-----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, HLWsjENS26ZwKIJKrSNteY2AuSESGpQdnNVr+O89i4AIZ35xTb4ufFGEgqkT2djU BL/obTJzSW3DeO7Ez5peqg== 0000950134-96-006750.txt : 19961211 0000950134-96-006750.hdr.sgml : 19961211 ACCESSION NUMBER: 0000950134-96-006750 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19961026 FILED AS OF DATE: 19961210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TSX CORP CENTRAL INDEX KEY: 0000896560 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 742678034 STATE OF INCORPORATION: NV FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11814 FILM NUMBER: 96678161 BUSINESS ADDRESS: STREET 1: 4849 N MESA STREET 2: STE 200 CITY: EL PASO STATE: TX ZIP: 79912 BUSINESS PHONE: 9155334600 MAIL ADDRESS: STREET 1: 4849 N MESA STREET 2: STE 200 CITY: EL PASO STATE: TX ZIP: 79912 10-Q 1 FORM 10-Q FOR QUARTER ENDED OCTOBER 26, 1996 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended October 26, 1996. or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from _________ to ________. Commission File Number 001-11814. TSX CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 74-2678034 - ------------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4849 N. Mesa, Suite 200 El Paso, Texas 79912 - ---------------------------------- --------------------- (Address of principal executive offices) (Zip Code) (915) 533-4600 - -------------------------------------------------------------------------------- Registrant's telephone number, including area code Not Applicable - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if change since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]. APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common stock, $.01 par value, 15,423,686 shares outstanding at December 3, 1996. 2 INDEX TSX CORPORATION AND SUBSIDIARY PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets -- . . . . . . . . . . . . . 3 October 26, 1996 and April 30, 1996 Condensed Consolidated Statements of Operations -- . . . . . . . . 5 Three months ended October 26, 1996 and October 28, 1995; and Six months ended October 26, 1996 and October 28, 1995 Condensed Consolidated Statements of Cash Flows -- . . . . . . . . 6 Six months ended October 26, 1996 and October 28, 1995 Notes to Condensed Consolidated Financial Statements . . . . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . 10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . 14 Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . 14 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . 15 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2 3 PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS TSX CORPORATION AND SUBSIDIARY
Oct. 26, 1996 (Unaudited) Apr. 30, 1996 ------------- ------------- (Expressed in Thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 26,894 21,688 Trade and other receivables, less allowances-- $1,423 at Oct. 26, 1996 and $335 at Apr. 30, 1996 15,001 19,645 Inventories, net 12,234 12,041 Other current assets 1,636 853 Deferred income tax, net 1,633 959 -------- --------- TOTAL CURRENT ASSETS 57,398 55,186 PROPERTY, PLANT AND EQUIPMENT, Net 9,807 9,192 DEFERRED INCOME TAX, Net 5,152 3,813 OTHER ASSETS, Net 1,116 886 -------- --------- $ 73,473 69,077 ======== =========
See notes to condensed consolidated financial statements. 3 4 CONDENSED CONSOLIDATED BALANCE SHEETS TSX CORPORATION AND SUBSIDIARY
Oct. 26, 1996 (Unaudited) Apr. 30, 1996 --------------- ------------- (Expressed in Thousands, Except Share Data) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,520 3,545 Warranty reserve 133 169 Accrued expenses: Salaries, wages and commissions 1,460 1,730 Taxes payable 2,777 3,841 Restructure reserve 0 108 Deferred income tax, net 3,041 2,336 Other 2,289 1,431 -------- -------- TOTAL CURRENT LIABILITIES 13,220 13,160 DEFERRED INCOME TAX, Net 0 6 -------- -------- TOTAL LIABILITY 13,220 13,166 COMMITMENTS AND CONTINGENCIES - - STOCKHOLDERS' EQUITY Preferred stock, $.01 par value, authorized 10,000,000 shares, none issued and outstanding - - Common stock, $.01 par value, authorized 50,000,000 shares, 15,423,666 issued and outstanding at Oct. 26, 1996 and 15,350,615 at April 30, 1996 154 154 Additional paid-in capital 35,368 34,487 Retained earnings from December 11, 1987 24,930 21,469 Cumulative Foreign Currency Adjustment (199) (199) -------- -------- TOTAL STOCKHOLDERS' EQUITY 60,253 55,911 -------- -------- $ 73,473 69,077 ======== ========
See notes to condensed consolidated financial statements. 4 5 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) TSX CORPORATION AND SUBSIDIARY
Three Months Ended Six Months Ended Oct. 26, '96 Oct. 28, '95 Oct. 26, '96 Oct. 28, '95 ------------ ------------ ------------ ------------ (Expressed in Thousands, Except Average Share and Per Share Data) Net sales $ 20,207 23,998 41,380 44,325 Cost of sales 13,510 13,551 25,169 24,812 ---------- ---------- ---------- ---------- Gross profit 6,697 10,447 16,211 19,513 Engineering, research and development expense 884 951 1,821 1,690 Selling and administrative expense 4,250 3,562 8,504 7,186 Unusual items of expense 2,109 0 2,109 0 ---------- ---------- ---------- ---------- INCOME (LOSS) FROM OPERATIONS (546) 5,934 3,777 10,637 Interest income 351 95 592 175 Net other income (expense) (26) 13 10 22 Foreign currency exchange gain (loss) 29 (24) 40 8 ---------- ---------- ---------- ---------- INCOME BEFORE PROVISION (CREDIT) FOR INCOME TAXES (192) 6,018 4,419 10,842 Provision (credit) for income taxes (157) 2,284 958 3,906 ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ (35) 3,734 3,461 6,936 ========== ========== ========== ========== Net Income per share $ --- .23 .22 .43 ========== ========== ========== ========== Weighted average shares and common stock equivalents outstanding 15,422,811 16,062,458 16,064,726 16,041,752 ========== ========== ========== ==========
See notes to condensed consolidated financial statements. 5 6 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) TSX CORPORATION AND SUBSIDIARY
Six Months Ended Oct. 26, 1996 Oct. 28, 1995 ------------- ------------- (Expressed in Thousands) OPERATING ACTIVITIES Net income $ 3,461 6,936 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,294 631 Net tax benefit from exercise of stock options and warrants 220 3,707 Loss on sale of property, plant and equipment 8 --- Provision for losses on accounts receivable 1,088 12 Foreign currency exchange (gain) loss (40) (8) Net change in deferred income taxes net of changes in the reserve (1,314) --- Changes in operating assets and liabilities: (Increase) decrease in accounts receivable 3,581 (358) Increase in inventories and prepaids (971) (3,921) Increase in other assets (230) (14) Decrease in accounts payable and accrued expenses (653) (600) --------- -------- Net cash provided by operating activities 6,444 6,385 INVESTING ACTIVITIES Purchases of property, plant, and equipment (1,901) (2,075) --------- -------- Net cash and cash equivalents used by investing activities (1,901) (2,075) FINANCING ACTIVITIES Proceeds from sale of common stock 661 1,444 --------- -------- Net cash and cash equivalents provided by financing activities 661 1,444 Effect of exchange rate changes on cash and cash equivalents 2 48 --------- -------- Increase in cash and cash equivalents 5,206 5,802 Cash and cash equivalents at beginning of period 21,688 7,294 --------- -------- Cash and cash equivalents at end of period $ 26,894 13,096 ========= ========
See notes to condensed consolidated financial statements. 6 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) TSX CORPORATION AND SUBSIDIARY NOTE A -- BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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. These interim financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended April 30, 1996. NOTE B -- INVENTORIES The components of inventory consist of the following:
Oct. 26, 1996 Apr. 30, 1996 ------------- ------------- (Expressed in Thousands) Raw Materials $ 10,096 7,946 Work in process 2,500 2,453 Finished Goods 4,224 4,336 -------- ------ 16,820 14,735 Reserves (4,586) (2,694) -------- ------ $ 12,234 12,041 ======== ======
Inventory reserves have been provided for excess inventory, obsolete inventory and differences between inventory cost and its net realizable value. Inventory reserves increased from April 30, 1996, largely due to the Company's downsizing activities described in Note E. NOTE C -- INCOME TAXES As of October 26, 1996, net deferred tax assets were comprised of a realizable net current and net noncurrent deferred tax asset of $1.6 million and $5.2 million, respectively, and fully reserved deferred tax assets of $4.9 million, which principally related to U.S. federal and state net operating loss carryforwards. Increases in realizable net deferred tax assets from April 30, 1996 were largely due to the Company's downsizing activities described in Note E. In accordance with the provisions of FAS No. 109, a valuation allowance of $4.9 million at October 26, 1996 was deemed adequate for these and other items which were not considered probable of realization. The Company will continue to review the deferred tax valuation allowance on a quarterly basis and make adjustments as appropriate. 7 8 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED TSX CORPORATION AND SUBSIDIARY Effective with the second quarter of fiscal 1997, the Company established a different tax structure with a low tax jurisdiction advantage. Based on this new tax structure, the Company expects to be subject to a 20% effective tax rate in the second quarter and thereafter. As of the first quarter, the Company lowered its effective tax rate from approximately 36% to 22% which represents a weighted average of the expected effective tax rate for fiscal year 1997. NOTE D -- STOCKHOLDERS' EQUITY On June 5, 1996, the Company announced a three-for-two stock split of its common stock to be effected in the form of a 50% stock dividend. The stock dividend was distributed on July 18, 1996 to stockholders of record at the close of business on June 28, 1996. All share and per share amounts reported in this report have been adjusted to reflect the effect of the three-for-two stock split. NOTE E -- UNUSUAL ITEMS OF EXPENSE During the second quarter of fiscal 1997, the Company recorded a one-time charge of $3.6 million to effect the downsizing of the Company's advertising insertion segment. The second quarter provision was established to: a) write- down inventories, trade receivables and fixed assets related to the advertising insertion segment -- $1.5 million, $1.1 million and $0.3 million, respectively; and b) accrue for severance and other related costs -- $0.4 million and $0.3 million, respectively. Of the $3.6 million, $2.1 million was reported as unusual items of expense, while $1.5 million related to write-down of advertising insertion segment inventories was reflected as cost of sales. Management determined that the downsizing was necessary due to the poor performance of this segment's digital advertising insertion product line and the substantial resources that would have been required to ensure the continued marketability of this product line. The Company has focused its future efforts on providing on-going support and service for the segment's customer base. Additionally, the Company will continue to accept orders for various other product lines of this segment. During the third quarter, the Company began to implement the downsizing which is to be completed by December 30, 1996. NOTE F -- SUBSEQUENT EVENT On October 28, 1996, TSX Corporation, a Nevada corporation ("Registrant"), ANTEC Corporation, a Delaware corporation ("ANTEC"), and TSX Acquisition Corporation, a newly formed Nevada corporation and wholly-owned subsidiary of ANTEC ("Merger Sub"), entered into a Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Registrant, each share of common stock of Registrant will be converted into the right to receive one share of common stock of ANTEC, and Registrant will become a wholly-owned subsidiary of ANTEC. Consummation of the merger, which is expected to occur in early 1997, is subject to the receipt of required regulatory and shareholder approvals and the satisfaction of other terms and conditions set forth in the Merger Agreement. Tele-Communications, Inc., which owns approximately 40% 8 9 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED TSX CORPORATION AND SUBSIDIARY of Registrant's outstanding shares of common stock, and Anixter International Inc., which owns approximately 31% of ANTEC's outstanding shares of common stock, have entered Voting Agreements to vote, subject to certain conditions, their shares in favor of the merger. 9 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS TSX CORPORATION AND SUBSIDIARY NET SALES For the quarter and six months ended October 26, 1996, consolidated net sales declined 16% ($3.8 million) and 7% ($2.9 million), respectively, as compared to prior year. Domestic demand for the Company's cable television (CATV) distribution and advertising insertion products was responsible for the decline. In contrast, international demand for the Company's core CATV fiber and radio frequency (RF) distribution segment's products was strong and accounted for 66% of quarter and 49% of year-to-date net sales, versus 38% and 32%, respectively, for the prior year periods. Worldwide, net sales for the CATV fiber and RF distribution segment declined 10% ($2.1 million), versus prior year quarter, but remained 2% ($0.9 million) ahead of the prior year six-month period. The Company's advertising insertion segment continued to record significant net sales declines for the quarter and six- month periods of 63% ($1.7 million) and 66% ($3.8 million), respectively, compared to prior year. Due to the poor performance of this segment's digital advertising insertion product line and the substantial resources that would have been required to ensure continued marketability of this product line, management decided to downsize this segment. A one-time charge to effect the downsizing was recorded in the second quarter and is discussed below in "Unusual and Other Income/Expenses". Second quarter consolidated order input increased 30% ($5.8 million) from fiscal 1997 first quarter on increased domestic order input received late in the quarter. As a result, backlog at second quarter end increased 22% to $27.3 million from fiscal 1997 first quarter end. GROSS PROFITS Consolidated gross profit percentage for the second quarter and six-month periods declined 25% and 11% from prior year gross profit percentage of 44% principally due to the $1.5 million inventory write-down included in the one-time advertising insertion segment downsizing charge, discussed below in "Unusual and Other Income/Expense." Additionally, the advertising insertion segment experienced declines of 7% and 57% in gross profit percentage for the second quarter and six-month periods, respectively, as compared to prior year. Excluding the impact of the one-time charge and lower advertising insertion segment gross profit percentage, the Company would have reported second quarter and year-to-date gross profit of 41% and 44%, respectively, which includes the effect of core CATV fiber and RF distribution segment reduced volume efficiencies and fiber optic sales mix. INCOME (LOSS) FROM OPERATIONS Consolidated engineering, selling and administrative expenses of 25% of second quarter and six-month net sales increased from 19% and 20%, respectively, for the prior year 10 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED TSX CORPORATION AND SUBSIDIARY periods, primarily on increased spending in sales and marketing and engineering. These spending levels were in support of core business product development and expected future growth. Consolidated operating profit(loss) of ($0.5 million) for the quarter, and $3.8 million for the six-month period, changed significantly from the prior year quarter of $5.9 million and six-month period of $10.6 million. Second quarter operating loss and reduced six-month period operating profit was impacted by the decline in net sales and gross margin, and increase in sales and marketing and engineering expenses discussed above. In addition, in the second quarter, the Company recorded a downsizing charge of $3.6 million, which is discussed below in "Unusual and Other Income/Expenses". UNUSUAL AND OTHER INCOME/EXPENSES There were no unusual items of expense recorded in fiscal 1996. In the second quarter ended October 26, 1996, the Company recorded a one-time charge of $3.6 million (or $0.18 per share) to effect the downsizing of the Company's advertising insertion segment. The downsizing charge included the write-down of certain assets, expected costs of work force reductions and other related costs. Write-down of inventories accounted for $1.5 million of the charge and was recorded as cost of sales. Management determined that the downsizing was necessary due to the poor performance of this segment's digital advertising insertion product line and the substantial resources that would have been required to ensure the continued marketability of this product line. The Company has focused its future efforts on providing on-going support and service for the segment's customer base. Additionally, the Company will continue to accept orders for various other product lines of this segment. During the third quarter, the Company began to implement the downsizing which is to be completed by December 30, 1996. Due to the strengthening of the U.S. dollar in relation to the Mexican peso, and weakening of the U.S. dollar in relation to the British pound, the Company's foreign operations experienced an exchange gain of less than $0.1 million for both the second quarter and six-month period, compared to a loss of less than $0.1 million and a gain of less than $0.1 million, respectively, for the same periods a year earlier. The Company's foreign operations render the Company susceptible to gains and losses from currency exchange rate fluctuations. The Company anticipates that it will continue to be susceptible to such gains and losses for the foreseeable future. 11 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED TSX CORPORATION AND SUBSIDIARY INCOME TAXES Under Financial Accounting Standards No. 109 (FAS No. 109), the Company has recorded net deferred tax assets for the expected future benefit of net operating loss carryforwards and items for which expenses have been recognized for financial statement purposes, but that are expected to be deductible for tax purposes in a future period, to the extent they are considered realizable. In accordance with the provisions of FAS No. 109, a valuation allowance of $4.9 million at October 26, 1996 was deemed adequate for various net operating loss carryforwards and other items which were not considered probable of realization. The Company will continue to review the deferred tax valuation allowance on a quarterly basis and make adjustments as appropriate. Effective with the second quarter of fiscal 1997, the Company established a different tax structure with a low tax jurisdiction advantage. Based on this new tax structure, the Company expects to be subject to a 20% effective tax rate in the second quarter and thereafter. As of the first quarter, the Company lowered its effective tax rate from approximately 36% to 22% which represents a weighted average of the expected effective tax rate for fiscal year 1997. LIQUIDITY AND CAPITAL RESOURCES For the six months ended October 26, 1996, consolidated cash of $26.9 million and working capital of $44.2 million increased $5.2 million and $2.2 million, respectively, from fiscal 1996 year-end. Cash provided by operating activities and sale of common stock, in connection with options exercised were largely responsible for increased cash. Working capital increased primarily due to increased cash. The Company had a bank Revolving Credit Agreement (the "Credit Agreement") which expired August 31, 1996. The Credit Agreement permitted borrowings of up to $9.0 million. The Company did not seek to extend or replace the Credit Agreement because management does not believe it is necessary at the present time. Management believes it has adequate cash to meet its operating needs in the foreseeable future and will be able to obtain borrowing necessary to meet its cash needs. During the six months ended October 26, 1996 and the last five fiscal years, the Company has not paid dividends. Future dividend payments by TSX must be funded from the proceeds of dividends paid to TSX by its Texscan subsidiary or subsidiaries acquired in the future. It is the present policy of TSX's Board of Directors to retain any future earnings of TSX to finance development of TSX's business and/or to retire any future debt. No dividend payments are anticipated within the foreseeable future. 12 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED TSX CORPORATION AND SUBSIDIARY The Company has no commitments for capital expenditures for amounts which are not comparable to commitments made in prior year periods in the ordinary course of business. 13 14 PART II. OTHER INFORMATION TSX CORPORATION AND SUBSIDIARY ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Company held its annual meeting of shareholders on September 26, 1996. (c) At the annual meeting, shareholders voted upon the matters set forth below: (i) Election of one director (ii) Increase in authorized shares of common stock (iii) Approval of KPMG Peat Marwick LLP as the independent auditors of the Company (iv) Increase the number of shares available for awards under the Company's Long-Term Incentive Compensation Program (the "Program") The number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to each such matter and nominee for office were as follows:
Broker For Against Abstain Non-Votes --- ------- ------- --------- Larry E. Romrell 12,778,204 156,373 --- --- Increase in authorized shares of 11,269,538 4,001,383 18,370 --- common stock KPMG Peat Marwick LLP 12,918,633 12,750 3,194 --- Increase in shares for the Program 10,662,359 2,071,269 26,068 2,537,293
ITEM 5. OTHER INFORMATION Plan of Merger On October 28, 1996, TSX Corporation, a Nevada corporation ("Registrant"), ANTEC Corporation, a Delaware corporation ("ANTEC"), and TSX Acquisition Corporation, a newly formed Nevada corporation and wholly-owned subsidiary of ANTEC ("Merger Sub"), entered into a Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Registrant, each share of common stock of Registrant will be converted into the right to receive one share of common stock of ANTEC, and Registrant will become a wholly-owned subsidiary of ANTEC. Consummation of the merger, which is expected to occur in early 1997, is subject to the receipt of required regulatory and shareholder approvals and the satisfaction of other terms and conditions set forth in the Merger Agreement. Tele-Communications, Inc., which owns approximately 40% of Registrant's outstanding shares of common stock, and Anixter International Inc., which owns approximately 31% of ANTEC's outstanding shares of common stock, have entered Voting Agreements to vote, subject to certain conditions, their shares in favor of the merger. A copy of the Merger Agreement and such Voting Agreements are listed as exhibits at Item 6 below. 14 15 Employment and Termination Agreements The three members of TSX's senior management, William Lambert, George Fletcher and Harold Tamburro, all had employment agreements with TSX providing them with certain benefits in the event of a "change in control" of TSX. In general, these benefits included the right to receive (a) the cash value of unexercised stock options and (b) a payment by TSX, upon termination of employment by the employee following a reduction in responsibilities by TSX or a termination of employment by TSX for other than for cause, in an amount equal to twice the annual salary and annual cash incentive compensation of the employee. The payment of cash with respect to the value of unexercised stock options is not permitted in a transaction that will be accounted for as a pooling. As a result, TSX asked each of these three employees to waive his right to receive that cash. In addition, ANTEC and TSX proposed a continuation of Messrs. Lambert's and Fletcher's employment following the completion of the merger or, in the alternative, a consulting arrangement pursuant to which they would assist the combined enterprise at least during the transition period following the completion of the merger. (A continuation of Mr. Tamburro's employment was not proposed due to the desire to achieve administrative savings following the completion of the merger.) Messrs. Lambert and Fletcher chose to remain as employees, and the employment agreements with Messrs. Lambert and Fletcher have been amended so that they provide for the waiver of the right to receive the cash value of options and for the continued employment by TSX, for nine months in the case of Mr. Lambert and for two years in the case of Mr. Fletcher, at their current salaries. They do not provide for any incentive compensation during those periods. In addition, they provide for the payment by TSX of the change in control payments to which they would be entitled if their employment were not continued, $1,262,567 in the case of Mr. Lambert, and $661,466 in the case of Mr. Fletcher, together with interest, upon the ultimate termination of their respective employment. Mr. Lambert's employment agreement grants certain registration rights to him with respect to TSX stock issuable upon the exercise of options to purchase 600,000 shares and such registration rights will also be applicable to ANTEC shares purchased upon exercise of the options after the completion of the merger. Mr. Tamburro, because of disagreement regarding the amount to be received upon the termination of his employment following the completion of the merger, chose to exercise his rights under his employment agreement to resign effective November 18, 1996. At that time he was paid the severance benefits provided by his employment agreement, and it was agreed that his stock options would be converted into options for ANTEC stock upon the consummation of the merger in lieu of any cash payments thereof. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following exhibits are filed as part of this report:
Exhibit No. Exhibit Description Method of Filing - ----------- ------------------- ---------------- 2 Plan of Merger among ANTEC Corporation, TSX Incorporated herein by Corporation and TSX Acquisition Corporation, dated reference to Exhibit 2 to October 28, 1996. the Company's Form 8-K dated October 28, 1996
15 16
Exhibit No. Exhibit Description Method of Filing - ----------- ------------------- ---------------- 3.1 Articles of Incorporation. Incorporated herein by reference to Exhibit 3(A) to the Company's Form 10-K for the fiscal year ended April 30, 1994 3.2 Certificate of Amendment of Articles of Submitted herein Incorporation. 3.3 Bylaws. Incorporated herein by reference to Exhibit 3(B) to the Company's Form 10-K for the fiscal year ended April 30, 1994 10.1 Amendment dated November 15, 1996 to Stock Option Submitted herein Agreement by and between the Company and TCI TSX, Inc. dated October 12, 1994, which granted preemptive rights stock options on account of employee stock options granted pursuant to Long-Term Incentive Compensation Program. 10.2 Amendment dated November 15, 1996 to Stock Option Submitted herein Agreement by and between the Company and TCI TSX, Inc. dated October 12, 1994, which granted preemptive rights stock options on account of stock options granted to William H. Lambert. 10.3 Amendment dated November 15, 1996 to Stock Option Submitted herein Agreement by and between the Company and TCI TSX, Inc. dated October 6, 1995, which granted preemptive rights stock options on account of employee stock options granted pursuant to Long-Term Incentive Compensation Program. 10.4 Stock Option Agreement dated November 15, 1996 by Submitted herein and between the Company and TCI TSX, Inc. granting preemptive rights stock options to TCI TSX, Inc. on account of employee stock options granted pursuant to Long-Term Incentive Compensation Program.
16 17
Exhibit No. Exhibit Description Method of Filing - ----------- ------------------- ---------------- 10.5 Amendment dated October 28, 1996 to Employment Submitted herein Agreement with William H. Lambert dated May 1, 1995. 10.6 Amendment dated October 28, 1996 to Employment Submitted herein Agreement with George Fletcher dated May 1, 1995. 10.7 Amendment and Termination dated November 18, 1996 Submitted herein of Employment Agreement with Harold C. Tamburro dated May 1, 1995. 10.8 Second Amended and Restated Long-term Incentive Incorporated by reference Compensation Plan to Exhibit A to the Company's definitive Proxy Statement dated August 28, 1996, for the 1996 Annual Meeting of its Stockholders 11 Statement re Computation Submitted herein of Per Share Earnings. 27 Financial Data Schedule. Submitted herein 99.1 Voting Agreement dated as of October 28, 1996, Incorporated herein by between ANTEC Corporation and Tele-Communications, reference to Exhibit 99.1 Inc. to the Company's Form 8-K dated October 28, 1996 99.2 Voting agreement dated as of October 28, 1996, Incorporated herein by between TSX Corporation and Anixter International reference to Exhibit 99.2 Inc. to the Company's Form 8-K dated October 28, 1996
(b) Reports on Form 8-K During the quarter for which this report is filed, the Registrant filed no reports on Form 8-K. 17 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TSX Corporation ---------------------------- (Registrant) Date December 10, 1996 /s/ Victor D. Gherson ---------------------- ---------------------------- Victor D. Gherson, Duly Authorized Officer Vice President, Secretary and Chief Financial Officer 18 19 INDEX TO EXHIBITS
Exhibit No. Exhibit Description Method of Filing - ----------- ------------------- ---------------- 2 Plan of Merger among ANTEC Corporation, TSX Incorporated herein by Corporation and TSX Acquisition Corporation, dated reference to Exhibit 2 to October 28, 1996. the Company's Form 8-K dated October 28, 1996 3.1 Articles of Incorporation. Incorporated herein by reference to Exhibit 3(A) to the Company's Form 10-K for the fiscal year ended April 30, 1994 3.2 Certificate of Amendment of Articles of Submitted herein Incorporation. 3.3 Bylaws. Incorporated herein by reference to Exhibit 3(B) to the Company's Form 10-K for the fiscal year ended April 30, 1994 10.1 Amendment dated November 15, 1996 to Stock Option Submitted herein Agreement by and between the Company and TCI TSX, Inc. dated October 12, 1994, which granted preemptive rights stock options on account of employee stock options granted pursuant to Long-Term Incentive Compensation Program. 10.2 Amendment dated November 15, 1996 to Stock Option Submitted herein Agreement by and between the Company and TCI TSX, Inc. dated October 12, 1994, which granted preemptive rights stock options on account of stock options granted to William H. Lambert. 10.3 Amendment dated November 15, 1996 to Stock Option Submitted herein Agreement by and between the Company and TCI TSX, Inc. dated October 6, 1995, which granted preemptive rights stock options on account of employee stock options granted pursuant to Long-Term Incentive Compensation Program. 10.4 Stock Option Agreement dated November 15, 1996 by Submitted herein and between the Company and TCI TSX, Inc. granting preemptive rights stock options to TCI TSX, Inc. on account of employee stock options granted pursuant to Long-Term Incentive Compensation Program. 10.5 Amendment dated October 28, 1996 to Employment Submitted herein Agreement with William H. Lambert dated May 1, 1995. 10.6 Amendment dated October 28, 1996 to Employment Submitted herein Agreement with George Fletcher dated May 1, 1995. 10.7 Amendment and Termination dated November 18, 1996 Submitted herein of Employment Agreement with Harold C. Tamburro dated May 1, 1995. 10.8 Second Amended and Restated Long-term Incentive Incorporated by reference Compensation Plan to Exhibit A to the Company's definitive Proxy Statement dated August 28, 1996, for the 1996 Annual Meeting of its Stockholders 11 Statement re Computation Submitted herein of Per Share Earnings. 27 Financial Data Schedule. Submitted herein 99.1 Voting Agreement dated as of October 28, 1996, Incorporated herein by between ANTEC Corporation and Tele-Communications, reference to Exhibit 99.1 Inc. to the Company's Form 8-K dated October 28, 1996 99.2 Voting agreement dated as of October 28, 1996, Incorporated herein by between TSX Corporation and Anixter International reference to Exhibit 99.2 Inc. to the Company's Form 8-K dated October 28, 1996
EX-3.2 2 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORP. 1 EXHIBIT 3.2 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF TSX CORPORATION The undersigned hereby certify that: I. they are the President and Secretary, respectively, of TSX Corporation, a Nevada corporation (the "Corporation"); II. at a duly held annual meeting of the stockholders of the Corporation, held at Denver, Colorado on September 26, 1996, the stockholders of the Corporation adopted and approved the following amendment to the Articles of Incorporation of the Corporation: IT IS HEREBY RESOLVED, that Article Four of the Articles of Incorporation of the Corporation shall be amended to read in full as follows: FOURTH: That the total number of shares of stock that the Corporation shall have authority to issue is 50,000,000 shares of Common Stock, $.01 par value (the "Common Stock"), and 10,000,000 shares of Preferred Stock, $.01 par value (the "Preferred Stock"). 1. The Board of Directors of the Corporation may at any time or from time to time, without any vote of the holders of the Corporation's capital stock, issue all or any part of the unissued capital stock of the Corporation authorized under these Articles of Incorporation and may determine, subject to any requirements of law, the consideration for which stock is to be issued and the manner of allocating such consideration between capital and surplus. The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of each class and series of the Corporation's capital stock such as, but not limited to: (i) the name and number of the series and the number of shares of each such series; (ii) the dividend rights or preferences of each such series, including rights to participate in dividends and rights to cumulative dividends, in all cases subject to such limitations, restrictions or conditions on the payment of such dividends as the Board of Directors may determine; (iii) the rights and preferences of each such series in relation to any other class or series of capital stock in case of voluntary or involuntary liquidation, dissolution or winding up of the Corporation; 2 (iv) whether the shares of each such series shall be redeemable at the option of the Corporation, or whether the Corporation shall be obligated to redeem such shares and the terms thereof; (v) the conversion or exchange rights of the shares of each such series, if any, and the terms and conditions thereof, including appropriate anti-dilution provisions; and (vi) the voting rights, if any, of the shares of each such series in addition to those provided by applicable law shall be determined by the Board of Directors of the Corporation. 2. No holder of stock of any class of the Corporation shall as such holder have any preemptive or preferential right of subscription to any stock of any class of the Corporation or to any obligations convertible into stock of the Corporation, issued or sold, or to any right of subscription to, or to any warrant or option for the purchase of any stock of the Corporation other than such (if any) as the Board of Directors of the Corporation, in its discretion, may determine from time to time. 3. The Corporation may from time to time issue and dispose of any of the authorized and unissued shares of stock of any class of the Corporation for such consideration, not less than its par value, as may be fixed from time to time by the Board of Directors, without action by the stockholders. The Board of Directors may provide for payment therefor to be received by the Corporation in cash, notes, property, services or any other form permitted under Nevada law. Any and all such shares the issuance of which has been so authorized, and for which consideration so fixed by the Board of Directors has been paid or delivered, shall be deemed fully paid stock and shall not be liable to any further call or assessment thereon. III. the number of shares of common stock entitled to vote on the above-referenced amendment (the "Amendment") was 15,421,544 shares, and that a vote of at least a majority of the voting power of such shares (or at least 7,710,773 shares) was required to approve the Amendment; IV. The stockholder vote on the Amendment was as follows: In Favor: 11,269,538 Against: 4,001,383 Abstain: 18,370; consequently, the stockholder vote required to approve the Amendment was satisfied. 2 3 IN WITNESS WHEREOF, the undersigned have executed this Certificate of Amendment as of the 22 day of November, 1996. By: /s/ WILLIAM H. LAMBERT ------------------------------- William H. Lambert, President By: /s/ VICTOR D. GHERSON ------------------------------- Victor D. Gherson, Secretary STATE OF TEXAS ) ) COUNTY OF EL PASO ) This instrument was acknowledged before me on November 22, 1996. by William H. Lambert as President of TSX Corporation. /s/ GABRIELLE L. ROBINSON ------------------------------ NOTARY PUBLIC STATE OF TEXAS ) ) COUNTY OF EL PASO ) This instrument was acknowledged before me on November 22, 1996 by Victor D. Gherson as Secretary of TSX Corporation. /s/ GABRIELLE L. ROBINSON ------------------------------ NOTARY PUBLIC 3 EX-10.1 3 AMENDMENT TO STOCK OPTION AGREEMENT 1 EXHIBIT 10.1 AMENDMENT TO STOCK OPTION AGREEMENT AMENDMENT dated as of November 15, 1996 (this "Amendment") to Stock Option Agreement dated as of October 12, 1994 (the "Stock Option Agreement") by and between TSX Corporation, a Nevada corporation, and TCI TSX, Inc., a Colorado corporation (the "Optionee"). Capitalized terms not otherwise defined herein are used herein as defined in the Stock Option Agreement. PRELIMINARY STATEMENT A. Pursuant to the Stock Option Agreement, the Company in 1994 granted an Option to the Optionee to purchase 22,227 shares of Common Stock by virtue of the Optionee's exercise of preemptive rights with respect to grants by the Company on July 28, 1994 to certain of its employees under the Company's Amended and Restated Long-Term Incentive Compensation Program ("LTIP") of options to purchase 39,000 shares of Common Stock. B. The Company in 1994 made additional grants under the LTIP to certain employees of options to purchase shares of Common Stock, thereby entitling the Optionee, pursuant to its preemptive rights, to additional Options to purchase shares of Common Stock. Accordingly, the parties desire to amend the Stock Option Agreement to include the additional Options. AMENDMENT NOW, THEREFORE, in consideration of the premises and covenants herein contained, the Stock Option Agreement is hereby amended as follows: 1. In addition to the Options granted to the Optionee pursuant to the Stock Option Agreement, the Company has granted and does hereby ratify and confirm the grants as of the respective dates hereinafter set forth of the following Options (the "Options") to purchase shares of Common Stock of the Company on the terms herein provided and otherwise as set forth in the Stock Option Agreement: (a) An Option to purchase 17,931 shares of Common Stock was granted and is hereby ratified and confirmed as of July 28, 1994 at an Exercise Price of $4.54 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of July 28, 1994 and expiring at the close of business on July 28, 2004. (b) An Option to purchase 4,628 shares of Common Stock was granted and is hereby ratified and confirmed as of July 28, 1994 at an Exercise Price of $5.75 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of July 28, 1994 and expiring at the close of business on July 28, 2004. 2 (c) An Option to purchase 13,648 shares of Common Stock was granted and is hereby ratified and confirmed as of October 3, 1994 at an Exercise Price of $8.04 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of October 3, 1994 and expiring at the close of business on October 3, 2004. The shares of Common Stock issuable upon exercise of the Options are referred to herein and in the Stock Option Agreement as "Option Stock." Except as otherwise herein provided, the provisions of the Stock Option Agreement shall apply to the Options which are the subject of this Amendment. Share and per share amounts set forth above have been adjusted for the two-for-one stock split in 1994 and the three-for-two stock split in 1996. 2. Except as amended hereby, the provisions of the Stock Option Agreement shall remain in full force and effect. EXECUTED as of the day and year first above written. TSX CORPORATION By: /s/ WILLIAM H. LAMBERT ---------------------------------- William H. Lambert, Chairman, President and Chief Executive Officer TCI TSX, INC. By: /s/ DAVID BOILEAU ---------------------------------- Name: David Boileau Title: Vice-President EX-10.2 4 AMENDMENT TO STOCK OPTION AGREEMENT 1 EXHIBIT 10.2 AMENDMENT TO STOCK OPTION AGREEMENT AMENDMENT dated as of November 15, 1996 (this "Amendment") to Stock Option Agreement dated as of October 12, 1994 (the "Stock Option Agreement") by and between TSX Corporation, a Nevada corporation, and TCI TSX, Inc., a Colorado corporation (the "Optionee"). Capitalized terms not otherwise defined herein are used herein as defined in the Stock Option Agreement. PRELIMINARY STATEMENT A. Pursuant to the Stock Option Agreement, the Company in 1994 granted an Option to the Optionee to purchase 430,221 shares of Common Stock by virtue of the Optionee's exercise of preemptive rights with respect to stock options granted by the Company to William H. Lambert ("Lambert") pursuant to a stock option agreement between the Company and Lambert dated March 14, 1994 (and approved by stockholders September 12, 1994). B. The parties have recalculated and determined that the Optionee was entitled to an additional 1,948 shares of Option Stock under the Option. Accordingly, the parties desire to amend the Stock Option Agreement to include the additional Options. AMENDMENT NOW, THEREFORE, in consideration of the premises and covenants herein contained, the Stock Option Agreement is hereby amended as follows: 1. In addition to the Options granted to the Optionee pursuant to the Stock Option Agreement, the Company has granted and does hereby ratify and confirm the grant to Optionee as of March 14, 1994, on the terms herein provided and otherwise as set forth in the Stock Option Agreement, of an Option to purchase 1,948 shares of Common Stock at an Exercise Price of $2.00 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of March 14, 1994 and expiring at the close of business on March 14, 2004. The shares of Common Stock issuable upon exercise of the Options are referred to herein and in the Stock Option Agreement as "Option Stock." Except as otherwise herein provided, the provisions of the Stock Option Agreement shall apply to the Option which is the subject of this Amendment. Share and per share amounts set forth in this Amendment have been adjusted for the two-for-one stock split in 1994 and the three-for-two stock split in 1996. 2. Except as amended hereby, the provisions of the Stock Option Agreement shall remain in full force and effect. 2 EXECUTED as of the day and year first above written. TSX CORPORATION By: /s/ WILLIAM H. LAMBERT ------------------------------ William H. Lambert, Chairman, President and Chief Executive Officer TCI TSX, INC. By: /s/ DAVID BOILEAU ------------------------------ Name: David Boileau Title: Vice-President EX-10.3 5 AMENDMENT TO STOCK OPTION AGREEMENT 1 EXHIBIT 10.3 AMENDMENT TO STOCK OPTION AGREEMENT AMENDMENT dated as of November 15, 1996 (this "Amendment") to Stock Option Agreement dated as of October 6, 1995 (the "Stock Option Agreement") by and between TSX Corporation, a Nevada corporation, and TCI TSX, Inc., a Colorado corporation (the "Optionee"). Capitalized terms not otherwise defined herein are used herein as defined in the Stock Option Agreement. PRELIMINARY STATEMENT A. Pursuant to the Stock Option Agreement, the Company in 1995 granted Options to the Optionee to purchase 54,292 shares of Common Stock by virtue of the Optionee's exercise of preemptive rights with respect to grants by the Company to certain of its employees under the Company's Amended and Restated Long-Term Incentive Compensation Program ("LTIP") of options to purchase 14,220 shares of Common Stock granted March 12, 1995, 6,399 shares granted January 23, 1995 and options to purchase 33,473 shares granted May 21, 2005. B. The Company in 1995 made additional grants to certain employees under the LTIP of options to purchase shares of Common Stock, thereby entitling the Optionee, pursuant to its preemptive rights, to additional Options to purchase shares of Common Stock. Accordingly, the parties desire to amend the Stock Option Agreement to include the additional Options. AMENDMENT NOW, THEREFORE, in consideration of the premises and covenants herein contained, the Stock Option Agreement is hereby amended as follows: 1. In addition to the Options granted to the Optionee pursuant to the Stock Option Agreement, the Company has granted and does hereby ratify and confirm the grants as of the respective dates hereinafter set forth of the following Options (the "Options") to purchase shares of Common Stock of the Company on the terms herein provided and otherwise as set forth in the Stock Option Agreement: (a) An Option to purchase 5,954 shares of Common Stock was granted and is hereby ratified and confirmed as of March 12, 1995 at an Exercise Price of $11.50 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of March 12, 1995 and expiring at the close of business on March 12, 2005. (b) An Option to purchase 4,043 shares of Common Stock was granted and is hereby ratified and confirmed as of January 23, 1995 at an Exercise Price of $10.75 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of January 23, 1995 and expiring at the close of business on January 23, 2005. 2 (c) An Option to purchase 3,275 shares of Common Stock was granted and is hereby ratified and confirmed as of January 28, 1995 at an Exercise Price of $5.00 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of January 28, 1995 and expiring at the close of business on January 28, 2005. (d) An Option to purchase 13,906 shares of Common Stock was granted and is hereby ratified and confirmed as of May 21, 1995 at an Exercise Price of $11.72 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of May 21, 1995 and expiring at the close of business on May 21, 2005. (e) An Option to purchase 27,284 shares of Common Stock was granted and is hereby ratified and confirmed as of June 30, 1995 at an Exercise Price of $15.83 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of June 30, 1995 and expiring at the close of business on June 30, 2005. (f) An Option to purchase 76,122 shares of Common Stock was granted and is hereby ratified and confirmed as of September 28, 1995 at an Exercise Price of $15.83 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of September 28, 1995 and expiring at the close of business on September 28, 2005. (g) An Option to purchase 5,426 shares of Common Stock was granted and is hereby ratified and confirmed as of October 17, 1995 at an Exercise Price of $13.00 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of October 17, 1995 and expiring at the close of business on October 17, 2005. The shares of Common Stock issuable upon exercise of the Options are referred to herein and in the Stock Option Agreement as "Option Stock." Except as otherwise herein provided, the provisions of the Stock Option Agreement shall apply to the Options which are the subject of this Amendment. Shares and per share amounts set forth above have been adjusted to reflect the three-for-two stock split in 1996. 2. Except as amended hereby, the provisions of the Stock Option Agreement shall remain in full force and effect. 3 EXECUTED as of the day and year first above written. TSX CORPORATION By: /s/ WILLIAM H. LAMBERT --------------------------------- William H. Lambert, Chairman, President and Chief Executive Officer TCI TSX, INC. By: /s/ DAVID BOILEAU ---------------------------------- Name: David Boileau Title: Vice-President 3 EX-10.4 6 STOCK OPTION AGREEMENT 1 EXHIBIT 10.4 STOCK OPTION AGREEMENT BY AND BETWEEN TSX CORPORATION AND TCI TSX, INC. GRANTING PREEMPTIVE RIGHTS STOCK OPTIONS TO TCI TSX, INC. ON ACCOUNT OF EMPLOYEE STOCK OPTIONS GRANTED PURSUANT TO LONG-TERM INCENTIVE COMPENSATION PROGRAM DATED AS OF NOVEMBER 15, 1996 2 TABLE OF CONTENTS 1. GRANT OF OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. EXERCISE OF OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . 2 2.1 METHOD OF EXERCISE. . . . . . . . . . . . . . . . . . . . 2 2.2 PAYMENT OF EXERCISE PRICE. . . . . . . . . . . . . . . . . 3 2.3 FAIR MARKET VALUE . . . . . . . . . . . . . . . . . . . . 3 3. NON-TRANSFERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 3 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. . . . . 3 4.1 ORGANIZATION, GOOD STANDING, AUTHORITY AND APPROVAL . . . 3 4.2 AUTHORIZATION OF SHARES OF OPTION STOCK . . . . . . . . . 4 4.3 COMPANY'S OBLIGATIONS . . . . . . . . . . . . . . . . . . 4 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONEE. . . . . . . 4 5.1 ORGANIZATION, GOOD STANDING, AUTHORITY AND APPROVAL . . . 4 5.2 ACQUISITION FOR OWN ACCOUNT . . . . . . . . . . . . . . . 4 6. CONDITIONS TO ISSUANCE OF SHARES. . . . . . . . . . . . . . . . . 4 7. TRANSFER RESTRICTIONS; LEGEND ON CERTIFICATE. . . . . . . . . . . 5 8. REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . 5 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. . . . . . . . . . . . 5 10. THE OPTIONEE'S RIGHTS AS SHAREHOLDER. . . . . . . . . . . . . . . 6 11. APPLICABILITY OF SECTION 16(B) OF THE 1934 ACT. . . . . . . . . . 6 12. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 12.1 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . 6 12.2 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . 7 12.3 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . 7 12.4 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . 8 12.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . 8 12.6 AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . 8 12.7 CERTAIN RULES OF CONSTRUCTION. . . . . . . . . . . . . . . 8 12.8 BENEFITS OF AGREEMENT . . . . . . . . . . . . . . . . . . 8 12.9 ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . 8 12.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . 8
3 STOCK OPTION AGREEMENT GRANTING PREEMPTIVE RIGHTS STOCK OPTIONS TO TCI TSX, INC. ON ACCOUNT OF EMPLOYEE STOCK OPTIONS GRANTED PURSUANT TO LONG-TERM INCENTIVE COMPENSATION PROGRAM STOCK OPTION AGREEMENT (this "Agreement") dated as of November 15, 1996, by and between TSX Corporation, a Nevada corporation with its principal office at 4849 North Mesa, Suite 200, El Paso, Texas 79912 (the "Company") and TCI TSX, Inc., a Colorado corporation with its principal office at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000 (the "Optionee"). PRELIMINARY STATEMENT (A) The Optionee is an indirect wholly owned subsidiary of TCI Communications, Inc. (formerly known as Tele-Communications, Inc.), a Delaware corporation ("TCIC"). (B) The Company and TCIC are parties to an Investment Agreement dated as of March 14, 1994 (the "Investment Agreement") pursuant to which TCIC purchased 2,109,000 shares of TSX Common Stock, par value $.01 per share (the "Common Stock"). Contemporaneously therewith, the Company and TCIC entered into a Registration Rights Agreement dated as of March 14, 1994 (the "Registration Rights Agreement") affording TCIC certain registration rights with respect to such shares and any additional shares of Common Stock held by TCIC from time to time during the term thereof. Section 4.04 of the Investment Agreement granted certain preemptive rights to TCIC with respect to the issuance by the Company of, among other things, any Additional Common Shares (as defined in the Investment Agreement) or options to subscribe for or to purchase Additional Common Shares. Share and per share amounts set forth in this Agreement have been adjusted as appropriate to reflect the two-for-one stock split in 1994 and the three-for-two stock split in 1996. (C) TCIC transferred and assigned its rights and obligations under the Investment Agreement and the Registration Rights Agreement to Optionee. (D) The Company has heretofore granted stock options to qualified employees under the terms of the Company's Long-Term Incentive Compensation Program ("LTIP") for options to purchase shares of Common Stock, thereby entitling TCIC to preemptive rights to Options to purchase a total of 28,089 shares of Common Stock at the Exercise Prices and for the respective terms expiring as set forth hereinafter. Accordingly, the parties have entered into this Agreement for the purpose of ratifying and confirming the grants to the Optionee of Options to purchase Common Stock in accordance with such preemptive rights. AGREEMENT NOW, THEREFORE, in consideration of the premises and covenants herein contained, the parties hereby agree as follows: 1. GRANT OF OPTIONS. 4 The Company has granted and does hereby ratify and confirm the grants as of the respective dates hereinafter set forth of the following Options (the "Options") to purchase shares of Common Stock of the Company on the terms herein provided: (a) An Option to purchase 5,460 shares of Common Stock was granted and is hereby ratified and confirmed as of January 4, 1996 at a purchase price (the "Exercise Price") of $12.83 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of January 4, 1996 and expiring at the close of business on January 4, 2006. (b) An Option to purchase 6,824 shares of Common Stock was granted and is hereby ratified and confirmed as of April 15, 1996 at an Exercise Price of $20.00 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of April 15, 1996 and expiring at the close of business on April 15, 2006. (c) An Option to purchase 4,913 shares of Common Stock was granted and is hereby ratified and confirmed as of June 5, 1996 at an Exercise Price of $20.00 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of June 5, 1996 and expiring at the close of business on June 5, 2006. (d) An Option to purchase 20,472 shares of Common Stock was granted and is hereby ratified and confirmed as of June 25, 1996 at an Exercise Price of $19.33 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of June 25, 1996 and expiring at the close of business on June 25, 2006. (e) An Option to purchase 6,824 shares of Common Stock was granted and is hereby ratified and confirmed as of June 25, 1996 at an Exercise Price of $15.83 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of June 25, 1996 and expiring at the close of business on June 25, 2006. (f) An Option to purchase 40,435 shares of Common Stock was granted and is hereby ratified and confirmed as of July 25, 1996 at an Exercise Price of $15.75 per share, which Option shall be exercisable by the Optionee in whole or in part at any time or times for a period commencing as of July 25, 1996 and expiring at the close of business on July 25, 2006. The shares of Common Stock issuable upon exercise of an Option are referred to herein as "Option Stock." 2. EXERCISE OF OPTIONS. 2.1 METHOD OF EXERCISE. 2 5 Each Option shall be exercisable, in whole or in part, by written notice to the Company stating the number of shares of Common Stock to be purchased and accompanied by full payment of the Exercise Price for the shares of Common Stock issuable upon such exercise. 2.2 PAYMENT OF EXERCISE PRICE. The Exercise Price for the shares of Common Stock issuable upon exercise of each Option shall be paid (i) in cash, by uncertified check, certified check or bank draft, or (ii) by the surrender, in whole or in part, of issued and outstanding shares of Common Stock of the Company (not including the shares of Common Stock issuable upon exercise of the Option), which shall be credited against the Exercise Price at the Fair Market Value (as defined below) of the shares surrendered on the date of the written notice of exercise of the Option. 2.3 FAIR MARKET VALUE. For purposes of this Agreement, "Fair Market Value" of the Common Stock shall be the closing sale price of a share of Common Stock as published by the national securities exchange on which the shares are traded on the applicable date (provided, that if the shares of Common Stock are traded on more than one national securities exchange, Fair Market Value shall be the closing sale price on the applicable date published by the exchange selected by the Company). If the exchange is closed for trading on such date, or if the Common Stock does not trade on such date, then Fair Market Value shall be the closing sale price on the date the Common Stock last traded on such exchange prior to the applicable date. 3. NON-TRANSFERABILITY. The Options granted hereby may not be transferred by the Optionee other than to a corporation, partnership or other entity controlling, controlled by or under common control with TCIC (collectively, the "TCIC Affiliates"). 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company represents and warrants to and agrees with Optionee as follows: 4.1 ORGANIZATION, GOOD STANDING, AUTHORITY AND APPROVAL. The Company is duly organized as a corporation and is validly existing and in good standing under the laws of Nevada. The Company has the corporate power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated by this Agreement (including the issuance of the shares of Option Stock) have been duly authorized and approved by all necessary corporate action of the Company, and this Agreement is a valid and binding obligation of the Company, enforceable in accordance with its terms. This Agreement and its execution and delivery by the Company do not, and the consummation of the transaction contemplated by this Agreement and the issuance of the shares of Option Stock will not, constitute a violation of or a default (whether with notice or the lapse of time or both) under the Articles of Incorporation or Bylaws of the Company, any law to which the Company is subject, any provision of any 3 6 agreement, instrument, order, judgment or decree to which the Company is a party or to which the Company or any of its assets is subject, or any rule of, or any provision of the Company's Listing Agreement with, the National Association of Securities Dealers, Inc. 4.2 AUTHORIZATION OF SHARES OF OPTION STOCK. Upon delivery of stock certificates by the Company and receipt by the Company of the full amount of the Exercise Price therefor, the shares of Option Stock, when issued and delivered in accordance with the provisions of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable outstanding shares of Common Stock of the Company. 4.3 COMPANY'S OBLIGATIONS. The Company shall (1) at all times during the term of each Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement, (2) pay all original issue and transfer taxes with respect to the issue and transfer to the Optionee of shares of Option Stock pursuant to the Options and all other fees and expenses necessarily incurred by the Company in connection therewith, and (3) from time to time use its best efforts to comply with all laws and regulations which shall be applicable thereto. 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONEE. Optionee represents and warrants to and agrees with the Company as follows: 5.1 ORGANIZATION, GOOD STANDING, AUTHORITY AND APPROVAL. Optionee is duly organized as a corporation and is validly existing and in good standing under the laws of Delaware. Optionee has the corporate power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement by Optionee and the consummation of the transactions contemplated by this Agreement have been duly authorized and approved by all necessary corporate action of Optionee, and this Agreement is a valid and binding obligation of Optionee. 5.2 ACQUISITION FOR OWN ACCOUNT. The shares of Option Stock to be issued and delivered to the Optionee pursuant to the Options (unless such shares have first been registered under the Securities Act of 1933, as amended (the "1933 Act")) shall be acquired by the Optionee for investment for the Optionee's own account and not with a view to, or for, sale or other distribution thereof, and that the Optionee has no present intention to sell or otherwise distribute any shares of Option Stock to be issued or delivered to the Optionee pursuant to the Options, except in a manner which will not violate the provisions of any applicable federal or state securities laws, rules or regulations. 6. CONDITIONS TO ISSUANCE OF SHARES. 4 7 If at the time of exercise of an Option, there does not exist either (a) an effective registration statement under the 1933 Act, with respect to the shares of Option Stock subject to the Option, (b) an opinion of counsel, satisfactory to the Company, to the effect that such registration is not required under one or more of the exemptions provided under the 1933 Act, or (c) a "no action" letter, with respect to the proposed issuance of such shares, issued by the staff of the Securities and Exchange Commission and delivered to the Company, then such shares of Option Stock may only be issued with an appropriate restrictive legend in accordance with Section 8 hereof. 7. TRANSFER RESTRICTIONS; LEGEND ON CERTIFICATE. The Optionee acknowledges that the Option Stock must be held indefinitely unless subsequently registered under the 1933 Act and the securities laws of every jurisdiction applicable to such resale or unless exemptions from such registration requirements are available. The Company will be entitled to place conspicuously upon each certificate representing shares of Option Stock a legend as required by Article 15 of the Articles of Incorporation of the Company and a legend substantially in the following form: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF THE HOLDER'S COUNSEL, IN FORM REASONABLY ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT. Notwithstanding the foregoing, the Optionee may transfer the shares of Option Stock to any TCIC Affiliate. 8. REGISTRATION RIGHTS. The provisions of the Registration Rights Agreement shall be applicable to the shares of the Option Stock, and the Optionee shall be entitled to exercise all of the rights granted to TCIC under the Registration Rights Agreement with respect to the shares of Option Stock. 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The Exercise Price and the number or kind of shares subject to each Option are subject to adjustment in case the Company should at any time issue additional shares of its Common Stock as a stock dividend, or in case the shares of its Common Stock should at any time be 5 8 subdivided into a greater number of shares, or in case the outstanding shares of its Common Stock should be combined by reclassification or otherwise into a lesser number of shares, or in case the Company shall merge, consolidate with or into another corporation or entity, or another corporation or entity merges into the Company, or in the case of any sale or transfer of all or substantially all of the assets of the Company, or in the case of a capital reorganization or recapitalization not involving a merger, consolidation or sale or transfer of all or substantially all of the assets of the Company. The adjustment will entitle the Optionee to receive, for the same aggregate Exercise Price, in lieu of securities receivable upon the exercise of any part of an Option prior to any such dividend, subdivision, reclassification, combination, sale, transfer or reorganization, the securities to which the Optionee would have been entitled if the Optionee had exercised any part of the Option immediately prior to the record date or effective date of the stock dividend, subdivision, reclassification, combination, sale, transfer or reorganization. Neither the issuance of stock for consideration, the issuance of stock on the exercise of stock rights, options or warrants, nor the issuance of stock on the conversion of a debenture or of a share of capital stock shall be considered a change in the Company's capital structure. No fractional shares of Option Stock shall be issued upon any exercise of an Option following an adjustment made pursuant to this Section 10, and the aggregate Exercise Price paid shall be appropriately adjusted on account of any fractional share not issued upon such an exercise. 10. THE OPTIONEE'S RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a shareholder with respect to any shares of Option Stock until the date of the exercise of the applicable Option and the issuance of the shares of Option Stock and then only to the extent that there has been issued one or more certificates for such shares of Option Stock to said the Optionee upon the due exercise in whole or in part of such Option. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date precedes the date such stock certificates are issued. 11. APPLICABILITY OF SECTION 16(B) OF THE 1934 ACT. The grant of each Option may, under Section 16 of the 1934 Act, be considered a "purchase" of an equity security subject to the "short-swing" profit rules of Section 16(b). The Optionee is urged to consult its legal advisor regarding the applicability of Section 16 to its transactions in equity securities of the Company, including the granting to the Optionee of the Option. In this connection, the Optionee agrees not to sell, during the six month period immediately following the date of the grant of each Option, any shares of Option Stock which may be acquired during such period upon exercise of the Option. 12. GENERAL. 12.1 ENTIRE AGREEMENT. 6 9 This Agreement, subject to the matters described in the Preliminary Statement, contains all of the agreements and understandings between the parties hereto, and no oral agreements or written correspondence shall be held to affect the provisions hereof. 12.2 WAIVER. No waiver by any party hereto of any breach of any covenant, condition or agreement hereof on the part of the parties hereto to be kept and performed shall be considered to constitute a waiver of any other covenant, condition or provision, or of any subsequent breach thereof. 12.3 NOTICES. Any notice, demand, request, waiver or other communication under this Agreement must be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered to the address of the party specified below (including delivery by courier), (ii) on the fifth day after mailing if mailed to the party to whom notice is to be given to the address specified below, by first class mail, certified or registered, return receipt requested, postage prepaid, or (iii) on the date of transmission if sent by facsimile transmission to the facsimile number given below and if telephonic confirmation of receipt is obtained promptly after completion of transmission, as follows: If to Optionee: c/o TCI Communications, Inc. 5619 DTC Parkway Englewood, Colorado 80111 Attn: Bernard W. Schotters, II Facsimile: (303) 488-3200 With a copy similarly addressed: Attn: Legal Department If to the Company: TSX Corporation 4849 North Mesa, Suite 200 El Paso, Texas 79912 Attn: William H. Lambert, Chairman, President and Chief Executive Officer Facsimile: (915) 543-4888 With a copy to: Kemp, Smith, Duncan & Hammond, P.C. 2000 Norwest Plaza El Paso, Texas 79901-1441 Attn: Tad R. Smith Facsimile: (915) 546-5360 Either party may from time to time change its address or facsimile number for the purpose of notices to that party by a similar notice specifying a new address or facsimile number, but no 7 10 such change will be deemed to have been given until it is actually received by the party sought to be charged with its contents. 12.4 SPECIFIC PERFORMANCE. The parties acknowledge that there will be no adequate remedy at law for a violation by the Company of its obligations set forth in this Agreement and its obligations to issue and sell the shares of Option Stock pursuant to this Agreement and that, in addition to any other remedies which may be available to Optionee for a violation of those obligations, those obligations will be specifically enforceable by Optionee in accordance with their terms. 12.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties set forth in this Agreement will survive the Closing. 12.6 AMENDMENTS. This Agreement may not be amended, modified, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement thereof is sought. 12.7 CERTAIN RULES OF CONSTRUCTION. This Agreement shall be construed in accordance with, and shall be governed by, the laws of the State of Texas. In the event any court of competent jurisdiction shall declare any portion of this Agreement to be invalid, the remainder of this Agreement shall not be invalidated thereby, but shall remain in full force and effect. The captions in this Agreement are for reference purposes only and will not in any way affect the meaning or interpretations of the text of this Agreement. Where the context requires, words in the singular shall be deemed to include the plural and vice versa. 12.8 BENEFITS OF AGREEMENT. Subject to the provisions of Section 4, this Agreement will be binding upon and will inure to the benefit of the parties and their respective successors and assigns. Neither this Agreement nor any of the right or obligations of a party hereunder may be assigned without the consent of the other party, provided that the Optionee may assign its rights and delegate its obligations to any TCIC Affiliate. 12.9 ATTORNEYS' FEES. In the event of any action or suit based upon or arising out of any alleged breach by any party of any representation, warranty, covenant or agreement contained in this Agreement, the prevailing party will be entitled to recover reasonable attorneys' fees and other costs of such action or suit from the other party. 12.10 COUNTERPARTS. 8 11 This Agreement may be executed in one or more counterparts, each of which will be deemed an original. IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement TSX CORPORATION BY: /s/ WILLIAM H. LAMBERT ------------------------------------- WILLIAM H. LAMBERT, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER TCI TSX, INC. BY: /s/ DAVID BOILEAU ------------------------------------- NAME: DAVID BOILEAU TITLE: VICE PRESIDENT 9 EX-10.5 7 AMENDMENT TO EMPLOYMENT AGREEMENT, WILLIAM LAMBERT 1 EXHIBIT 10.5 AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment to Employment Agreement ("Amendment") is entered into as of this 28th day of October, 1996, by and between TSX Corporation, a Nevada corporation (the "Company"), and William H. Lambert (the "Executive"). WITNESSETH: WHEREAS, the Executive is currently employed by the Company as Chairman, President and Chief Executive Officer of the Company; and WHEREAS, the Company, ANTEC, a Delaware corporation ("ANTEC"), and TSX Acquisition Corporation, a Nevada corporation ("Merger Sub"), have entered into a Plan of Merger dated as of October 28, 1996 (the "Merger Agreement") pursuant to which Merger Sub will be merged into the Company and the Company shall continue to exist as the surviving corporation (the "Merger"); and WHEREAS, the Company and the Executive are parties to an Employment Agreement dated May 1, 1995 (the "Employment Agreement") which provides that in the event the Executive's employment with the Company is terminated under certain circumstances following a Change in Control (as defined therein) the Company shall provide certain benefits to the Executive on terms described in the Employment Agreement; and WHEREAS, the Company and the Executive desire to enter into this Amendment to the Employment Agreement to clarify those changes in control payments and to otherwise modify the Employment Agreement; NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: 1. Amendment. The Employment Agreement is hereby amended as follows: (a) Section 2 is amended in its entirety to read: 2. Nature of Executive Services. The Executive shall have such positions and perform such duties as the parties may mutually agree to facilitate the integration of the business of the Company with the business of ANTEC Corporation following the merger of the Company and TSX Acquisition Corporation (the "Merger") and to further the business of the Company. (b) Section 3 is amended in its entirety to read: 2 3. Term. The term of the Executive's employment hereunder shall continue for 270 days after the effective time of the Merger (the "Effective Time") at which time (the "Date of Termination" or "Termination Date") it is acknowledged that the employment of Executive shall have been terminated by the Company for other than Cause and by the Executive for Good Reason (in both cases as defined by Section 11 of the Agreement as it read prior to the Effective Time) for purposes of Section 8C of the Stock Option Agreement between the parties dated March 14, 1994. The term of the Agreement is hereinafter referred to as the "Employment Period." For purposes of clarifying Section 8C of the Stock Option Agreement, the parties confirm their mutual interpretation that under Section 8C, the term of the Option after the termination at any time of the Optionee's employment by the Company for other than Cause or by the Executive for Good Reason shall continue to be a period of ten (10) years following the Commencement Date (as defined in Section 5 of the Stock Option Agreement) as provided in Section 3 of the Stock Option Agreement. (c) Section 4(b) of the Employment Agreement is deleted and all references anywhere in the Employment Agreement to Section 4(b) are deleted. (d) Section 10(f) is deleted and all references anywhere in the Employment Agreement to Section 10(f) are deleted. (e) All references anywhere in the Employment Agreement to Section 11 are deleted and Section 11 is amended by deleting subsections (a), (b), (c) (ii) and (d) and amending the first sentence of subsection (c) prior to the beginning of paragraph (c) (i) in its entirety to read: (c) It is acknowledged that upon the Effective Time, the Executive's duties, titles and offices will be changed by the amendment of this Agreement on October 28, 1996 (the 'Amendment") in a manner that would entitle Executive to terminate his employment under this Agreement for Good Reason pursuant to the provisions of this Agreement as they existed prior to the Amendment and obligate the Company to provide the benefits provided by paragraphs (i), (iii) and (iv) below. However, Executive has agreed to defer the exercise of that right until the Termination Date, and the Company has agreed to provide the benefits provided by paragraphs (i) (iii) and (iv) below on the Termination Date. The payment provided by paragraph (i), which will be $1,262,567 if the Effective Time is after January 1, 1997 as contemplated, will be paid with interest at the annual rate of 7.5% from the tenth date following the Effective Time until the date of payment. The parties have agreed that these will be the Company's obligations as a result of the termination of the employment of the Executive. (f) Section 17 shall be amended in its entirety to read: -2- 3 Executive shall be entitled to an office and to work out of the Company's offices in El Paso, Texas or Juarez, Mexico or such other location as shall be mutually agreeable to Executive and the Company. (g) Section 18(a) is modified by inserting the phrase "and for the period ending two years after the Effective Time" after the phrase "the term of this Agreement" in the second line of Section 18(a). (h) Section 19(b) is deleted and Section 19(d) is amended in its entirety to read as follows: (d) Costs. If any legal action or any arbitration or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach or default in connection with any of the provisions of this Agreement, the prevailing party shall be entitled to recover his or its reasonable attorneys' fees and other costs incurred in that action or proceeding, in addition to any other relief to which such party may be entitled. (i) Schedule 1 is deleted. (j) Section 18 is amended by adding the following paragraph at the end thereof: (i) ANTEC Common Stock. Following the Merger, the foregoing rights of the Executive with respect to the Company Shares shall apply equally to the common stock of ANTEC. 2. Conditioned on Merger. This Amendment is conditioned upon the consummation of the Merger. If for any reason the Merger Agreement is terminated, then this Amendment shall become null and void and have no force or effect. The parties hereto ratify and affirm their respective obligations under the Employment Agreement, as amended by this Amendment. 3. Applicable Law. The Employment Agreement and this Amendment shall be construed and interpreted pursuant to the laws of Texas. 4. Entire Agreement. The Employment Agreement and this Amendment contain the entire agreement between the Company and the Executive and supersedes any and all previous agreements, written or oral, between the parties relating to the subject matter hereof. No amendment or modification of the terms of the Employment Agreement or this Amendment shall be binding upon the parties hereto unless reduced to writing and signed by the Company and the Executive. 5. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original. -3- 4 6. Severability. In the event any provision of this Amendment is held illegal or invalid, the remaining provisions of this Amendment shall not be affected thereby. IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the Company has caused the Amendment to be executed in its name on its behalf, all as of the day and year first above written. COMPANY: TSX CORPORATION By: /s/ William H. Lambert ------------------------- Title: Chairman, President and Chief Executive Officer ----------------------- EXECUTIVE: /s/ William H. Lambert ----------------------------- -4- EX-10.6 8 AMENDMENT TO EMPLOYMENT AGREEMENT, GEORGE FLETCHER 1 EXHIBIT 10.6 AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment to Employment Agreement ("Amendment") is entered into as of this 28th day of October, 1996, by and between TSX Corporation, a Nevada corporation (the "Company"), and George L. Fletcher (the "Executive"). WITNESSETH: WHEREAS, the Executive is currently employed by the Company as Senior Vice President of the Company; and WHEREAS, the Company, ANTEC, a Delaware corporation ("ANTEC"), and TSX Acquisition Corporation, a Nevada corporation ("Merger Sub"), have entered into a Plan of Merger dated as of October 28, 1996 (the "Merger Agreement") pursuant to which Merger Sub will be merged into the Company and the Company shall continue to exist as the surviving corporation (the "Merger"); and WHEREAS, the Company and the Executive are parties to an Employment Agreement dated May 1, 1995 (the "Employment Agreement") which provides that in the event the Executive's employment with the Company is terminated under certain circumstances following a Change in Control (as defined therein) the Company shall provide certain benefits to the Executive on terms described in the Employment Agreement; and WHEREAS, the Company and the Executive desire to enter into this Amendment to the Employment Agreement to clarify those Change in Control payments and to otherwise modify the Employment Agreement; NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: 1. Amendment. The Employment Agreement is hereby amended as follows: (a) The first paragraph of Section 2 is amended in its entirety to read: 2. Nature of Executive Services. The Executive shall have such positions and perform such duties as the Company shall reasonably determine from time to time to facilitate the integration of the business of the Company with the business of ANTEC Corporation following the merger of the Company and TSX Acquisition Corporation (the "Merger") and to further sales and marketing. In no event shall the Executive be required to relocate his principal residence from Tucson, Arizona. 2 (b) Section 3 is amended in its entirety to read: 3. Term. The Term of the Executive's employment hereunder shall continue until December 31, 1998 (the "Date of Termination" or "Termination Date"). The term of this Agreement is hereinafter referred to as the "Employment Period." (c) Section 4(b) is deleted. (d) A new Section 4(c) is added reading: (c) Stock Options. In connection with grants made in 1998, the Executive will be eligible to receive options to purchase stock of ANTEC Corporation in the same manner as other comparable executives of ANTEC and its subsidiaries. (e) Section 8(f) is deleted and references anywhere in the Employment Agreement to Section 8(f) are deleted. (f) All references anywhere in the Employment Agreement to Section 9 are deleted and Section 9 is amended by deleting subsections (a), (b), (c) (ii), (c)(iii) and (d) and amending the first sentence of subsection (c) prior to the beginning of paragraph (c) (i) in its entirety to read: (c) It is acknowledged that upon the Effective Time, the Executive's duties, titles and offices will be changed by the amendment of this Agreement on October 28, 1996 (the "Amendment") in a manner that would entitle Executive to terminate his employment under this Agreement for Good Reason pursuant to the provisions of this Agreement as they existed prior to the Amendment and obligate the Company to provide the benefits provided by paragraphs (i) and (iv) below. However, Executive has agreed to defer the exercise of that right until the Termination Date, and the Company has agreed to provide the benefits provided by paragraphs (i) and (iv) below on the Termination Date. The payment provided by paragraph (i), which will be $661,466 if the Effective Time is after January 1, 1997 as contemplated, will be paid with interest at the annual rate of 7.5% from the tenth date following the Effective Time until the date of payment. The parties have agreed that these will be the Company's obligations as a result of the termination of the employment of the Executive. (g) Section 14 is deleted. (h) Schedule 1 is deleted. -2- 3 2. Conditioned on Merger. This Amendment is conditioned upon the consummation of the Merger. If for any reason the Merger Agreement is terminated, then this Amendment shall become null and void and have no force or effect. 3. Applicable Law. The Employment Agreement and this Amendment shall be construed and interpreted pursuant to the laws of Texas. 4. Entire Agreement. The Employment Agreement and this Amendment contain the entire agreement between the Company and the Executive and supersedes any and all previous agreements, written or oral, between the parties relating to the subject matter hereof. No amendment or modification of the terms of the Employment Agreement or this Amendment shall be binding upon the parties hereto unless reduced to writing and signed by the Company and the Executive. 5. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original. 6. Severability. In the event any provision of this Amendment is held illegal or invalid, the remaining provisions of this Amendment shall not be affected thereby. IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the Company has caused the Amendment to be executed in its name on its behalf, all as of the day and year first above written. COMPANY: TSX CORPORATION By: /s/ William H. Lambert ------------------------- Title: Chairman, President and Chief Executive Officer ----------------------- EXECUTIVE: /s/ George L. Fletcher ----------------------------- -3- EX-10.7 9 AMENDMENT/TERMINATION EMPLMT AGRMT,HAROLD TAMBURRO 1 EXHIBIT 10.7 AMENDMENT AND TERMINATION OF EMPLOYMENT AGREEMENT AGREEMENT dated as of November 18, 1996 (this "Agreement) between TSX Corporation (the "Company"), a Nevada corporation, and Harold C. Tamburro (the "Executive"). PRELIMINARY STATEMENT A. The Executive has been employed by the Company pursuant to an Employment Agreement dated as of May 1, 1995 (the Employment Agreement). Capitalized terms not otherwise defined herein are used herein as defined in the Employment Agreement. B. The Company, ANTEC Corporation, a Delaware corporation ("ANTEC"), and TSX Acquisition Corporation, a Nevada corporation ("Merger Sub") have entered into a Plan of Merger dated as of October 28, 1996 pursuant to which Merger Sub will be merged into the Company and the Company shall continue to exist as the surviving corporation (the "Merger"). Such Plan of Merger, as same may be amended, supplemented or modified from time to time, is referred to herein as the "Merger Agreement." C. Certain disputes (the "Disputes") have arisen between the Company and the Executive, including but not limited to (i) the Executive's claim that the calculation of "incentive compensation" under Section 9(c)(i) of the Employment Agreement included the income received from exercise of stock options, (ii) and the matters set forth in letters from Scott, Hulse, Marshall, Feuille, Finger & Thurmond, P.C. ("Scott & Hulse"), counsel to the Executive, to Kemp, Smith, Duncan & Hammond, P.C. ("Kemp Smith"), counsel to the Company, dated October 18, 21, 23, 30 and November 11, 1996; letters from Kemp Smith to Scott & Hulse dated October 18, 19, 22 and November 12, 1996; and letter from William H. Lambert, Chairman and C.E.O. of the Company, to the Executive dated October 28, 1996. D. The Company on October 28, 1996 declared the Employment Agreement to be void and terminated, and the Executive has filed with the American Arbitration Association ("AAA") a demand for arbitration under Section 14 of the Employment Agreement. The parties have reached an understanding whereby such voiding and termination will be rescinded, the Employment Agreement will be modified and further actions will be taken in settlement and compromise of disputed claims as provided below. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and in settlement and compromise of disputes and claims between the parties and for other good and valuable consideration, the parties agree as follows: 1. The prior determination by the Company to void and terminate the Employment Agreement and to terminate the Executive's employment is rescinded and such prior determination is void ab initio as of October 28, 1996; and the Executive's employment with the Company under the Employment Agreement, as amended hereby, shall remain in effect until terminated as hereinafter provided. 2. The parties agree that the Executive is entitled to terminate his employment under Section 8(f) of the Employment Agreement because on and after October 28, 1996, he is no longer serving as, and accordingly is no longer authorized to discharge the usual duties of, Senior Vice President, Chief Financial Officer and Secretary of the Company; and the Executive has elected to and does hereby terminate his Employment Period pursuant to Section 8(f) effective as of the date of this Agreement 2 (which date is the "Termination Date" within the meaning of Section 8(h) of the Employment Agreement). Pursuant thereto, the parties have agreed as follows: (a) The Company shall pay to the Executive, and simultaneously with the execution and delivery of this Agreement has paid to Executive, in lump sum, in cash, the sum of $343,304, consisting of the following: (i) The Company shall pay to the Executive the amount of his Base Salary, $10,153.83, from October 29, 1996 through the date of this Agreement, and the amount of accrued vacation pay, $17,266.97, through the date of this Agreement, aggregating $27,421, less normal deductions for medical insurance, Medicare, Federal income tax withholding and 401k plan; and the Executive acknowledges that payment of such amount is in full and final payment of all Base Salary and accrued vacation pay to which he is entitled. (ii) The Company shall pay to the Executive in lump sum, in cash, the agreed amount of $448,000 due to the Executive under the provisions of Section 9(c)(i) of the Employment Agreement (less withholding for Federal income tax and Medicare) and no additional amounts shall be claimed or payable under said Section 9(c)(i); and the Executive acknowledges that payment thereof constitutes full and final payment of all amounts due under said Section 9(c)(i), waives and releases the Executive's claim that the calculation of "incentive compensation" under said Section 9(c)(i) includes the income received from exercise of stock options, and agrees that no additional amounts shall be claimed or payable under said Section 9(c)(i) of the Agreement. (iii) As the following coverage under Benefit Plans (as defined in Section 9(c)(iv) of the Employment Agreement) is paid for by the Company (except for the Executive's portion described below) and afforded to the Executive and his dependents, then in accordance with Section 9(c)(iv) of the Employment Agreement: (A) The Company shall pay to Executive the present value of life insurance premiums for three years (less Federal income tax and Medicare withholding) totaling $2,267; (B) The Company shall pay to Executive the present value of MERP (medical and dental for three years, less Federal income tax and Medicare withholding), totaling $13,365; and (C) The remaining portion of such coverage which is paid for by the Company shall be paid by the Company and afforded to the Executive and his dependents for a three (3) year period beginning on the Date of Termination (i.e., the date of this Agreement); and the present value ($3,754) of the portion of the coverage which the Executive is obligated to pay for such three year period (based upon the current amount of $26.31 per week) has been deducted from the amount payable to the Executive (as reflected on Schedule A referred to below), and accordingly, the Company shall pay for the Executive's portion of the coverage for such three year period. 3 Attached hereto as Schedule A is a schedule of the amounts payable, less applicable withholding amounts, under Sections 2(a)(i), 2(a)(ii) and 2(a)(iii)(A) and (B) of this Agreement, aggregating $491,053, less withholding of $145,242, plus refund to Executive of a previous COBRA payment of $1,245 and less the present value of the Executive's portion of Benefit Plan coverages as provided in Subparagraph (C) above, totaling $343,304. The Company has paid such amount of $343,304 to Executive by wire transfer to an account designated by the Executive, the receipt of which Executive hereby acknowledges, in full and final payment of all amounts due under Sections 9(c)(i), 9(c)(ii) and 9(c)(iv) of the Employment Agreement, except for additional amounts hereafter payable under Section 9(c)(iv) of the Employment Agreement as provided in Section 2(a)(iii)(C) of this Agreement above. (b) The provisions of Section 9(c)(ii) of the Employment Agreement shall be inapplicable, and the Executive shall have no right to elect to receive cash for his outstanding options for shares of the Company's Common Stock. The three month period following termination of employment specified in Section 2(b)(i) of the Non-Statutory Stock Option Agreements dated May 23, 1995 and September 29, 1995 between the Company and the Executive (the "Stock Option Agreements"), during which period the Executive is entitled to exercise his stock options then exercisable under the terms of the respective Stock Option Agreements, shall not commence until the termination of the restrictions contained in paragraph (c) of the Affiliates Letter referred to in Section 5 of this Agreement, and this sentence shall constitute an amendment of Section 2(b)(i) of each of the Stock Option Agreements. (c) No benefits are payable to the Executive under Section 9(c)(iii) of the Employment Agreement. (d) Excepting Executive's remaining benefits under Benefit Plans as provided in Section 2(a)(iii)(C) of this Agreement, the Executive waives and releases all further claims for benefits or compensation from the Company. (e) Notwithstanding anything in this Agreement to the contrary, the parties agrees that the provisions of Section 11 of the Employment Agreement shall survive the termination of the Employment Agreement. 3. Pursuant to Section 14 of the Employment Agreement, the Executive has requested reimbursement of his legal fees and expenses in the amount of $29,719.20 (as reflected by a statement of Scott & Hulse dated November 18, 1996, a copy of which has been delivered by the Executive to the Company) incurred by the Executive in connection with certain disputes arising between the Company and the Executive. Without agreeing or disagreeing that Executive is entitled to such reimbursement, the Company acknowledges that the Employment Agreement is reasonably susceptible of an interpretation that Executive is entitled to such reimbursement. Accordingly, in settlement and compromise of disputes between the parties, the Company has agreed to and does hereby recognize that it is obligated under the provisions of Section 14 of the Employment Agreement to pay such legal fees and expenses of the Executive and, simultaneously with the execution and delivery of this Agreement by the Company and Executive, has paid such amount in full directly to Scott & Hulse. 4. The Company agrees that all of the payments to be made pursuant to Sections 2 and 3 hereof shall be made in full without any remaining dispute between the Executive and the Company with regard to such payments, and the Company releases any defenses to, and agrees that no offset, counterclaim, charge or deduction (except as set forth in Section 2(a) of this Agreement) of any kind shall be asserted or taken against, payment of such amounts. 3 4 5. The Executive, simultaneously with the execution and delivery of this Agreement and as contemplated by the Merger Agreement, has executed and delivered a letter dated October 28, 1996 addressed to ANTEC, the Company and Merger Sub (the "Affiliates Letter") which, among other things, places certain restrictions on the sale or other disposition of TSX Common Stock before the Merger or ANTEC Common Stock after the Merger. The Company represents that the form of such Affiliates Letter executed by the Executive is the same as that executed by other executive officers of TSX. 6. Except as otherwise provided in this Agreement, the Executive hereby releases, discharges and acquits the Company and its subsidiaries and their respective officers, directors, employees, shareholders, agents and attorneys of and from any claims, damages, liabilities, costs or expenses arising from or growing out of the prior termination on October 28, 1996 of the Employment Agreement and the Executive's employment, including but not limited to the Disputes. Except as otherwise provided in this Agreement, the Company, for itself and its subsidiaries, hereby releases, discharges and acquits the Executive, his agents and attorneys, and the Executive hereby releases, discharges and acquits the Company and its subsidiaries and their respective officers, directors, employees, shareholders, agents and attorneys, of and from any claims, damages, liabilities, costs or expenses (collectively, the "Liabilities") existing on the date hereof or arising from or growing out of events, actions or omissions occurring prior to the date hereof, of whatever kind or nature, known or unknown, liquidated or unliquidated, fixed or contingent, including but not limited to the Disputes; and the Company agrees to indemnify and save harmless the Executive from any such Liabilities to its subsidiaries. Executive agrees to dismiss his demand for arbitration with AAA. 7. The Employment Agreement and this Agreement shall be construed and interpreted in accordance with the laws of Texas, and the parties consent to the exclusive venue and jurisdiction of the Federal and state courts located in El Paso County, Texas. The Employment Agreement, as amended by this Agreement, contains the entire agreement between the Company and the Executive and supersedes any and all previous agreements, written or oral, between the parties relating to the subject matter hereof. No amendment or modification of the terms of the Employment Agreement or this Agreement shall be binding upon the parties hereto unless reduced to writing and signed by the Company and the Executive. This Agreement may be executed in counterparts, each of which shall be deemed an original. 8. The parties hereto acknowledge and agree that Executive has returned to the Company all property in his possession which belongs to the Company. 9. Each party to this Agreement agrees to perform all further acts and to execute and deliver all further documents that may be reasonably necessary, and otherwise reasonably cooperate and use 4 5 reasonable efforts, to carry out the provisions of this Agreement. IN WITNESS WHEREOF, this Agreement has been executed by the Executive and the Company as of the day and year first above written. TSX CORPORATION By: /s/ WILLIAM H. LAMBERT --------------------------------------------- William H. Lambert, Chairman, President and Chief Executive Officer /s/ HAROLD C. TAMBURRO ------------------------------------------------ Harold C. Tamburro 5 6 SCHEDULE A PAY PAYMENT 1 10/29/96 THRU 11/18/96 $10,153.83 Vacation Pay 17,266.97 Total $27,420.80 $27,421 2 Life Ins. 11/16/96 to 11/15/97 $666 11/16/97 to 11/15/98 $789 11/16/98 to 11/15/99 $963 3 yr pres val @ 6% 2,267 3 MERP Medical $2000/yr Dental $3000/yr Total $5000/yr 3 yr pres val @ 6% 13,365 4a 1993 1994 1995 1996 Base 125,306 134,935 148,770 160,000 0 94,400 95,420 85,000 Severance 2 x ($160,000 + ($94,400 + $95,420) /3) 446,547 4b 1997 target bonus $160,000 x 40% $64,000 Severance 2 x ($160,000 + $64,000) 448,000 TOTAL DUE (Gross) 491,053 Med ins 3 wks 78.93 79 401K 548.07 548 Fed Tx @ 28% 28% of 491,053 137,495 Medicare @ 1.45% 1.45% of 491,0534 7,120 Subtotal 145,242 Net Due 345,811 Cobra refund 1,245 Deduct present value, Executive's portion of Benefit Plan Coverage ($26.31/mo - 3 yr pres val @ 6%) 3,754 Net payment due 343,304 EX-11 10 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS 1 EXHIBIT 11 -- STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS TSX CORPORATION AND SUBSIDIARY
Three Months Ended Six Months Ended Oct. 26, 1996 Oct. 28, 1995 Oct. 26, 1996 Oct. 28, 1995 ------------- ------------- ------------- ------------- (Expressed in Thousands Except Per Share Data) PRIMARY Average shares outstanding 15,423 15,297 15,423 15,054 Net effect of dilutive stock options and warrants 0 684 608 857 ------------ ---------- ----------- ---------- TOTAL 15,423 15,981 16,031 15,911 ============ ========== =========== ========== Net Income $ (35) 3,734 3,461 6,936 ============ ========== =========== ========== Net Income per share $ --- .23 .22 .44 ============ ========== =========== ========== FULLY DILUTED Average shares outstanding 15,423 15,297 15,423 15,054 Net effect of dilutive stock options and warrants 0 765 642 988 ------------ ---------- ----------- ---------- TOTAL 15,423 16,062 16,065 16,042 ============ ========== =========== ========== Net Income $ (35) 3,734 3,461 6,936 ============ ========== =========== ========== Net Income per share $ --- .23 .22 .43 ============ ========== =========== ==========
EX-27 11 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q FOR THE SIX MONTHS ENDED OCTOBER 26, 1996. 1,000 6-MOS APR-30-1997 MAY-01-1996 OCT-26-1996 26,894 0 16,424 1,423 12,234 57,398 20,530 10,723 73,473 13,220 0 0 0 154 60,099 73,473 41,380 41,380 25,169 37,603 0 0 0 4,419 958 0 0 0 0 3,461 0 .22
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