<PAGE>
<PAGE> 1
As filed with the Securities and Exchange Commission on August 26, 1994.
Registration No. _________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
---------------------------
SPS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 3452 23-1116110
(State of incorporation) (Primary standard industrial (I.R.S. employer
classification code number) identification number)
Jenkintown Plaza, Suite 470, 101 Greenwood Avenue,
Jenkintown, PA 19046 (215) 517-2022
(Address, including zip code and telephone number, including area code,
of registrant's principal executive offices)
---------------------------
Aaron Nerenberg, Esquire
Vice President, General Counsel and Secretary
SPS Technologies, Inc.
Jenkintown Plaza, Suite 470
101 Greenwood Avenue
Jenkintown, PA 19046
(215) 517-2022
(Name, Address, including zip code and telephone number,
including area code of agent for service)
Copy to:
Andrew C. Culbert, Esquire
Masterman, Culbert & Tully
One Lewis Wharf
Boston, MA 02110
(617) 227-8010
---------------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement
---------------------------
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: / /
<TABLE>
<CAPTION>
---------------------------
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered unit(1) price(1) registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share 515,000 shares(2) $26.81 $13,807,150.00 $4,761.53
Rights to purchase Common Stock 515,000 rights 0 0 0(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457, paragraphs (c) and (g).
The average of the high and low market price of the Registrant's Common Stock on the NYSE on August 23, 1994 was $26.81
per share.
(2) Includes an indeterminate number of shares which may be sold by the Registrant pursuant to a certain standby
purchase agreement described in the Prospectus.
(3) Pursuant to Rule 457(g), no separate registration fee is required with respect to the Rights.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 26, 1994
PROSPECTUS 515,000 Shares
- ----------- SPS TECHNOLOGIES, INC.
Common Stock
-------------
SPS Technologies, Inc., a Pennsylvania corporation (the "Company"), is
distributing to record holders of shares of its Common Stock, par value $1.00
per share (the "Common Stock"), transferable subscription rights (the "Rights")
to subscribe for and purchase up to 515,000 shares of Common Stock held by the
Company as treasury shares, together with a like number of associated rights
under the Company's Rights Agreement (as defined below) (the "Underlying
Shares") for a purchase price (the "Subscription Price") of $______ per share
(the "Rights Offering"). Such shareholders will receive one (1) Right for each
ten (10) shares of Common Stock held by them as of the close of business on
____________, 1994 (the "Record Date"). No fractional Rights or cash in lieu
thereof will be distributed or paid by the Company, and the number of Rights
distributed by the Company to each holder of Common Stock will be rounded up to
the nearest whole number of Rights. Holders of Rights ("Rights Holders") may
purchase one Underlying Share for each Right held (the "Subscription
Privilege"). The Rights will be evidenced by transferable certificates (the
"Subscription Certificates").
The Company has entered into a "Standby Purchase Agreement", dated as
of ___________, 1994 with the "Purchasers" and "Investors" named therein.
Pursuant to the Standby Purchase Agreement, Purchasers have agreed, subject to
the terms and conditions set forth therein, to acquire from the Company at the
Subscription Price all Underlying Shares subject to their Subscription Privilege
and any and all Underlying Shares remaining unsold after the expiration of the
Rights (the "Remaining Shares"). An "Affiliate" (as such term is defined in Rule
12b-2 under the Securities Exchange Act of 1934 as amended) of certain of the
Purchasers is a Director of the Company, and as of ___________, 1994, the
Purchasers and Investors, together with their Affiliates, beneficially owned
approximately 9.9% of the outstanding Common Stock. Pursuant to the Standby
Purchase Agreement, the Purchasers are to receive a fee from the Company in the
amount of one-half of 1% of the gross proceeds to be received by the Company in
connection with the Rights Offering (the "Standby Fee"). Contemporaneously with
the execution of the Standby Purchase Agreement, the Company has (i) amended the
Rights Agreement, dated as of November 11, 1988, and amended by Amendment No. 1
thereto, dated as of January 22, 1991 between the Company and Mellon Bank
(East), N.A., as Rights Agent (the "Rights Agreement"), by executing Amendment
No. 2 thereto dated as of ______________, 1994 ("Amendment No. 2"); and (ii)
entered into a Registration Rights Agreement among the Company, Purchasers and
Investors, dated as of ______________, 1994 (the "Registration Rights
Agreement"). See "The Standby Purchase Agreement" and "Description of Capital
Stock - Common Stock - Registration Rights Agreement."
The Rights will expire at 5:00 p.m., New York City local time, on
_______________, 1994, unless extended by the Company (such date and time, the
"Expiration Date") and thereafter will have no value. Accordingly, Rights
Holders are strongly urged to either exercise or sell their Rights prior to the
Expiration Date.
<PAGE>
<PAGE> 3
The proceeds to the Company from the Rights Offering and the Standby
Purchase Agreement will be used to pay transaction expenses, reduce debt under
the Company's domestic Amended and Restated Credit Agreement, dated March 21,
1994 and as subsequently amended (the "Bank Credit Agreement"), and for other
corporate purposes of the Company.
The Common Stock is traded on the New York Stock Exchange, Inc. (the
"NYSE") under the symbol "ST". It is anticipated that the Rights will trade on
the NYSE under the symbol "ST RT" until the close of business on the last
trading day preceding the Expiration Date. There has, however, been no prior
market for the Rights, and no assurance can be given that a market for the
Rights will develop or, if a market develops, that it will remain available
throughout the period ending with the Expiration Date, or as to the price at
which the Rights will trade. On __________, 1994, the closing sale price of the
Common Stock on the New York Stock Exchange Composite Transactions Tape (the
"NYSE Composite Tape") was $_____ per share.
AFTER THE EXPIRATION DATE, THE RIGHTS WILL NO LONGER BE EXERCISABLE AND WILL
HAVE NO VALUE. ACCORDINGLY, RIGHTS HOLDERS ARE STRONGLY URGED TO EITHER
EXERCISE OR SELL THEIR RIGHTS.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY RIGHTS HOLDERS AND PROSPECTIVE INVESTORS PRIOR TO DECIDING TO EXERCISE OR
SELL RIGHTS OR PURCHASE COMMON STOCK THROUGH THE RIGHTS OFFERING.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
Underwriting Discounts Proceeds
Price to Public and Commissions to Company(1)
- --------------------------------------------------------------------------------
Per Share .......... $ None $
- --------------------------------------------------------------------------------
Total .............. $ None $
================================================================================
(1) Before deduction of approximately $___________ to be paid to the Purchasers
as the Standby Fee pursuant to the Standby Purchase Agreement (See "The Standby
Purchase Agreement") and other expenses of the Rights Offering estimated to be
$____________.
The date of this Prospectus is _______________, 1994.
<PAGE>
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other information filed
by the Company with the Commission may be inspected at the public reference
facilities maintained by the Commission at the Securities and Exchange
Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and should
also be available for inspection and copying at the regional offices of the
Commission located at Seven World Trade Center, Suite 1300, New York, New York
10048; and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. Additionally, such reports and other information
concerning the Company are available for inspection at the offices of the NYSE
located at 20 Broad Street, New York, New York, 10005.
This Prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission under the Securities Act of 1933 (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement, and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the Common Stock offered hereby. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to such copy filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. The
Registration Statement and the exhibits thereto may be inspected without charge
at the office of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies thereof may be obtained from the Commission
at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 1-4416) pursuant to the Exchange Act, are incorporated herein by reference
and made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994 and June 30, 1994.
3. The Company's Current Report on Form 8-K dated January 5, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be deemed
to be incorporated in this Prospectus by reference and to be a part hereof from
the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of any such person, a copy of any and all of the documents
incorporated herein by reference (other than exhibits unless such exhibits are
specifically incorporated herein by reference). Requests for such copies should
be directed to SPS Technologies, Inc., Jenkintown Plaza, 101 Greenwood Avenue,
Suite 470, Jenkintown, PA 19046. Attention: Aaron Nerenberg, Esq., General
Counsel, telephone number (215) 517-2022.
<PAGE>
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements appearing or incorporated by
reference elsewhere in this Prospectus. Rights Holders and prospective investors
should carefully consider the information set forth under the heading "Risk
Factors." References to the Company in this Prospectus include the Company's
consolidated subsidiaries unless the context otherwise requires.
The Company
The Company was incorporated under the name "Standard Pressed Steel
Company" in Pennsylvania in January, 1903. The Company is engaged in the design,
manufacture and marketing of high-strength precision mechanical fasteners,
precision components and fastening systems, and superalloys in ingot form and
magnetic materials.
The Company has been a leading supplier of industrial and aerospace
fasteners for more than 90 years. The Company was among the first producers of
fasteners for commercial and military aircraft, and through its Aerospace
Products Division continues to provide the industry high-strength bolts, nuts,
screws and precision components. Its Industrial Products Division supplies
engineered fasteners to makers of automobiles, trucks, diesel engines and farm
and construction equipment. The Company's Unbrako Products Division provides
socket screws and other fasteners for industrial machinery and equipment.
Through its Cannon-Muskegon subsidiary, the Company also provides superalloys
for medical applications, aerospace and industrial gas turbine engine components
and other parts produced by investment casting. The Arnold Engineering Co.,
another subsidiary, specializes in magnetic materials and precision foil and
strip products for automobiles, aircraft, power supplies, electrical equipment
and electronic security systems. Its joint-venture partner, National-Arnold
Magnetics Company, supplies soft magnetic tape-wound core products for
electrical and electronic equipment. The Company has production facilities and a
network of manufacturing and marketing affiliates in 11 countries.
The Company's principal executive offices are located at Jenkintown Plaza,
101 Greenwood Avenue, Suite 470, Jenkintown, PA 19046, telephone number (215)
517-2022.
Summary of the Rights Offering
Rights
- ------
Each holder of Common Stock will receive one (1) transferable Right for each ten
(10) shares of Common Stock held of record by such holder as of the close of
business on the Record Date. The number of Rights distributed by the Company to
each holder of Common Stock will be rounded up to the nearest whole number of
Rights. An aggregate of approximately 515,000 Rights will be distributed
pursuant to the Rights Offering, and each Right will be exercisable for one
Underlying Share. An aggregate of approximately 515,000 Underlying Shares will
be sold upon exercise of the Rights and pursuant to the Standby Purchase
Agreement. The distribution of the Rights and sale of shares of Common Stock
upon the exercise of the Rights are referred to herein as the "Rights Offering".
The Rights Offering and the purchase of Remaining Shares pursuant to the Standby
Purchase Agreement are referred to herein as the "Transaction". See "The Rights
Offering - The Rights" and "The Standby Purchase Agreement."
Record Date
- -----------
Close of business on _________, 1994.
Expiration Date
- ---------------
5:00 p.m. New York City local time, on__________, 1994, unless extended by
the Company.
Subscription Privilege
- ----------------------
Rights Holders are entitled to purchase for the Subscription Price one
Underlying Share for each Right held. See "The Rights Offering - Subscription
Privilege".
Subscription Price
- ------------------
$_________, in cash, per Underlying Share subject to purchase pursuant to the
Subscription Privilege or the Standby Purchase Agreement. See "The Rights
Offering - Determination of Subscription Price."
<PAGE>
<PAGE> 6
Procedure for Exercising Rights
- --------------------------------
The Subscription Privilege may be exercised and Underlying Shares may be
subscribed for by properly completing the Subscription Certificate evidencing
the Rights and forwarding such Subscription Certificate (or following the
Guaranteed Delivery Procedures (as hereinafter defined)), with payment of
the Subscription Price for each Underlying Share purchased pursuant to the
Subscription Privilege, to the Subscription Agent for receipt by the
Subscription Agent on or prior to the Expiration Date. If the mail is used to
forward Subscription Certificates, it is recommended that insured, registered
mail be used and that return receipt be requested.
If the aggregate Subscription Price paid by an exercising Rights Holder is
insufficient to purchase the number of Underlying Shares that such holder
indicates on the Subscription Certificate are being purchased or subscribed for,
or if no number of Underlying Shares to be purchased or subscribed for is
specified, then the Rights Holder will be deemed to have exercised the
Subscription Privilege to purchase Underlying Shares to the full extent of the
payment tendered. If the aggregate Subscription Price paid by an exercising
Rights Holder exceeds the amount necessary to purchase the number of Underlying
Shares for which the Rights Holder has indicated on the Subscription Certificate
an intention to purchase, then the excess funds paid by that holder will be
returned as soon as possible by mail, without interest or deduction. See "The
Rights Offering - Exercise of Rights."
No Revocation
- -------------
ONCE A RIGHTS HOLDER HAS EXERCISED THE SUBSCRIPTION PRIVILEGE, SUCH EXERCISE OR
SUBSCRIPTION MAY NOT BE REVOKED BY SUCH RIGHTS HOLDER. RIGHTS NOT EXERCISED
PRIOR TO THE EXPIRATION DATE WILL EXPIRE AND WILL NO LONGER BE EXERCISABLE BY
ANY RIGHTS HOLDER. See "The Rights Offering - No Revocation."
Shares of Common Stock Outstanding After the Transaction
- --------------------------------------------------------
Approximately _________ shares, based on __________ shares outstanding
on ________, 1994 (prior to the Transaction).
Transferability of Rights
- -------------------------
The Rights will be transferable, and it is anticipated that they will trade on
the NYSE until the close of business on the last NYSE trading day preceding
the Expiration Date. There can be no assurances, however, that any market
for the Rights will develop, or, if a market develops, that the market will
remain available throughout the period during which the Rights may be
exercised, or as to the price at which the Rights will trade. See "The Rights
Offering - Methods of Transferring Rights."
Amendments and Termination
- --------------------------
The Rights Offering may be extended, and its terms and conditions amended by
the Company, at the Company's option subject to the terms of the Standby
Purchase Agreement. See "The Standby Purchase Agreement". If the Company
materially amends the terms of the Rights Offering, a new definitive Prospectus
will be distributed to all Rights Holders who have theretofore exercised their
Rights and to all Rights Holders of record on the date of such amendment,
together with a form on which each exercising Rights Holder can consent to the
amended terms; any Rights Holder who has theretofore exercised any Rights, or
who exercises Rights within four (4) business days after the mailing of the new
definitive Prospectus, and who does not so consent within ten (10) business days
after the mailing of the amended definitive Prospectus and form of consent, will
be deemed to have cancelled such exercise and the Company will refund as soon as
practicable by mail the full amount of the Subscription Price theretofore paid
by such Rights Holder, without interest or deduction. Any completed Subscription
Certificate received by the Subscription Agent five (5) or more business days
after the date of the amendment will be deemed to constitute the consent of the
Rights Holder who completed such Subscription Certificate to the amended terms
of the Rights Offering.
The Company may terminate the Rights Offering under certain limited
circumstances at any time prior to the Expiration Date. See "The Standby
Purchase Agreement."
<PAGE>
<PAGE> 7
Persons Holding Shares, or Wishing to Exercise Rights, Through Others
- ----------------------------------------------------------------------
Persons holding shares of Common Stock, and receiving the Rights distributable
with respect thereto, through a broker, dealer, commercial bank, trust
company or other nominee, as well as persons holding certificates of Common
Stock personally who would prefer to have such institutions effect
transactions relating to the Rights on their behalf, should contact the
appropriate institution or nominee and request it to effect such transactions
for them. See "The Rights Offering - Exercise of Rights."
Procedures for Exercising Rights by Foreign Shareholders
- --------------------------------------------------------
Subscription Certificates will not be mailed to Rights Holders
whose addresses are outside the United States, but will be held by the
Subscription Agent for such Holders' accounts. To exercise or sell their Rights,
such Holders must notify the Subscription Agent prior to 11:00 a.m., New York
City local time, at least two NYSE trading days preceding the Expiration Date,
at which time (if no contrary instructions have been received) the Rights
represented thereby will be sold, subject to the Subscription Agent's ability to
find a purchaser. Any such sales will be at prevailing market prices. The
proceeds, if any, resulting from sales of Rights of Holders who addresses are
not known by the Subscription Agent or to whom delivery cannot be made will be
held by the Subscription Agent in a non-interest bearing account. The ability of
such Holders to exercise or sell Rights will expire on the Expiration Date. See
"The Rights Offering" - "Foreign and Certain Other Shareholders".
Issuance of Common Stock
- ------------------------
Certificates representing shares of Common Stock purchased pursuant to the
Subscription Privilege will be delivered to subscribers by mail as soon as
practicable after the Expiration Date. See "The Rights Offering - Subscription
Privilege."
Certain Federal Income Tax Consequences
- ---------------------------------------
For United States federal income tax purposes, Rights Holders generally will
not recognize taxable income in connection with the issuance to them or
exercise by them of Rights. Rights Holders may incur gain or loss upon the
sale of the Rights. See "The Rights Offering - Certain Federal Income
Tax Consequences."
Use of Proceeds
- ---------------
The Company anticipates that the proceeds from the Transaction will be
approximately $_______________. Such proceeds will be used by the Company
to reduce debt under the Company's Bank Credit Agreement and for other
corporate purposes, and to pay fees and expenses incurred in connection with the
Transaction. See "Use of Proceeds".
Subscription Agent
- ------------------
Mellon Bank, N.A., telephone number: (800) 777-3674; telecopy number:
(201) 296-4062.
Information Agent
- -----------------
Questions and requests for copies of applicable documents and for assistance
concerning the exercise or transfer of the Rights should be directed to
Georgeson & Company Inc. (the "Information Agent"). The Information Agent's
telephone number is (800) 223-2064.
<PAGE>
<PAGE> 8
The Standby Purchase Agreement
- ------------------------------
The Company has entered into the Standby Purchase Agreement with the
Purchasers and Investors. As of __________, 1994, the Purchasers and
Investors, together with their Affiliates, beneficially owned approximately 9.9%
of the outstanding Common Stock. A director of the Company is an Affiliate of
certain of the Purchasers. See "Security Ownership of Certain Persons." Pursuant
to the Standby Purchase Agreement, the Purchasers have agreed, subject to the
terms and conditions set forth therein, to purchase from the Company all
Underlying Shares subject to their Subscription Privilege and any and all
Remaining Shares. Pursuant to the Standby Purchase Agreement, the Purchasers and
Investors have agreed to certain conditions and restrictions with respect to
shares of Common Stock beneficially owned by them and their Affiliates. Pursuant
to the Standby Purchase Agreement, the Company has amended the Rights Agreement
by Amendment No. 2 and otherwise agreed, subject to the terms and conditions set
forth therein, for a period of approximately six years to, among other things,
take all actions necessary to permit, and not to take any action to interfere
with, Purchasers', Investors' and their Affiliates' acquisition or beneficial
ownership of Common Stock representing up to and including twenty percent (20%)
of the total voting power in the general election of directors of the Company
(subject to increase in certain circumstances, the "Percentage Limitation").
In addition, the Purchasers may acquire Rights from Rights Holders in the
open market or in privately negotiated transactions prior to the Expiration
Date. Following consummation of the Transaction, the Purchasers may, subject
to the Percentage Limitation, acquire additional shares of Common Stock and/or,
subject to the terms of the Standby Purchase Agreement, dispose of shares of
Common Stock. See "The Standby Purchase Agreement," "Description of Capital
Stock," "The Rights Agreement" and "Amendments to Rights Agreement."
Effect of Rights Offering on Stock Options
- ------------------------------------------
The Rights Offering will result in certain adjustments to the outstanding
stock options granted pursuant to the SPS 1988 Long Term Incentive Stock Plan
(the "Stock Plan"). Rights will be issued with respect to all shares
issued and outstanding as a result of the exercise of any such stock option
prior to the Record Date. See "The Rights Offering - Effect of the Rights
Offering on Stock Options".
Risk Factors
- ------------
FOR A DISCUSSION OF FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING WHETHER TO
EXERCISE OR SELL RIGHTS OR PURCHASE COMMON STOCK THROUGH THE RIGHTS OFFERING,
SEE "RISK FACTORS".
NYSE Symbol for Common Stock
- ----------------------------
The Common Stock of the Company is traded on the NYSE under the symbol "ST".
NYSE Symbol for the Rights
- --------------------------
The Rights will trade on the NYSE under the symbol "ST RT".
<PAGE>
<PAGE> 9
RISK FACTORS
Rights Holders and prospective investors should carefully consider the
specific risk factors set forth below as well as the other information set forth
in this Prospectus before deciding whether to exercise or sell Rights or
purchase shares of Common Stock through the Rights Offering.
CERTAIN COMPANY CONSIDERATIONS
Recent Losses
The Company has suffered substantial losses over the past two years. A
net loss was reported for 1993 of $31 million, or $6.07 per share, compared to a
net loss of $20.4 million, or $4.00 per share, in 1992. The loss in 1993 was
attributable to a pre-tax restructuring charge recorded by the Company of $32.4
million. The 1992 loss resulted from a pre-tax restructuring charge of $6.8
million and a change in accounting policies of $13.4 million. Sales in 1993 of
$319.1 million declined by $40.3 million, or 11.2 percent from 1992 amounts.
Fastener segment sales declined $35.7 million, or 13.6 percent, primarily due to
the effect of exchange rate changes which affected sales by $12 million and also
due to reduced shipments to the aerospace market. Materials segment sales
decreased by $4.6 million, or 4.8 percent, as the increased sales of magnetic
materials were offset by a greater decline in the sales of superalloys. The
Company's total debt to equity ratio was 87% at December 31, 1993, and 49% at
December 31, 1992. Total debt was $89.2 million at the end of 1993, up $18.8
million from the end of 1992. Because of these losses and existing financial
conditions, the Board of Directors suspended dividends to shareholders in
December 1993.
For the six month period ended June 30, 1994, the Company reported a
net loss of $440 thousand, or $.09 per share, compared to net earnings of $3
million, or $.59 per share, for the same period in 1993. The net loss for the
six months ended June 30, 1994 was attributable to unusual items which resulted
in a net charge of $3.5 million. This included a $6.6 million loss on disposal
of Ferre Plana, S.A., the Company's subsidiary in Barcelona, Spain and a $3.1
million credit for the reversal of reserves associated with the 1993 restructure
charge. Ferre Plana, S.A., which manufactured commodity industrial fasteners,
had lost $9.4 million since it was acquired in 1990, and would have incurred
additional losses and required a substantial cash investment in 1994. The
Company's total debt to equity ratio was 86% at June 30, 1994, compared to 87%
at December 31, 1993. Total debt was $91.6 million at June 30, 1994, an increase
of $2.4 million from the end of 1993.
Environmental Contingencies
The Company has been identified as a potentially responsible party by
various federal and state authorities for cleanup or removal of waste from
various disposal sites. As the scope of the Company's environmental liability
becomes more clearly defined, it is possible that additional reserves other than
those currently reflected in the Company's financial statements may be
necessary. However, management does not expect the overall costs of environmen-
tal remediation, which will be incurred over an extended period of time, to
have a material effect on the financial position of the Company.
<PAGE>
<PAGE> 10
No Assurance as to Market Development
The market outlook for the Company's various businesses currently is
mixed. The aerospace industry is projected to remain depressed. The domestic
automotive market is strong, and the Company expects growth in its automotive
products business. While the Company hopes to strengthen its position in the
marketplace in all of its major business segments and to explore potential
acquisitions, there can be no assurance of its success in these regards.
Competition
The Company's business is highly competitive. Competition is based
primarily on technology, price, service, product quality and performance. The
Company believes that it has a favorable competitive position based upon its
high-quality product performance and service to its customers, supported by its
commitment to research and development. The Company competes with other
companies having greater financial resources than the Company.
Dividend Policy
The Company does not anticipate the payment of dividends on its Common
Stock in the foreseeable future. Currently, the Company's Bank Credit Agreement
prohibits the payment of dividends.
Concentration of Ownership
Ownership of a substantial number of shares of Common Stock is
concentrated in a relatively small number of holders. Sales of or offers to sell
a substantial number of shares of Common Stock, or the perception by investors,
investment professionals and securities analysts of the possibility of such
sales, could adversely affect the market for, and price of, the Common Stock.
CERTAIN OFFERING CONSIDERATIONS
Dilution
The Rights entitle Rights Holders to purchase shares of the Common
Stock at a price below the market price of the Common Stock immediately prior to
the commencement of the Rights Offering. Shareholders who exercise their Rights
will preserve their proportionate interest in the equity ownership and voting
power of the Company. Shareholders who do not exercise their Rights in full will
experience a decrease in their proportionate interest in the equity ownership
and voting power of the Company. Shareholders who do not exercise or sell their
Rights will relinquish any value inherent in the Rights. Assuming the issuance
of all of the shares of Common Stock offered in the Transaction (estimated for
these purposes at 515,000 shares using an assumed exercise price of $25.00 per
share), purchasers of the Common Stock offered hereby will experience immediate
dilution of $3.86 per share, which represents the difference between the assumed
exercise price of $25.00 per share and the net tangible book value per share at
June 30, 1994 of $21.14 per share on a pro forma basis. See "Unaudited Pro Forma
Consolidated Capitalization."
<PAGE>
<PAGE> 11
Market Considerations
There can be no assurance that the market price of the Common Stock
will not decline during the subscription period or that, following the issuance
of the Rights and the sale of the Underlying Shares upon exercise of Rights or
the Remaining Shares pursuant to the Standby Purchase Agreement, a subscribing
Rights Holder will be able to sell shares of Common Stock purchased in the
Rights Offering at a price equal to or greater than the Subscription Price. THE
ELECTION OF A RIGHTS HOLDER TO EXERCISE RIGHTS IN THE RIGHTS OFFERING IS
IRREVOCABLE. MOREOVER, UNTIL CERTIFICATES OF SHARES OF COMMON STOCK ARE
DELIVERED, SUBSCRIBING RIGHTS HOLDERS MAY NOT BE ABLE TO SELL THE SHARES OF
COMMON STOCK THAT THEY HAVE PURCHASED IN THE RIGHTS OFFERING. CERTIFICATES
REPRESENTING SHARES OF COMMON STOCK PURCHASED PURSUANT TO THE SUBSCRIPTION
PRIVILEGE WILL BE DELIVERED BY MAIL AS SOON AS PRACTICABLE FOLLOWING THE
EXPIRATION DATE. THE UNDERLYING SHARES HAVE BEEN PREVIOUSLY LISTED ON THE NYSE
AND ARE CURRENTLY HELD BY THE COMPANY AS TREASURY SHARES.
No interest will be paid to Rights Holders on funds delivered to the
Subscription Agent pursuant to the exercise of Rights pending delivery of the
Underlying Shares.
There is currently no public market for the Rights. The Company intends
to trade the Rights on the NYSE (although there can be no assurance that any
market for the Rights will develop or as to the ability of Rights Holders to
sell their Rights prior to the Expiration Date or as to the price at which their
Rights may be sold).
SIGNIFICANT SHAREHOLDERS
As of April 1, 1994, several entities or individuals owned 5% or more
of the Company's Common Stock, including the Purchasers, Investors and their
Affiliates who beneficially owned approximately 9.9% of the Company's Common
Stock as of such date. See "Security Ownership of Certain Persons." Pursuant to
the Standby Purchase Agreement, the Purchasers have agreed to exercise all of
their Subscription Privileges and have agreed to purchase all of the Remaining
Shares. In the event that other shareholders do not exercise any of their
Rights, the Purchasers, Investors and their Affiliates could own up to an
aggregate of approximately 18% of the Common Stock. In addition, the Purchasers,
Investors and their Affiliates may (i) purchase Rights in the open market and in
privately negotiated transactions prior to the Expiration Date, (ii) subject to
the Percentage Limitation, acquire additional shares of Common Stock following
the consummation of the Transaction, and/or (iii) subject to the terms of the
Standby Purchase Agreement, dispose of shares of Common Stock. See "The Standby
Purchase Agreement" and "Description of Capital Stock - Rights Agreement -
Amendments to Rights Agreement."
<PAGE>
<PAGE> 12
The Standby Purchase Agreement provides, among other things, that
during the term of the Standby Purchase Agreement, the Company will generally
exercise all authority under applicable law to cause an Affiliate of certain of
the Purchasers (Eric M. Ruttenberg, currently a Director of the Company, or
another designee of the Purchasers and Investors), to be elected to the
Company's Board of Directors and to be appointed to the Audit, Executive,
Directors and Executive Compensation and Stock Option Committees of the Board.
In the event the number of Directors is increased beyond eight (8) members, the
Purchasers and Investors are entitled to nominate an individual to fill the
first of each three (3) additional Board member positions. See "The Standby
Purchase Agreement."
ANTI-TAKEOVER PROVISIONS
Certain agreements, including the Rights Agreement and the Standby
Purchase Agreement, contain provisions that may have the effect of delaying,
deferring or preventing a change in control of the Company. In addition, the
Company's Amended and Restated Certificate of Incorporation and Bylaws contain
certain provisions that may have an anti-takeover effect. See "Description of
Capital Stock - Authorized Capital Stock - Preferred Stock" and "Description of
Capital Stock - Anti-Takeover Provisions".
The Board of Directors has taken all action necessary to provide that
the restrictions on business combinations set forth in Subchapter F of
Chapter 25 of the Pennsylvania Business Corporation Law will not apply to any
of the Purchasers, Investors or their Affiliates as a result of the
Purchasers', Investors' or their Affiliates' acquisition or beneficial
ownership of Common Stock not in excess of the Percentage Limitation.
See "The Standby Purchase Agreement."
<PAGE>
<PAGE> 13
USE OF PROCEEDS
The Company anticipates that the proceeds available to the Company from
the Transaction will be approximately $__________________. Such proceeds will be
used by the Company to reduce debt under the Company's Bank Credit Agreement and
for other corporate purposes, and to pay fees and expenses incurred in
connection with the Transaction.
PRO FORMA CONSOLIDATED CAPITALIZATION TABLE
The following table sets forth the consolidated capitalization of the
Company at June 30, 1994 and the pro forma consolidated capitalization of the
Company as of that date adjusted to give effect to the Transaction. The table
assumes, solely for purposes of presenting pro forma consolidated capitaliza-
tion, the purchase of 515,000 Underlying Shares at a Subscription Price of
$25.00 per share and expenses of the Transaction in the amount of $300,000. The
table further assumes that all of the net proceeds of the Rights Offering
will be applied to reduce debt under the Bank Credit Agreement which provides
for a revolving credit line, that would enable the Company to re-borrow
amounts repaid.
<TABLE>
<CAPTION>
SPS TECHNOLOGIES
PRO FORMA CONSOLIDATED CAPITALIZATION TABLE AT JUNE 30, 1994
($000's)
ACTUAL IMPACT AS ADJUSTED
------ ------ -----------
<S> <C> <C> <C>
LONG-TERM DEBT $ 86,554 (12,575) 73,979
=============================================
SHAREHOLDERS' EQUITY
Preferred stock, par value
$1 per share,
Authorized 400,000 shares,
Issued none
Common stock, par value
$1 per share,
Authorized 30,000,000 shares,
Issued 6,361,606 shares 6,362 6,362
Additional paid-in-capital 59,726 8,414 68,140
Retained earnings 60,076 60,076
Minimum pension liability (1,780) (1,780)
Common stock in treasury,
at cost ($8.08)
1,253,458 shares as of 6/30/94 (10,132) 4,161 (5,971)
515,000 shares issued as part of Transaction
738,458 shares after Transaction
Cumulative translation adjustments
(7,948) (7,948)
---------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 106,304 12,575 118,879
=============================================
TOTAL SHARES OUTSTANDING 5,108,148 515,000 5,623,148
BOOK VALUE PER SHARE $20.81 NA $21.14
EXERCISE PRICE NA NA $25.00
DILUTION PER SHARE $3.86
- ------------------------
</TABLE>
<PAGE>
<PAGE> 14
THE RIGHTS OFFERING
The Rights
The Company is distributing transferable Rights directly to the record
holders of its outstanding Common Stock as of the close of business on the
Record Date. The Company will distribute, at no cost to such record holders, one
(1) Right for each ten (10) shares of Common Stock held on the Record Date. The
Rights will be evidenced by transferable Subscription Certificates.
No fractional Rights or cash in lieu thereof will be issued or paid,
and the number of Rights distributed to each holder of Common Stock will be
rounded up to the nearest whole number of Rights. No Subscription Certificate
may be divided in such a way as to permit a holder of Common Stock to receive a
greater number of Rights than the number to which such Subscription Certificate
entitles such holder, except that a depository, bank, trust company or
securities broker or dealer holding shares of Common Stock on the Record Date
for more than one beneficial owner may, upon proper showing to the Subscription
Agent, exchange its Subscription Certificate to obtain a Subscription
Certificate for the number of Rights to which all such beneficial owners in the
aggregate would have been entitled had each been a record holder of Common Stock
on the Record Date. The Company reserves the right to refuse to issue any such
Subscription Certificate if such issuance would be inconsistent with the
principle that each beneficial owner's holdings will be rounded up to the
nearest whole Right.
Because the number of Rights distributed to each record holder will be
rounded up to the nearest whole number, beneficial owners of Common Stock who
are also the record holders of their shares might receive more Rights under
certain circumstances than beneficial owners of Common Stock who are not also
the record holders of their shares and who do not obtain (or cause the record
owner of their shares of Common Stock to obtain) a separate Subscription
Certificate with respect to the shares beneficially owned by them, including
shares held in an investment advisory or similar account. To the extent that
record holders of Common Stock or beneficial owners of Common Stock who obtain a
separate Subscription Certificate receive more Rights, they will be able to
subscribe for more shares pursuant to the Subscription Privilege.
Expiration Date
The Rights will expire at 5:00 p.m., New York City local time, on
_____________, 1994, subject to extension by the Company. After the Expiration
Date, unexercised Rights will be null and void. The Company will not be
obligated to honor any purported exercise of Rights received by the Subscription
Agent after the Expiration Date, regardless of when the documents relating to
such exercise were sent, except pursuant to the "Guaranteed Delivery Procedures"
described below.
Subscription Privilege
Each Right will entitle the holder thereof to receive, upon payment of
the Subscription Price, one Underlying Share. Certificates representing
Underlying Shares purchased pursuant to the Subscription Privilege will be
delivered by mail to subscribers as soon as practicable after the exercise by
the Rights Holder of their Subscription Privileges and receipt of payment
therefor by the Subscription Agent.
Subscription Price
The Subscription Price is $_______, in cash, per Underlying Share
purchased pursuant to the Subscription Privilege or the Standby Purchase
Agreement. See "Determination of Subscription Price" and "The Standby Purchase
Agreement."
<PAGE>
<PAGE> 15
Exercise of Rights
Rights may be exercised by delivery to the Subscription Agent on or
prior to 5:00 p.m., New York City local time, on the Expiration Date, the
properly completed and executed Subscription Certificate evidencing such Rights
with any required signature guaranties, together with payment in full of the
Subscription Price for each Underlying Share to be purchased pursuant to the
Subscription Privilege. Such payment in full must be by check or bank draft
drawn upon a U.S. bank or postal, telegraphic or express money order payable to
"Mellon Bank, N.A. as Subscription Agent". The Subscription Price will be deemed
to have been received by the Subscription Agent only upon (i) clearance of any
uncertified check or (ii) receipt by the Subscription Agent of any certified
check or bank draft drawn upon a U.S. bank or of any postal, telegraphic or
express money order. IF PAYING BY UNCERTIFIED PERSONAL CHECK, PLEASE NOTE THAT
THE FUNDS PAID THEREBY MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR.
ACCORDINGLY, RIGHTS HOLDERS WHO WISH TO PAY THE SUBSCRIPTION PRICE BY MEANS OF
UNCERTIFIED PERSONAL CHECK ARE URGED TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE OF
THE EXPIRATION DATE TO ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS BY SUCH
DATE AND ARE URGED TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK
OR MONEY ORDER.
The address to which the Subscription Certificates and payment of the
Subscription Price should be delivered is:
If by mail: Mellon Bank, N.A.
P.O. Box 768
Midtown Station
New York, NY 10018
Attention: REORG Dept.
If by hand: Mellon Bank, N.A.
c/o Mellon Securities Transfer Services
120 Broadway, 13th Floor
New York, NY
If by overnight courier: Mellon Bank, N.A.
85 Challenger Road
Overpeck Centre
Richfield Park, NJ 07660
The Subscription Agent's telephone number is (800) 777-3674 and its
telecopy number is (201) 296-4062.
If a Rights Holder wishes to exercise Rights, but time will not permit
such holder to cause the Subscription Certificate(s) evidencing such Rights to
reach the Subscription Agent on or prior to the Expiration Date, such Rights may
nevertheless be exercised if all of the following conditions (the "Guaranteed
Delivery Procedures") are met:
(a) such holder has caused payment in full of the Subscription
Price for each Underlying Share being purchased pursuant to the
Subscription Privilege to be received (in the manner set forth
above) by the Subscription Agent on or prior to the Expiration
Date;
<PAGE>
<PAGE> 16
(b) the Subscription Agent receives, on or prior to the Expiration
Date, a notice of guaranteed delivery (a "Notice of Guaranteed
Delivery"), substantially in the form provided with the
"Instructions as to Use of Subscription Certificates" (the
"Instructions") distributed with the Subscription Certificates,
from a member firm of a registered national securities exchange or
a member of the National Association of Securities Dealers, Inc.,
from a commercial bank or trust company having an office or
correspondent in the United States, or from a financial
institution acceptable to the Subscription Agent (each an
"Acceptable Institution"), stating the name of the exercising
Rights Holder, the number of Rights represented by the
Subscription Certificate(s) held by such exercising Rights Holder,
the number of Underlying Shares being purchased pursuant to the
Subscription Privilege and guaranteeing the delivery to the
Subscription Agent of any Subscription Certificate(s) evidencing
such Rights within five NYSE trading days following the date of
the Notice of Guaranteed Delivery; and
(c) the properly completed Subscription Certificate(s) evidencing
the Rights being exercised, with any required signature
guaranties, is received by the Subscription Agent within five NYSE
trading days following the date of the Notice of Guaranteed
Delivery relating thereto. The Notice of Guaranteed Delivery may
be delivered to the Subscription Agent in the same manner as
Subscription Certificates at the address set forth above, or may
be transmitted to the Subscription Agent by telegram or facsimile
transmission (telecopy no. 201-296-4062). Additional copies of the
form of Notice of Guaranteed Delivery are available upon request
from the Subscription Agent or the Information Agent, whose
addresses and telephone numbers are set forth below.
If an exercising Rights Holder does not indicate the number of Rights
being exercised, or does not forward full payment of the aggregate Subscription
Price for the number of Rights that the Rights Holder indicates are being
exercised, then the Rights Holder will be deemed to have exercised the
Subscription Privilege with respect to the maximum number of Rights that may be
exercised for the aggregate Subscription Price payment delivered by the Rights
Holder. To the extent that the aggregate Subscription Price payment delivered by
the Rights Holder exceeds the product of the Subscription Price multiplied by
the number of Rights evidenced by the Subscription Certificates delivered by the
Rights Holder (such excess being the "Subscription Excess"), the Subscription
Excess paid by that Rights Holder shall be returned as soon as practicable by
mail, without interest or deduction.
Unless a Subscription Certificate (i) provides that Underlying Shares
to be issued pursuant to the exercise of Rights represented thereby are to be
delivered to the holder of such Rights or (ii) is submitted for the account of
an Acceptable Institution, signatures on such Subscription Certificate must be
guaranteed by a participant in the Securities Transfer Agents Medallion Program,
the Stock Exchange Medallion Signature Program or the New York Stock Exchange,
Inc. Medallion Signature Program.
Persons who hold shares of Common Stock for the account of others,
such as brokers, trustees or depositaries for securities (each, a "Nominee
Holder") should notify the respective beneficial owners of such shares as soon
as possible to ascertain such beneficial owners' intentions and to obtain
instructions with respect to the Rights. If the beneficial owner so instructs,
the Nominee Holder of such Right should complete Subscription Certificates and
submit them to the Subscription Agent with the proper payment. In addition,
beneficial owners of Common Stock or Rights held through such a Nominee Holder
should contact the Nominee Holder and request the Nominee Holder to effect
transactions in accordance with the beneficial owners' instructions.
<PAGE>
<PAGE> 17
The instructions accompanying the Subscription Certificates should be
read carefully and followed in detail. DO NOT SEND SUBSCRIPTION CERTIFICATES TO
THE COMPANY.
THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE
SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE ELECTION AND RISK OF
THE RIGHTS HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT SUCH CERTIFICATES
AND PAYMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE DELIVERY TO
THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO 5:00 P.M., NEW YORK
CITY LOCAL TIME, ON THE EXPIRATION DATE. BECAUSE UNCERTIFIED PERSONAL CHECKS MAY
TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, YOU ARE STRONGLY URGED TO PAY, OR
ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR CASHIER'S CHECK OR MONEY ORDER.
All questions concerning the timeliness, validity, form and
eligibility of any exercise of Rights will be determined by the Company, whose
determinations will be final and binding. The Company in its sole discretion may
waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine, or reject the purported exercise
of any Right. Subscriptions will not be deemed to have been received or accepted
until all irregularities have been waived or cured within such time as the
Company determines in its sole discretion. Neither the Company nor the
Subscription Agent will be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Certificates or
incur any liability for failure to give such notification.
Any questions or requests for assistance concerning the method of
exercising Rights or requests for additional copies of this Prospectus, the
Instructions as to Use of Subscription Certificates or the Notice of Guaranteed
Delivery should be directed to the Information Agent, Georgeson & Company Inc.,
at its address set forth under "Information Agent" below.
No Revocation
ONCE A RIGHTS HOLDER HAS EXERCISED THE SUBSCRIPTION PRIVILEGE, SUCH
EXERCISE OR SUBSCRIPTION MAY NOT BE REVOKED BY SUCH RIGHTS HOLDER.
<PAGE>
<PAGE> 18
Methods of Transferring Rights
The Rights may be purchased or sold through usual investment channels.
It is anticipated that they will trade on the NYSE until the close of business
on the last NYSE trading day preceding the Expiration Date.
The Rights evidenced by a single Subscription Certificate may be
transferred in whole by endorsing the Subscription Certificate for transfer in
accordance with the accompanying instructions. A portion of the Rights evidenced
by a single Subscription Certificate (but not fractional Rights) may be
transferred by delivering to the Subscription Agent a Subscription Certificate
properly endorsed for transfer, with instructions to register such portion of
the Rights evidenced thereby in the name of the transferee (and to issue a new
Subscription Certificate to the transferee evidencing such transferred Rights).
In such event, a new Subscription Certificate evidencing the balance of the
Rights will be issued to the Rights Holder or, if the Rights Holder so
instructs, to an additional transferee.
The Rights evidenced by a Subscription Certificate may be sold, in
whole or in part (but not with respect to fractional Rights), through the
Subscription Agent by delivering to the Subscription Agent the Subscription
Certificate properly executed for sale by the Subscription Agent. If only a
portion of the Rights evidenced by a single Subscription Certificate is to sold
by the Subscription Agent, that Subscription Certificate must be accompanied by
instructions setting forth the action to be taken with respect to the Rights
that are not to be sold. Promptly following the settlement of such sale, the
Subscription Agent will send the Rights Holder a check for the proceeds from the
sale of any Rights sold, less any applicable brokerage commissions, taxes and
other direct expenses of sales. Upon settlement, a Rights Holder for which the
Subscription Agent sells Rights on any given day will receive for each of its
rights so sold the net weighted average sale price of all Rights sold on that
day by the Subscription Agent. The net weighted average sale price will be
calculated by dividing the total proceeds from all sales realized by the
Subscription Agent on the day of sale by the total number of Rights sold by the
Subscription Agent on that day and then subtracting a pro-rata portion of any
applicable brokerage commissions, taxes and other expenses. No assurance,
however, can be given that a market will develop for the Rights, that the
Subscription Agent will be able to sell any Rights, or as to the price at which
the Rights will trade. The Company will pay the fees charged by the Subscription
Agent for effecting such sales. Orders to sell Rights must be received by the
Subscription Agent at or prior to 11:00 a.m., New York City local time, at least
two NYSE trading days preceding the Expiration Date. The Subscription Agent's
obligation to execute orders is subject to its ability to find buyers. If the
Rights cannot be sold by the Subscription Agent by 5:00 p.m., New York City
local time, one NYSE trading day preceding the day on which the Expiration Date
occurs, they will be returned promptly by mail to the Rights Holder or, if so
arranged, held by the Subscription Agent for pickup.
Rights Holders wishing to transfer all or a portion of their Rights
(but not fractional Rights) should allow a sufficient amount of time prior to
the Expiration Date for (i) the transfer instructions to be received and
processed by the Subscription Agent, (ii) a new Subscription Certificate to be
issued and transmitted to the transferee or transferees with respect to
transferred Rights, and to the transferor with respect to retained Rights, if
any, and (iii) the Rights evidenced by such new Subscription Certificates to be
exercised or sold by the recipients thereof. Neither the Company nor the
Subscription Agent shall have any liability to a transferee or transferor of
Rights if Subscription Certificates are not received in time for exercise or
sale prior to the Expiration Date.
<PAGE>
<PAGE> 19
Except for the fees charged by the Subscription Agent, and the fee
paid to the Purchasers pursuant to the Standby Purchase Agreement (each of which
will be paid by the Company as described below), all commissions, fees and other
expenses (including brokerage commissions and transfer taxes) incurred in
connection with the purchase, sale or exercise of Rights will be for the account
of the transferor of the Rights, and none of such commissions, fees or expenses
will be paid by the Company or the Subscription Agent.
Procedures for DTC Participants
The Company anticipates that the exercise of the Subscription
Privilege may be effected through the facilities of the Depository Trust
Company.
Amendment and Termination
Subject to the terms of the Standby Purchase Agreement, the Company
reserves the right to extend the Expiration Date and to amend the terms and
conditions of the Rights Offering, regardless of whether the amended terms are
more or less favorable to Rights Holders. If the Company amends the terms of the
Rights Offering, the Registration Statement of which this Prospectus forms a
part will be amended, and a new definitive Prospectus will be distributed to all
Rights Holders who have theretofore exercised Rights and to holders of record of
unexercised Rights on the date the Company amends such terms. In addition, all
Rights Holders who have theretofore exercised Rights, or who exercise Rights
within four (4) business days after the mailing of the new definitive
Prospectus, shall be provided with a form of Consent to Amended Rights Offering
Terms, on which they can confirm their exercise of Rights and their
subscriptions under the terms of the Rights Offering as amended; any Rights
Holder who has theretofore exercised any Rights, or who exercises Rights within
four (4) business days after the mailing of the new definitive Prospectus, and
who does not return such Consent within ten (10) business days after the mailing
of such Consent by the Company will be deemed to have canceled his or her
exercise of Rights, and the full amount of the Subscription Price theretofore
paid by such Rights Holder will be returned as soon as possible by mail, without
interest or deduction. Any completed Subscription Certificate received by the
Subscription Agent five (5) or more business days after the date of the
amendment will be deemed to constitute the consent of the Rights Holder who
completed such Subscription Certificate to the amended terms.
The Company also reserves the right to terminate the Rights Offering
prior to the Expiration Date for the following reasons: (i) a suspension of
trading in the Company's Common Stock by the NYSE or suspension of trading of
securities generally on the NYSE, (ii) a "stop order" issued by the SEC
suspending the effectiveness of the Company's Registration Statement covering
the Underlying Shares, (iii) entry of a judgment or order by a court or other
governmental authority restraining, prohibiting or materially interfering with
the Rights Offering and (iv) subject to compliance with NYSE policies, the
Company's determination that continuation of the Rights Offering would not be in
the Company's best interest. Such termination would be effected by the Company
by giving oral or written notice of such termination to the Subscription Agent
and making a public announcement thereof. If the Rights Offering is so
terminated, the Subscription Price will be returned as soon as possible by mail
to exercising Rights Holders, without interest or deduction. Neither the
Company nor any selling Rights Holders will have any obligation to a purchaser
of Rights, whether such purchase was made through the Subscription Agent or
otherwise, in the event that the Rights Offering is terminated.
<PAGE>
<PAGE> 20
Determination of Subscription Price
The Company believes that the Subscription Price reflects the
Company's objective of achieving the maximum net proceeds obtainable from the
Rights Offering while providing the holders of Common Stock with an opportunity
to make an additional investment in the Company, and thus avoid a dilution of
their ownership position in the Company.
In determining the structure of the Rights Offering and establishing
the Subscription Price, the Board of Directors considered such factors as the
alternatives available to the Company for raising capital (including the costs
of such alternatives), the market price of the Common Stock, the business
prospects for the Company, the general condition of the securities markets at
the time of the meeting of the Board of Directors at which the Rights Offering
was approved, a review of the subscription prices relative to market prices in a
number of rights offerings and negotiations with Purchasers and their
Affiliates. There can be no assurance, however, that the market price of the
Common Stock will not decline during the subscription period to a level equal to
or below the Subscription Price, or that, following the issuance of the Rights
and of the Common Stock upon exercise of Rights, a subscribing Rights Holder
will be able to sell shares purchased in the Rights Offering at a price equal to
or greater than the Subscription Price.
Subscription Agent
The Company has appointed Mellon Bank, N.A. as Subscription Agent for
the Rights Offering. The Subscription Agent's addresses, which are the
addresses to which Subscription Certificates, subscription payments and a
Notice of Guaranteed Delivery must be delivered, are:
If by mail: Mellon Bank, N.A.
P.O. Box 768
Midtown Station
New York, NY 10018
Attention: REORG Dept.
If by hand: Mellon Bank, N.A.
c/o Mellon Securities Transfer Services
120 Broadway, 13th Floor
New York, NY If by overnight courierMellon Bank, N.A.
85 Challenger Road
Overpeck Centre
Richfield Park, NJ 07660
The Subscription Agent's telephone number is (800) 777-3674 and its
telecopy number is (201) 296-4062.
The Company will pay the fees and expenses of the Subscription Agent
and has also agreed to indemnify the Subscription Agent from certain liability
which it may incur in connection with the Rights Offering.
<PAGE>
<PAGE> 21
Information Agent
The Company has appointed Georgeson & Company Inc. as Information
Agent for the Rights Offering. Any questions or requests for additional copies
of this Prospectus, the Instructions or the Notice of Guaranteed Delivery may
be directed to the Information Agent at the address and telephone number below:
Georgeson & Company Inc.
Wall Street Plaza
New York, NY 10005
The Information Agent's telephone number is (800) 232-2064.
The Company will pay the fees and expenses of the Information Agent
and has also agreed to indemnify the Information Agent from certain liabilities
which it may incur in connection with the Rights Offering.
Effect of the Rights Offering on Stock Options
In accordance with the Company's Stock Plan, a committee consisting of
at least three directors appointed by the Board of Directors (the "Stock Plan
Committee"), may make appropriate adjustments to the (i) total number of shares
of Common Stock of the Company for which Options, Discounted Options or
Restricted Shares may be granted or Options or Discounted Options exercised (as
those terms are defined in the Stock Plan on file with the Company), (ii) number
of shares subject to each outstanding Option, Discounted Option or Restricted
Share award, and (iii) Option prices or Discounted Option prices per share as a
result of the change in the number of outstanding shares of Common Stock
resulting from the Rights Offering. The Stock Plan Committee shall have the sole
discretion to make such adjustments.
Pursuant to the foregoing, additional options in an aggregate amount
equal to the same percentage (approximately 10%) as the Underlying Shares bear
to the total number of issued and outstanding shares of Common Stock as of the
Record Date will be granted on the Closing Date under the Standby Purchase
Agreement with respect to all options outstanding under the Stock Plan as of the
Record Date.
<PAGE>
<PAGE> 22
Rights will be issued with respect to all shares issued and
outstanding under employee options exercised prior to the Record Date.
Foreign and Certain Other Shareholders
Subscription Certificates will not be mailed to Rights Holders or to
any subsequent transferees of any Subscription Certificates whose addresses are
outside the United States or who have APO or FPO addresses or whose addresses
are in states in which the Company has not filed a registration statement
pursuant to the relevant state "blue sky" laws, but will be held by the
Subscription Agent for such Holders' accounts. To exercise or sell their Rights,
such Holders must notify the Subscription Agent prior to 11:00 a.m., New York
City local time, at least two NYSE trading days preceding the Expiration Date,
at which time (if no contrary instructions have been received) the Rights
represented thereby will be sold, subject to the Subscription Agent's ability to
find a purchaser. Any such sales will be at prevailing market prices. See "The
Rights Offering - Method of Transferring Rights." If the Rights can be sold, a
check for the proceeds from the sale of any Rights, less any applicable
brokerage commissions, taxes and other expenses, will be remitted to such
Holders by mail. The proceeds, if any, resulting from sales of Rights of Holders
who addresses are not known by the Subscription Agent or to whom delivery cannot
be made will be held by the Subscription Agent in a non-interest bearing
account. Any amount remaining unclaimed on the second anniversary of the
Expiration Date will be turned over by the Subscription Agent to the Company
and, after such date, any person claiming such proceeds will, as an unsecured
general creditor of the Company, be able to look only to the Company for payment
thereof. The ability of such Holders to exercise or sell Rights will expire on
the Expiration Date.
No Board Recommendation
An investment in the Common Stock must be made pursuant to each Right
Holder's or prospective investor's evaluation of its, his or her best interests.
Accordingly, the Board of Directors of the Company does not make any
recommendation to any Rights Holder or prospective investor regarding the
exercise of its, his or her Rights. The Board of Directors does, however, urge
the Rights Holders to either exercise or sell their Rights prior to the
Expiration Date.
THE STANDBY PURCHASE AGREEMENT
The Company has entered into the Standby Purchase Agreement, dated as
of ____________, 1994, with the Purchasers and Investors, pursuant to which the
Purchasers have agreed, subject to certain terms and conditions specified in
such agreement and summarized below, to acquire from the Company, at the
Subscription Price, all Underlying Shares subject to their Subscription
Privilege and any and all Remaining Shares.
As of July 31, 1994, the Purchasers, Investors and their Affiliates
beneficially owned 504,300 shares of Common Stock, or approximately 9.9% of the
outstanding Common Stock of the Company. Pursuant to the Rights Offering, the
Purchasers will purchase [_______] shares of Common Stock upon exercise of their
Subscription Privilege. In addition, Purchasers may purchase Rights in the open
market and in privately negotiated transactions prior to the Expiration Date. If
no other Rights Holders were to exercise their Subscription Privileges, the
Purchasers, Investors and their Affiliates would beneficially own approximately
18% of the Common Stock outstanding immediately after consummation of the
Transaction.
<PAGE>
<PAGE> 23
Pursuant to the Standby Purchase Agreement, the Purchasers will
receive from the Company, in addition to certain other contractual benefits
described below, the Standby Fee.
The respective obligations of the Company and the Purchasers and
Investors under the Standby Purchase Agreement are conditioned upon, among other
things (i) all consents, approvals, permits and authorizations required to be
obtained from, and all filings required to be made with, any governmental
authority, having been obtained or made; (ii) the effectiveness of the
Registration Statement and no stop order suspending the effectiveness of the
Registration Statement of which this Prospectus forms a part having been issued,
and no proceeding for that purpose having been instituted or threatened; (iii)
no litigation relating to or challenging the Rights Offering, the Standby
Purchase Agreement, Amendment No. 2 or the Registration Rights Agreement having
been instituted or threatened, no injunction relating thereto having been issued
and no proceeding for such an injunction having been instituted or threatened;
and (iv) the Rights Offering having been completed.
The obligations of Purchasers and Investors to consummate the
transactions contemplated by the Standby Purchase Agreement are also subject to
the fulfillment or waiver of the following conditions (i) the representations
and warranties of the Company being true and correct and the Company having
performed in all material respects its covenants and agreements contained in the
Standby Purchase Agreement; (ii) the terms of the Rights Offering contained in
this Prospectus not being in material conflict with the provisions of the
Standby Purchase Agreement; (iii) the Purchasers having received the Standby
Fee; and (iv) the continued listing of the Underlying Shares and the Remaining
Shares on the NYSE.
The obligations of the Company to consummate the transactions
contemplated by the Standby Purchase Agreement are also subject to the
fulfillment or waiver of certain conditions, including the representations and
warranties of the Purchasers being true and correct and the Purchasers having
performed in all material respects their covenants and agreements contained in
the Standby Purchase Agreement.
The Standby Purchase Agreement may be terminated by either the
Purchasers and Investors or by the Company upon the occurrence of (i) a
suspension of trading in the Company's Common Stock on the NYSE or a suspension
of trading of securities generally on the NYSE; or (ii) a "stop order" issued by
the Commission suspending the effectiveness of the Registration Statement
covering the Underlying Shares; or (iii) entry of a judgment by any court or
governmental authority restraining, prohibiting or materially adversely
interfering with the Rights Offering, the Stock Purchase Agreement, the
Registration Rights Agreement or Amendment No. 2; (iv) a material default or
breach with respect to the due and timely performance of the agreements or the
representations and warranties contained in the Standby Purchase Agreement, and
such material default or breach has not been, or is not susceptible of being
with diligent efforts, cured prior to the Expiration Date, or (v) if the Rights
Offering has not been completed by the Expiration Date.
<PAGE>
<PAGE> 24
The Standby Purchase Agreement further provides that it may be
terminated by the Purchasers and Investors upon the occurrence of a material
adverse change in the business, financial condition, liabilities or results of
operations of the Company.
In addition, the Company may terminate the Standby Purchase Agreement
if the Board of Directors determines, in the exercise of its fiduciary
responsibilities, that consummation of the Rights Offering would not be in the
best interest of the Company. As of the date hereof, the Board of Directors has
determined that the consummation of the Rights Offering and the Transaction
would be in the best interest of the Company.
Unless otherwise terminated upon the terms and conditions contained in
the Standby Purchase Agreement, the Standby Purchase Agreement will terminate
upon the earliest to occur of (i) six years from the date of the Standby
Purchase Agreement, (ii) the date upon which the Purchasers, Investors and their
Affiliates no longer beneficially own Common Stock representing in excess of 10%
of the Total Voting Power (as defined below), and (iii) removal of or failure to
re-elect the Purchasers', Investors' and their Affiliates' designees to the
Board of Directors in certain circumstances contemplated by the Standby Purchase
Agreement.
There can be no assurance that all of the conditions to the Standby
Purchase Agreement will be satisfied or waived or that an event permitting
termination of the Standby Purchase Agreement will not occur.
The Company has agreed to indemnify the Purchasers, Investors and
their Affiliates against certain liabilities, including liabilities under the
Securities Act.
Pursuant to the Standby Purchase Agreement, the Company has agreed,
for a period of approximately six years, to amend the Rights Agreement as
necessary to permit the Purchasers, Investors and their Affiliates to acquire or
beneficially own Common Stock representing up to the Percentage Limitation. The
Percentage Limitation is subject to increase in certain circumstances, including
in the event that the Company permits (e.g., amends the Rights Agreement to
permit) any other person to acquire or beneficially own Common Stock
representing in excess of eighteen percent (18%) or more of the total voting
power in the general election of directors of the Company ("Total Voting
Power"), in which case, the Percentage Limitation will generally automatically
increase to 110% of the percentage to Total Voting Power that such other person
is permitted to acquire or beneficially own, except that in the case of an
increase in beneficial ownership of Common Stock to more than 30% of the Total
Voting Power (the "Gabelli Group Increase") by the group known as GAMCO
Investors/Gabelli Funds, Inc., as constituted for purposes of the most recent
Schedule 13D filed by such group, the Percentage Limitation shall be increased
pro rata to the Gabelli Group Increase. The Company has further agreed, for a
period of approximately six years, not to take any action to prevent or
interfere with Purchasers', Investors' and their Affiliates' ability to acquire,
or their rights with respect to shares of Common Stock representing not in
excess of the Percentage Limitation.
The Standby Purchase Agreement further provides for the Company's
Board of Directors to have taken all action necessary and appropriate to provide
that the restrictions on "business combinations" (as defined in Section 2554 of
Subchapter F of Chapter 25 of the Pennsylvania Business Corporation Law) do not
apply to the Purchasers, Investors or their Affiliates in the event that the
Purchasers, Investors or their Affiliates acquire or beneficially own shares of
Common Stock in excess of 20% of the Total Voting Power but not in excess of the
Percentage Limitation.
<PAGE>
<PAGE> 25
Under the terms of the Standby Purchase Agreement, the Purchasers,
Investors and their Affiliates have agreed for a period of approximately six (6)
years to a broad range of restrictions prohibiting such activities as soliciting
proxies; making shareholder proposals, except as contemplated by the Standby
Purchase Agreement, engaging in efforts to acquire stock in, or assets of the
Company (by purchase, merger, or otherwise); seeking changes in the composition
of the Board of Directors; challenging the Rights Agreement; seeking to waive
any term of the Standby Purchase Agreement, or aiding or assisting any third
party to accomplish any of the prohibited activities.
The restrictions on the Purchasers, Investors and their Affiliates
imposed by the Standby Purchase Agreement will be automatically waived (A) if
any person publicly makes a bona fide offer to acquire a majority of the
outstanding Common Stock and the Company's Board of Directors does not oppose
such offer within 120 days after such offer is made and remains outstanding, or
(B) if any person makes a bona fide offer to acquire a majority of the
outstanding Common Stock and either (i) the Company's Board of Directors
determines to accept such offer, or (ii) the Company's Board of Directors
determines to seek competing offers or proposes to effect or negotiate with any
person any form of business combination or similar transaction with the Company,
or proposes in response to such bona fide offer, a recapitalization, share
repurchase, extraordinary dividend or other similar extraordinary transaction
involving the Company, its securities or assets, to the extent necessary to
allow the Purchasers, Investors or Affiliates thereof to make a competing offer
to the Company's Board of Directors to acquire the Company or its securities or
its assets. The Purchasers, Investors and their Affiliates may not take any
action pursuant to the foregoing sentence that requires public disclosure of
such bona fide offer or competing offer prior to the public disclosure of such
bona fide offer by either the Company or the offeror thereof.
The Purchasers have also agreed that, for a period of approximately
six years, all shares of Common Stock which are directly or indirectly
beneficially owned by the Purchasers, Investors and their Affiliates, other than
those shares of Common Stock which represent voting power of up to ten percent
(10%) of the Total Voting Power (i) will be voted in accordance with the
recommendation of the majority of the Company's Board of Directors on all
matters submitted to the shareholders for a vote, including the election of
Directors of the Company, and (ii) notwithstanding clause (i) above, with
respect to any matter which, pursuant to the Company's Bylaws, requires the
approval of an 80% super majority of the Company's shareholders, will be voted
pro rata in accordance with the vote of the Company's other shareholders.
Purchasers and Investors have further agreed, for a period of
approximately six (6) years, not to sell or transfer shares of Common Stock
representing in excess of 10% of Total Voting Power in a single transaction to
any one person, unless such person agrees to be bound by the terms of the
Standby Purchase Agreement. The restrictions on disposition will not apply to:
(i) the tender or disposition of Common Stock in connection with a tender offer,
merger, consolidation or other extraordinary transaction involving the Company,
(ii) the disposition of Common Stock in connection with a merger, consolidation,
liquidation or dissolution or the death or incapacity of any Purchaser, Investor
or Affiliate thereof, provided that the person to whom such shares are disposed
agrees in writing to be bound by the terms of the Standby Purchase Agreement,
(iii) the disposition of Shares to any Purchaser, Investor or Affiliate thereof,
provided that such person agrees to be bound by the terms of the Standby
Purchase Agreement or (iv) dispositions pursuant to the exercise of registration
rights provided in the Registration Rights Agreement. In addition, a Purchaser,
Investor or Affiliate thereof is permitted to pledge shares of Common Stock to
an institutional lender for money borrowed.
<PAGE>
<PAGE> 26
During the term of the Standby Purchase Agreement, the Company has
agreed, except as otherwise provided in the Standby Purchase Agreement, to cause
Eric M. Ruttenberg (or another designee) to be elected to the Company's Board of
Directors and in addition, to the Audit, Executive, Directors and Executive
Compensation and Stock Option Committees of the Board. In the event the Board of
Directors is expanded beyond eight (8) members, the Purchasers and Investors are
entitled to nominate an individual to fill the first out of each three (3) Board
member positions in excess of eight (8) Board member positions (i.e. the ninth,
twelfth, etc.).
The foregoing is a summary of the terms of the Standby Purchase
Agreement and agreements related thereto. Such summary does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Standby Purchase Agreement and the agreements related thereto, copies of which
have been filed as exhibits to this Registration Statement and are incorporated
herein by reference. See "Incorporation of Certain Documents by Reference."
DESCRIPTION OF CAPITAL STOCK
Authorized Capital Stock
The Company's Amended and Restated Articles of Incorporation provide
for authorized capital stock consisting of 30,000,000 shares of Common Stock,
$1.00 par value, of which, as of July 31, 1994, 5,108,148 shares are issued and
outstanding and 400,000 shares of Preferred Stock, $1.00 par value, none of
which are issued and outstanding. In addition to the issued and outstanding
Common Stock, the Company retains, as of July 31, 1994, 1,253,458 shares of
Common Stock in its treasury. The Company will issue the Underlying Shares and
the Remaining Shares out of the shares of Common Stock retained in its treasury.
Common Stock
General. The holders of the Common Stock are entitled to one vote per
share held of record on all matters submitted to a vote of shareholders.
However, in all elections of directors, the Company's Bylaws provide for
cumulative voting. Subject to the relative rights, limitations and preferences
of the holders, if any of Preferred Stock, holders of Common Stock are entitled,
among other things, (i) to share ratably in dividends if, when and as declared
by the Board of Directors out of funds legally available therefor, and (ii) in
the event of the liquidation, dissolution or winding-up of the Company, to share
ratably in the distribution of assets legally available therefor, after payment
of debts and expenses. The holders of Common Stock have no preemptive rights to
subscribe for additional shares of the Company.
Trading Market. The Common Stock is traded on the NYSE under the
symbol ST.
<PAGE>
<PAGE> 27
Registration Rights Agreement. The Company has entered into the
Registration Rights Agreement with the Purchasers and Investors, dated as of
___________, 1994 pursuant to which the Company, subject to certain terms and
conditions has granted two (2) demand registration rights and unlimited
piggyback registration rights to the Purchasers and Investors pursuant to which
the Purchasers and Investors may require the Company to cause shares of Common
Stock beneficially owned by them to be registered for public sale under the
Securities Act. The demand registration rights will not be exercisable for a
period of three (3) years from ______________, 1994, but the piggyback
registration rights will be currently exercisable. All such registration rights
will terminate on _______________, 2002. A demand registration may only be
effected upon the written request for registration of registrable securities by
Purchasers and Investors who beneficially own 30% or more of the then
registrable securities, and then only if such Purchasers and Investors request
the registration of registrable securities having a market value of $5,000,000
or more. The Company is required to pay all registration expenses in connection
with any registration effected pursuant to the Registration Rights Agreement.
The Purchasers and Investors are required to pay all underwriting discounts and
commissions attributable to the registrable securities sold by the Purchasers
and Investors pursuant to any registration right and the fees and expenses of
any advisor(s) other than the fees and expenses of the one counsel to Purchasers
and Investors whose fees and expenses are expressly included in the registration
expenses required to be paid by the Company. The Company will be entitled to
postpone for a reasonable period of time (in no event more than 90 days) the
filing of any demand registration statement otherwise required to be prepared
and filed by it (A) if the Company would be required to disclose in such demand
registration statement the existence of any fact relating to a material business
transaction not otherwise required to be disclosed or (B) if a registration at
the time and on the terms requested would materially adversely affect any
proposed equity financing by the Company that had been contemplated by the
Company prior to its receipt of the request for registration notice. Any sales
of substantial amounts of Common Stock pursuant to the registration rights
described above could adversely affect the prevailing market price of the Common
Stock.
Preferred Stock
General. There are 400,000 shares of Preferred Stock, none of which
are issued or outstanding. The Board of Directors is authorized to issue any and
all shares of the Preferred Stock, from time to time, in one or more series with
such privileges, terms and conditions as they may determine in their sole
discretion without shareholder approval. The ability to issue such Preferred
Stock could have an anti-takeover effect. Of the authorized Preferred Shares,
46,000 are reserved by the Company for issuance pursuant to the terms of the
Rights Agreement and an additional 5,000 have been reserved for issuance in
connection with the Rights Offering. See "Rights Agreement" and "Amendments to
Rights Agreement."
<PAGE>
<PAGE> 28
Rights Agreement
On November 11, 1988 the Board of Directors of the Company declared a
dividend distribution of one right for each outstanding share of Common Stock to
shareholders of record at the close of business on November 21, 1988. Each such
right entitles the registered holder to purchase from the Company a unit
consisting of one one-hundredth of a share (a "Unit") of the Preferred Shares,
or a combination of securities and assets of equivalent value, at a purchase
price of $125.00 per Unit (the "Purchase Price"), subject to adjustment (the
"Preferred Share Rights"). The Purchase Price may be paid in cash or, if the
Company permits, by delivery of Common Stock having a value at the time of
exercise equal to the Purchase Price. The description and terms of the Preferred
Share Rights are set forth in the Rights Agreement between the Company and
Mellon Bank (East) N.A., as Rights Agent, dated as of November 11, 1988, and
amended by Amendment No. 1. thereto dated as of January 22, 1991, and Amendment
No. 2 thereto dated as of ____________, 1994.
The ownership of the Preferred Share Rights are evidenced by the
Common Stock certificates representing shares then outstanding, and no separate
Preferred Share Rights Certificates have been distributed. Certificates
representing the Underlying Shares will also represent a like number of
Preferred Share Rights. The Preferred Share Rights will separate from the Common
Stock and a Distribution Date will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 10% or more of the outstanding Common Stock
(the "Stock Acquisition Date") unless such acquisition occurred in a tender or
exchange offer determined by the Board of Directors to be fair, or (ii) the
close of business on such date as may be fixed by the Board of Directors, which
date shall not be more than 65 days following the commencement of a tender offer
or exchange offer that would result in a person or group beneficially owning 10%
or more of the outstanding Common Stock.
Amendments to Rights Agreement
Pursuant to the Standby Purchase Agreement, the Company has agreed,
for a period of approximately six years, to amend the Rights Agreement as
necessary to permit the Purchasers, Investors and their Affiliates to acquire or
beneficially own Common Stock representing up to the Percentage Limitation. The
Percentage Limitation is subject to increase in certain circumstances, including
in the event that the Company permits (e.g., amends the Rights Agreement to
permit) any other person to acquire or beneficially own Common Stock
representing in excess of eighteen percent (18%) or more of the Total Voting
Power in which case, the Percentage Limitation will generally automatically
increase to 110% of the percentage to Total Voting Power that such other person
is permitted to acquire or beneficially own, except that in the case of a
Gabelli Group Increase, the Percentage Limitation shall be increased pro rata to
the Gabelli Group Increase. The Company has further agreed, for a period of
approximately six years, not to take any action to prevent or interfere with
Purchasers', Investors' and their Affiliates' ability to acquire, or their
rights with respect to, shares of Common Stock representing not in excess of the
Percentage Limitation.
The foregoing description of the Rights Agreement and Amendments to
Rights Agreement are summaries only. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the Rights
Agreement and Amendments to Rights Agreement, copies of which have been filed as
exhibits to the Registration Statement and are incorporated herein by reference.
See "Incorporation of Certain Documents by Reference."
<PAGE>
<PAGE> 29
Anti-Takeover Provisions
The Company's Bylaws contain several provisions intended to limit the
possibility of a takeover of the Company. In addition to providing for a
classified Board of Directors, such that only one-third of the Board of
Directors is elected each year, the Company's Bylaws require an 80%
supermajority vote of shareholders to approve certain extraordinary transactions
(such as a merger, liquidation or sale of substantially all the assets of the
Company) and certain amendments to the Company's Bylaws.
The Company's Bylaws provide that the Company shall not be subject to
the provisions of (i) Subchapter E (Control Transactions), (ii) Subchapter G
(Control-Share Acquisitions), (iii) Subchapter I (Severance Compensation for
Employees Terminated Following Certain Control-Share Acquisitions) and (iv)
Subchapter J (Business Combination Transactions - Labor Contracts), of Chapter
25 of the Pennsylvania Business Corporation Law of 1988. Although the Company
has not opted out of Subchapter F (Business Combinations) of Chapter 25 of the
Pennsylvania Business Corporation Law of 1988, the Board of Directors has taken
all action necessary to provide that the provisions of Subchapter F will not
apply to any of the Purchasers, Investors or their Affiliates as a result of the
Purchasers', Investors' or their Affiliates' acquisition or beneficial ownership
of shares of Common Stock representing 20% or more of the Total Voting Power,
but not in excess of the Percentage Limitation. See "The Standby Purchase
Agreement".
Transfer Agent and Registrar
The Company's Transfer Agent and Registrar for the Common Stock is:
Mellon Bank, N.A.
c/o Mellon Securities
Transfer Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
<PAGE>
<PAGE> 30
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock is listed on the NYSE under the symbol "ST". The
following table sets forth the high and low sales prices of the Common Stock as
reported in the NYSE Composite Tape for the periods indicated.
Dividend
High Low Declared
Fiscal Year Ended December 31, 1992 ---- --- --------
First Quarter ........................ $ 29.50 $ 24.75 $ 0.32
Second Quarter ....................... 29.13 23.25 0.32
Third Quarter ........................ 26.50 19.75 0.32
Fourth Quarter ....................... 22.13 19.00 0.32
Fiscal Year Ended December 31, 1993
First Quarter ........................ 24.75 20.00 0.32
Second Quarter ....................... 28.00 24.00 0.32
Third Quarter ........................ 29.75 26.38 0.32
Fourth Quarter ....................... 30.13 15.75 -0-
Fiscal Year Ended December 31, 1994
First Quarter ........................ 24.50 18.75 -0-
Second Quarter ....................... 27.38 21.50 -0-
Third Quarter (through
_____________, 1994) _____ _____ _____
On ___________________, 1994 the closing price of the Common Stock was
_______ per share. As of __________________, 1994, there were approximately
_________ holders of record of the Common Stock.
The Company does not anticipate the payment of dividends on the Common
Stock in the foreseeable future. Future declarations of dividends on the Common
Stock will depend upon, among other factors, future earnings, the operating and
financial condition of the Company, the Company's capital requirements and
general business conditions. Presently, the Company's Bank Credit Agreement
prohibits the payment of dividends.
<PAGE>
<PAGE> 31
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN PERSONS
As of July 31, 1994, the following persons were known by the Company to be the
beneficial owners of more than 5% of the voting securities of the Company:
- ---------------------------------------------------------------------------------------------
Name and Address Amount and Nature of Beneficial
of Beneficial Owner Ownership of Shares of Common Stock Percent of Class
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Gabelli Funds, Inc., 1,436,400(a) 28.1%
GAMCO Investors, Inc.,
Gabelli & Company, Inc. and
Mario J. Gabelli
One Corporate Center
Rye, NY 10580-1434
Tinicum Enterprises, Inc., 504,300(b) 9.9%
Tinicum Investors, L.P.,
RIT Capital Partners plc,
J. Rothschild Holdings plc,
J. Rothschild Capital
Management Limited,
St. James Place Capital plc, and
Putnam L. Crafts, Jr.
c/o Tinicum Enterprises, Inc.
900 Stewart Avenue
Garden City, NY 11530
Anne Hallowell Miller 310,099(c) 6.1%
c/o Stacey W. McConnell
MacElree, Harvey, Gallagher &
Featherman, Ltd.
P.O. Box 660
West Chester, PA 19381-0660
Pinnacle Associates Ltd. 286,000(d) 5.6%
666 Fifth Avenue
14th Floor
New York, NY 10103
Howard T. Hallowell, III 264,340(e) 5.2%
c/o Stacey W. McConnell
MacElree, Harvey, Gallagher &
Featherman, Ltd.
P.O. Box 660
West Chester, PA 19381-0660
<FN>
- --------------------------------------------------------------------------------------------------------------------------
(a)Based on information supplied by the named entities in a joint filing on Schedule 13D made on January 6, 1994 with the
Securities and Exchange Commission. According to such filing, the named entities held sole, shared or no voting and
dispositive power over the shares as follows: Gabelli Funds, Inc. - 169,500 shares (sole voting and dispositive power),
GAMCO Investors, Inc. - 1,148,800 shares (sole voting and dispositive power) and 104,700 shares (no voting and sole
dispositive power) and Gabelli & Company, Inc. - 6,800 shares (shared voting and dispositive power). Mr. Mario J. Gabelli
is the majority shareholder of Gabelli Funds, Inc. and individually owns 6,600 shares (sole voting and dispositive power) of
the Company's Common Stock.
(b)Based on the information supplied by the named entities in a joint filing on Schedule 13D made on October 10, 1991 with the
Securities and Exchange Commission. According to such filing, the named entities held sole, shared or no voting and
dispositive power over the shares as follows: Tinicum Enterprises, Inc. - 214,000 shares (sole voting and dispositive power);
Tinicum Investors, L.P. - 73,904 shares (sole voting and dispositive power); RIT Capital Partners plc (RIT) - 132,311 shares
(shared voting and dispositive power); J. Rothschild Holdings plc (no voting or dispositive power); J. Rothschild Capital
Management Limited (JRCML) - 132,311 shares (shared voting and dispositive power); St. James's Place Capital plc (no
voting or dispositive power); and Putnam L. Crafts, Jr. - 84,085 shares (sole voting and dispositive power). The filing
indicates that pursuant to a discretionary management agreement between RIT and JRCML, JRCML serves as the investment
manager of RIT's investment portfolio and pursuant to such agreement has the authority on behalf of RIT's investment
portfolio and pursuant to such agreement has the authority on behalf of RIT to vote and dispose of RIT's shares. Eric M.
Ruttenberg, a director of the Company, is affiliated with Tinicum Enterprises, Inc. and Tinicum Investors, L.P.
(c)Based on information supplied by Mrs. Miller in a filing on Schedule 13D made on August 21, 1989, with the Securities and
Exchange Commission and modified subsequently by a letter to the Company dated March 22, 1994. According to such
information, the shareholdings indicated by Mrs. Miller include 3,883 shares held in a fiduciary capacity in which she has a
beneficial interest and shared voting and dispositive power, and 306,216 shares held by Mrs. Miller as to which she has sole
voting and dispositive power. The amount of shares held and percent of ownership does not include 64,906 shares held by
Hallowell Foundation, established in 1956 by H. Thomas Hallowell, Jr., of which the Company is informed Mrs. Miller is a
trustee.
(d)Based on information supplied by Pinnacle Associates Ltd. in a filing on Schedule 13G made on February 11, 1992 with the
Securities and Exchange Commission. According to such filing, the named entity held sole voting power over 258,500
shares; shared voting power over 27,500 shares; sole dispositive power over 284,600 shares; and shared dispositive power
over 1,400 shares.
(e)Based on information supplied by Mr. Hallowell to the Company. According to such information, the shareholdings
indicated by Mr. Hallowell include 245 shares held in a fiduciary capacity in which he has a beneficial interest and shared
voting and dispositive power, and 264,095 shares held by Mr. Hallowell as to which he holds sole voting and dispositive
power. The amount of shares held and percent of ownership shown does not include 64,906 shares held by the Hallowell
Foundation established in 1956 by H. Thomas Hallowell, Jr., of which the Company is informed Mr. Hallowell is a trustee.
Mr. Hallowell has disclaimed beneficial ownership of such shares.
</TABLE>
<PAGE>
<PAGE> 32
Information pertaining to the voting securities of the Company
beneficially owned, as of July 31, 1994, by each director, by the Chief
Executive Officer and the four other most highly compensated executive officers,
and by the group consisting of such persons and the Company's other executive
officers (the "Group") is set forth below. This information has been supplied in
each instance by the named individuals.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Name of Individual or Amount and Nature of Acquirable Percent of
Number of Persons Beneficial Ownership Within Class if More
in Group of Common Stock(a) 60 Days(b) Than 1% Titles
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles W. Grigg 10,000 0 -- Chairman and Chief
Executive Officer,
Director
Howard T. Hallowell, III 264,340 0 5.2% Director
John Francis Lubin 110 1,265 -- Director
Paul F. Miller, Jr. 11,000 2,530 -- Director
Eric M. Ruttenberg 0(c) 1,702 -- Director
Raymond P. Sharpe 0 0 -- Director
Harry J. Wilkinson 11,600 59,283 1.4% President and Chief
Operating Officer,
Director
Aaron Nerenberg 2,670 19,002 -- Vice President, General
Counsel and Secretary
John P. McGrath 2,676 26,444 -- Vice President, Corporate
Services
John M. Morrash 95 11,000 -- Treasurer and Assistant Secretary
All Directors & Executive
Officers as a Group
(12 persons) 303,791 147,535 8.6%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The individuals named in the table or included in the Group each
exercise sole voting and dispositive power over the shares owned by
them except for 5,621 shares held by certain members of the Group, over
which such members have shared voting and dispositive power.
(b) Represents shares which may be acquired within 60 days of July 31, 1994
through the exercise of stock options under the Company's SPS 1988
Long Term Incentive Stock Plan.
(c) Eric M. Ruttenberg is affiliated with Tinicum Enterprises, Inc.
("Enterprises") and Tinicum Investors, L.P. ("Investors") which have
direct beneficial ownership of 214,000 and 73,944 shares of Common
Stock, respectively. Based on understandings with certain other
beneficial owners of shares of Common Stock as set forth in Schedule
13D filed on October 10, 1991 with the Securities and Exchange
Commission with respect to such shares, Enterprises and Investors may
be deemed to have indirect beneficial ownership of an additional
216,396 shares of Common Stock, directly owned by such other beneficial
owners. Mr. Ruttenberg disclaims beneficial ownership of any shares of
Common Stock beneficially owned directly or indirectly by Enterprises,
Investors or such other beneficial owners.
<PAGE>
<PAGE> 33
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain anticipated federal
income tax consequences under present law to holders of Common Stock upon the
issuance (the "Issuance") of Rights and to Rights Holders upon exercise and
disposition of the Rights. This discussion is based on the provisions of the
Internal Revenue Code of 1986, as amended (the "Tax Code"), final, temporary and
proposed Treasury regulations thereunder, and administrative and judicial
interpretations thereof, all as in effect as of the date hereof and all of which
are subject to change (possibly on a retroactive basis). Legislative, judicial
or administrative changes or interpretations could alter or modify the tax
discussion set forth below. This discussion dose not purport to deal with all
aspects of federal income taxation that may be relevant to a particular Rights
Holder in light of such Rights Holder's personal investment circumstances or to
certain types of Rights Holders subject to special treatment under the federal
income laws (e.g., life insurance companies, tax exempt organizations, foreign
corporations and nonresident aliens). No attempt is made to consider any aspects
of state, local or foreign taxation. Finally, substantial uncertainties
resulting from the lack of definitive judicial or administrative authority and
interpretations apply to various tax issues addressed herein. The Company has
not sought, nor does it intend to seek, any rulings from the IRS relating to
such issues or any other issues.
EACH RIGHTS HOLDER IS URGED TO CONSULT SUCH RIGHTS HOLDER'S OWN TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE RIGHTS OFFERING WITH RESPECT
TO SUCH RIGHTS HOLDER'S OWN PARTICULAR TAX SITUATION, INCLUDING THE APPLICATION
AND EFFECT OF THE TAX CODE, AS WELL AS STATE, LOCAL AND FOREIGN INCOME AND OTHER
TAX LAWS.
Issuance of the Rights
Holders of Common Stock will not recognize taxable income, for federal
income tax purposes, in connection with the receipt of the Rights.
Basis and Holding Period of the Rights
Unless a shareholder elects otherwise (as provided in (ii) below), if
the fair market value of the Rights on the date of Issuance is less than 15% of
the fair market value (on the date of Issuance) of the Common Stock with respect
to which the Rights are received, the basis of the Rights received by a
shareholder as a distribution with respect to shareholder's Common Stock will be
zero. If, however, either (i) the fair market value of the Rights on the date of
Issuance is 15% or more of the fair market value (on the date of Issuance) of
the Common Stock with respect to which the Rights are received or (ii) the
shareholder elects, in his or her federal income tax return for the taxable year
in which the Rights are received, to allocate part of the basis of such Common
Stock to the Rights, then upon exercise or transfer of the Rights, the
shareholder will allocate such shareholder's basis in such Common Stock between
the Common Stock and the Rights in proportion to the fair market values of each
on the date of Issuance, except that, in either case, no allocation of basis
will be made to the Rights if the Rights expire unexercised. The holding period
of a shareholder with respect to the Rights received as a distribution on such
shareholder's Common Stock will include the shareholder's holding period for the
Common Stock with respect to which the Rights were issued. With respect to a
purchaser of Rights, the tax basis of such Rights will be equal to the purchase
price paid therefor and the holding period for such Rights will begin on the day
following the date of purchase.
Transfer of the Rights
Holders of Common Stock who sell the Rights received in the Issuance
prior to exercise will recognize gain or loss equal to the difference between
the sale proceeds and the basis of such shareholder, if any, in the Rights sold.
Such gain or loss will be capital gain or loss if gain or loss from a sale of
Common Stock held by such shareholder would be characterized as capital gain or
loss at the time of such sale. Any gain or loss recognized on a sale of Rights
acquired by purchase will be capital gain or loss if Common Stock would, if
acquired by the seller, be a capital asset in the hands of such seller.
<PAGE>
<PAGE> 34
Lapse of the Rights
Upon the lapse of any Rights received by Rights Holders on the
Issuance, such Rights Holders will not recognize any gain or loss, and no
adjustment will be made to the basis of the Common Stock, if any, owned by such
Rights Holders. Upon the expiration of any Rights purchased by purchasers of the
Rights, such purchasers will be entitled to a loss equal to their tax basis in
the Rights. Any loss recognized on the expiration of the Rights acquired by the
purchase will be a capital loss if Common Stock would, if acquired by the
seller, be a capital asset in the hands of such seller.
Exercise of the Rights; Basis and Holding Period of the
Common Stock Acquired through Exercise
Rights Holders will not recognize any gain or loss upon the exercise of
such Rights. The basis of the Common Stock acquired through the exercise of the
Rights will be equal to the sum of the Exercise Price therefor and any basis of
the Rights Holder in such Rights. The holding period for the Common Stock
acquired through exercise of the Rights will commence on the date the Rights are
exercised.
Net Operating Loss Carryovers of the Company
As of December 31, 1993, the Company had $29,310,000 of net operating
loss (NOLs) carryforwards available to reduce future taxable income. The net
operating loss carryforwards expire as follows: $650,000 in 1995, $1,470,000 in
1996, $1,900,000 in 1997, $2,290,000 in 1998 and $23,000,000 in 2008. The NOLs
are not currently subject to a use limitation under Section 382 of the Tax Code.
If the Company were to undergo an ownership change in the future, all
of the NOLs would become subject to an annual use limitation under Section 382
of the Tax Code. The annual limitation would be determined based on the fair
market value of the Company and the long-term tax exempt rate prescribed by the
IRS as of the change date. Generally, an ownership change in the Company would
occur if there has been a change in ownership of any one or more 5% shareholders
of more than fifty percentage points in the stock of the Company within three
years.
The Company does not expect the Rights Offering, in and of itself, to
result in an ownership change within the meaning of Section 382 of the Tax Code.
However, depending on the mix of Rights Holders exercising the Rights and the
number of shares purchased pursuant to the Standby Purchase Agreement, the
Rights Offering may result in increases in the ownership of one or more
shareholders of the Company of as much as ten percentage points, although the
increase is likely to be less than that amount. Under existing regulations,
direct public groups which currently own Common Stock will be deemed to exercise
the Rights Offering to purchase 50% of such direct public groups' current
percentage ownership interest in the Company (increased to the extent that the
Company has actual knowledge that additional Underlying Shares are purchased by
members of existing direct public groups and limited so that the number of
Underlying Shares actually issued to shareholders when added to the number of
Underlying Shares deemed issued to existing direct public groups does not exceed
the total number of Underlying Shares issued in the Rights Offering). Any
remaining Underlying Shares purchased by shareholders which are not 5%
shareholders will be deemed purchased by a new public group. Moreover,
transactions in the Common Stock independent of the Rights Offering (whether
before or after the Rights Offering) and transactions in the stock of corporate
shareholders of the Company are beyond the control of the Company and thus could
result in additional increases in the ownership of one or more 5% shareholders
and could trigger an ownership change.
With respect to limitation under the Tax Code's alternative minimum tax
system, only 90 percent of a corporation's annual alternative minimum taxable
income may be offset by NOLs. Therefore, the Company will be required to pay
alternative minimum tax at a minimum effective rate of two percent (10% of the
20% alternative minimum tax rate) in any taxable year during which they have
alternative minimum taxable income and their regular tax is fully offset by
NOLs. Payment of that alternative tax will entitle the Company to a credit
against regular tax liability in subsequent tax years.
<PAGE>
<PAGE> 35
Although the Company believes its calculations of the aggregate NOLs
and the NOLs subject to annual limitation are reasonable, the NOLs and the other
items on the Company's tax returns are subject to audit by the IRS. Due to the
lack of specific guidance on certain significant issues, the Company's position
with respect to some or all of the items making up the NOLs could be challenged
by the IRS. Also, the IRS could claim that the Company is not entitled to some
of the losses that make up a significant portion of the NOLs.
While the Company believes that it is justified in taking the positions
that is has taken with respect to the NOLs, the law with respect to the
treatment of some of the items making up the NOLs is unclear or unsettled. If
the IRS were to successfully disallow some or all of the Company's NOLs, the
Company would be able to offset less of its taxable income with NOLs and other
tax deductions. The partial or complete elimination of the Company's NOLs could
have an adverse impact on future projected cash flows of the Company.
LEGAL MATTERS
The validity of the issuance of the Rights and the Underlying Shares
has been passed upon for the Company by Aaron Nerenberg, General Counsel of the
Company.
EXPERTS
The consolidated balance sheets of SPS Technologies, Inc. at December
31, 1993 and 1992, the statements of consolidated operations, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1993, and the financial statement schedules included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993
incorporated by reference in this Prospectus have been incorporated herein in
reliance upon the report (which includes an explanatory paragraph regarding the
Company's change in method of accounting for income taxes and postretirement
benefits other than pensions in 1992) of Coopers & Lybrand, independent
accountants, given on the authority of that firm as experts in auditing and
accounting.
<PAGE>
<PAGE> 36
<TABLE>
<CAPTION>
=============================================================================== ===================================
<S> <C>
No person, salesperson or other individual has been authorized to give any
information or to make any representation in connection with this offering other
than those contained in this Prospectus and, if given or made, such information SPS TECHNOLOGIES, INC.
or representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation 515,000 Shares
of an offer to buy, any securities other than the registered securities to which Common Stock
it relates, or to any person in any jurisdiction where such an offer or Par Value $1.00 Per Share
solicitation will be unlawful. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that there has not been any change in the facts set forth in this Prospectus
or in the affairs of the Company since the date hereof or that the information
contained herein is correct as of any time subsequent to its date.
------------- ---------------
TABLE OF CONTENTS PROSPECTUS
---------------
Page
----
Available Information ................................
Incorporation of Certain Documents
by Reference.........................................
Prospectus Summary.....................................
Risk Factors...........................................
Use of Proceeds........................................
Capitalization.........................................
The Rights Offering....................................
The Standby Purchase Agreement......................... ____________, 1994
Description of Capital Stock...........................
Price Range of Common Stock and
Dividend Policy......................................
Security Ownership of Certain Persons..................
Certain Federal Income Tax Considerations..............
Legal Matters..........................................
Experts................................................
============================================================================== ===================================
</TABLE>
<PAGE>
<PAGE> 37
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission Registration Fee ...... $4,761.53
*Accounting fees and expenses
*Legal fees and expenses
*Blue Sky fees and expenses
*Purchasers' fee
*Subscription Agent fees and expenses
*Information Agent fees and expenses
*Printing and Engraving expenses
*Mailing expenses
*Miscellaneous expenses
Total expenses ........................................... $
=========
- -----------------------
*To be provided by amendment
All of the fees and other expenses of the Registration Statement will
be borne by the Company.
Item 15. Indemnification of Directors and Officers.
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the
Pennsylvania Business Corporation Law of 1988 (the "BCL") contains provisions
for mandatory and discretionary indemnification of a corporation's directors,
officers and other personnel, and related matters.
Under Section 1741, subject to certain limitations, a corporation has
the power to indemnify directors and officers under certain prescribed
circumstances against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
an action or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his being a
representative, director or officer of the corporation or serving at the request
of the corporation as a representative of another corporation, partnership,
joint venture, trust or other enterprise, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. Under Section 1743, indemnification
is mandatory to the extent that the officer or director has been successful on
the merits or otherwise in defense of any action or proceeding if the
appropriate standards of conduct are met.
Section 1742 provides for indemnification in derivative actions except
in respect of any claim, issue or matter as to which a person has been adjudged
to be liable to the corporation unless and only to the extent that the proper
court determines upon application that, despite the adjudication of liability
but in view of all circumstances of the case, the person is fairly and
reasonably entitled to indemnity for the expenses that the court deems proper.
<PAGE>
<PAGE> 38
Section 1744 provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation only
as authorized in the specific case upon a determination that the representative
met the applicable standard of conduct, and such determination will be made by
the board of directors (i) by a majority vote of a quorum of directors not
parties to the action or proceeding; (ii) if a quorum is not obtainable, of if
obtainable and a majority of disinterested directors so directs, by independent
legal counsel; or (iii) by the shareholders.
Section 1745 provides that expenses incurred by an officer, director,
employee or agent in defending a civil or criminal action or proceeding may be
paid by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation.
Section 1746 provides generally that, except in any case where the act
or failure to act giving rise to the claim for indemnification is determined by
a court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by Subchapter 17D of the
BCL shall not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, votes of shareholders or disinterested directors or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding that office.
Section 1747 also grants to a corporation the power to purchase and
maintain insurance on behalf of any director or officer against any liability
incurred by him or her in his or her capacity as officer or director, whether or
not the corporation would have the power to indemnify him or her against the
liability under Subchapter 17D of the BCL.
Sections 1748 and 1749 extend the indemnification and advancement of
expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental changes and to representatives serving as
fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, Subchapter 17D of the BCL, shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs and personal representative of such person.
For information regarding provisions under which a director or officer
of the Company may be insured or indemnified in any manner against any liability
which he or she may incur in his or her capacity as such, reference is made to
Article IX of the Company's Bylaws, which provides in general that the Company
shall indemnify its officers, directors, employees and agents to the fullest
extent authorized by law.
The Company has directors' and officers' liability insurance covering
certain liabilities incurred by the officers and directors of the Company in
connection with the performance of their duties.
<PAGE>
<PAGE> 39
Item 16. Exhibits and Financial Statement Schedules.
Exhibits
4.1 -- Amended and Restated Articles of Incorporation
(incorporated by reference to Form 10-K for the year
ended December 31, 1990)
4.2 -- Bylaws, as amended, effective April 29, 1993
(incorporated by reference to Form 10-Q for the quarter
ended March 31, 1993)
**4.3 -- Specimen of Common Stock Certificate
**4.4 -- Form of Subscription Certificate
*4.5 -- Form of Registration Rights Agreement between the
Company, the Purchasers and the Investors
4.6 -- Rights Agreement dated as of November 11, 1988,
between the Company and Mellon Bank (East), N.A.
(incorporated by reference to Form 8-K filed
November 17, 1988)
4.7 -- Amendment No. 1 to Rights Agreement dated January 22,
1991 (incorporated by reference to Form 8-K filed
January 25, 1991)
*4.8 -- Form of Amendment No. 2 to Rights Agreement
**4.9 -- Agreement between the Company and Mellon Bank, N.A.,
Subscription Agent
**5.1 -- Opinion of Aaron Nerenberg, General Counsel
to the Company, regarding legality of the securities
*10.1 -- Form of Standby Purchase Agreement
10.2 -- SPS 1988 Long Term Incentive Stock Plan as
amended, effective February 2, 1989 (incorporated
by reference to Exhibit 10a to the Annual Report
on Form 10-K for the year ended December 31, 1988)
**10.3 -- Agreement between the Company and Georgeson &
Company Inc., Information Agent
*23.1 -- Consent of Coopers & Lybrand L.L.P., independent public
accountants, as to the Company
*23.2 -- Awareness letter of Coopers & Lybrand L.L.P., independent
public accountants, as to the Company
**23.3 -- Consent of Aaron Nerenberg, General Counsel to the Company
(contained in his opinion to be filed as Exhibit 5.1 to
this Registration Statement)
*24.1 -- Powers of Attorney (included in signature page of the
Registration Statement)
- -----------------------
*Filed herewith.
**To be filed by Amendment.
<PAGE>
<PAGE> 40
Item 17. Undertakings.
A. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the Rights Offering.
<PAGE>
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Jenkintown, Commonwealth of Pennsylvania, on
August 26, 1994.
SPS TECHNOLOGIES, INC.
By: /S/ Aaron Nerenberg
---------------------------------
Aaron Nerenberg, Vice President,
General Counsel and Secretary
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
officers and Directors of SPS TECHNOLOGIES, INC., a Pennsylvania corporation, do
hereby constitute and appoint Charles W. Grigg, Harry J. Wilkinson and Paul F.
Miller, Jr. and each of them acting singly, as his true and lawful
attorney-in-fact for him and in his name, to sign, execute, deliver and file
with the Securities and Exchange Commission a Registration Statement on Form S-3
under the Securities Act of 1933, and any and all amendments thereto (including
post-effective amendments) and any and all certificates, letters, applications
or other documents connected therewith which such attorney-in-fact may deem
necessary or advisable for the registration under such Act of said corporation's
shares of common stock, $1.00 par value, and to take any and all action that the
said attorney-in-fact may deem necessary or desirable in order to carry out
fully the intent of the foregoing appointment, hereby ratifying and approving
the acts of said attorney-in-fact.
<PAGE>
<PAGE> 42
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/S/ Charles W. Grigg Chairman, Chief Executive August 26, 1994
- ------------------------------ Officer and Director
Charles W. Grigg
/S/ Harry J. Wilkinson President, Chief August 26, 1994
- ------------------------------ Operating Officer and Director
Harry J. Wilkinson
/S/ John P. McGrath Vice President Corporate August 26, 1994
- ------------------------------ Services
John P. McGrath
/S/ Aaron Nerenberg Vice President, General August 26, 1994
- ------------------------------ Counsel and Secretary
Aaron Nerenberg
/S/ John M. Morrash Treasurer and August 26, 1994
- ------------------------------ Assistant Secretary
John M. Morrash
/S/ William M. Shockley Controller August 26, 1994
- ------------------------------
William M. Shockley
/S/ Howard T. Hallowell, III Director August 26, 1994
- -----------------------------
Howard T. Hallowell, III
/S/ John Francis Lubin Director August 26, 1994
- -----------------------------
John Francis Lubin
/S/ Paul F. Miller, Jr. Director August 26, 1994
- -----------------------------
Paul F. Miller, Jr.
/S/ Eric M. Ruttenberg Director August 26, 1994
- -----------------------------
Eric M. Ruttenberg
/S/ Raymond P. Sharpe Director August 26, 1994
- -----------------------------
Raymond P. Sharpe
</TABLE>
<PAGE>
<PAGE> 43
EXHIBIT INDEX
Exhibit Page
Number Exhibit Description Number
------- ------------------- ------
4.1 -- Amended and Restated Articles of Incorporation
(incorporated by reference to Form 10-K for the year
ended December 31, 1990)
4.2 -- Bylaws, as amended, effective April 29, 1993
(incorporated by reference to Form 10-Q for the quarter
ended March 31, 1993)
**4.3 -- Specimen of Common Stock Certificate
**4.4 -- Form of Subscription Certificate
*4.5 -- Form of Registration Rights Agreement between the
Company, the Purchasers and the Investors
4.6 -- Rights Agreement dated as of November 11, 1988,
between the Company and Mellon Bank (East), N.A.
(incorporated by reference to Form 8-K filed
November 17, 1988)
4.7 -- Amendment No. 1 to Rights Agreement dated January 22,
1991 (incorporated by reference to Form 8-K filed
January 25, 1991)
*4.8 -- Form of Amendment No. 2 to Rights Agreement
**4.9 -- Agreement between the Company and Mellon Bank, N.A.,
Subscription Agent
**5.1 -- Opinion of Aaron Nerenberg, General Counsel
to the Company, regarding legality of the securities
*10.1 -- Form of Standby Purchase Agreement
10.2 -- SPS 1988 Long Term Incentive Stock Plan as
amended, effective February 2, 1989 (incorporated
by reference to Exhibit 10a to the Annual Report
on Form 10-K for the year ended December 31, 1988)
**10.3 -- Agreement between the Company and Georgeson &
Company Inc., Information Agent
*23.1 -- Consent of Coopers & Lybrand L.L.P., independent public
accountants, as to the Company
*23.2 -- Awareness letter of Coopers & Lybrand L.L.P., independent
public accountants, as to the Company
**23.3 -- Consent of Aaron Nerenberg, General Counsel to the Company
(contained in his opinion to be filed as Exhibit 5.1 to
this Registration Statement)
*24.1 -- Powers of Attorney (included in signature page of the
Registration Statement)
- -----------------------
*Filed herewith.
**To be filed by Amendment.
<PAGE>
<PAGE>
<PAGE> 1 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
Exhibit 4.5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of ____________, 1994, by and
among the parties listed on Schedule I hereto (each a
"Purchaser" and collectively the "Purchasers"), the
parties listed on Schedule II hereto (each an
"Investor" and collectively the "Investors") and SPS
Technologies, Inc., a Pennsylvania corporation (the
"Company");
W I T N E S S E T H:
WHEREAS, the Company, the Purchasers and the
Investors have entered into a Standby Purchase
Agreement, dated as of ________, 1994 (the "Standby
Purchase Agreement");
WHEREAS, in order to induce the Purchasers
and the Investors to enter into the Standby Purchase
Agreement the Company has agreed to provide the
registration rights set forth in this Agreement; and
WHEREAS, the Standby Purchase Agreement
requires that the Company, the Purchasers and the
Investors enter into this Agreement;
NOW, THEREFORE, in consideration of the
mutual agreements and covenants contained herein and
other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Certain Definitions.
Capitalized terms that are not otherwise
defined in this Agreement shall have the meanings
ascribed to them in the Standby Purchase Agreement. As
used in this Agreement, the following capitalized terms
shall have the meanings set forth below:
Affiliate. "Affiliate" shall have the
meaning ascribed to that term in Rule 12b-2 of the
Rules and Regulations under the Exchange Act.
Common Stock. "Common Stock" shall mean the
common stock, $1.00 par value per share, of the
Company.
Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
Holder. "Holder" shall mean any Purchaser,
any Investor, any Affiliate of any Purchaser or
Investor and any person to whom Registrable
Securities may be transferred by any Purchaser,
any Investor or any Affiliate of any Purchaser or
Investor.
<PAGE>
<PAGE> 2 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
Registrable Securities. "Registrable
Securities" shall mean any shares of Common Stock
Beneficially Owned by the Holders from time to
time (whether currently owned or hereafter
acquired), which in the aggregate represent a
percentage of the Total Voting Power not in excess
of the Percentage Limitation. The term
"Registrable Securities" shall also include any
securities issued in exchange for (including,
without limitation, by way of stock split or in
connection with a combination of shares,
recapitalization, merger, consolidation or
otherwise) or as a dividend on Registrable
Securities.
Registration Expenses. "Registration
Expenses" shall mean all expenses incident to the
Company's performance of or compliance with the
registration requirements set forth in this
Agreement including, without limitation, the
following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants
in connection with any registration of Registrable
Securities pursuant to this Agreement; (ii) the
reasonable fees, disbursements and expenses of one
counsel selected by the Holders in connection with
any registration of Registrable Securities
pursuant to this Agreement; (iii) all expenses in
connection with the preparation, printing and
filing of the registration statement, any
preliminary prospectus or final prospectus, any
other offering document and amendments and
supplements thereto and the mailing and delivering
of copies thereof to any underwriters and dealers;
(iv) the cost of printing or producing any
agreement(s) among underwriters, underwriting
agreement(s), blue sky or legal investment
memoranda, selling agreements and any other
documents in connection with the offering, sale or
delivery of the Registrable Securities pursuant to
this Agreement; (v) all expenses in connection
with the qualification of the Registrable
Securities for offering and sale under state
securities laws, including the fees and
disbursements of counsel for the underwriter(s) in
connection with such qualification and in
connection with any blue sky and legal investment
surveys; and (vi) any filing fees incident to the
registration of Registrable Securities pursuant to
this Agreement.
SEC. "SEC" shall mean the United Sates
Securities and Exchange Commission.
Securities Act. "Securities Act" shall mean
the Securities Act of 1933, as amended.
<PAGE>
<PAGE> 3 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
2. Securities Subject to this Agreement.
(a) The securities entitled to the benefits
of this Agreement are the Registrable Securities.
(b) As to any proposed offer or sale of
Registrable Securities, such securities shall cease to
be Registrable Securities when (i) a registration
statement with respect to the sale of such securities
shall have become effective under the Securities Act
and such securities shall have been disposed of
pursuant to such registration statement or (ii) such
securities shall have been transferred or sold to any
Person other than a Holder.
(c) Subject to Section 2(b), the demand
registration rights and the piggyback registration
rights provided under Sections 3 and 4 of this
Agreement shall terminate upon the earlier to occur of
(i) _________, 2002 and (ii) such time as counsel for
the Company shall have delivered to the Purchasers and
Investors an opinion (which counsel and opinion shall
be satisfactory to the Purchasers and Investors) that
all of the Registrable Securities Beneficially Owned by
the Purchasers, the Investors and their respective
Affiliates can be sold without restriction or
registration under the Securities Act.
3. Registration Request.
(a) From and after ____________, 1997 and
until the termination of this Agreement, upon the
written request for the registration of Registrable
Securities by Holders who Beneficially Own 30% of more
of the then Registrable Securities, the Company shall
use its best efforts to cause the Registrable
Securities specified in such request to be registered
(a "Demand Registration") as expeditiously as possible
under the Securities Act so as to permit the sale
thereof in the manner specified in such request and in
connection therewith prepare and file, on such
appropriate form as the Company in its reasonable
discretion shall determine, a registration statement (a
"Demand Registration Statement") under the Securities
Act to effect such Registration and seek to have such
Demand Registration Statement become effective as
promptly as practicable; provided, however, that each
such request shall (i) specify the number of shares of
Registrable Securities intended to be offered and sold,
(ii) express the present intention of the Holders to
offer or cause the offering of such Registrable
Securities for sale, (iii) describe the nature or
method of the proposed offer and sale thereof and (iv)
contain an undertaking by the Holders to provide all
such information and materials and to take all such
action as may be required in order to permit the
Company to comply with all applicable requirements of
the SEC and to obtain any desired acceleration of the
effective date of such Demand Registration Statement
and; provided, further, that no such request shall be
for the registration of Registrable Securities having a
market value that is less than $5,000,000 at the time
of such request.
<PAGE>
<PAGE> 4 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(b) Upon any Demand Registration Statement
becoming effective pursuant to this Section 3, the
Company shall use its best efforts to keep such Demand
Registration Statement current and effective for such
period of time as shall be necessary to effect the
distribution of Registrable Securities in the manner
specified by the Holders in the notice delivered to the
Company pursuant to Section 3(a); provided, however,
that such period shall not exceed nine months with
respect to a shelf registration or six months with
respect to any other registration.
(c) Notwithstanding the foregoing:
(i) the Company shall be entitled to
postpone for a reasonable period of time the
filing of any Demand Registration Statement
otherwise required to be prepared and filed
by it (A) if the Company would be required to
disclose in such Demand Registration
Statement the existence of any fact relating
to a material business transaction not
otherwise required to be disclosed or (B) if
a registration at the time and on the terms
requested would materially adversely affect
any proposed equity financing by the Company
that had been contemplated by the Company
prior to receipt of notice delivered to the
Company pursuant to Section 3(a); provided,
however, that in no event may the Company
delay the filing of a Demand Registration
Statement for more than 90 days; and
(ii) the Company shall not be obligated
to file a Demand Registration Statement
pursuant to this Section 3 during the 180-day
period following the effective date of any
other registration statement filed by the
Company in connection with an underwritten
primary or a secondary offering of its
securities.
(d) The obligation of the Company to effect
Demand Registrations in accordance with this Section 3
shall expire after two separate Demand Registration
Statements shall have become effective pursuant to this
Agreement. A Demand Registration Statement shall not
be deemed to have become effective for purposes of the
preceding sentence:
(i) if, after a Demand Registration
Statement has become effective such Demand
Registration Statement is interfered with by
any stop order, injunction or other order or
requirement of the SEC or other governmental
authority for any reason other than an act or
omission of the Holders requesting such
registration; or
(ii) if the Company voluntarily takes
any action that would result in the Holders
not being able to sell the Registrable
Securities covered by such Demand
Registration Statement during the period
specified in Section 3(b).
<PAGE>
<PAGE> 5 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(e) If the Company files a Demand
Registration Statement pursuant to this Section 3 for
an underwritten offering, the Company shall be entitled
to include in such Demand Registration Statement, as
part of such underwritten offering, additional shares
of the Common Stock to be sold for the account of the
Company or for any other Person(s), on the same terms
and conditions as the shares of Common Stock being sold
by the Holders; provided, however, that if the managing
underwriter(s) of such offering advises in writing that
in their opinion the inclusion in such Demand
Registration Statement of all Common Stock proposed to
be included by the Company and such other Person(s)
would result in a total number of shares of Common
Stock in excess of the number of shares of Common Stock
which can be sold in such offering or would
substantially affect the price that the Holders could
otherwise obtain in such offering, then the number of
shares of Common Stock to be included in such Demand
Registration Statement for the account of the Company
or such other Person(s) shall be reduced to such number
that the managing underwriter(s) advise could be
included in such underwriting without interfering with
the successful marketing and pricing of the Registrable
Securities proposed to be sold by the Holders.
(f) the Company shall pay all Registration
Expenses incurred in connection with any Demand
Registration effected pursuant to this Section 3. The
Holders shall pay all underwriting discounts and
commissions attributable to the Registrable Securities
sold by the Holders pursuant to Demand Registration
Statement and the fees and expenses of any advisor(s)
other than the one counsel whose fees and expenses are
expressly included in the Registration Expenses.
4. Incidental Registration
(a) If the Company at any time proposes to
register any of its securities ("Other Securities")
under the Securities Act (other than a registration on
Form S-4 or S-8 or an S-3 registration statement which
relates solely to a dividend reinvestment plan or
employee purchase plan), whether or not for sale for
its own account, it will each such time give written
notice to the Holders of its intention to do so at
least 30 days prior to the anticipated filing date of
the registration statement relating to such
registration. Such notice shall offer the Holders the
opportunity to include in such registration statement
(a "Piggyback Registration Statement") such number of
Registrable Securities as the Holders may request.
Upon the written request of the Holders made within 10
days after the receipt of the Company's notice (which
request shall specify the number of Registrable
Securities intended to be disposed of and the intended
method of disposition thereof), the Company will use
its best efforts to effect, in connection with the
registration of the Other Securities, the registration
(a "Piggyback Registration") under the Securities Act
of all Registrable Securities which the Company has
been so requested to register by the Holders, to the
extent required to permit the disposition (in
accordance with such intended method or methods thereof
as aforesaid) of the Registrable Securities to be so
<PAGE>
<PAGE> 6 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
registered; provided, that if at any time after giving
such written notice of its intention to register any
Other Securities and prior to the effective date of the
Piggyback Registration Statement, the Company shall
determine for any reason not to register the Other
Securities, the Company may, at its election, give
written notice of such determination to the Holders and
thereupon the Company shall be relieved of its
obligation to register such Registrable Securities in
connection with the registration of such Other
Securities (but not from its obligation to pay
Registration Expenses to the extent incurred n
connection therewith as provided in Section 4(f) or its
obligation to effect subsequent Piggyback Registrations
pursuant to this Section 4).
(b) If a Piggyback Registration is to be:
(i) an underwritten primary registration on
behalf of the Company, and the managing
underwriter(s) advise the Company in writing that
in their opinion the total number of securities
requested to be included in such registration
would exceed the number of securities which can be
sold in such offering or would substantially
affect the price that the Company could otherwise
obtain in such offering, the Company shall include
in such registration: (1) first, up to the full
number of securities the Company proposes to sell,
(2) second, up to the full number of securities
that the Holders propose to sell and (3) third, up
to the full number of securities that the managing
underwriter(s) advise can be so sold, allocated
pro rata among the holders of Other Securities
(other than the securities sold by the Company)
(the "Other Holders) who have also requested
registration on the basis of the number of
securities requested to be included therein by
such Other Holders; or
(ii) an underwritten secondary registration
on behalf of a holder of Common Stock demanding
registration (an "Initiating Holder"), and the
managing underwriter(s) advise the Company in
writing that in their opinion the total number of
securities requested to be included in such
registration would exceed the number of securities
which can be sold in such offering or would
substantially affect the price that the Initiating
Holder could otherwise obtain in such offering,
the Company shall include in such registration:
(1) first, up to the full number of Other
Securities the Initiating Holder proposes to sell,
(2) second, up to the full number of securities
that the Holders propose to sell and (3) third, up
to the full number of securities that the managing
underwriter(s) advise can be so sold, allocated
pro rata among the Company and any Other Holders
(other than the Initiating Holder) who have also
requested registration on the basis of the number
of securities requested to be included therein by
the Company and such Other Holders.
<PAGE>
<PAGE> 7 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(c) The Company shall not be required to
effect any Piggyback Registration under this
Section 4 incidental to the registration of any of
its securities in connection with dividend
reinvestment plans or stock option or other
employee benefit plans.
(d) No Piggyback Registration effected under
this Section 4 shall relieve the Company of its
obligation to effect Demand Registrations pursuant
to Section 3.
(e) The Company shall pay all Registration
Expenses in connection with any Piggyback
Registration effected pursuant to this Section 4.
The Holders shall pay all underwriting discounts
or commissions attributable to the Registrable
Securities sold by the Holders pursuant to
Piggyback Registration Statement and the fees and
expenses of any advisor(s) other than the one
counsel whose fees and expenses are expressly
included in the Registration Expenses.
5. Registration Procedures.
(a) In connection with any offering of
Registrable Securities pursuant to this Agreement, the
Company (i) shall furnish to the Holders without charge
such number of copies of any prospectus (including any
preliminary prospectus) and prospectus supplement as
they may reasonably request in order to effect the
offering and sale of the Registrable Securities to be
offered and sold, but only while the Company shall be
required under the provisions hereof to cause the
registration statement to remain current and effective,
and (ii) take such action as shall be necessary to
qualify the Registrable Securities covered by such
registration statement under such blue sky or other
state securities laws as the Holders shall request;
provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it
shall not be then qualified or to file any general
consent to service of process.
(b) If requested, the Company shall enter
into an underwriting agreement with an investment
banking firm selected by the Company (and reasonably
satisfactory to the Holders) in connection with a
Piggyback Registration, or with a nationally recognized
investment banking firm selected by the Holders (and
reasonably acceptable to the Company) in connection
with a Demand Registration. In either case, such
underwriting agreement shall contain such
representations, warranties, indemnities and agreements
as are then customarily included in underwriting
agreements with relating to secondary public offerings.
<PAGE>
<PAGE> 8 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(c) In connection with any offering of
Registrable Securities registered pursuant to this
Agreement, the Company shall (i) furnish the Holders,
at the Company's expense, with unlegended certificates
representing ownership of the Registrable Securities
which are sold in such offering in such denominations
as the Holders shall request and (ii) instruct the
transfer agent and registrar of the Common Stock to
release any stop transfer orders with respect to the
Registrable Securities so sold.
(d) In connection with the Company's
obligations pursuant to Sections 3 and 4 hereof, the
Company will:
(i) before filing a registration
statement or prospectus or any amendments or
supplements thereto, furnish to counsel for
the Holders, copies of all such documents
proposed to be filed, which documents will be
subject to such counsel's review and
comments;
(ii) cause the prospectus to be
supplemented by any required prospectus
supplement, and as so supplemented to be
filed pursuant to Rule 424 under the
Securities Act;
(iii) notify each Holder of Registrable
Shares covered by the registration statement
promptly: (A) when the prospectus or any
prospectus supplement or post-effective
amendment has been filed, and, with respect
to the registration statement or any post-
effective amendment, when the same has become
effective; (B) of any request by the SEC for
any amendments or supplements to the
registration statement or the prospectus or
for additional information; (C) of the
issuance by the SEC of any stop order
suspending the effectiveness of the
registration statement or the initiation of
any proceedings for that purpose; (D) if, at
any time prior to the closing contemplated by
an underwriting agreement entered into in
connection with such registration statement,
that the representations and warranties of
the Company contemplated by Section 5(b)
above cease to be true and correct; (E) of
the receipt by the Company of any
notification with respect to the suspension
of the qualification of the Registrable
Securities for sale in any jurisdiction or
the initiation or threatening of any
proceeding for such purpose; and (F) of the
happening of any event which make any
statement made in the registration statement,
the prospectus or any document incorporated
therein by reference untrue or which requires
the making of any changes in the registration
statement, the prospectus or any document
incorporated therein by reference in order to
make the statements therein not misleading;
<PAGE>
<PAGE> 9 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(iv) make every reasonable effort to
obtain the withdrawal of any order suspending
the effectiveness of the registration
statement;
(v) furnish to each Holder of
Registrable Securities covered by the
registration statement, without any
additional charge, one manually signed copy
of the Registration Statement and any post-
effective amendment thereto, including
financing statements and schedules, all
documents incorporated therein by reference
and all exhibits (including those
incorporated by reference);
(vi) upon the occurrence of any event
contemplated by paragraph (d)(iii)(F) above,
prepare a supplement or post-effective
amendment to the registration statement, the
related prospectus or any document
incorporated therein by reference or file any
other required document so that, as
thereafter delivered to the purchasers of the
Registrable Securities, the prospectus will
not contain an untrue statement of a material
fact or omit to state any material fact
necessary to make the statements therein not
misleading;
(vii) cause all Registrable Securities
covered by the registration statement to be
listed on each securities exchange on which
similar securities issued by the Company are
then listed if requested by the Holders
thereof or the managing underwriter(s), if
any;
(viii) (A) obtain opinions of counsel
to the Company and updates thereof addressed
to the Holders and the underwriter(s), if
any, covering the matters customarily covered
in opinions requested in underwritten
offerings and such other matters as may be
reasonably requested by the Holder and the
underwriter(s), if any; and (B) obtain "cold
comfort" letters and updates thereof from the
Company's independent certified public
accountants addressed to the Holders and the
underwriter(s), if any, such letters to be in
customary form and covering matters of the
type customarily covered in "cold comfort"
letters by accountants in connection with
underwritten offerings. The above shall be
done at each closing under such underwriting
or similar agreement or as and to the extent
required thereunder;
<PAGE>
<PAGE> 10 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(ix) make available for inspection, in
connection with the preparation of a
registration statement pursuant to this
Agreement, by a representative of the Holders
of Registrable Securities covered by the
registration statement, and any attorney or
accountant retained by such Holders, all
financial and other records and pertinent
corporate documents and properties of the
Company, and cause the Company's officers,
directors and employees to supply all
information reasonably requested by any such
representative, attorney or accountant;
provided, that any records, information or
documents that are designated by the Company
in writing as confidential shall be kept
confidential by such persons unless
disclosure of such records, information or
documents is required by court or
administrative order; and
(x) otherwise use its best efforts to
comply with all applicable rules and
regulations of the SEC.
6. Indemnification and Contribution.
(a) In the case of each offering effected
pursuant to this Agreement, the Company agrees to
indemnify and hold the Holders, the underwriter(s), and
each person who controls any of the foregoing within
the meaning of Section 15 of the Securities Act,
harmless against any and all losses, claims, damages or
liabilities (collectively, "Losses") to which they or
any of them may become subject under the Securities Act
or any other statute or common law or otherwise, and to
reimburse them for any reasonable legal or other
expenses incurred by them in connection with
investigating any claims and defending any actions,
insofar as any such Losses shall arise out of or shall
be based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the
registration statement relating to the sale of such
Registrable Securities, or the omission or alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or
alleged untrue statement of a material fact contained
in any preliminary prospectus (as amended or
supplemented if the Company shall have filed with the
SEC any amendment thereof or supplement thereof), if
used prior to the effective date of such registration
statement, or contained in the prospectus (as amended
or supplemented if the Company shall have filed with
the SEC any amendment thereof or supplement thereof,
including the information deemed part of such
registration statement pursuant to Rule 430A), if used
within the period during which the Company shall be
required to keep the registration statement to which
such prospectus relates current and effective pursuant
to the terms of this Agreement, or the omission or
alleged omission to state therein (if so used) a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the
<PAGE>
<PAGE> 11 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
indemnification agreement contained in this Section
6(a) shall not apply to Losses which arise out of or
are based upon any such untrue statement or alleged
untrue statement, or any such omission or alleged
omission, if such statement or omission shall have been
made in reliance upon and in conformity with
information furnished in writing to the Company by the
Holders specifically for use in connection with the
preparation of the registration statement or any
preliminary prospectus or prospectus contained in the
registration statement or any such amendment thereof or
supplement thereto.
(b) In the case of each offering effected
pursuant to this Agreement, the Holders and
underwriter(s) shall agree, severally, in the same
manner and to the same extent as set forth in Section
6(a) to indemnify and hold harmless the Company and
each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, its
directors and those officers of the Company who shall
have signed any such registration statement, for Losses
arising out of any statement in or omission from such
registration statement or any preliminary prospectus
(as amended or as supplemented, if amended or
supplemented as aforesaid) or prospectus contained in
such registration statement (as amended or as
supplemented, if amended or supplemented as aforesaid),
if such statement or omission shall have been made in
reliance upon and in conformity with information
furnished in writing to the Company by the Holders or
the underwriter(s), as the case may be, specifically
for use in connection with the preparation of such
registration statement or any preliminary prospectus or
prospectus contained in such registration statement or
any such amendment thereof or supplement thereto;
provided, however, that with respect to any statement
or omission made in any preliminary prospectus, the
indemnity agreement contained in this Section 6(b)
shall not apply with respect to the Holders to the
extent that any such Losses arise out of or are based
upon the fact that a current copy of the prospectus was
not sent or given to a person asserting such Losses at
or prior to the written confirmation of the sale of the
Registrable Securities if such current copy of the
prospectus would have cured the defect giving rise to
such Losses.
(c) Each party indemnified under Sections
6(a) or 6(b) shall, promptly after receipt of notice of
any claim against, or the commencement of any action
against, such indemnified party in respect of which
indemnity may be sought, notify the indemnifying party
in writing of the commencement thereof. The omission
of any indemnified party to so notify an indemnifying
party of any such action shall not relieve the
indemnifying party from any liability in respect of
such action which it may have to such indemnified party
on account of the indemnity agreement in Section 6(a)
or 6(b), unless and to the extent the indemnifying
party was prejudiced by such omission, and in no event
shall relieve the indemnifying party from any other
liability which it may have to such indemnified party.
In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying
party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to
<PAGE>
<PAGE> 12 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the
indemnifying party to such indemnified party of its
election so to assume the defense thereof, the
indemnifying party shall not be liable to such
indemnified party under Sections 6(a) or 6(b) for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense
thereof other than reasonable costs of investigations;
provided, however, that the indemnifying party shall
not be entitled to assume the defense of the
indemnified party if in the reasonable judgment of such
indemnified party based on advice of counsel, a
conflict of interest may exist between such indemnified
party and any other indemnified parties with respect to
such claim.
(d) The Company, the Holders and the
underwriter(s) shall also agree that if and to the
extent that the indemnification provided under Sections
6(a) or 6(b) shall be held unenforceable, the Company,
the Holders and the underwriter(s) shall contribute to
the aggregate Losses arising in connection with any
offering effected pursuant to this Agreement in such
proportion as is appropriate to reflect the relative
benefits to and the relative fault of the Company, the
Holders and the underwriter(s) as well as any other
relevant equitable considerations. The relative fault
of a party shall be determined by reference to, among
other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged
omission to state a material fact relates to
information supplied by such party and each party's
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or
omission. The parties agree that it would not be just
and equitable if contribution pursuant to this Section
6(d) were determined by pro rata allocation or by any
other method of allocation which does not take into
account the equitable considerations referred to above.
No person guilty of fraudulent misrepresentation
(within the meaning of Section 11 of the Securities
Act) shall be entitled to contribution from any person
who was not also guilty of such fraudulent
misrepresentation.
(e) No Holder shall be liable for
indemnification or contribution under this Section 6 in
an aggregate amount that exceeds the net proceeds
received by such Holder and its Affiliates in
connection with an offering effected pursuant to this
Agreement.
<PAGE>
<PAGE> 13 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
7. Miscellaneous.
(a) Restrictions on Public Sale by the
Company. The Company covenants and agrees that (i) it
shall not effect any public sale or distribution of any
securities similar to those being registered pursuant
to this agreement, or any securities convertible into
or exchangeable or exercisable for such securities
(except pursuant to a registration statement on Form S-
4 or S-8) during the thirty (30) days prior to, and
during the one-hundred eight (180) day period beginning
on, the effective date of any registration statement
relating to the Registrable Securities or the
commencement of a public distribution of Registrable
Securities pursuant to such registration statement, and
(ii) that any agreement entered into after the date
hereof pursuant to which the Company agrees to issue
any privately placed securities shall contain a
provision under which holders of such securities agree
not to effect any public sale or distribution of any
such securities during the period described in
clause (i) above (except as part of the registration
referred to in such clause (i), if permitted),
including any sales pursuant to Rule 144 under the
Securities Act.
(b) Registration Rights. The Company
covenants and agrees that, prior to _______________,
2002, it will not grant registration rights to any
other person unless the Holders shall be entitled to
have included in any registration effected pursuant to
Section 4 of this Agreement all Registrable Securities
requested by them to be so included pro rata with the
inclusion of any securities requested to be registered
by such person pursuant to incidental registration
rights so granted.
(c) Adjustments Affecting Registrable
Securities. The Company will not take any action, or
permit any change to occur, with respect to the
Registrable Securities which would adversely affect the
ability of the Holders to include Registrable
Securities in a registration effected pursuant to this
Agreement.
(d) Governing Law and Severability. This
Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania without giving effect to
conflicts of law principles thereof. If any provision
of this Agreement shall be declared invalid or
unenforceable by a court of competent jurisdiction, the
remaining provisions hereof shall remain valid and
continue in effect.
(e) Binding Effect on Successor. This
Agreement shall be binding upon and inure to the
benefit of the Company, the Purchasers, the Investors
and their respective successors and assigns (including
successors resulting from any merger, consolidation,
reorganization or transfer of assets).
<PAGE>
<PAGE> 14 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
(f) Specific Performance. The Purchasers,
the Investors and the Company acknowledge and agree
that irreparable injury would occur in the event that
any of the provisions of this Agreement were not
performed in accordance with their specific terms or
were otherwise breached and that such injury would not
be compensable in damages. The parties agree that they
shall be entitled to specific enforcement of, and
injunctive relief to prevent, any violation of the
terms hereof, and no party will take action, directly
or indirectly, in opposition to another party seeking
such relief on the grounds that any other remedy or
relief is available at law or in equity. The parties
further agree that no bond shall be required as a
condition to the granting of such relief.
(g) No Waiver. Any waiver by any party of a
breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this
Agreement on any one or more occasions shall not be
considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term
or any other term of the Agreement.
(h) Entire Agreement; Amendments. This
Agreement, together with the Standby Purchase
Agreement, contains the entire understanding of the
parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements,
promises, representations, warranties, covenants or
undertakings other than those expressly set forth
herein or therein. This Agreement may be amended only
by a written instrument duly executed by the parties or
their respective successors or assigns.
(i) Headings. The section headings
contained in the Agreement are for reference purposes
only and shall not effect in any way the meaning or
interpretation of this Agreement.
(j) Notices. All notices, requests, claims,
demands and other communications hereunder shall be in
writing and shall be given in the manner specified in
the Standby Purchase Agreement.
(k) Further Assurances. From time to time
on and after the date hereof, the Company, the
Purchasers and the Investors shall deliver or cause to
be delivered such further documents and instruments and
shall do and cause to be done such further acts as
shall be reasonably required to carry out the
provisions and purposes of this Agreement.
(l) Counterparts. This Agreement may be
executed in one or more counterparts, each of which
shall be deemed an original and all of which together
shall be deemed one and the same Agreement.
<PAGE>
<PAGE> 15 Exhibit 4.5 (REGISTRATION RIGHTS AGREEMENT)
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SPS TECHNOLOGIES, INC.
By:_____________________
Name:
Title:
PURCHASERS:
________________________
INVESTORS:
________________________
<PAGE>
<PAGE>
<PAGE> 1 Exhibit 4.8
Exhibit 4.8
AMENDMENT NO. 2 TO RIGHTS AGREEMENT
This Amendment No. 2 ("Amendment No. 2"), dated as of
____________, 1994, to the Rights Agreement, dated as of November
11, 1988, between SPS Technologies, Inc., a Pennsylvania
corporation (the "Company") and Mellon Bank (East) N.A., a
national banking association (the "Rights Agent"), as amended by
Amendment No. 1 thereto dated as of January 22, 1991
(collectively, the "Rights Agreement").
Capitalized terms not defined in this Amendment No. 2
shall have the meaning given to them in the Rights Agreement.
The parties hereto agree to amend the Rights Agreement
as follows:
1. Section 1(j) shall be amended and restated as
follows:
(j) "Exempted Person" shall mean (i) the group known
as "GAMCO Investors/Gabelli Funds Inc.", as identified in the
most recent Schedule 13D filed by such group prior to January 22,
1991, unless and until such group or any Person in such group,
together with all Affiliates and Associates of such group or any
Person in such group, becomes the Beneficial Owner of 30% or more
of the Common Shares then outstanding, and (ii) the group known
as "Tinicum Enterprises/Tinicum Investors", as identified in
Amendment No. 6 to the Schedule 13D filed by such group prior to
the date hereof, and as such group may be reconstituted from time
to time by Affiliates and Associates of Persons in such group,
unless and until such group or any Person in such group, together
with all Affiliates and Associates of such group or any Person in
such group, becomes the Beneficial Owner of more than 20% of the
Common Shares then outstanding. The purchaser, assignee or
transferee of the Common Stock of an Exempted Person shall not be
an Exempted Person.
2. Except as otherwise amended herein, the Company
and the Rights Agent do hereby ratify and confirm the remaining
terms and provisions of the Rights Agreement.
<PAGE>
<PAGE> 2 Exhibit 4.8
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to be duly executed as of the day and year first
above written within.
SPS Technologies, Inc.
By______________________
Name:
Title:
Mellon Bank (East) N.A.
By______________________
Name:
Title:
<PAGE>
<PAGE>
<PAGE> 1 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
Exhibit 10.1
STANDBY PURCHASE AGREEMENT
STANDBY PURCHASE AGREEMENT, dated as of ________, 1994 (the
"Agreement"), by and among the Persons listed on Schedule I
hereto (each a "Purchaser" and collectively the "Purchasers"),
the Persons listed on Schedule II hereto (each an "Investor" and
collectively the "Investors") and SPS Technologies, Inc., a
Pennsylvania corporation (the "Company"). Purchasers, Investors
and the Company are sometimes collectively referred to as the
"Parties" or individually as a "Party".
RECITALS
A. In connection with the raising of funds to reduce debt
under the Company's Bank Credit Agreement and for other corporate
purposes, the Company proposes to distribute to the record
holders of its common stock, par value $1.00 per share (the
"Common Stock"), subscription rights (the "Subscription Rights")
to subscribe for and purchase up to approximately 515,000 shares
of Common Stock (together with a like number of associated rights
under the Company's Amended Rights Agreement (as defined below),
the "Underlying Shares") at a purchase price of $______ per share
(the "Subscription Price").
B. The Company desires to sell to Purchasers, and
Purchasers desire to purchase from the Company all Underlying
Shares which, as of the date the Subscription Rights expire (the
"Expiration Date"), have not been subscribed for by the exercise
of the Subscription Rights (the "Remaining Shares").
C. The issuance of the Subscription Rights and the purchase
of the Common Stock upon the exercise of the Subscription Rights
are herein collectively referred to as the "Rights Offering".
D. Contemporaneously with the execution of this Agreement,
the Company will (i) amend the Rights Agreement dated as of
November 11, 1988, and amended by Amendment No. 1 thereto dated
as of January 22, 1991 between the Company and Mellon Bank (East)
N.A., as Rights Agent, by executing Amendment No. 2 thereto dated
as of ___________, 1994, substantially in the form attached
hereto as Exhibit ("Amendment No. 2") (collectively the
"Amended Rights Agreement"); and (ii) enter into the Registration
Rights Agreement among the Company, Purchasers and Investors,
dated as of ___________, 1994 (the "Registration Rights
Agreement").
E. The Rights Offering and the purchase of the Remaining
Shares by Purchasers pursuant to this Agreement, the Amended
Rights Agreement and the Registration Rights Agreement are herein
collectively referred to as the "Transactions".
NOW, THEREFORE, in consideration of the promises and the
mutual covenants and agreements of the Parties, and other good
and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, and subject to the terms and
conditions hereof, the Parties agree as follows:
<PAGE>
<PAGE> 2 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
1. TERMS OF THE RIGHTS OFFERING
The terms of the Rights Offering will be as follows:
1.1 The Rights Offering. The Company will distribute to
holders of Common Stock on the record date established by the
Board of Directors, Subscription Rights to subscribe for and
purchase the Underlying Shares. No fractional Subscription
Rights or cash in lieu thereof will be distributed or paid by the
Company.
1.2 Basic Subscription Privilege. Each holder of
Subscription Rights will be entitled to purchase at the
Subscription Price, on or prior to the Expiration Date (which
shall not be later than _________, 1994), one share of Common
Stock (and one (1) right issued pursuant to the Amended Rights
Agreement (the "Rights")) for each Subscription Right held (the
"Basic Subscription Privilege"). Purchasers shall exercise
Purchasers' Basic Subscription Privilege by payment in full of
the Subscription Price prior to the Expiration Date and otherwise
pursuant to the terms of this Agreement.
1.3 Registration Statement. The Company has filed with the
Securities and Exchange Commission ("SEC") a registration
statement on Form S-3 (as it has been and may be amended, the
"Registration Statement"), under the 1933 Act, including the
prospectus included therein (as it has been and may be amended,
the "Prospectus"), and (LIST OF AMENDMENTS, IF ANY), for the
registration under the 1933 Act of the offering and sale of the
Underlying Shares. The Company may file one or more amendments
to the Registration Statement or Prospectus, each of which will
be furnished to and consented to by Purchasers prior to the
filing thereof with the SEC, which consent shall not be
unreasonably withheld or delayed (it being understood that the
withholding of such consent shall be deemed to be reasonable if
the proposed amendment reflects a change in the size of the
Rights Offering, the Subscription Price, an extension of the
Expiration Date by more than twenty (20) days, or a material
modification of any other principal term of the Rights Offering).
1.4 Other Terms and Amendments to the Rights Offering.
Subject to the provisions of paragraphs 1.1 and 1.2, all other
terms of the Rights Offering are as described in the Prospectus.
2. PURCHASE AND SALE OF REMAINING SHARES
2.1 Purchase and Sale of Remaining Shares. Upon the terms
and conditions of this Agreement, the Company shall sell to
Purchasers, and Purchasers shall purchase from the Company the
Remaining Shares. The closing of the purchase of the Remaining
Shares by Purchasers (the "Closing"/"Closing Date") will take
place (i) on the fifth (5th) business day following the
Expiration Date, or (ii) at such other time and date as the
Parties may designate by mutual written agreement. At Closing,
the Company shall deliver to Purchasers (or their representative)
stock certificates representing the Remaining Shares registered
in the names and denominations requested by Purchasers in a
written notice delivered to the Company at least two (2) business
days prior to the Closing Date. Purchasers shall pay the
aggregate purchase price for the Remaining Shares by delivery to
the Company by wire transfer of immediately available funds in an
amount equal to the result obtained by multiplying (x) the
Subscription Price by (y) the number of Remaining Shares.
<PAGE>
<PAGE> 3 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
2.2 It is understood and agreed among the Parties that in
no event shall the total size of the Rights Offering exceed
515,000 shares or $_______________ in gross proceeds.
2.3 Purchasers' Acquisition and Beneficial Ownership of
Stock. Purchasers covenant and agree that Purchasers (i) will
exercise their Basic Subscription Privilege in full, and (ii)
will purchase the Remaining Shares at the Subscription Price at
Closing. Further, the Company acknowledges that (x) Purchasers
may acquire Subscription Rights from other shareholders and
exercise the Basic Subscription Privilege associated therewith
prior to the Expiration Date, and (y) Purchasers and Investors
may purchase shares of Common Stock after the Rights Offering.
3. Purchaser's and Investor's Representations and Warranties
3.1 Purchaser's and Investor's Representations and
Warranties. Each Purchaser and Investor individually represents
and warrants to the Company that:
3.1 (a) If such Purchaser or Investor is other than an
individual, such Purchaser or Investor is duly authorized and has
all requisite corporate or other power to execute, deliver and
perform this Agreement and the Registration Rights Agreement and
to consummate the Transactions contemplated hereby and thereby,
and no other corporate or other proceedings on the part of such
Purchaser or Investor are necessary;
3.1 (b) This Agreement and the Registration Rights
Agreement have been duly executed and delivered by such Purchaser
or Investor and, assuming due execution and delivery of this
Agreement and the Registration Rights Agreement by the Company,
each is a valid and binding agreement of such Purchaser or
Investor and is enforceable against such Purchaser or Investor in
accordance with its terms, except to the extent that (i)
enforcement hereof may be limited by (A) bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other laws now or hereafter in effect relating to creditors'
rights generally, and (B) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity), and (ii) rights to contribution
and indemnification may be violative of the public policy
underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation);
3.1 (c) If such Purchaser or Investor is other than an
individual, the execution, delivery and performance by such
Purchaser or Investor of this Agreement and the Registration
Rights Agreement and the purchase of and Beneficial Ownership of
the Common Stock by such Purchaser pursuant to this Agreement
does not violate or conflict with or result in a breach of or
constitute (or with notice or lapse of time or both constitute) a
default under such Purchaser's or Investor's certificate of
incorporation, partnership agreement or by-laws or similar
organizational documents;
<PAGE>
<PAGE> 4 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
3.1 (d) No consent, approval, waiver, permit, order or
authorization of, or registration, declaration, notification or
filing with any governmental authority is required, with respect
to such Purchaser or Investor acting individually or the
Purchasers or Investors acting collectively, in connection with
execution and delivery of this Agreement, the Rights Offering,
the Registration Rights Agreement and the Amended Rights
Agreement by Purchasers and Investors or the consummation of the
Transactions contemplated hereby and thereby by Purchasers and
Investors, except with respect to (i) the 1933 Act; (ii) the 1934
Act; (iii) the blue sky laws of various states; (iv) the
requirements of the New York Stock Exchange (the "Exchange
Requirements"); and (v) a "no action letter" to Purchasers from
the SEC with respect to Purchasers' compliance with the 1934 Act
in connection with purchases of Subscription Rights contemplated
by paragraph 2.3 hereof (the "No Action Letter");
3.1 (e) Such Purchaser is acquiring the Common Stock
for his or its own account for the purpose of investment and not
with a view to or for sale in connection with any distribution
thereof;
3.1 (f) The Transactions to be consummated pursuant to
this Agreement by Purchasers and Investors on or prior to the
Closing Date hereunder are not subject to the reporting
requirements of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"); and
3.1 (g) Purchasers have adequate capital to fulfill
their obligations under this Agreement.
3.2 Limited Representations and Warranties. Except as set
forth in this Section 3, the Purchasers and Investors make no
other representation, express or implied, to the Company.
4. Company's Representations and Warranties
4.1 Company's Representations and Warranties. The Company
represents and warrants to the Purchasers and Investors that:
4.1 (a) The Company is a corporation duly organized, in
good standing and presently subsisting under the laws of the
Commonwealth of Pennsylvania and has the corporate power to own
its respective properties and to carry on its respective
businesses as now being conducted, and is in good standing in
every jurisdiction in which the nature of the respective business
conducted or property owned by it makes such qualification
necessary, except for a failure which would not have a material
adverse effect on the business, financial condition, liabilities
or results of operations of the Company and its subsidiaries;
4.1 (b) The Company is duly authorized and has all
requisite corporate power to execute, deliver and perform this
Agreement, the Rights Offering, the Amended Rights Agreement and
the Registration Rights Agreement and to consummate each of the
Transactions contemplated hereby and thereby, and no other
corporate or other proceedings on the part of the Company are
necessary;
<PAGE>
<PAGE> 5 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
4.1 (c) Each of this Agreement, the Amended Rights
Agreement and the Registration Rights Agreement has been duly
executed and delivered by the Company, is a valid and binding
agreement of the Company, and assuming due execution and delivery
of this Agreement and the Registration Rights Agreement by the
Purchasers and Investors, is enforceable against the Company in
accordance with its terms, except to the extent that (i)
enforcement hereof may be limited by (A) bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other laws now or hereafter in effect relating to creditors'
rights generally, and (B) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity), and (ii) rights to contribution
and indemnification may be violative of the public policy
underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation);
4.1 (d) The execution, delivery and performance by the
Company of this Agreement, the Rights Offering, the Rights
Agreement and the Registration Rights Agreement do not violate or
conflict with or result in a breach of or constitute or give rise
to (or with notice or lapse of time or both constitute or give
rise to) a default or a right of acceleration or termination
under (i) the Articles of Incorporation or Bylaws (or any similar
organizational document) of the Company or any of its
subsidiaries, or (ii) any indenture, mortgage, bond, license,
lease, permit, loan or credit agreement or any other material
agreement to which the Company or any of its subsidiaries is a
party, or by which the Company or any of its subsidiaries, or any
of its or their properties or assets may be bound, or (iii) any
statute, law, rule or regulation or any judgment or award, or any
order, writ, injunction or decree pertaining to the Company or
any of its subsidiaries;
4.1 (e) No consent, approval, waiver, permit, order or
authorization of, or registration, declaration, notification or
filing with any governmental authority is required in connection
with the execution and delivery of this Agreement, the Rights
Offering, the Registration Rights Agreement and the Amended
Rights Agreement by the Company or the consummation of the
Transactions contemplated hereby and thereby by the Company,
except with respect to (i) the 1933 Act; (ii) the 1934 Act; (iii)
the blue sky laws of various states; and (iv) the Exchange
Requirements; and provided, however, that with respect to the HSR
Act, this representation is made in reliance upon and subject to
the accuracy of the representation set forth in Section 3.1(f).
4.1 (f) The Subscription Rights, when issued and
delivered in accordance with the terms of the Rights Offering,
will be validly issued, and no holder thereof is or will be
subject to personal liability by reason of being such a holder;
the Remaining Shares and the shares of Common Stock issuable upon
the exercise of the Subscription Rights and the Rights to be
issued in connection therewith, when issued or delivered and paid
for in accordance with the terms of the Rights Offering and this
Agreement, will be validly issued, fully paid and non-assessable,
and no holder thereof is or will be subject to personal liability
by reason of being such a holder; and the issuance of the
Remaining Shares and the shares of Common Stock issuable upon the
exercise of the Subscription Rights will not be subject to the
preemptive rights of any shareholder of the Company;
<PAGE>
<PAGE> 6 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
4.1 (g) The Company has taken all valid corporate
action to duly reserve such number of its authorized treasury
shares of Common Stock as are deliverable upon consummation of
purchases of Common Stock pursuant to the Rights Offering and
this Agreement, and such shares of Common Stock are listed on the
New York Stock Exchange in accordance with all Exchange
Requirements and will continue to be so listed after the sale
hereof to the Purchasers;
4.1 (h) The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock;
4.1 (i) As of the date hereof (i) 5,108,148 shares of
Common Stock are issued and outstanding, all of which are validly
issued, fully paid and non-assessable, and (ii) 1,253,458 shares
of Common Stock are held in Treasury, and except for the
Subscription Rights, the Rights and (_______) shares of Common
Stock issuable upon exercise of options granted pursuant to the
"SPS 1988 Long Term Incentive Stock Plan", as amended, there are
no options, warrants, preemptive rights or other rights, or
convertible securities outstanding providing for the issuance by
the Company of any Common Stock or agreements, arrangements or
commitments of any nature relating to the issued or unissued
capital stock of the Company or obligating the Company to issue
or sell any shares of capital stock or equity interest in the
Company;
4.1 (j) The Company has filed all proxy statements,
periodic reports and other documents required to be filed by it
under the 1934 Act (collectively the "SEC Reports") and has made
available to the Purchasers and Investors copies of its Annual
Report on Form 10-K for the fiscal years ended December 31, 1993
and 1992, its Quarterly Report on Form 10-Q for the quarters
ended March 31, 1994 and June 30, 1994, and the Company's Current
Report on Form 8-K dated January 5, 1994, each as filed with the
SEC;
4.1 (k) Each SEC Report is in compliance as to form in
all material respects with the requirements of its respective
report form and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein in the light of the circumstances under
which they were made not misleading, except as may have been
amended or supplemented in a subsequently filed SEC Report filed
prior to the date hereof;
4.1 (l) The financial statements (including any related
schedules and/or notes) included or incorporated by reference in
the SEC Reports were prepared in accordance with generally
accepted accounting principles consistently applied (except as
indicated in the notes thereto) throughout the periods involved
and fairly present the consolidated financial condition, results
of operations and changes in financial position of the Company
and its subsidiaries as of the dates thereof and for the periods
ended on such dates (in each case subject, as to interim
statements, to changes resulting from year-end adjustments);
<PAGE>
<PAGE> 7 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
4.1 (m) There has been no material adverse change in
the business, financial condition, liabilities, or results of
operations of the Company and its subsidiaries from that set
forth in the balance sheet as of December 31, 1993, included in
or incorporated by reference in the SEC Reports, other than
changes disclosed or referred to in any subsequently filed SEC
Reports filed prior to the date hereof or otherwise publicly
disclosed by the Company since December 31, 1993, or as disclosed
in the Prospectus;
4.1 (n) There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company,
threatened by any public official or governmental authority,
against the Company, or any of its subsidiaries or any of their
respective properties or assets or before any court, arbitrator
or governmental body, department, commission, board, bureau,
agency or instrumentality, which (i) questions the validity of or
seeks to restrain this Agreement or the Rights Offering, or any
action taken or to be taken pursuant hereto or thereto, or (ii)
except as is set forth in the SEC Reports or as disclosed in the
Prospectus, which would result in any material adverse change in
the business, financial condition, liabilities or results of
operations of the Company and its subsidiaries; and
4.1 (o) The operations of the Company and its
subsidiaries are being conducted in compliance in all material
respects with all laws, regulations and ordinances, including,
without limitation, those relating to pollution and the discharge
of materials into the environment, equal employment opportunity
and employee safety, in all jurisdictions in which the Company
and its subsidiaries are presently doing business, except where
the failure to effect such compliance would not have a material
adverse effect on the business, results of operations or
financial condition of the Company and its subsidiaries or as
disclosed in the Prospectus; the Company will use commercially
reasonable efforts to comply with all such laws and regulations
which may be legally applicable in the future in jurisdictions in
which the Company and its subsidiaries may then be doing
business;
4.1 (p) The Company, pursuant to the Rights Offering
and this Agreement, is selling, conveying, transferring,
assigning and delivering to each Purchaser of Common Stock all
right, title and interest in and to such Common Stock being
purchased by each such Purchaser, and the sale and delivery of
such Common Stock will vest in the Purchasers good, valid and
marketable title to such shares, free and clear of all
restrictions (other than those imposed by the terms of this
Agreement, the Registration Rights Agreement, the Amended Rights
Agreement and applicable securities laws) and liens, security
interests or adverse claims of any kind and nature assuming that
the Purchasers purchased such Common Stock in good faith without
notice of any adverse claims;
<PAGE>
<PAGE> 8 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
4.1 (q) The Company is not in default under, nor does
any party have a right of acceleration or termination under, nor
does any condition exist whereupon lapse of time or with notice
will give rise to such a default or right of acceleration or
termination under any indenture, mortgage, bond, license, lease,
permit or loan agreement or any other agreement to which the
Company or any of its subsidiaries is a party or by which any of
their respective properties or assets may be bound, except to the
extent such default is not reasonably likely to result in a
material adverse change in the business, financial condition,
liabilities or results of operations of the Company and its
subsidiaries;
4.1 (r) The Registration Statement complies in all
material respects with the requirements of the 1933 Act, and the
Prospectus does not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading; and
4.1 (s) No representation or warranty contained in this
Agreement and no statement contained in any other writing
provided to the Purchasers by the Company in connection with the
Transactions contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make such
representation, warranty or statement not misleading.
4.2 Limited Representations and Warranties of Company.
Except as set forth in this Section 4, the Company makes no
representation, express or implied, to the Purchasers and
Investors.
5. Conditions to the Obligations of Purchasers and Investors
5.1 Conditions to the Obligations of Purchasers and
Investors. The obligation of Purchasers and Investors to
consummate the Transactions is subject to the fulfillment, on or
before the Closing Date, of all of the following conditions
(except such of the following as will have been expressly waived
in writing by Purchasers and Investors prior to the Closing
Date):
5.1 (a) The representations and warranties of the
Company contained in this Agreement will have been true and
correct as of the date of this Agreement and as of the Closing
Date, and the Company will have performed and complied in all
material respects with all of its covenants and agreements
required by this Agreement to be performed or complied with by it
hereunder at or prior to the Closing Date;
5.1 (b) All consents, approvals, permits and
authorizations required to be obtained from, and all filings
required to be made with, any governmental authority in
connection with the consummation of the Transactions will have
been obtained or made;
<PAGE>
<PAGE> 9 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
5.1 (c) The Registration Statement will have become
effective; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to rule 424(b) of the 1933 Act, the
Prospectus, and any such supplement, will be filed in the manner
and within the time period required by Rule 424(b) of the 1933
Act; and no stop order suspending the effectiveness of the
Registration Statement will have been issued and no proceedings
for that purpose will have been instituted or threatened;
5.1 (d) No litigation relating to the Rights Offering,
this Agreement, the Registration Rights Agreement or Amendment
No. 2 will be pending or, to the knowledge of any director or
executive officer of the Company, threatened (orally or in
writing), nor will any injunction relating thereto have been
issued or any proceeding therefor be pending or, to the knowledge
of any director or executive officer of the Company, threatened
(orally or in writing);
5.1 (e) Except as otherwise consented to by the
Purchasers and Investors, the terms of the Rights Offering
contained in the Prospectus will not conflict with the provisions
of this Agreement including, without limitation, the recitals and
Section 1 hereof;
5.1 (f) The Rights Offering will have been completed;
5.1 (g) The Underlying Shares and the Remaining Shares
continue to be listed on the New York Stock Exchange, and no
Party shall have been advised by the New York Stock Exchange or
otherwise that an issue exists with respect to such listing;
5.1 (h) A standby fee (the "Standby Fee") in the amount
of one-half of 1% of the gross proceeds to be received by the
Company in connection with the Transactions shall have been paid
by the Company to Purchasers in consideration for acting as the
contingent standby purchaser of the Remaining Shares; and
5.1 (i) Purchasers and Investors will have received a
legal opinion of Aaron Nerenberg, General Counsel of the Company,
in substantially the form attached hereto as Exhibit A.
5.2 Conditions to the Obligations of the Company. The
obligation of the Company to consummate the Transactions is
subject to the fulfillment, on or before the Closing Date, of the
following conditions (except such of the following conditions as
will have been expressly waived in writing by the Company on or
prior to the Closing Date):
5.2 (a) The representations and warranties of
Purchasers and Investors contained in this Agreement will have
been true and correct at and as of the date of this Agreement and
as of the Closing Date, and Purchasers and Investors will have
performed and complied in all material respects with all of their
covenants and agreements required by this Agreement to be
performed or complied with by them hereunder at or prior to the
Closing Date;
<PAGE>
<PAGE> 10 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
5.2 (b) All consents, approvals, permits and
authorizations required to be obtained from, and all filings
required to be made with, any governmental authority in
connection with the consummation of the Transactions will have
been obtained or made;
5.2 (c) The Registration Statement will have become
effective; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) of the 1933 Act, the
Prospectus, and any such supplement, will be filed in the manner
and within the time period required by Rule 424(b) of the 1933
Act; and no stop order suspending the effectiveness of the
Registration Statement will have been issued and no proceedings
for that purpose will have been instituted or threatened; and
5.2 (d) The Rights Offering will have been completed.
6. Indemnification
6.1 Indemnification of Purchasers and Investors by the
Company. The Company hereby agrees to indemnify and hold
harmless Purchasers, Investors, each other Person, if any, which
controls any Purchaser or Investor within the meaning of the 1933
Act, and their respective officers, directors, partners and
Affiliates (collectively, the "Indemnitees") against any losses,
claims, damages, expenses or liabilities, joint or several, to
which the Indemnitees may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or
the Prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, or (ii) the Rights Offering, this Agreement, the
Amended Rights Agreement and the Registration Rights Agreement,
and will reimburse the Indemnitees for any legal or other
expenses reasonably incurred by them in connection with
investigating, defending or settling any such loss, claim,
damage, expense, liability or action; provided, however, that the
Company will not be liable in any such case (x) described in
paragraph 6.1(i) if and to the extent that any such loss, claim,
damage, expense or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission so made in reliance upon and in conformity with
information pertaining to the Indemnitees (as opposed to
information pertaining to the Company, the Rights Offering
generally or this Agreement and the other agreements related
thereto generally) furnished to the Company by any Indemnitee in
writing specifically for use in the Registration Statement or the
Prospectus, or (y) described in paragraph 6.1(ii) if and to the
extent that any such loss, claim, damage, expense or liability is
found in a final judgment by a court of competent jurisdiction to
have resulted from the bad faith or gross negligence of the
Indemnitees, or to have resulted from Purchasers' violation of
Rule 10b-6, 10b-7 or 10b-8 under the 1934 Act, unless the actions
were performed at the written request of or with the written
<PAGE>
<PAGE> 11 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
consent of the Company; provided further, however, that in no
event shall the Company be obligated to indemnify and hold
harmless the Indemnitees against losses the Indemnitees may incur
solely as a result of the price at which or the circumstances
under which the Indemnitees acquired Subscription Rights or
Common Stock in connection with the Rights Offering. Such
indemnity will remain in full force and effect regardless of any
reasonable investigation made by or on behalf of the Indemnitees.
6.2 Indemnification of the Company by Purchasers and
Investors. Purchasers and Investors hereby agree to indemnify
and hold harmless the Company, each Person, if any, who controls
the Company within the meaning of the 1933 Act, and each officer
and director of the Company against all losses, claims, damages,
expenses or liabilities to which the Company or such officer or
director or controlling Person may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages,
expenses or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement or the Prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and
will reimburse the Company and each such officer, director and
controlling Person for any legal or other expenses reasonably
incurred by them in connection with investigating, defending or
settling any such loss, claim, damage, expense, liability or
action; provided, however, that Purchasers and Investors will be
liable hereunder in any such case, if and only to the extent that
any such loss, claim, damage, expense or liability arises out of
or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in
conformity with information pertaining to Purchasers, Investors
or their controlling Persons (as opposed to information
pertaining to the Company, the Rights Offering generally or this
Agreement and the other agreements related thereto generally)
that is furnished in writing to the Company by Purchasers or
Investors specifically for use in the Registration Statement or
the Prospectus.
6.3 Indemnification Claim by Either Party. Promptly after
receipt by an indemnified Party hereunder of notice of the
commencement of any action, such indemnified Party will, if a
claim in respect thereof may be made against the indemnifying
Party hereunder, notify the indemnifying Party in writing
thereof, but the omission so to notify the indemnifying Party
will not relieve the indemnifying Party from any liability which
the indemnifying Party may have to any indemnified Party
hereunder except to the extent such indemnifying Party is
prejudiced by such failure to so notify, nor will it relieve the
indemnifying Party from any liability which the indemnifying
Party may have to any indemnified Party other than under this
Agreement. In case any such action will be brought against any
indemnified Party, it will notify the indemnifying Party of the
commencement thereof and the indemnifying Party will be entitled
to participate in and, to the extent it wishes, to assume and
undertake the defense thereof with counsel satisfactory to such
indemnified Party, and after notice from the indemnifying Party
to such indemnified Party of its election so to assume and
undertake the defense thereof, the indemnifying Party will not be
<PAGE>
<PAGE> 12 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
liable to such indemnified Party under this Section 6 for any
legal expenses subsequently incurred by such indemnified Party in
connection with the defense thereof; provided, however, that, if
the defendants in any such action include both the indemnified
Party and the indemnifying Party and the indemnified Party will
have reasonably concluded that there may be reasonable defenses
available to it which are different from or additional to those
available to the indemnifying Party or if the interests of the
indemnified Party reasonably may be deemed to conflict with the
interests of the indemnifying Party, the indemnified Party will
have the right to select separate counsel and to control the
defense of such action, with the reasonable expenses and fees of
such separate counsel and other reasonable expenses related to
such participation to be reimbursed by the indemnifying Party as
incurred.
In any such action, any indemnified Party will have the
right to retain its own counsel, but, except as provided above,
the fees and disbursements of such counsel will be at the expense
of such indemnified Party unless (i) the indemnifying Party will
have failed to retain counsel for the indemnified Party as
aforesaid, or (ii) the indemnifying Party and such indemnified
Party will have mutually agreed to the retention of such counsel.
It is understood that the indemnifying Party will not, in
connection with any action or related actions in the same
jurisdiction, be liable for the fees and disbursements of more
than one separate law firm qualified in such jurisdiction to act
as counsel for the indemnified Party and will not be obligated to
pay the fees and expenses of more than one counsel (and any
required local counsel) for all parties indemnified by such
indemnifying Party with respect to such claim, unless in the
reasonable judgment of any indemnified Party the interests of
such indemnified Party may be deemed to conflict with any other
of such indemnified Parties with respect to such claim. The
indemnifying Party will not be liable for any settlement of any
proceeding effected without its prior written consent. With such
consent in the case of a settlement, or if there be a final
judgment for the plaintiff, the indemnifying Party agrees to
indemnify the indemnified Party from and against any loss or
liability by reason of such settlement or judgment.
6.4 Contribution. If the indemnification provided for in
this Section 6 is unavailable for any reason or insufficient to
hold harmless an indemnified Party in respect of any losses,
claims, damages, liabilities or actions referred to herein, then
each indemnifying Party will in lieu of indemnifying such
indemnified Party contribute to the amount paid or payable by
such indemnified Party as a result of such losses, claims,
damages, liabilities or actions in such proportion as is
appropriate to reflect the relative fault of the Company, on the
one hand, and Purchasers and Investors, on the other hand, in
connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or actions as well as
any other relevant equitable considerations. The relative fault
will be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact relates
to information supplied by the Company, on the one hand, or
Purchasers and Investors, on the other hand, and to the Parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Parties
hereto agree that it would not be just and equitable if
<PAGE>
<PAGE> 13 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
contribution pursuant to this paragraph were determined by any
method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. Subject to
the provisions of this Section 6, the amount paid or payable by
an indemnified Party as a result of the losses, claims, damages,
liabilities or actions in respect thereof, referred to above in
this paragraph, will be deemed to include any legal or other
expenses reasonably incurred by such indemnified Party in
connection with investigating or defending any such action or
claim.
6.5 Purchasers' and Investors' Limited Indemnification and
Contribution. In no event shall Purchasers' and Investors'
aggregate indemnification and contribution obligations under this
Section 6 exceed the amount obtained by multiplying the
Subscription Price by the number of Remaining Shares.
7. Amendment of Amended Rights Agreement
7.1 Amendment of Amended Rights Agreement.
Contemporaneously with the execution of this Agreement, the
Company has executed the Amended Rights Agreement, and agrees
until ______________, 2000 to further amend or supplement the
Amended Rights Agreement as necessary to ensure that neither the
Purchasers, Investors nor their respective Affiliates,
individually or together, shall be deemed an "Acquiring Person"
(as defined in the Amended Rights Agreement) or are the cause of
a "Section 11(a)(ii) Event" (as defined in the Amended Rights
Agreement) by virtue solely of their acquisition and Beneficial
Ownership of the Common Stock with voting power not in excess of
the "Percentage Limitation" (as defined in paragraph 14.3).
7.2 Action by Board of Directors. The Board of Directors
of the Company has, pursuant to Subchapter F of Chapter 25 of the
Pennsylvania Business Corporation Law ("Subchapter F"), taken all
necessary and appropriate action to provide that the restrictions
on "business combinations" (as defined in Section 2554 of Subchapter F)
set forth in Subchapter F will not apply to any of the
Purchasers, Investors or their Affiliates with respect to their
acquisition of Common Stock having voting power in excess of 20%
of the Total Voting Power; provided, that the acquisition of
Common Stock or any other event which would render such
Purchasers, Investors or Affiliates an "interested shareholder"
(as defined in Section 2553 of Subchapter F) does not result in the
Purchasers, Investors and their Affiliates, individually or
together, Beneficially Owning Common Stock with voting power in
excess of the Percentage Limitation.
7.3 Further Amendment of Amended Rights Agreement. If,
prior to ___________, 2000, the Company shall amend or supplement
the Amended Rights Agreement to increase the "Acquiring Person"
and "Section 11(a)(ii) Event" threshold percentage above eighteen
percent (18%) (including, without limitation, by way of any
amendment of the definition of "Exempted Person" under the
Amended Rights Agreement) generally or with respect to any
particular Person or otherwise allow any other Person to become
the Beneficial Owner of Common Stock representing in excess of
18% of the Total Voting Power, then, (i) the Percentage
Limitation shall be automatically increased to 110% of such
<PAGE>
<PAGE> 14 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
increased threshold percentage, provided, however, that with
respect to any amendment of the "Exempted Person" definition to
authorize an increase in the Beneficial Ownership to more than
thirty percent (30%) of the Common Stock (the "Gabelli Group
Increase") by the group known as GAMCO Investors/Gabelli Funds,
Inc. (as constituted for purposes of the most recent Schedule
13D, filed by such group prior to the date hereof), the
Percentage Limitation shall be increased pro-rata to the Gabelli
Group Increase, and (ii) the Company shall take all action
necessary to permit Purchasers, Investors and their Affiliates to
acquire or Beneficially Own Common Stock not in excess of the
Percentage Limitation, including, without limitation, any
necessary amendment of the Amended Rights Agreement.
7.4 Purchasers' Restrictions on Acquisition of Common
Stock. Except for this Agreement, the Amended Rights Agreement,
the Registration Rights Agreement, Section 3.11 of the Company's
Bylaws, Subchapter F and applicable securities laws (and assuming
receipt by Purchasers of the No Action Letter), the Company is
unaware of any restrictions on the Purchasers', Investors' or
their Affiliates' ability to acquire shares of Common Stock or
exercise rights relating to shares of Common Stock. The Company
shall not (i) take any action to prevent or interfere with the
Purchasers', Investors' or their Affiliates' ability to legally
acquire or Beneficially Own Common Stock with voting power not in
excess of the Percentage Limitation or (ii) take any action that
would interfere with or adversely affect the Purchasers',
Investors' or their Affiliates' rights with respect to Common
Stock having voting power not in excess of the Percentage
Limitation.
8. Purchasers' and Investors' Restrictions
8.1 Purchasers' and Investors' Restrictions. Purchasers
and Investors agree that until the earlier of (x) two (2) weeks
prior to the deadline for the submission of shareholder proposals
or shareholder nominees to the Board of Directors in connection
with the Company's annual meeting of its shareholders scheduled
for the calendar year 2000 (it being understood that the Company
shall provide the Purchasers and Investors with at least two (2)
weeks' prior notice of such deadline), and (y) _________, 2000,
without the Company's prior written consent, Purchasers and
Investors will not and will cause their Affiliates not to,
directly or indirectly, acting alone or in concert with others:
8.1(a) Make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined in
Regulation 14A promulgated by the SEC pursuant to Section 14 of
the 1934 Act) or votes relating to the Common Stock, or other
voting stock of the Company (except as to any proxies that may be
given pursuant to paragraph 8.2), or request, or take any action
to obtain or retain any list of holders of any securities of the
Company for such purposes, or initiate or propose any shareholder
proposal or participate in the making of, or solicit shareholders
for the approval of, one or more shareholder proposals relating
to the Company;
<PAGE>
<PAGE> 15 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
8.1 (b) Deposit any shares of Common Stock in a voting
trust or subject any shares of Common Stock to any voting
agreement or arrangements, except for agreements, arrangements or
understandings among any of the Purchasers, Investors or their
Affiliates and except as provided herein;
8.1 (c) Form, join or in any way participate in a group
(other than the group consisting of certain of the Purchasers,
Investors and their respective Affiliates, successors and
assigns, as such group was identified in the joint Schedule 13D
filed by certain of the Purchasers and Investors prior to the
date hereof, and as such group may be reconstituted as a result
of the withdrawal from the group of certain members thereof or
the addition to the group of Affiliates of certain members
thereof) with respect to any Common Stock, or any securities the
ownership of which would make the owner thereof a Beneficial
Owner of Common Stock;
8.1 (d) Except as expressly contemplated herein, make
any offer or proposal to acquire the Company, its securities or
assets or solicit or propose to effect or negotiate with any
Person any form of business combination or similar transaction
with, a change in control of, or any restructuring,
recapitalization or other extraordinary transaction involving,
the Company, its securities or assets;
8.1 (e) Seek representation on the Company's Board of
Directors (except for the Board representation agreed to pursuant
to this Agreement) or the removal of any directors or a change in
the composition or size of the Board of Directors of the Company;
8.1 (f) Make any request to amend or waive any
provision of this Agreement, which request would require the
public disclosure by the Company or any Purchaser, Investor or
any Affiliate of a Purchaser or Investor to avoid violating
federal securities law;
8.1 (g) Disclose any intent, purpose, plan or proposal
with respect to the Company, its Board of Directors, management,
policies or affairs or its securities or assets or this Agreement
that if effected would result in a violation of any of the
provisions of this paragraph 8.1, including any intent, purpose,
plan or proposal that is conditioned on, or would require waiver,
amendment, nullification or invalidation of, any provision of
this Agreement, or take any action that would require the Company
to make any public disclosure relating to any such intent,
purpose, plan, proposal or condition;
8.1 (h) Take any actions challenging the validity or
enforceability, in whole or in part, of the Amended Rights
Agreement as in effect on the date hereof, or proposing, seeking
or compelling the redemption of any Rights (provided that the
foregoing shall not preclude action solely challenging the
validity or enforceability of any amendment to the Amended Rights
Agreement effected after the date hereof); or
<PAGE>
<PAGE> 16 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
8.1 (i) Assist, advise, or encourage any Person with
respect to, or seek to do, any of the foregoing; provided that
the Purchasers, Investors and their Affiliates shall not be
prohibited (I) pursuant to the provisions of this paragraph 8.1
from making any offer or proposal if the Company's Board of
Directors requests in writing that such offer or proposal be
made, or (II) pursuant to paragraph 8.1(d) from purchasing
additional securities in open market brokerage transactions,
privately negotiated transactions or transactions with the
Company or any "Subsidiary" (as that term is defined in Rule 12b-
2 under the 1934 Act) of the Company, provided that, after giving
effect to any such purchase, Purchasers, Investors and their
Affiliates do not Beneficially Own Common Stock in excess of the
Percentage Limitation. Anything to the contrary notwithstanding,
nothing in this paragraph 8.1 shall prevent a Purchaser, Investor
or Affiliate thereof in his capacity as a Director of the Company
from discussing with the Company or its Board of Directors any
matter referred to in paragraph 8.1(d) or paragraph 8.1(g),
provided that (y) such discussions do not require disclosure
pursuant to any federal securities law by any Purchaser, Investor
or Affiliate thereof or by the Company, and (z) no Purchaser,
Investor or Affiliate thereof makes any public filing or
disclosure regarding such discussions. Notwithstanding (z) in
the preceding sentence, no Purchaser, Investor or Affiliate
thereof shall be prohibited from making a public filing or
disclosure regarding such discussions if the Company or any of
its Affiliates makes a prior public filing or disclosure
regarding such discussions that the Company was not required to
make pursuant to any federal securities law solely as a result of
such discussions.
Notwithstanding any restriction set forth in paragraph
8.1(a)-(i) to the contrary, if (A) any Person publicly makes a
bona fide offer to acquire a majority of the Company's
outstanding Common Stock and the Company's Board of Directors
does not reject or otherwise take a position in opposition to
such offer within 120 days after such offer is made and such
offer remains outstanding, or (B) any Person makes a bona fide
offer to acquire a majority of the Company's outstanding Common
Stock, and either (i) the Company's Board of Directors has
determined that accepting such offer is in the best interests of
shareholders of the Company, or (ii) the Board of Directors of
the Company decides to seek competing offers or proposes to
effect or negotiate with any Person any form of business
combination or similar transaction with the Company or proposes,
in response to such bona fide offer, a recapitalization, share
repurchase, extraordinary dividend or other similar extraordinary
transaction involving the Company, its securities or assets, the
applicability of the restrictions set forth in paragraph 8.1(a)-
(i) shall be waived without any action on the part of the Company
or the Board of Directors of the Company solely to the limited
extent necessary to allow any Purchaser, Investor or any
Affiliate thereof to make a competing offer to the Company's
Board of Directors to acquire the Company or its securities or
its assets. The Purchasers, Investors and their Affiliates shall
not take any action pursuant to the foregoing sentence that would
require public disclosure of such bona fide offer or competing
offer prior to the public disclosure of such bona fide offer by
either the Company or the offeror thereof.
<PAGE>
<PAGE> 17 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
8.2 Quorum. Until the earlier of (x) ___________, 2000,
and (y) the day before the date of the Company's annual meeting
of shareholders for calendar year 2000, each Purchaser and
Investor shall take such action as may be required so that all
shares of Common Stock Beneficially Owned directly or indirectly
by it or any Affiliate shall be present for quorum purposes, in
person or represented by proxy, at every meeting of shareholders
of the Company and at any shareholders meeting for the election
of Directors. Each Purchaser and Investor agrees to provide to
the Persons acting as proxies in respect of proxies solicited by
the Board of Directors with a proxy granting such Persons
discretionary votes for the election of Directors at such
meeting, except to the extent that such shares are voted in favor
of the election of Eric M. Ruttenberg (and any other designees to
which the Purchasers and Investors may be entitled pursuant to
this Agreement) to the Board of Directors in order to insure such
election as provided in paragraph 10 of this Agreement.
8.3 Voting. Until the earlier of (x) ___________, 2000,
and (y) the day before the date of the Company's annual meeting
of shareholders for calendar year 2000, with respect to any
matter submitted to the Company's shareholders for approval, the
Purchasers and Investors covenant and agree that all shares of
Common Stock which are directly or indirectly Beneficially Owned
by the Purchasers, Investors and their Affiliates, other than
those shares of Common Stock which represent voting power of up
to ten percent (10%) of the Total Voting Power (such shares of
Common Stock, other than those representing up to 10% of the
Total Voting Power being, the "Restricted Shares") (i) will be
voted in accordance with the recommendation of the majority of
the Company's entire Board of Directors, and (ii) with respect to
any matter which, pursuant to the Company's by-laws, requires the
approval of an 80% super majority of the Company's shareholders,
notwithstanding the provisions of the foregoing clause (i) of
this paragraph 8.3, the Restricted Shares will be voted pro-rata
in accordance with the vote of the Company's shareholders
(ignoring, for purposes of determining such pro-rata allocation,
votes cast with respect to shares of Common Stock directly or
indirectly Beneficially Owned by the Purchasers, Investors and
their Affiliates which are not Restricted Shares).
8.4 Fiduciary Duty. Nothing contained in this paragraph 8
shall be deemed in any way to prohibit or limit any Purchaser,
Investor or Affiliate thereof acting in his capacity as a
Director from exercising his fiduciary duties as a Director of
the Company by participating in discussions, voting or other
actions relating to the Board of Directors.
9. Restrictions on Transfer
9.1 Restrictions on Transfer. The Purchasers and Investors
covenant and agree that until ___________, 2000, without the
prior written consent of the Company, neither they nor any of
their Affiliates will, directly or indirectly, sell, transfer or
otherwise dispose of (each a "Disposition"), shares of Common
Stock representing in excess of 10% of the Total Voting Power to
any one Person in any transaction or series of transactions,
unless such Person agrees in writing to be bound by the terms of
this Agreement.
<PAGE>
<PAGE> 18 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
9.2 Limitation on Transfer Restrictions. Notwithstanding
the fact that paragraph 9.1 may otherwise be applicable, the
restrictions imposed by paragraph 9.1 shall not apply to the
following Dispositions:
9.2 (a) The tender of shares of Common Stock pursuant
to any tender offer for shares of Common Stock, or the
Disposition of shares of Common Stock in connection with any
merger, consolidation or other extraordinary transaction
involving the Company;
9.2 (b) The Disposition of shares of Common Stock in
connection with a merger, consolidation, liquidation or
dissolution, or the death or incapacity of any Purchaser,
Investor or any Affiliate thereof; provided, that the successors
or distributees of such Purchaser, Investor or Affiliate agree in
writing to be bound by the terms of this Agreement;
9.2 (c) The Disposition of shares of Common Stock to
any Purchaser, Investor or any Affiliate thereof; provided, that
such Purchaser, Investor or Affiliate agrees in writing to be
bound by the terms of this Agreement; and
9.2 (d) The Disposition of shares of Common Stock
pursuant to a registration right provided for in the Registration
Rights Agreement.
9.3 Pledge of Common Stock. Nothing in this Agreement
shall prohibit a bona fide pledge of, or the granting of a
security interest in, shares of Common Stock to an institutional
lender for money borrowed.
10. Representation on Company Board of Directors
10.1 Mr. Ruttenberg - Board of Directors. Eric M.
Ruttenberg ("Mr. Ruttenberg") serves on the Company's Board of
Directors as a member of Class III, having been elected at the
1993 annual meeting of the shareholders and will be subject to
re-election at the 1996 annual meeting of the shareholders. The
Company agrees that during the period that this Agreement is in
effect, the Company will exercise all authority under applicable
law to cause Mr. Ruttenberg to be re-elected or appointed to the
Company's Board of Directors, including, without limitation, (i)
including Mr. Ruttenberg in the slate of nominees recommended by
the Board of Directors to the shareholders at each annual meeting
of the shareholders at which the Class III Directors are
scheduled for election, (ii) soliciting proxies in favor of the
election of Mr. Ruttenberg, and (iii) voting discretionary
proxies in favor of the election of Mr. Ruttenberg.
Notwithstanding the foregoing, if, the Board of Directors
reasonably determines by a two-thirds (2/3) majority vote at a
duly constituted meeting of the Board of Directors that Mr.
Ruttenberg's nomination to serve as a member of the Board of
Directors would be materially adverse to the interests of the
Company due to Mr. Ruttenberg's conviction of a crime or other
conduct bearing on Mr. Ruttenberg's integrity, the Purchasers and
Investors may designate another individual to be appointed to the
Board of Directors pursuant to paragraph 10.3.
<PAGE>
<PAGE> 19 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
10.2 Additional Directors. In the event that the number of
members of the Company's Board of Directors shall be more than
eight (8), the Purchasers and Investors, during the period that
this Agreement is in effect, shall be entitled to propose an
individual to fill the first out of each three (3) Board
positions beyond eight (8) (for example, the Purchasers and
Investors shall be entitled to nominate the individual to fill
the ninth, twelfth, etc. position on the Board of Directors). An
individual or individuals proposed by the Purchasers and
Investors reasonably acceptable to the Company's Board of
Directors shall be appointed to fill such newly created Board
position as a member of a class of directors whose term does not
expire during the period that this Agreement is in effect or, if
such term expires during the period that this Agreement is in
effect, the Company shall, in the manner required by paragraph
10.1, undertake to facilitate the re-election or appointment of
such individual(s) to the Company's Board of Directors.
10.3 Replacement of Mr. Ruttenberg. In the event that
prior to the termination of this Agreement, Mr. Ruttenberg, or
any other member of the Board nominated by the Purchasers and
Investors under this Agreement, shall cease to be a member of the
Company's Board of Directors as a result of his death,
disability, resignation (other than a resignation relating to a
termination of this Agreement), or failure to be re-nominated
pursuant to the last sentence of paragraph 10.1, the Purchasers
and Investors shall be entitled to propose an individual to fill
the vacancy on the Company's Board of Directors thereby created.
An individual proposed by the Purchasers and Investors and
reasonably acceptable to the Company's Board of Directors shall
be appointed to fill such vacancy.
10.4 Approval of Mr. Ruttenberg or Designee. The Board of
Directors agrees that none of the current members of the Board of
Directors, the Company or any Affiliate of any of the foregoing,
will, directly or indirectly, alone or in concert with others,
seek the removal of any Director elected or appointed pursuant to
this paragraph 10 other than for cause. In addition, the Board
of Directors will, unless otherwise required in the exercise of
its fiduciary duties, recommend that shareholders of the Company
vote against any proposal to remove a Director elected or
appointed pursuant to this paragraph 10 other than for cause and
will solicit proxies in opposition to any such proposal.
The Company agrees that if it enters into any written
agreement with any shareholder of the Company providing for the
appointment or election of an individual proposed by such
shareholder to the Board of Directors, the Company will obtain
the written agreement of any such shareholder and such
shareholder's nominee to the Board of Directors that neither such
shareholder nor any of its Affiliates nor such shareholder's
nominee to the Board of Directors nor any of its Affiliates will
directly or indirectly, alone or in concert with others seek the
removal or oppose the re-election of a Director elected or
appointed pursuant to this paragraph 10 other than for cause.
10.5 Committees of the Board of Directors. Mr. Ruttenberg
serves as a member of the Executive Compensation and Stock Option
Committee of the Board of Directors and shall not be removed from
the Executive Compensation and Stock Option Committee so long as
he is a member of the Board of Directors of the Company. In
<PAGE>
<PAGE> 20 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
addition, Mr. Ruttenberg serves as a member of the Directors
Committee and the Audit Committee of the Board of Directors and
shall not be removed from such committees so long as he is a
member of the Board of Directors of the Company. Mr. Ruttenberg
shall also be appointed to the Executive Committee of the Board
of Directors (or such other committee, if any, that serves the
functions typically served by an executive committee of the board
of directors of a corporation) and shall not be removed from such
committee so long as he is a member of the Board of Directors of
the Company. In the event that Mr. Ruttenberg or any Director
elected or appointed pursuant to this paragraph 10 shall cease to
be a member of the Board of Directors as a result of his death,
disability or resignation (other than a resignation relating to a
termination of this Agreement) the vacancy created thereby on
each committee of the Board of Directors of the Company shall be
filled by the Person who fills the vacancy on the Board of
Directors pursuant to paragraph 10.3.
10.6 Purchasers' and Investors' Compliance With Agreement.
Notwithstanding the foregoing provisions of this paragraph 10,
the Purchasers and Investors shall be entitled to designate
nominees for election to the Board of Directors of the Company
only if the Purchasers, Investors and their Affiliates are acting
in material compliance with this Agreement and, as of the record
date for the shareholders' meeting at which such nominees will be
considered for election to the Board, the Purchasers, Investors
and their respective Affiliates Beneficially Own, in the
aggregate, Common Stock representing at least 10% of the Total
Voting Power (the "10% Requirement"); provided, however, that if
the Company issues additional shares of Common Stock and if,
after such issuance, the percentage of Total Voting Power with
respect to Common Stock Beneficially Owned by the Purchasers,
Investors and their respective Affiliates is decreased, then the
10% Requirement shall be decreased by an amount in proportion to
the decrease in the percentage of Total Voting Power of the
Purchasers, Investors and their respective Affiliates.
10.7 Removal of Mr. Ruttenberg or Designee. If Mr.
Ruttenberg (or any other member of the Board nominated by
Purchasers and Investors pursuant to paragraph 10.2 or 10.3) is
removed from the Board of Directors of the Company, other than
pursuant to paragraph 10.3, or the shareholders fail to re-elect
Mr. Ruttenberg (or any other member of the Board nominated by
Purchasers and Investors pursuant to paragraph 10.2) to the Board
of Directors of the Company, this Agreement shall immediately
terminate and neither the Purchasers, Investors nor any of their
Affiliates nor the Company shall have any further obligation
pursuant to this Agreement, provided, however, that following any
such termination and until ___________, 2000, the provisions of
Section 7 shall survive and continue in full force and effect.
<PAGE>
<PAGE> 21 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
11. Breach of Agreement
11.1 Equitable Remedies for Breach of Agreement. The
Purchasers and Investors, on the one hand, and the Company, on
the other hand, acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that
the Parties shall be entitled to equitable relief (including
injunction and specific performance) in any action instituted in
any court of the United States or any state thereof having
subject matter jurisdiction, as a remedy for any such breach or
to prevent any breach of this Agreement. Such remedies shall not
be deemed to be the exclusive remedies for a breach or
anticipatory breach of this Agreement, but shall be in addition
to all other remedies available at law or equity to the Parties
hereof. The Parties hereto irrevocably submit to the exclusive
jurisdiction of the courts of the Commonwealth of Pennsylvania
and the United States of America located in the Commonwealth of
Pennsylvania for any suits, actions or proceedings arising out of
or relating to this Agreement.
12. Stock Restriction Legends
12.1 Stock Restriction Legends. Upon issuance of the
Common Stock pursuant to this Agreement and the Rights Offering,
and so long as the Disposition of the Common Stock is subject to
restriction pursuant to this Agreement, the certificates
evidencing the Common Stock Beneficially Owned by Purchasers and
Investors (and all securities issued in exchange therefor or
substitution thereof) shall bear the following legend:
THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES
EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN
RESTRICTIONS CONTAINED IN AN AGREEMENT, DATED AS OF
________, 1994 BETWEEN SPS TECHNOLOGIES, INC. AND THE
PURCHASERS AND INVESTORS SET FORTH THEREIN, A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF SPS
TECHNOLOGIES, INC. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH RESTRICTIONS ON
SALE, TRANSFER OR OTHER DISPOSITION; PROVIDED, HOWEVER, THAT
SUCH SECURITIES MAY BE PLEDGED TO AN INSTITUTIONAL LENDER AS
SECURITY FOR MONEY BORROWED.
In addition, upon issuance thereof and so long as such
Common Stock is subject to voting restrictions pursuant to this
Agreement, the certificates evidencing the Common Stock (and all
securities issued in exchange therefor or substitution thereof)
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN VOTING RESTRICTIONS SET FORTH IN AN AGREEMENT DATED
AS OF _____________, 1994, BETWEEN SPS TECHNOLOGIES, INC.
AND THE PURCHASERS AND INVESTORS SET FORTH THEREIN, A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
SPS TECHNOLOGIES, INC.
<PAGE>
<PAGE> 22 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
12.2 Exchange of Certificates of Common Stock. Upon
issuance of the Common Stock pursuant to this Agreement and the
Rights Offering, the Purchasers and Investors shall deliver to
the Company all certificates evidencing all other Common Stock
Beneficially Owned by them as of the date of this Agreement and
the Purchasers and Investors shall receive in exchange therefore
new certificates representing such Common Stock, which
certificates shall bear the legends set forth in paragraph 12.1
of this Agreement.
12.3 Exchange of Certificate of Common Stock Upon
Termination. Upon termination of this Agreement or upon any
Disposition of shares of Common Stock pursuant to the terms of
this Agreement under circumstances where such shares of Common
Stock are no longer subject to the restrictions contained in this
Agreement, the Company shall issue new certificate(s) without the
restrictive legends required by this paragraph 12 in exchange for
the legended certificate(s) representing such shares of Common
Stock.
13. Termination
13.1 Termination by Purchasers and Investors Prior to
Closing Date/Effect. Purchasers and Investors acting
collectively may, upon notice to the Company, given at any time
on or before Closing, terminate collectively and only
collectively, this Agreement and the Registration Rights
Agreement, upon the occurrence of (i) a material adverse change
in the business, financial condition, liabilities or results of
operations of the Company and its subsidiaries occurring on or
after the date of this Agreement; (ii) a suspension of trading in
the Company's Common Stock on the New York Stock Exchange; or
(iii) a "stop order" issued by the SEC suspending the
effectiveness of the Registration Statement covering the
Underlying Shares, or a suspension of trading in securities
generally on the New York Stock Exchange; (iv) a material default
or breach by the Company with respect to the due and timely
performance of the Company's agreements contained herein or with
respect to the Company's representations and warranties and such
material default or breach has not been, or is not susceptible of
being with diligent efforts, cured prior to the Closing; (v)
entry of a judgment or order by any court or governmental
authority restraining, prohibiting or materially adversely
interfering with the Rights Offering, this Agreement, the
Registration Rights Agreement or Amendment No. 2.; or (vi) the
Rights Offering has not been completed by the Expiration Date (as
such may be extended in accordance with this Agreement). Upon
termination by Purchasers and Investors pursuant to the
provisions of this paragraph 13.1, this Agreement, the
Registration Rights Agreement and Amendment No. 2 to the Amended
Rights Agreement shall, except as otherwise provided in Section
13.4, be deemed terminated, null and void and of no further force
and effect, and there shall be no liability on the part of the
Parties or their respective officers or directors, except for
liability arising out of any breach or default hereunder.
<PAGE>
<PAGE> 23 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
13.2 Termination by the Company Prior to Closing
Date/Effect. The Company may, upon notice to Purchasers and
Investors, given at any time on or before Closing (A) terminate
collectively and only collectively, this Agreement, the
Registration Rights Agreement and Amendment No. 2 to the Amended
Rights Agreement, upon the occurrence of (i) a suspension of
trading in the Company's Common Stock on the New York Stock
Exchange; or (ii) a "stop order" issued by the SEC suspending the
effectiveness of the Registration Statement covering the
Underlying Shares, or a suspension of trading in securities
generally on the New York Stock Exchange; (iii) entry of a
judgment or order by any court or governmental authority
restraining, prohibiting or materially adversely interfering with
the Rights Offering; or (iv) a material default or breach by
Purchasers and Investors with respect to the due and timely
performance of the Purchaser's and Investor's agreements
contained herein or with respect to Purchaser's and Investor's
representations and warranties and such material default or
breach has not been, or is not susceptible of being with diligent
efforts, cured prior to the Closing, and (B) terminate the Rights
Offering upon the occurrence of any event set forth in clauses
(i), (ii) and (iii) of this paragraph 13.2, and upon such
termination, this Agreement, the Registration Rights Agreement,
Amendment No. 2 to the Amended Rights Agreement and the Rights
Offering (if terminated pursuant to clause (B) of this paragraph
13.2) shall, except as otherwise provided in the next sentence
and in Section 13.4, be deemed terminated, null and void and of
no further force and effect, and there shall be no liability on
the part of the Parties or their respective officers or
directors, except for liability arising out of any breach or
default hereunder. Further, the Company may, subject to
compliance with the Exchange Requirements and upon written notice
to Purchasers and Investors given at any time on or before
Closing, terminate the Rights Offering and this Agreement upon a
determination by the Company, in the exercise of its fiduciary
responsibilities, that the consummation of the Rights Offering is
not in the best interest of the Company, provided, however, that
in the event of any such termination (x) Amendment No. 2 to the
Amended Rights Agreement, (y) the provisions of Sections 7 and 8
of this Agreement, and (z) the Registration Rights Agreement
shall survive and continue in full force and effect until such
time as they would have otherwise terminated pursuant to the
provisions of paragraph 13.3 below or, in the case of the
Registration Rights Agreement, pursuant to its terms.
13.3 Termination of Agreement On and After the Closing
Date. This Agreement shall terminate on and after the Closing
Date without further action by the Parties upon the earliest to
occur of (i) ________, 2000, (ii) the date upon which the
Purchasers and their Affiliates no longer Beneficially Own shares
of Common Stock representing in excess of 10% of the Total Voting
Power, and (iii) an event contemplated by paragraph 10.7 hereof.
13.4 Survival of Certain Provisions. The provisions of
Section 6 of this Agreement shall survive and continue in full
force and effect, notwithstanding any termination of this
Agreement. In the event of any termination of this Agreement,
other than a termination by the Company pursuant to Section
13.2(A)(iv), the Company shall nevertheless be obligated to pay
to Purchasers the Standby Fee contemplated by Section 5.1(h)
hereof.
<PAGE>
<PAGE> 24 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
14. Miscellaneous Provisions
14.1 Entire Agreement. This Agreement (together with the
Rights Offering, the Amended Rights Agreement and the
Registration Rights Agreement) contains the entire understandings
of the Parties with respect to the subject matter hereof and
supersedes all prior agreements, negotiations and understandings,
whether written or oral, between the Parties relating to the
subject matter hereof, and this Agreement may not be amended
except by a writing signed by the Parties. Except as otherwise
provided herein, this Agreement is not assignable by either of
the Parties. This Agreement shall be binding upon, and inure to
the benefit of, the respective successors and permitted assigns
of the Parties. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
14.2 Notice. Any notices and other communications required
to be given pursuant to this Agreement shall be in writing and
shall be given by delivery by hand, by mail (registered or
certified mail, postage prepaid, return receipt requested), by
telecopy or telex, as follows:
If to the Company:
SPS Technologies, Inc.
Jenkintown Plaza
101 Greenwood Avenue, Suite 470
Jenkintown, PA 19046
Attention: General Counsel
With a copy to:
Andrew C. Culbert, Esquire
Masterman, Culbert & Tully
One Lewis Wharf
Boston, MA 02110
If to any Purchaser or Investor:
The address of such Purchaser or Investor set
forth on Schedule I or Schedule II hereto.
With a copy to:
Paul T. Schnell, Esquire
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
or to such other addresses as either the Company or any Purchaser
or Investor shall designate to the other by notice in writing.
<PAGE>
<PAGE> 25 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
14.3 Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Agreement" means this Standby Purchase Agreement among
Purchasers, Investors and the Company.
"Affiliate" shall have the meaning ascribed thereto in Rule
12b-2 of the 1934 Act.
"Amended Rights Agreement" has the meaning given in Recital
D.
"Amendment No. 2" has the meaning given in Recital D.
"Basic Subscription Privilege" has the meaning given in
paragraph 1.2.
"Beneficially Own" with respect to any securities and
"Beneficial Ownership" shall mean having beneficial ownership as
determined pursuant to Rule 13d-3 under the 1934 Act.
"Business Day" shall mean any day on which the NYSE is open
for trading.
"Closing/Closing Date" has the meaning given in paragraph
2.1.
"Common Stock" has the meaning given in Recital A.
"Company" means SPS Technologies, Inc., a Pennsylvania
corporation.
"Disposition" has the meaning given in paragraph 9.1.
"Exchange Requirements" means the requirements of the New
York Stock Exchange for listed companies.
"Expiration Date" has the meaning given in Recital B.
"Gabelli Group Increase" has the meaning given in paragraph
7.3.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"Investors" means the Persons listed on Schedule II hereto.
"No Action Letter" has the meaning given in paragraph
3.1(d).
"Party" means individually Purchasers, Investors or the
Company.
"Percentage Limitation" as used herein shall mean 20% of the
Total Voting Power as may be increased from time to time pursuant
to Section 7.3 hereof); provided, however, that if as a result of
any recapitalization, repurchase or other action by the Company,
the aggregate Total Voting Power Beneficially Owned by the
Purchasers, Investors and their respective Affiliates shall be
<PAGE>
<PAGE> 26 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
increased to more than 20%, then the Percentage Limitation shall
be increased to such increased percentage. In no event shall the
Purchasers and their Affiliates be deemed to have exceeded the
Percentage Limitation if (i) the Purchasers and their Affiliates
shall have exceeded the then applicable Percentage Limitation by
not more than 1% of the Total Voting Power, (ii) the Board of
Directors of the Company shall have determined that such action
was inadvertent, and (iii) the Purchasers, Investors and their
Affiliates shall have reduced their Beneficial Ownership to
within the then applicable Percentage Limitation within twenty
(20) days of receipt of notice from the Company indicating that
the Purchasers, Investors and their Affiliates have exceeded the
Percentage Limitation.
"Person" shall mean any individual, partnership, joint
venture, corporation, trust, incorporated organization,
government or department or agency of a government, or any other
entity that would be deemed to be a "person" under Section
13(d)(3) of the 1934 Act.
"Prospectus" has the meaning given in paragraph 1.3.
"Purchasers means the Persons listed on Schedule I hereto.
"Registration Rights Agreement" has the meaning given in
Recital D.
"Registration Statement" has the meaning given in paragraph
1.3.
"Remaining Shares" has the meaning given in Recital B.
"Restricted Shares" has the meaning given in paragraph 8.3.
"Rights" has the meaning given in paragraph 1.2.
"Rights Offering" has the meaning given in Recital C.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" has the meaning given in paragraph 4.1(i).
"Subchapter F has the meaning given in paragraph 7.2.
"Subscription Price" has the meaning given in Recital A.
"Subscription Rights" has the meaning given in Recital A.
"Total Voting Power" at any time shall mean the total
combined voting power for the general election of directors of
the Company.
"Transactions" has the meaning given in Recital E.
"Underlying Shares" has the meaning given in Recital A.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE>
<PAGE> 27 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
14.4 Disposition of Purchaser or Affiliate. For the
purposes of this Agreement, any Disposition of control of any
Purchaser, Investor or Affiliate thereof by the Persons
controlling such Purchaser, Investor or Affiliate on the date
hereof (other than such a disposition to another Purchaser,
investor or Affiliate thereof) shall be deemed to constitute the
Disposition of the Common Stock Beneficially Owned by such
Purchaser, Investor or Affiliate.
14.5 HSR Act. Each of the Parties covenants and agrees
that within 14 days of a written request by any Purchaser or
Investor (i) it will make all filings required under the HSR Act
in connection with the Purchasers', Investors' and their
Affiliates' acquisition and/or Beneficial Ownership of Common
Stock having voting power up to the Percentage Limitation, and
(ii) it will otherwise use its best efforts and cooperate fully
with the other Parties to obtain any approvals that may be
required under the HSR Act in connection the Purchasers',
Investors' and their Affiliates' acquisition and/or Beneficial
Ownership of Common Stock having voting power up to the
Percentage Limitation. The Company agrees to reimburse
Purchasers, Investors and their Affiliates in the amount of any
filing fees actually paid with respect to filings required under
the HSR Act in connection with the Purchasers', Investors' and
their Affiliates' acquisition and/or Beneficial Ownership of
Common Stock having voting power up to the Percentage Limitation.
14.6 Further Undertakings. Subject to the terms and
conditions of this Agreement, each of the Parties hereby agrees
to use all reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws, rules and regulations
to consummate and make effective the Transactions, including
using its best efforts to obtain all necessary waivers, consents,
and approvals. In case at any time after the execution of this
Agreement, further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and directors
of each of the Parties shall take all such necessary action.
14.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
<PAGE>
<PAGE> 28 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
IN WITNESS WHEREOF, the Parties have hereunto caused this
Agreement to be duly executed as of the day and year first above
written.
SPS TECHNOLOGIES, INC.
By:___________________________
Charles W. Grigg, Its
Chairman and Chief Executive
Officer, hereunto duly
authorized
Purchasers:
______________________________
______________________________
______________________________
______________________________
Investors:
______________________________
______________________________
______________________________
______________________________
<PAGE>
<PAGE> 29 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
SCHEDULE 1
TO
STANDBY PURCHASE AGREEMENT
DATED AS OF _________, 1994
(Names and Addresses of Purchasers)
<PAGE>
<PAGE> 30 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
SCHEDULE 2
TO
STANDBY PURCHASE AGREEMENT
DATED AS OF _________, 1994
(Names and Addresses of Investors)
<PAGE>
<PAGE>
<PAGE> 1 Exhibit 23.1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated March 2, 1994, except
as to Note 12 for which the date is March 21, 1994, (which includes an
explanatory paragraph regarding the Company's change in method of accounting
for income taxes and post retirement benefits other than pensions in 1992) on
our audits of the consolidated financial statements and financial statement
schedules of SPS Technologies, Inc. and subsidiaries as of December 31, 1993
and 1992, and for each of the three years in the period ended December 31,
1993, which report is included or incorporated by reference in the
SPS Technologies, Inc. Annual Report on Form 10-K for the year ended
December 31, 1993.
We also consent to the references to our firm set forth under the
caption "Experts" in this Registration Statement.
/S/ Coopers & Lybrand L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
August 25, 1994
<PAGE>
<PAGE>
<PAGE> 1 Exhibit 23.2
Exhibit 23.2
AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: SPS Technologies, Inc.
Registration on Form S-3
We are aware that our report dated May 12, 1994 on our review of
interim financial information of SPS Technologies, Inc. for the period ended
March 31, 1994 and included in the Company's quarterly report on Form 10-Q for
the quarter then ended is incorporated by reference in this Registration
Statement. Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of the Registration Statement prepared
or certified by us within the meaning of Sections 7 and 11 of that Act.
/S/ Coopers & Lybrand L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
August 25, 1994
<PAGE>