchange for Outstanding Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, (2) neither the Holder of such Outstanding Notes nor any such other person is participating in, intends to participate in or has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of such Exchange Notes, and (3) neither the Holder of such Outstanding Notes nor any such other person is an "affiliate" (as defined in Rule 405 under the Securities Act) of the Company and, if it is such an affiliate, it understands and acknowledges that such Exchange Notes may not be offered for resale, resold or otherwise transferred by it without registration under the Securities Act or an exemption therefrom. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes, it represents that the Outstanding Notes to be exchanged for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering such prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned further represents that it is not acting on behalf of any person who could not truthfully make the foregoing representations. The undersigned acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the "SEC"), as set forth in no-action letters issued to third parties; that the Exchange Notes issued pursuant to the Exchange Offer in exchange for the Outstanding Notes may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder that is an affiliate of the Company) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such Holders' business and such Holders have no arrangement with any person to participate in the distribution of such Exchange Notes; that, however, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If any Holder is an affiliate of the Company, or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such Holder acknowledges that it (i) may not rely on the applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Failure to comply with such requirements could result in the Holder incurring liability under the Securities Act for which such Holder is not indemnified by the Company. The undersigned also warrants that it will, upon request, execute and deliver such additional documents and make such additional representations as are deemed by the Company necessary or desirable to complete the sale, assignment and transfer of the Outstanding Notes tendered hereby. The undersigned further agrees that acceptance 5 of any tendered Outstanding Notes by the Company and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement, dated November 24, 2003, between the Company and the initial purchasers of the Outstanding Notes, and that the Company shall have no further obligations or liabilities thereunder for the registration of the Outstanding Notes or the Exchange Notes. The Exchange Offer is subject to certain conditions set forth in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more fully set forth in the Prospectus. The Company may not be required to exchange any of the Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not exchanged will be returned to the undersigned at the address shown below the signature of the undersigned or, in the case of a book-entry delivery of Outstanding Notes, to the credit of the account indicated above maintained at DTC. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer -- Withdrawal of Tenders" section of the Prospectus. See Instruction 10. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing Outstanding Notes for any Outstanding Notes not exchanged) to the name of the undersigned or, in the case of a book-entry delivery of Outstanding Notes, please credit the account indicated above maintained at DTC. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, please send the Exchange Notes (and, if applicable, substitute certificates representing Outstanding Notes for any Outstanding Notes not exchanged) to the undersigned at the address shown above in the box entitled "Description of Outstanding Notes" or, in the case of a book-entry delivery of Outstanding Notes, please credit the account indicated above maintained at DTC The undersigned, by completing the box entitled "Description of Outstanding Notes" above and signing this Letter, will be deemed to have tendered the Outstanding Notes as set forth in such box. 6 SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Outstanding Notes not exchanged and/or Exchange Notes are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) on this Letter above, or if Outstanding Notes delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above. Issue Exchange Notes and/or Outstanding Notes to: Name(s): ________________________________________________________________________________ (Please type or print) ________________________________________________________________________________ (Please type or print) Address (including zip code): ________________________________________________________________________________ ________________________________________________________________________________ Employer Identification or Social Security Number: ________________________________________________________________________________ (COMPLETE SUBSTITUTE FORM W-9) [ ] Credit unexchanged Outstanding Notes delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below. Book-Entry Transfer Facility (Account Number, if applicable): ________________________________________________________________________________ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Outstanding Notes not exchanged and/or Exchange Notes are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above or to such person or persons at an address other than shown in the box entitled "Description of Outstanding Notes" on this Letter above. Mail Exchange Notes and/or Outstanding Notes to: Name(s): ________________________________________________________________________________ (Please type or print) ________________________________________________________________________________ (Please type or print) 7 Address (including zip code): ________________________________________________________________________________ ________________________________________________________________________________ Employer Identification or Social Security Number: ________________________________________________________________________________ (COMPLETE SUBSTITUTE FORM W-9) 8 ALL TENDERING HOLDERS SIGN HERE (IN ADDITION, COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 BELOW) X______________________________ ___________________________________ X______________________________ ___________________________________ (SIGNATURE(S) OF OWNER) (DATE) Area Code and Telephone Number: _____________________________________________________ If a holder is tendering any Outstanding Notes, this Letter must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Outstanding Notes or on a security position listing, or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3. Name(s): Address (including zip code): ___________________________ ________________________________________ (PLEASE TYPE OR PRINT) ________________________________________ ____________________________ (PLEASE TYPE OR PRINT) Employer Identification or Social Security Number: __________________________________________________ Capacity: ____________________________ ________________________________________________________________________________ ________________________________________________________________________________ SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 3) Signature(s) Guaranteed by an Eligible Institution: ________________________________________________________________________________ (AUTHORIZED SIGNATURE) ________________________________________________________________________________ (TITLE) ________________________________________________________________________________ (NAME AND FIRM) DATED:__________________________________________________________________________ 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES To participate in the Exchange Offer, Holders must tender by (1) book-entry transfer to the account maintained by the Exchange Agent at DTC pursuant to the procedures set forth in "The Exchange Offer -- Procedures for Tendering" section of the Prospectus or (2) forwarding certificates for the Outstanding Notes herewith. Certificates for all physically tendered Outstanding Notes, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof) and any other documents required by this Letter, or an agent's message, as the case may be, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below, Delivery to an address or via a facsimile number other than as set forth herein will not constitute a valid delivery. Outstanding Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. Holders whose certificates for Outstanding Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Outstanding Notes pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures for Tendering" section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through a firm that is an eligible institution, (ii) prior to 5:00 P.M., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder of Outstanding Notes and the amount of Outstanding Notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange ("NYSE") trading days after the Expiration Date, the certificates for all physically tendered Outstanding Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and a properly completed and duly executed Letter, or an agent's message, and all other documents required by this Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Outstanding Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and a properly completed and duly executed Letter, or an agent's message, and all other documents required by this Letter, must be received by the Exchange Agent within three NYSE trading days after the Expiration Date. THE METHOD OF DELIVERY OF THIS LETTER, THE OUTSTANDING NOTES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. If Outstanding Notes are sent by mail, it is suggested that the mailing be by registered mail, properly insured, with return receipt requested, made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date. See "The Exchange Offer" section of the Prospectus. 2. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER) If less than all of the Outstanding Notes evidenced by a submitted certificate are to be tendered, the tendering Holder(s) should fill in the aggregate principal amount of Outstanding Notes to be tendered in the box above entitled "Description of Outstanding Notes -- Principal Amount Tendered." A reissued certificate representing the balance of untendered Outstanding Notes will be sent to such tendering Holder, unless otherwise provided in the appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE OUTSTANDING NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED IN FULL UNLESS OTHERWISE INDICATED. 10 3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES If this Letter is signed by the registered Holder of the Outstanding Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates for such notes without any change whatsoever. If this Letter is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the owner of the Outstanding Notes. If any tendered Outstanding Notes are owned of record by two or more joint owners, all of such owners must sign this Letter. If any tendered Outstanding Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter as there are different registrations of certificates. When this Letter is signed by the registered Holder or Holders of the Outstanding Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Notes are to be issued, or any untendered Outstanding Notes are to be reissued, to a person other than the registered Holder, then endorsements of any certificates transmitted hereby or separate bond powers by the registered Holder are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution. If this Letter is signed by a person other than the registered Holder or Holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered Holder or Holders appear(s) on the certificate(s) (and, with respect to a DTC participant whose name(s) appear(s) on a security position listing as the owner of Outstanding Notes, exactly as the name of the participant appears on such security position listing) and signatures on such certificate(s) must be guaranteed by an Eligible Institution. If this Letter or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted. Signatures on this Letter need not be guaranteed by an Eligible Institution, provided the Outstanding Notes are tendered: (i) by a registered Holder of Outstanding Notes (which term, for purposes of the Exchange Offer, includes any participant in DTC whose name appears on a security position listing as the Holder of such Outstanding Notes) who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on this Letter; or (ii) for the account of an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS Tendering holders of Outstanding Notes should indicate in the applicable box the name and address to which Exchange Notes issued pursuant to the Exchange Offer and or substitute certificates evidencing Outstanding Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Outstanding Notes by book-entry transfer may request that Outstanding Notes not exchanged be credited to such account maintained at DTC as such Holder may designate hereon. If no such instructions are given, such Outstanding Notes not exchanged will be returned to the name and address of the person signing this Letter. 5. TAXPAYER IDENTIFICATION NUMBER Federal income tax law generally requires that a tendering Holder whose Outstanding Notes are accepted for exchange must provide the Company (as payor) with such Holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9 below, which in the case of a tendering Holder who is an individual, is his or her social security number. If the Company is not provided with the current TIN or an adequate basis for an exemption from backup withholding, such tendering Holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, the Exchange Agent may be required to withhold 30% (or, for payments made after December 31, 2004, the maximum backup withholding rate then in effect) of the amount of any reportable payments made after the 11 exchange to such tendering Holder of Exchange Notes. If withholding results in an overpayment of taxes, a refund may be obtained. Certain Holders of Outstanding Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed Guidelines of Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for additional instructions. To prevent backup withholding, each tendering Holder of Outstanding Notes must provide its correct TIN by completing the Substitute Form W-9 set forth below, certifying, under penalties of perjury, that (i) the TIN provided is correct (or that such Holder is awaiting a TIN), (2)(i) the Holder is exempt from backup withholding, or (ii) the Holder has not been notified by the Internal Revenue Service that such Holder is subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the Holder that such Holder is no longer subject to backup withholding, and (3) the Holder is a U.S. person (including a U.S. resident alien). If the tendering Holder of Outstanding Notes is a nonresident alien or foreign entity not subject to backup withholding, such Holder must give the Exchange Agent a completed Form W-8BEN "Certificate of Beneficial Owner for United States Tax Withholding" or other appropriate Form W-8 such as (i) Form W-8ECI "Certificate of Foreign Person's Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States;" (ii) Form W-8IMY "Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding;" or (iii) Form W-8EXP "Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding." These forms may be obtained from the Exchange Agent. If the Outstanding Notes are in more than one name or are not in the name of the actual owner, such Holder should consult the W-9 Guidelines for information on which TIN to report. If such Holder does not have a TIN, such Holder should consult the W-9 Guidelines for instructions on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and write "applied for" in lieu of its TIN. Note: Checking this box and writing "applied for" on the form means that such Holder has already applied for a TIN or that such Holder intends to apply for one in the near future. If the box in Part 2 of the Substitute Form W-9 is checked, the Exchange Agent will retain 30% (or, for payments made after December 31, 2004, the maximum backup withholding rate then in effect) of all reportable payments made to a Holder during the sixty (60) day period following the date of the Substitute Form W-9. If the Holder furnishes the Exchange Agent with his or her TIN within sixty (60) days of the Substitute Form W-9, the Exchange Agent will remit such amounts retained during such sixty (60) day period to such Holder and no further amounts will be retained or withheld from payments made to the Holder thereafter. If, however, such Holder does not provide its TIN to the Exchange Agent within such sixty (60) day period, the Exchange Agent will remit such previously withheld amounts to the Internal Revenue Service as backup withholding and will withhold 30.5% (or, for payments made after December 31, 2004, the maximum backup withholding rate then in effect) of all reportable payments to the Holder thereafter until such Holder furnishes its TIN to the Exchange Agent. 6. TRANSFER TAXES The Company will pay all transfer taxes, if any, applicable to the transfer of Outstanding Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Notes and/or substitute Outstanding Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered Holder of the Outstanding Notes tendered hereby, or if tendered Outstanding Notes are registered in the name of any person other than the person signing this Letter, or if a transfer tax is imposed for any reason other than the transfer of Outstanding Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder. Except as provided in this instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Outstanding Notes specified in this Letter. 7. WAIVER OF CONDITIONS The Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 12 8. NO CONDITIONAL TENDERS No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders of Outstanding Notes, by execution of this Letter, shall waive any right to receive notice of the acceptance of their Outstanding Notes for exchange. Neither the Company, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Outstanding Notes nor shall any of them incur any liability for failure to give any such notice. 9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES Any Holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 10. WITHDRAWAL OF TENDERS Tenders of Outstanding Notes may be withdrawn at any time prior to the Expiration Date. For a withdrawal of a tender of Outstanding Notes to be effective, a written notice of withdrawal must be received by the Exchange Agent at the address set forth above prior to the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person tendering the Outstanding Notes to be withdrawn (the "Depositor"), (ii) identify the Outstanding Notes to be withdrawn (including certificate number or numbers and the principal amount of such Outstanding Notes), (iii) contain a statement that such Holder is withdrawing his election to have such Outstanding Notes exchanged, (iv) be signed by the Holder in the same manner as the original signature on the Letter by which such Outstanding Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer to have the Trustee with respect to the Outstanding Notes register the transfer of such Outstanding Notes in the name of the person withdrawing the tender and (v) specify the name in which such Outstanding Notes are registered, if different from that of the Depositor. If Outstanding Notes have been tendered pursuant to the procedure for book-entry transfer set forth in "THE EXCHANGE OFFER -- Book-Entry Transfer" section of the Prospectus, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Outstanding Notes and otherwise comply with the procedures of DTC. Any Outstanding Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Outstanding Notes so withdrawn are validly retendered. Properly withdrawn Outstanding Notes may be retendered by following the procedures described above at any time on or prior to 5:00 P.M., New York City time, on the Expiration Date. 11. VALIDITY AND FORM; UNEXCHANGED OUTSTANDING NOTES All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Outstanding Notes will be determined by the Company in its discretion, which determination will be final and binding on all parties. The Company reserves the right to reject any and all Outstanding Notes not properly tendered or any Outstanding Notes the acceptance of which would, in the Company's judgment, be unlawful. The Company also reserves the right to waive any defects, irregularities or conditions of tender as to particular Outstanding Notes, either before or after the Expiration Date, including the right to waive the ineligibility of any tendering holder. The Company's interpretation of the terms and conditions of the Exchange Offer (including the Letter and these Instructions) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Outstanding Notes, neither the Company, the Exchange Agent nor any other person will (i) be under any duty to do so and (ii) incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. 13 Any Outstanding Notes received by the Exchange Agent that have been tendered for exchange but which are not exchanged for any reason will be returned to the Holder thereof without cost to such Holder (or, in the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent's account at DTC pursuant to the book-entry transfer procedures set forth in "THE EXCHANGE OFFER -- Book-Entry Transfer" section of the Prospectus, such Outstanding Notes will be credited to an account maintained with DTC for the Outstanding Notes) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. 12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter, and requests for Notices of Guaranteed Delivery and other related documents may be directed to the Exchange Agent, at the address and telephone number indicated above. IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTICATES FOR OUTSTANDING NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX IN THIS LETTER. 14 THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED. Please provide your social security number or other taxpayer identification number in the following Substitute Form W-9 and certify therein that you are subject to backup withholding. SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN THE BOX FORM W-9 AT THE RIGHT AND CERTIFY BY SIGNING AND TIN: DEPARTMENT OF THE DATING BELOW. For individuals, this is your _____________________________ TREASURY Social Security Number (SSN). For sole Social security number INTERNAL REVENUE SERVICE proprietors, see the Instructions in the or PAYER'S REQUEST FOR enclosed Guidelines. For other entities, it Employer Identification Number TAXPAYER IDENTIFICATION is your Employer Identification Number NUMBER (EIN). If you do not have a number, see how ("TIN") AND CERTIFICATION to get a TIN in the enclosed Guidelines. ________________________________________________________________________________ PART 2 -- TIN APPLIED FOR: [ ] ______________________________________________ PART 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien). _______________________________________________________________________________ Signature: Date: , 2004 ______________________________________________ ______________________________
You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax returns and you have not been notified by the IRS that you are no longer subject to backup withholding. The IRS does not require your consent to any provisions of this document other than the certifications required to avoid backup withholding. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9. I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 30 percent of all reportable cash payments made to me thereafter will be withheld until I provide a number and such retained amounts will be remitted to the Internal Revenue Service as backup withholding. Signature:______________________________________ Date:___________________________________________ FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. 15 EX-99.2 37 l05578aexv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 9.5% SENIOR NOTES DUE 2010 OF GENERAL CABLE CORPORATION PURSUANT TO THE PROSPECTUS DATED , 2004 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). The Exchange Agent for the Exchange Offer is: U. S. BANK NATIONAL ASSOCIATION By Regular, Registered or Certified Mail, By Facsimile Overnight Courier or Hand Delivery: (Eligible Institutions Only): U.S. Bank National Association (651) 495-8158 60 Livingston Ave. Confirm by Telephone: Attn: Specialized Finance (800) 934-6802 St. Paul, MN 55107 This notice of guaranteed delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) if (1) certificates for General Cable Corporation's outstanding 9.5% Senior Notes Due 2010 (the "Outstanding Notes") are not immediately available, (2) Outstanding Notes, the Letter of Transmittal and all other required documents cannot be delivered to the Exchange Agent prior to the Expiration Date (as defined above) or (3) the procedures for delivery by book-entry transfer cannot be completed prior to the Expiration Date. This notice of guaranteed delivery may be transmitted by facsimile or delivered by mail, hand or overnight courier to the Exchange Agent, as set forth above, prior to the Expiration Date. See "Exchange Offer -- Procedures for Tendering" in the Prospectus (as defined below). Transmission of this Notice of Guaranteed Delivery via facsimile to a number other than as set forth above or delivery of this Notice of Guaranteed Delivery to an address other than as set forth above will not constitute a valid delivery. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If an "eligible institution" is required to guarantee a signature on a Letter of Transmittal pursuant to the instructions therein, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to General Cable Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the prospectus dated , 2004 (as it may be amended or supplemented from time to time, the "Prospectus") and the accompanying Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate principal amount of Outstanding Notes set forth below, pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." Principal Amount of Outstanding Notes Tendered:* $ _____________________________________________________ Certificate Nos. (if available): _____________________________________________________ Total Principal Amount Represented by Certificate(s): $ _____________________________________________________ * Must be in denominations of principal amount of $1,000 and any integral multiple thereof. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. 2 PLEASE SIGN HERE X_____________________________________________ ____________________________ X_____________________________________________ ____________________________ (SIGNATURE(S) OF OWNER OR AUTHORIZED SIGNATORY) (DATE) Area Code and Telephone Number: _____________________________________________________________ Must be signed by the holder(s) of Outstanding Notes as their name(s) appear(s) on certificates for Outstanding Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his, her or its full title below. If Outstanding Notes will be delivered by book-entry transfer to The Depository Trust Company ("DTC"), provide account number. Please type or print name(s) and address(es) Name(s): ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Capacity: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Address(es): ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ DTC Account Number: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 3 GUARANTEE OF DELIVERY (THIS SECTION MUST BE COMPLETED; NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm or other entity identified in Rule I7Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution", hereby guarantees to deliver to the Exchange Agent, at its number or address set forth above, either the Outstanding Notes tendered hereby in proper form for transferor confirmation of the book-entry transfer of such Outstanding Notes to the Exchange Agent's account at DTC, pursuant to the procedures for book-entry transfer set forth in the Prospectus, together with one or more properly completed and duly executed Letters of Transmittal (or facsimile thereof), or an agent's message (as defined in the Prospectus), and any other documents required by the Letter of Transmittal prior to 5:00 P.M., New York City time, on the third New York Stock Exchange trading date after the Expiration Date. Name of Firm: ________________________________________________________________________________ ________________________________________________________________________________ Address: ________________________________________________________________________________ Telephone No: ________________________________________________________________________________ (INCLUDING AREA CODE) Authorized Signature: ________________________________________________________________________________ Name: ________________________________________________________________________________ (PLEASE TYPE OR PRINT) Title: ________________________________________________________________________________ Date: ________________________________________________________________________________ NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING NOTES WITH THIS NOTICE OF GARANTEED DELIVERY. ACTUAL SURRENDER OF OUTSTANDING NTOES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLYCOMPLETED AND DULY EXECUTEDE LETTER OF TRANSMITTAL, OR AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS. EX-99.3 38 l05578aexv99w3.txt EXHIBIT 99.3 EXHIBIT 99.3 GENERAL CABLE CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING 9.5% SENIOR NOTES DUE 2010 FOR 9.5% SENIOR NOTES DUE 2010, SERIES B, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON , 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). To Our Clients: Enclosed for your consideration is a prospectus dated , 2004 (as the same may be amended or supplemented from time to time, the "Prospectus") and the accompanying Letter of Transmittal (which together constitute the "Exchange Offer") relating to the offer by General Cable Corporation to exchange an aggregate principal amount of up to $285,000,000 of its 9.5% Senior Notes due 2010, Series B (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its outstanding 9.5% Senior Notes due 2010 (the "Outstanding Notes"). As set forth in the Prospectus, the terms of the Exchange Notes are identical in all material respects to the Outstanding Notes, except that the Exchange Notes have been registered under the Securities Act and therefore (1) will not be subject to certain restrictions on their transfer, (2) will not be entitled to registration rights and (3) will not contain provisions providing for an increase in the interest rate thereon under the circumstances set forth in the Registration Rights Agreement described in the Prospectus. Outstanding Notes may be tendered in a principal amount of $1,000 and integral multiples of $l,000. We are forwarding the enclosed material to you as the beneficial owner of Outstanding Notes held by us for your account or benefit but not registered in your name. We may tender Outstanding Notes in the Exchange Offer as the registered holder only if you so instruct us. Therefore, General Cable Corporation urges you, as a beneficial owner of Outstanding Notes registered in our name to contact us promptly if you wish to exchange Outstanding Notes in the Exchange Offer. Accordingly, we request instructions as to whether you wish us to exchange any or all Outstanding Notes held by us for your account or benefit pursuant to the terms and conditions set forth in the Prospectus and Letter of Transmittal. We urge you to read carefully the Prospectus and Letter of Transmittal before instructing us to exchange your Outstanding Notes. You should forward instructions to us as promptly as possible in order to permit us to exchange Outstanding Notes on your behalf before the Exchange Offer expires at 5:00 P.M., New York City time, on , 2004, unless extended. A tender of Outstanding Notes may be withdrawn at any time prior to the Expiration Date, which means 5:00 P.M., New York City time, on , 2004, or the latest time to which the Exchange Offer is extended. We call your attention to the following: 1. The Exchange Offer is for the exchange of $l,000 principal amount of Exchange Notes for each $1,000 principal amount of Outstanding Notes. $285,000,000 aggregate principal amount of the Outstanding Notes was outstanding as of the date of the Prospectus. 2. THE EXCHANGE OFFER IS SUBJECT TO THE CONDITIONS DESCRIBED IN THE SECTION ENTITLED "THE EXCHANGE OFFER -- CONDITIONS TO THE EXCHANGE OFFER" OF THE PROSPECTUS. 3. General Cable Corporation has agreed to pay certain of the expenses of the Exchange Offer, and will pay any transfer taxes incident to the transfer of Outstanding Notes from the tendering holder to General Cable Corporation, except as provided in the Prospectus and the Letter of transmittal. See "The Exchange Offer -- Fees and Expenses" in the Prospectus and instruction 6 of the Letter of Transmittal. General Cable Corporation is not making the Exchange Offer to, nor will it accept tenders from or on behalf of, holders of Outstanding Notes residing in any jurisdiction in which the making of the Exchange Offer or the acceptance of tenders would not be in compliance with the laws of that jurisdiction. If you wish us to tender any or all of your Outstanding Notes held by us for your account or benefit, please so instruct us by completing, executing and returning to us the attached instruction form. The accompanying Letter of Transmittal is furnished to you for informational purposes only and may not be used by you to exchange Outstanding Notes held by us and registered in our name for your account or benefit. 2 INSTRUCTIONS The undersigned acknowledge(s) receipt of your letter and the material enclosed with and referred to in your letter relating to the Exchange Offer of General Cable Corporation. This will instruct you to tender for exchange the aggregate principal amount of Outstanding Notes indicated below or, if no aggregate principal amount is indicated below, all Outstanding Notes held by you for the account or benefit of the undersigned, pursuant to the terms and conditions set forth in the Prospectus and the Letter of Transmittal. AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING NOTES TO BE TENDERED FOR EXCHANGE:* $_________________________________________________________ * I (we) understand that if I (we) sign this instruction form without indicating an aggregate principal amount of Outstanding Notes in the space above, all Outstanding Notes held by you for my (our) account will be tendered for exchange. Signature(s): ________________________________________________________________________________ Name(s) (Please type or print): ________________________________________________________________________________ Employer Identification or Social Security Number: ________________________________________________________________________________ Capacity (full title), if signing in a fiduciary or representative capacity: ________________________________________________________________________________ Telephone (including area code): ________________________________________________________________________________ Address (including zip code): ________________________________________________________________________________ Date: ________________________________________________________________________________ 3 EX-99.4 39 l05578aexv99w4.txt EXHIBIT 99.4 EXHIBIT 99.4 GENERAL CABLE CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING 9.5% SENIOR NOTES DUE 2010 FOR 9.5% SENIOR NOTES DUE 2010, SERIES B, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We are offering, upon the terms and subject to the conditions set forth in the prospectus dated , 2004 (as the same maybe amended or supplemented from time to time, the "Prospectus") and the accompanying Letter of Transmittal enclosed herewith (which together constitute the "Exchange Offer"), to exchange up to $285,000,000 aggregate principal amount of our 9.5% Senior Notes Due 2010, Series B (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of our outstanding 9.5% Senior Notes Due 2010 (the "Outstanding Notes"). As set forth in the Prospectus, the terms of the Exchange Notes are identical in all material respects to the Outstanding Notes, except that the Exchange Notes have been registered under the Securities Act and therefore (1) will not be subject to certain restrictions on their transfer, (2) will not be entitled to registration rights and (3) will not contain provisions providing for an increase in the interest rate thereon under the circumstances set forth in the Registration Rights Agreement described in the Prospectus. Outstanding Notes may be tendered in a principal amount of $1,000 and integral multiples of $l,000. THE EXCHANGE OFFER IS SUBJECT TO THE CONDITIONS DESCRIBED IN THE SECTION ENTITLED "THE EXCHANGE OFFER -- CONDITIONS TO THE EXCHANGE OFFER" OF THE PROSPECTUS. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Prospectus, dated , 2004; 2. The Letter of Transmittal for your use in connection with the exchange of Outstanding Notes and for the information of your clients (facsimile copies of the Letter of Transmittal may be used to tender Outstanding Notes); 3. A form of letter which may be sent to your clients for whose accounts you hold Outstanding Notes registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; 4. A Notice of Guaranteed Delivery; and 5. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. YOUR PROMPT ACTION IS REQUESTED. PLEASE NOTE THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2004, UNLESS EXTENDED. PLEASE FURNISH COPIES OF THE ENCLOSED MATERIALS TO THOSE OF YOUR CLIENTS FOR WHOM YOU HOLD OUTSTANDING NOTES REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE AS QUICKLY AS POSSIBLE. In all cases, exchanges of Outstanding Notes pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent (as defined in the Prospectus) of (1) certificates representing such Outstanding Notes, or a book-entry confirmation (as defined in the Prospectus), as the case may be, (2) the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, or an agent's message (as defined in the Prospectus), and (3) any other required documents. Holders who wish to tender their Outstanding Notes and (1) whose certificates for the Outstanding Notes are not immediately available, (2) who cannot deliver their Outstanding Notes, the Letter of Transmittal or an agent's message and any other required documents to the Exchange Agent prior to the Expiration Date, or (3) who cannot complete the procedures for delivery by book-entry transfer prior to the Expiration Date, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth under the caption "The Exchange Offer -- Guaranteed Delivery Procedures" in the Prospectus. We are not making the Exchange Offer to, nor will we accept tenders from or on behalf of, holders of Outstanding Notes residing in any jurisdiction in which the making of the Exchange Offer or the acceptance of tenders would not be in compliance with the laws of such jurisdiction. We will not make any payments to brokers, dealers or other persons for soliciting acceptances of the Exchange Offer. We will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. We will pay or cause to be paid any transfer taxes payable on the transfer of Outstanding Notes to us, except as otherwise provided in instruction 6 of the Letter of Transmittal. Questions and requests for assistance with respect to the Exchange Offer or for copies of the Prospectus and the Letter of Transmittal may be directed to the Exchange Agent at its numbers and address set forth in the Prospectus and the Letter of Transmittal. Very truly yours, GENERAL CABLE CORPORATION NOTHING CONTAINED IN THIS LETTER OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON OUR AGENT OR THE AGENT OF ANY OF OUR AFFILIATES, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY DOCUMENT ON BEHALF OF ANY OF US IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 2 -----END PRIVACY-ENHANCED MESSAGE-----