<PAGE> 1
As filed with the Securities and Exchange Commission on November 16, 1994.
Registration No. 33-55259
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
AMENDMENT NO. 1 TO
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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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)
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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
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement
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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: / /
---------------------------
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.
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PROSPECTUS 515,000 Shares
- ---------- SPS TECHNOLOGIES, INC.
Common Stock
Par value $1.00 per share
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 $24.50 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
November 28, 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
November 16, 1994 with the "Purchasers" and "Investors" named therein. Pursuant
to the Standby Purchase Agreement, Purchasers have agreed, among other things,
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
October 31, 1994, the Purchasers and Investors, together with their Affiliates,
beneficially owned an aggregate of approximately 9.9% of the outstanding Common
Stock. Pursuant to the Standby Purchase Agreement, the Purchasers are to receive
an amount equal to one-half of 1% of the gross proceeds to be received by the
Company in connection with the Rights Offering in reimbursement of certain
expenses incurred by the Purchasers in connection with the Rights Offering (the
"Expense Reimbursement"). 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
November 16, 1994 ("Amendment No. 2"); and (ii) entered into a Registration
Rights Agreement among the Company, Purchasers and Investors, dated as of
November 16, 1994 (the "Registration Rights Agreement"). See "The Standby
Purchase Agreement" and "Description of Capital Stock - Common Stock -
Registration Rights Agreement - Amendments to Rights Agreement."
The Rights will expire at 5:00 p.m., New York City local time, on December
16, 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.
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 November 15, 1994, the closing sale price of the
Common Stock on the New York Stock Exchange Composite Transactions Tape (the
"NYSE Composite Tape") was $25.62 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.
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Price to Public Underwriting Discounts and Commissions Proceeds to Company(1)
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Per Share..... $24.50 None $24.50
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Total......... $12,617,500.00 None $12,617,500.00
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(1) Before deduction of approximately $63,087.50 to be paid to the Purchasers
in reimbursement of certain expenses incurred by the Purchasers in
connection with the Rights Offering pursuant to the Standby Purchase
Agreement (see "The Standby Purchase Agreement") and other expenses of the
Rights Offering estimated to be $222,261.53.
The date of this Prospectus is November 16, 1994.
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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, NY 10048; and at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 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, NY 10005.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (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 and the related amendment filed on Form 10-K/A-1 for the year ended
December 31, 1993.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994, June 30, 1994 and September 30, 1994, and the related
amendments filed on Form 10-Q/A-1 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> 4
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.
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The Rights Offering
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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 November 28, 1994.
Expiration Date 5:00 p.m. New York City local time, on December 16, 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 $24.50, in cash, per Underlying Share purchased pursuant to the Subscription Privilege or the
Standby Purchase Agreement. See "The Rights Offering - Determination of Subscription Price."
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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 5,633,798 shares, based on 5,118,798 shares outstanding on October 31, 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 promptly 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."
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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 (2) 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 whose 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 net proceeds from
the Transaction will be approximately $12,330,000.00. 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."
Pursuant to the mandatory prepayment provisions of the Bank
Credit Agreement, unless waived by the lenders, the Company
is required to prepay debt or have its debt capacity reduced
by the amount by which the net proceeds from equity
financing, such as the Rights Offering, exceed $10,000,000.
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 in New York is (212) 440-9800, and
outside of New York is toll-free (800) 223-2064.
The Standby
Purchase Agreement The Company has entered into the Standby Purchase Agreement with the Purchasers and Investors. As of
October 31, 1994, the Purchasers and Investors, together with their Affiliates, beneficially owned an aggregate
of 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 pursuant 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 (6) 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."
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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".
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<PAGE> 8
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 nine month period ended September 30, 1994, the Company reported
net earnings of $1.6 million, or $.30 per share, compared to a net loss of $3.8
million, or $.75 per share, for the same period in 1993. The net earnings for
the nine months ended September 30, 1994 contained 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 83% at September 30, 1994, compared to
87% at December 31, 1993. Total debt was $91.2 million at September 30, 1994, an
increase of $2 million from the end of 1993. Notwithstanding current earnings,
no assurances can be given that the Company will not incur losses in future
periods or that such losses, if incurred, will not have a material impact on the
Company's financial condition.
Environmental Contingencies
The Company has been identified as a potentially responsible party by
various federal and state authorities for clean-up or removal of waste from
various disposal sites. At September 30, 1994, the accrued liability for
environmental remediation represents management's best estimate of the probable
and reasonably estimable costs related to environmental remediation. The
measurement of the liability is evaluated quarterly based on currently available
information. As the scope of the Company's environmental liability becomes more
clearly defined, it is possible that additional reserves may be necessary.
Accordingly, it is possible that the Company's results of operations in future
quarterly or annual periods could be materially adversely affected. However,
management believes that the overall costs of environmental remediation will be
incurred over an extended period of time and, as a result, such costs are not
expected to have a material impact on the consolidated financial position of
the Company.
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. 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 competes with other companies having greater financial resources than
the Company.
Dividend Policy
The Company does not anticipate the payment of dividends on the 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.
Concentration of ownership in certain holders of Common Stock may increase
significantly as a result of the Rights Offering.
<PAGE> 9
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
effective date of the Company's Registration Statement. 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.
The sale of the Rights by a Shareholder may not compensate such Shareholder for
all or any part of any reduction in the market value of such Shareholder's
shares of Common Stock due to the Rights Offering. 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 $3.24 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 September
30, 1994 of $21.76 per share on a pro forma basis. See "Unaudited Pro Forma
Consolidated Capitalization."
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).
Certain Tax Considerations
Shareholders will not recognize taxable income, for federal income tax
purposes, in connection with the receipt of the Rights and will not recognize
any gain or loss upon the exercise of such Rights. Shareholders who sell their
Rights prior to exercise may recognize gain or loss in the Rights sold. EACH
SHAREHOLDER IS URGED TO CONSULT SUCH SHAREHOLDER'S OWN TAX ADVISOR AS TO THE
SPECIFIC TAX CONSEQUENCES OF THE RIGHTS OFFERING AS MAY BE APPLICABLE TO THAT
SHAREHOLDER. In addition, the Company does not believe that as a consequence of
the Rights Offering there will be any ownership change in the Company which
would eliminate partially or completely the Company's net operating loss
carryforwards available to reduce the Company's future taxable income or that
the Company has been incorrect in any of its loss carryforward calculations.
However, since the law is sometimes unclear or unsettled with respect to such
loss carryforwards, there can be no assurance in this regard. See "Certain
Federal Income Tax Considerations."
SIGNIFICANT SHAREHOLDERS
As of October 31, 1994, several entities or individuals owned 5% or more of
the Common Stock, including the Purchasers, Investors and their Affiliates who
collectively beneficially owned approximately 9.9% of the 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."
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."
<PAGE> 10
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" and "Description of Capital Stock - Antitakover Provisions."
USE OF PROCEEDS
The Company anticipates that the proceeds available to the Company from the
Transaction will be approximately $12,330,000.00. 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. Pursuant to the mandatory prepayment provisions
of the Bank Credit Agreement, unless waived by the lenders, the Company is
required to prepay debt or have its debt capacity reduced by the amount by which
the net proceeds from equity financing, such as the Rights Offering, exceed
$10,000,000.
PRO FORMA CONSOLIDATED CAPITALIZATION TABLE
The following table sets forth the consolidated capitalization of the
Company at September 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
capitalization, 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.
SPS TECHNOLOGIES
PRO FORMA CONSOLIDATED CAPITALIZATION TABLE AT SEPTEMBER 30, 1994
($000's)
<TABLE>
<CAPTION>
ACTUAL IMPACT AS ADJUSTED
------ ------ -----------
<S> <C> <C> <C>
LONG-TERM DEBT $86,112 (12,575) 73,547
======= ======= ======
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 6,372,256 shares 6,372 6,372
----- -----
Additional paid-in-capital 59,972 8,414 63,386
----- -----
Retained earnings 62,066 62,066
----- -----
Minimum pension liability (1,780) (1,780)
Common stock in treasury,
at cost ($8.08)
1,253,458 shares as of 9/30/94 (10,132) 4,161 (5,971)
515,000 shares issued as part of
Transaction 738,458 shares after
Transaction
Cumulative translation adjustments (6,482) (6,482)
----- -------
TOTAL SHAREHOLDERS' EQUITY 110,016 12,575 122,591
======= ====== =======
TOTAL SHARES OUTSTANDING 5,118,798 515,000 5,633,798
--------- ------- ---------
BOOK VALUE PER SHARE $21.49 $.27 $21.76
------ --- ------
EXERCISE PRICE NA NA $25.00
DILUTION PER SHARE $3.24
-----
</TABLE>
<PAGE> 11
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 December 16,
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 $24.50, 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."
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 (a) 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", or (b) by wire transfer of funds to the account
maintained by the Subscription Agent for such purpose at Mellon Bank, N.A.,
Pittsburgh, PA, ABA No. 043000261, Account No. 100-2331, Mellon Financial
Services Corporation, #17, Reorg. Account, Attention: SPS Rights, Evelyn
O'Connor. The Subscription Price will be deemed to have been
received by the Subscription Agent only upon (i) clearance of any uncertified
check, (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, or (iii) receipt of collected funds in the Subscription Agent's account
designated above. 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 OR BY WIRE TRANSFER OF FUNDS.
<PAGE> 12
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 toll-free (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;
(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> 13
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.
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. The Subscription Agent shall not sell the Rights at a
price which would result in a net loss to the Subscription Agent after any
applicable brokerage commissions, taxes or other direct expenses of sale. 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, two (2) NYSE trading days 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> 14
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 (upon approval by the NYSE) 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.
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 (other than Eric M. Ruttenberg who
has abstained from voting on all matters related to the Rights Offering and the
Transaction) 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 the 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.
<PAGE> 15
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 toll-free (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 liabilities which
it may incur in connection with the Rights Offering.
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 in New York is (212) 440-9800 and
outside of New York is toll-free (800) 223-2064.
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.
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.
<PAGE> 16
No Board Recommendation
An investment in the Common Stock must be made pursuant to each Rights
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 (other than Eric M.
Ruttenberg who has abstained from voting on all matters relating to the Rights
Offering and the Transaction) 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
November 16, 1994, with Tinicum Enterprises, Inc., Tinicum Investors, RUTCO
Incorporated, Tinicum Foreign Investments Corporation, Tinicum Associates, G.P.,
Putnam L. Crafts, Jr. and James H. Kasschau (collectively, the "Purchasers"),
and RIT Capital Partners plc, J. Rothchild Capital Management Limited and St.
James's Place Capital plc (collectively, the "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 October 31, 1994, the Purchasers, Investors and their Affiliates
beneficially owned an aggregate of 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 50,430 shares of Common
Stock upon exercise of their Subscription Privilege. In addition, the
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 an aggregate of approximately 18% of the
Common Stock outstanding immediately after consummation of the Transaction.
Pursuant to the Standby Purchase Agreement, the Purchasers will receive from
the Company, in addition to certain other contractual benefits described below
and as reimbursement for certain expenses incurred by the Purchasers in
connection with the Rights Offering, the Expense Reimbursement.
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 Expense
Reimbursement; 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 Standby 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.
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, subject to the requirements of the NYSE,
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 (other than Eric M. Ruttenberg who has abstained
from voting on all matters related to the Rights Offering and the Transaction)
has determined that the consummation of the Rights Offering and the Transaction
would be in the best interest of the Company.
<PAGE> 17
Certain indemnification provisions set forth in the Standby Purchase Agreement
shall survive any termination of the Standby Purchase Agreement. In addition,
certain other provisions of the Standby Purchase Agreement shall survive the
termination of the Standby Purchase Agreement by the Company pursuant to the
exercise of the Company's Board of Director's fiduciary responsibilities.
Further, in the event of termination of the Standby Purchase Agreement by the
Company, the Company shall pay the Expense Reimbursement to Purchasers, unless
such termination results from a material default or breach by Purchasers and
Investors with respect to their due and timely performance of the agreements or
the representations and warranties contained in the Standby Purchase Agreement.
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 of 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 representing 20% or more of the Total Voting Power, but not in
excess of the Percentage Limitation.
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 to any one person in any transaction or
<PAGE> 18
series of transactions, 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.
During the term of the Standby Purchase Agreement, the Company has agreed to
exercise all authority under applicable law, 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 October 31, 1994, 5,118,798 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 October 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.
Registration Rights Agreement. The Company has entered into the Registration
Rights Agreement with the Purchasers and Investors, dated as of November 16,
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 November 16, 1994, but the piggyback registration rights will be
currently exercisable. All such registration rights will terminate on November
16, 2002. A demand registration may be effected only 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.
<PAGE> 19
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."
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 November 16, 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"), other than an "Exempted Person" (as defined in the Rights
Agreement) 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 of 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."
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 approximately 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."
<PAGE> 20
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
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.
<TABLE>
<CAPTION>
Dividend
High Low Declared
---- --- --------
<S> <C> <C> <C>
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 ................................ 27.38 25.25 -0-
Fourth Quarter through November 15, 1994 ..... 26.50 25.00 -0-
</TABLE>
On November 15, 1994, the closing price of the Common Stock was $25.62 per
share. As of November 10, 1994, there were 1,386 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> 21
SECURITY OWNERSHIP OF CERTAIN PERSONS
As of October 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:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
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,
Tinicum Associates, G.P.,
Tinicum Foreign Investments Corporation,
RUTCO Incorporated,
RIT Capital Partners plc,
J. Rothschild Capital
Management Limited,
St. James's Place Capital plc,
Putnam L. Crafts, Jr., and
James H. Kasschau
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
- ----------------------------------------------------------------------------------------------------
</TABLE>
(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 August 29, 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:
Tinicum Enterprises, Inc. ("Enterprises") - 214,000 shares (sole voting and
dispositive power); Tinicum Investors ("Investors") - 73,904 shares (sole
voting and dispositive power); Tinicum Associates, G.P. ("Associates"),
Tinicum Foreign Investments Corporation ("Foreign") and RUTCO Incorporated
("RUTCO") (no voting or dispositive power); RIT Capital Partners plc ("RIT")
- 132,311 shares (shared voting and 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); Putnam L. Crafts, Jr. - 84,085 shares (sole voting and dispositive
power); and James H. Kasschau (no voting or 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 Enterprises, Investors,
Associates, Foreign and RUTCO. See the "Standby Purchase Agreement."
<PAGE> 22
(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 the 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.
Information pertaining to the voting securities of the Company
beneficially owned, as of October 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 October 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 Enterprises and Investors which have
direct beneficial ownership of 214,000 and 73,944 shares of Common Stock,
respectively. Mr. Ruttenberg is also affiliated with Associates, Foreign and
RUTCO. Based on understandings with certain other beneficial owners of
shares of Common Stock as set forth in Schedule 13D filed on August 29, 1994
with the Securities and Exchange Commission with respect to such shares,
Enterprises, Investors, Associates, Foreign and RUTCO 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, Associates,
Foreign, RUTCO or such other beneficial owners. See the "Standby Purchase
Agreement."
<PAGE> 23
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 does 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 tax 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.
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.
<PAGE> 24
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.
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> 25
<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. -------------
PROSPECTUS
-------------
-------------
TABLE OF CONTENTS
Page
----
Available Information . . . . . . .
Incorporation of Certain Documents
by Reference . . . . . . . . . . .
Prospectus Summary . . . . . . . . .
Risk Factors . . . . . . . . . . . .
Use of Proceeds. . . . . . . . . . .
Pro Forma Capitalization Table . . .
The Rights Offering. . . . . . . . .
The Standby Purchase Agreement . . . November 16, 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> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee........................ $ 4,761.53
*Accounting fees and expenses .............................................. 25,000.00
*Legal fees and expenses ................................................... 150,000.00
*Blue Sky fees and expenses ................................................ 1,000.00
*Purchasers' Expense Reimbursement ......................................... 63,087.50
*Subscription Agent fees and expenses ...................................... 10,000.00
*Information Agent fees and expenses ....................................... 8,500.00
*Printing and Engraving expenses ........................................... 9,000.00
*Mailing expenses .......................................................... 6,500.00
*Miscellaneous expenses .................................................... 7,500.00
-----------
Total expenses........................................................ $285,349.03
===========
</TABLE>
*Estimated
All of the fees and other expenses of the Rights Offering 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.
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.
<PAGE> 27
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.
Item 16. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
Exhibits
<S> <C> <C>
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 -- Form of 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 (marked to show changes from
previously filed form)
10.2 -- Intentionally Omitted.
*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 filed as Exhibit 5.1 to this Registration
Statement)
**24.1 -- Powers of Attorney (included in signature page of the Registration Statement)
- -----------------------
</TABLE>
*Filed herewith.
**Previously filed.
<PAGE> 28
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) It will 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> 29
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 Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Jenkintown, Commonwealth of Pennsylvania, on
November 15, 1994.
SPS TECHNOLOGIES, INC.
By: /S/ Aaron Nerenberg
-------------------------------
Aaron Nerenberg, Vice President,
General Counsel and Secretary
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/ Harry J. Wilkinson(1)
- ------------------------- Chairman, Chief Executive November 15, 1994
Charles W. Grigg Officer and Director
/S/ Harry J. Wilkinson
- ------------------------- President, Chief November 15, 1994
Harry J. Wilkinson Operating Officer and Director
/S/ Harry J. Wilkinson(1)
- ------------------------- Vice President Corporate November 15, 1994
John P. McGrath Services
/S/ Harry J. Wilkinson(1)
- ------------------------- Vice President, General November 15, 1994
Aaron Nerenberg Counsel and Secretary
/S/ Harry J. Wilkinson(1)
- ------------------------- Treasurer and November 15, 1994
John M. Morrash Assistant Secretary
/S/ Harry J. Wilkinson(1)
- ------------------------- Controller November 15, 1994
William M. Shockley
/S/ Harry J. Wilkinson(1)
- ------------------------- Director November 15, 1994
Howard T. Hallowell, III
/S/ Harry J. Wilkinson(1)
- ------------------------- Director November 15, 1994
John Francis Lubin
/S/ Harry J. Wilkinson(1)
- ------------------------- Director November 15, 1994
Paul F. Miller, Jr.
/S/ Harry J. Wilkinson(1)
- ------------------------- Director November 15, 1994
Eric M. Ruttenberg
/S/ Harry J. Wilkinson(1)
- ------------------------- Director November 15, 1994
Raymond P. Sharpe
- ----------------------------
(1) As attorney-in-fact
</TABLE>
<PAGE> 30
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description Page Number
------ ------------------- -----------
<S> <C> <C> <C>
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 -- Form of 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 (marked to show changes from
previously filed form)
10.2 -- Intentionally Omitted
*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 filed as Exhibit 5.1 to this Registration
Statement)
**24.1 -- Powers of Attorney (included in signature page of the Registration Statement)
- -----------------------
*Filed herewith.
**Previously filed.
</TABLE>
<PAGE> 1
NUMBER SHARES
SPS TECHNOLOGIES, INC. SEE REVERSE FOR CERTAIN
DEFINITIONS
PAR VALUE $1.00 CUSIP 784626 10 3
THIS CERTIFIES THAT
PHOTO SPECIMEN
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES
INCORPORATED UNDER THE LAWS OF OF THE COMMON STOCK OF
THE COMMONWEALTH OF PENNSYLVANIA
CERTIFICATE OF STOCK
COMMON STOCK SPS Technologies, Inc. (hereinafter called
"Company") transferable on the books of the
DATED Company in person or by duly authorized
attorney upon surrender of this certificate
properly endorsed. This certificate and the
shares represented hereby are issued and
shall be held subject to all of the
provisions of the Certificate of
Incorporation, as amended, of the Company,
to all of which the holder, by acceptance
hereof, assents. This certificate is not
valid until countersigned by the Transfer
Agent and registered by the Registrar.
Witness the seal of the Company and the
signatures of its duly authorized officers.
SEAL
/s/ JM Morrash /s/ Charles W. Grigg
-------------- --------------------
TREASURER CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
COUNTERSIGNED AND REGISTERED:
MELLON BANK, N.A.
TRANSFER AGENT
AND REGISTRAR,
BY
AUTHORIZED OFFICER.
<PAGE> 2
This Certificate also evidences a beneficial interest in and entitles the
holder hereof to certain Rights as set forth in the Rights Agreement between
SPS Technologies, Inc. (the "Company") and Mellon Bank (East) N.A. (the
"Rights Agent") dated as of November 11, 1988 (the "Rights Agreement"), and
as the same may be amended from time to time, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate certificates
and beneficial interests therein will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy
of the Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEM COM -- as tenants in common UNIF GIFT MIN ACT --........Custodian........
(Cust) (Minor)
TEN ENT -- as tenants by the under Uniform Gifts to Minors
entireties
JT TEN -- as joint tenants with
right of survivorship Act.......................
and not as tenants in (State)
common
Additional abbreviations may also be used though not in the
above list.
For value received, _________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint---------------------------------------------
- --------------------------------------------------------------------------------
Attorney to transfer the said stock on the books of the within named Company
with full power of substitution in the premises.
Dated,---------------------------------
-------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
<PAGE> 1
Exhibit 4.4
THIS SUBSCRIPTION CERTIFICATE WILL BE VALUELESS IF NOT USED
ON OR BEFORE 5:00 P.M., NEW YORK CITY LOCAL TIME ON , 1994.
SUBSCRIPTION CERTIFICATE NO. RIGHTS TO PURCHASE
COMMON STOCK OF
SPS TECHNOLOGIES, INC.
SUBSCRIPTION CERTIFICATE
SPS TECHNOLOGIES, INC.
THE TERMS AND CONDITIONS OF THIS RIGHTS OFFERING ARE SET FORTH IN THE
PROSPECTUS RELATING TO 515,000 SHARES OF COMMON STOCK OF SPS
TECHNOLOGIES, INC. ("SPS") DATED , 1994 (THE "PROSPECTUS") AND ARE
INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE
AVAILABLE UPON REQUEST FROM SPS, GEORGESON & COMPANY INC. (THE
"INFORMATION AGENT") AND MELLON BANK, N.A. (THE "SUBSCRIPTION AGENT").
CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION SHALL HAVE THE MEANINGS
SET FORTH IN THE PROSPECTUS.
SUBSCRIPTION PRICE: CUSIP 784626 12 9
$ PER SHARE
The Rights represented by this Subscription Certificate, in whole or in part,
may be exercised by duly completing Form 1, may be transferred or
exercised or sold through a bank or broker by duly completing Form 2,
and may be sold through the Subscription Agent by duly completing Form 3.
Before exercising or selling Rights, Rights Holders are urged to read
carefully and in their entirety the Prospectus and Instructions, copies
of which are available from SPS, the Information Agent and the Subscription
Agent. IMPORTANT -- Complete appropriate FORM and, if applicable, delivery
instructions, and SIGN on reverse side. If the instructions of the registered
holder hereof are insufficient to delineate the proper action to be taken
with respect to all of the Rights evidenced hereby, such action as is
clearly delineated in such holder's instructions will be taken and such
holder will be delivered a new Subscription Certificate evidencing the
remaining Rights to which such holder is entitled.
The registered holder of Rights whose name is set forth herein, or assigns,
is entitled to subscribe for one share of Common Stock of SPS Technologies,
Inc. for each Right evidenced hereby under the terms and subject to the
conditions set forth in the Prospectus relating thereto.
SPS TECHNOLOGIES, INC.
By: SEAL By:
Chairman and Chief Executive Officer Treasurer and Assistant Secretary
THIS SUBSCRIPTION CERTIFICATE IS TRANSFERABLE AND MAY BE COMBINED OR DIVIDED
(BUT ONLY INTO SUBSCRIPTION CERTIFICATES EVIDENCING A WHOLE NUMBER OF RIGHTS)
AT THE OFFICE OF THE SUBSCRIPTION AGENT.
Countersigned:
Mellon Bank, N.A.
Subscription Agent
By
Authorized Signature
<PAGE> 2
RIGHTS HOLDERS SHOULD BE AWARE THAT IF THEY CHOOSE TO EXERCISE OR TRANSFER
LESS THAN ALL OF THE RIGHTS EVIDENCED HEREBY, A NEW SUBSCRIPTION CERTIFICATE
MAY NOT BE RECEIVED IN SUFFICIENT TIME TO EXERCISE THE REMAINING RIGHTS
EVIDENCED THEREBY. NEITHER SPS 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 TIME.
ANY EXERCISE, TRANSFER OR SALE OF RIGHTS EVIDENCED HEREBY IS IRREVOCABLE.
FORM 1-EXERCISE AND SUBSCRIPTION: The undersigned hereby exercises one or
more Rights to subscribe for shares of Common Stock as indicated below, on
the terms and subject to the conditions specified in the Prospectus, receipt
of which is hereby acknowledged.
(a) Number of shares subscribed for pursuant
to the Subscription Privilege (not to
exceed the number of Rights stamped on the
face of this Subscription Certificate) (a)--------------------
(b) Total Subscription Price (number of
shares on line (a) multiplied by the
Subscription Price of $ ): (b)--------------------
METHOD OF PAYMENT (CHECK AND COMPLETE APPROPRIATE BOX(ES)):
/ / Uncertified, certified or cashier's check or money order in the
amount of $---------- payable to Mellon Bank, N.A.
/ / Wire transfer in the amount of $---------- directed to Mellon Bank,
N.A., Pittsburgh, Pennsylvania, aba no. 043000261, account
no. 100-2331, Mellon Financial Services Corporation, #17, Reorg.
account, attention: SPS Rights, Evelyn O'Connor, indicate your
name and the name of institution wire-transfering funds.
(c) If the number of Rights being exercised pursuant to the Subscription
Privilege is less than all of the Rights represented by this
Subscription Certificate (check only one):
/ / Deliver to the undersigned a new Subscription Certificate evidencing
the remaining Rights to which the undersigned is entitled.
/ / Deliver a new Subscription Certificate evidencing the remaining
Rights in accordance with the undersigned's instructions on Form 2
below (which include any required signature guarantee).
/ / Sell the remaining unexercised Rights in accordance with the
undersigned's instructions on Form 3 below.
(d) Check here if Rights are being exercised pursuant to a notice of
guaranteed delivery delivered to the Subscription Agent prior to
/ / the date hereof and complete the following:
Name(s) of Registered Holder(s):------------------------------------
Window Ticket Number (if any):--------------------------------------
Date of Execution of Notice of Guaranteed Delivery:-----------------
Name of Eligible Institution which Guaranteed Delivery:-------------
/ / FORM 2-CHECK HERE (A) TO TRANSFER YOUR SUBSCRIPTION CERTIFICATE FOR
SOME OR ALL OF YOUR RIGHTS, OR (B) TO EXERCISE OR SELL RIGHTS THROUGH
YOUR BANK OR BROKER: For value received, Rights represented by this
Subscription Certificate are hereby assigned to (please print name(s)
and address(es) and Taxpayer Identification or Social Security
Number(s) of transferees in full):
Name:---------------------------------------------------------------------
Address:------------------------------------------------------------------
- --------------------------------------------------------------------------
Taxpayer Identification or Social Security Number:------------------------
/ / FORM 3- CHECK HERE TO SELL SOME OR ALL OF YOUR UNEXERCISED RIGHTS
THROUGH THE SUBSCRIPTION AGENT AND COMPLETE THE FOLLOWING: The undersigned
hereby authorizes the Subscription Agent to sell ---------- Rights represented
by this Subscription Certificate but not exercised hereby and to deliver to
the undersigned a check for the proceeds from the sale thereof, less any
applicable brokerage commissions, taxes or other direct expenses of sale. The
Subscription Agent's obligation to execute orders is subject to its ability
to find buyers for the Rights.
In order to sell Rights through the Subscription Agent, you must complete,
sign and submit with this Subscription Certificate the Substitute Form W-9
as provided in Paragraph 8 of the Instructions.
/ / FORM 4-CHECK HERE FOR SPECIAL ISSUANCE, PAYMENT OR DELIVERY
INSTRUCTIONS. Unless otherwise indicated below, the Subscription Agent is
hereby authorized to issue and deliver any check, Subscription Certificate
and certificates for Common Stock to the undersigned at the address
appearing on the face of this Subscription Certificate.
Name:---------------------------------------------------------------------
Address:------------------------------------------------------------------
- --------------------------------------------------------------------------
Taypayer Identification or Social Security Number:------------------------
<PAGE> 3
- --------------------------------------------------------------------------
IMPORTANT
RIGHTS HOLDER SIGN HERE AND, IF RIGHTS ARE BEING SOLD OR EXERCISED,
PLEASE ALSO COMPLETE, SIGN AND SUBMIT SUBSTITUTE FORM W-9 ENCLOSED
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Signature(s) of Holder(s))
Dated:--------------------------------------------------------------- 1994
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
this Subscription Certificate. If signature is by Trustee(s), executor(s),
administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of
a corporation or another acting in a fiduciary or representative capacity,
please provide the following information. See instructions.)
Name(s)-------------------------------------------------------------------
- --------------------------------------------------------------------------
(Please Print)
Capacity------------------------------------------------------------------
Area Code and
Telephone Number----------------------------------------------------------
(Name)
- --------------------------------------------------------------------------
(Address)
Tax Identification or
Social Security No.-------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
Note: See paragraph 3(e) of Instructions
Authorized Signature------------------------------------------------------
Name----------------------------------------------------------------------
Title---------------------------------------------------------------------
Name of Firm--------------------------------------------------------------
Address-------------------------------------------------------------------
Indicate name of Approved Signature Guarantee Medallion Program
in which Firm is a member-------------------------------------------------
<PAGE> 1
Exhibit 4.9
RIGHTS SUBSCRIPTION OFFER AGENCY AGREEMENT
Mellon Bank, N.A.
Commerce Court
4 Station Square, 3rd Floor
Pittsburgh, PA 15219
Gentlemen:
The following relates to a rights offering (the "Rights
offering") to be undertaken by SPS Technologies, Inc. ("SPS
Technologies" or the "Company"), as is more fully described below and
in the Prospectus dated , 1994 attached hereto as Exhibit 1 with
respect to which Mellon Bank, N.A. ("Mellon" or the "Subscription
Agent") has agreed to serve as Subscription Agent on the terms set
forth herein and in the Prospectus. Mellon's duties as Subscription
Agent will be separate from, and in addition to, its continuing duties
as Transfer Agent for SPS Technologies' Common Stock (in which
capacity Mellon is herein referred to as the "Transfer Agent").
Section 1. The Rights and the Rights Offering. SPS
Technologies intends to issue to the holders of record ("Record
Date Holders") of its outstanding common stock, $1.00 par value
per share the "Common Stock"), at the close of business on
, 1994 (the "Record Date") one (1) transferable Right
to Purchase the Company's Common Stock (the "Rights") for each ten
(10) shares of Common Stock held by them. 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 Record Date Holder
will be rounded up to the nearest whole number of Rights. Record Date
Holders will be entitled to subscribe for one (1) share of Common
Stock for each Right held by them for a purchase price (the
"Subscription Price") of $ per share (the "Subscription Privilege")
subject to the terms and conditions set forth in the Prospectus. The
Rights will expire at 5:00 p.m., New York City local time, on
, 1994 ("Expiration Date"). The exercise of Rights
is irrevocable.
The Rights will be evidenced by transferable subscription
certificates (the "Subscription Certificates"), a copy of the form of
which is attached hereto as Exhibit 2.
All shares of Common Stock offered in the Rights Offering
for which no Subscription certificates are exercised (the "Remaining
Shares") will be acquired by certain purchasers (the "Purchasers")
pursuant to the terms of a Standby Purchase
<PAGE> 2
Agreement dated as of , 1994 by and among Purchasers and SPS
Technologies (the "Standby Purchase Agreement") at a "Closing" (as
defined in the Standby Purchase Agreement) to be held subsequent to
the Expiration Date.
SPS Technologies has filed a Registration Statement with the
Securities and Exchange Commission under the Securities Act of 1933,
as amended (the "1933 Act") relating to the Rights and the Common
Stock to be issued pursuant to the Rights Offering. The Registration
Statement has been declared effective. A copy of the Prospectus, as
filed pursuant to applicable rules under the 1933 Act, will be
furnished to Mellon. As used herein, the term "Prospectus" shall mean
the prospectus most recently furnished to Mellon by SPS Technologies.
Section 2. Appointment of Subscription Agent.
A. SPS Technologies hereby appoints Mellon Bank, N.A. as
Subscription Agent for the Rights Offering, and Mellon hereby agrees
to act as Subscription Agent in accordance with this Agreement. In
connection with its appointment as Subscription Agent, SPS
Technologies hereby also appoints Mellon as Transfer Agent and as
Registrar for SPS Technologies with respect to the Subscription
Certificates, to act as is customary in such capacities. SPS
Technologies has previously appointed Mellon as Transfer Agent and
Registrar for SPS Technologies for its Common Stock, which appointment
will include serving in such capacities for the Common Stock to be
issued pursuant to the Rights.
B. Mellon understands and agrees that it will:
1. issue the Subscription Certificates in the
names of the Record Date Holders and keep such records as are
necessary for the purposes of recording such issuance;
2. use reasonable efforts to identify Record
Date Holders whose addresses are outside the United States or an
APO or FPO address ("Foreign Record Date Holders");
3. use reasonable efforts to identify Record Date
Holders whose addresses are in states in which SPS Technologies is not
exempt or has not otherwise qualified under the Blue Sky Regulations
(the "Blue Sky State Record Date Holders");
4. mail by first class mail to each Record Date Holder
other than Foreign Record Date Holders and Blue Sky State Record Date
Holders on instructions from SPS Technologies:
<PAGE> 3
a. a Subscription Certificate evidencing
the Rights to which such Record Date Holder is entitled under the
Rights Offering;
b. a copy of the Prospectus;
c. a copy of the Instructions,
substantially in the form set forth hereto as Exhibit 3; and
d. a return envelope addressed to the
Subscription Agent.
5. hold for the account of each Foreign Record Date
Holder, each "Foreign Transferee" (as hereinafter defined) (the Foreign
Record Date Holders and the Foreign Transferees are collectively
referred to as the "Foreign Holders"), each Blue Sky State Record Date
Holder and each "Blue Sky State Transferee" (as hereinafter defined)
(the Blue Sky State Record Date Holders and the Blue Sky State
Transferees are collectively referred to as the "Blue Sky State
Holders") the Subscription Certificate(s) representing Rights issued
with respect to, or transferred to, such Foreign Holder or Blue Sky
State Holder. Unless exercised by such Foreign Holder or Blue Sky State
Holder prior to 11:00 a.m., New York City local time, two New York
Stock Exchange ("NYSE") trading days preceding the Expiration Date,
Mellon shall sell such Rights, subject to Mellon's ability to find a
purchaser. Any such sales will be at prevailing market prices. 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 by Mellon to such Foreign Holders and Blue
Sky State Holders by mail.
The Proceeds, if any, resulting from sales of Rights of
Record Date Holders whose addresses are not known by Mellon or to whom
delivery cannot be made will be held by Mellon in a non-interest
bearing account. Any amount remaining unclaimed on the second
anniversary of the Expiration Date will be turned over by Mellon to SPS
Technologies and, after such date, any person claiming such proceeds
will, as an unsecured general creditor of SPS Technologies, be able to
look only to SPS Technologies for payment thereof. The ability of all
Record Date Holders, including Foreign Holders and Blue Sky State
Holders, to exercise Rights will expire at the Expiration Date.
In addition to the foregoing, Mellon will perform on behalf
of SPS Technologies all the actions specified in Section 3.
Section 3. Duties of the Subscription Agent. In its
capacity as Subscription Agent, Mellon is authorized and
directed, and agrees to do the following:
<PAGE> 4
A. Transfer and Division of Subscription
Certificates. Effect transfer, division and combinations of
Subscription Certificates at the request of holders thereof, in
the manner and subject to the terms and conditions set forth in
the Subscription Certificates and in the Prospectus.
B. Issuance of New Subscription Certificates. Issue
new Subscription Certificates under the circumstances, in the
manner and subject to the terms and conditions set forth in the
Subscription Certificates and in the Prospectus.
C. Sale of Subscription Certificates. Sell Subscription
Certificates if so instructed by subscribers on their behalf to the
extent that the Subscription Agent is able to find buyers therefor by
5:00 p.m., New York City local time, one (1) NYSE trading day
preceding the day on which the Expiration Date occurs, and sending the
subscribers a check for the proceeds from the sale of any Subscription
Certificate sold, less any applicable brokerage commissions, taxes and
other direct expenses of sales. The Subscription Agent will mail to
such subscribers on settlement of sales of Subscription Certificates
on any given day sale proceeds equal to the net weighted average of
all Subscription Certificates sold on that day by the Subscription
Agent. The Subscription Agent will calculate the net weighted average
sale price by dividing the total proceeds from all sales realized by
it on the day of sale by the total number of Subscription Certificates
sold by the Subscription Agent on that day and then subtracting a pro
rata portion of any applicable brokerage commissions, taxes and other
expenses. SPS Technologies will pay the fees charged by the
Subscription Agent for effecting such sales. If Subscription
Certificates cannot be sold by the Subscription Agent by 5:00 pm., New
York City local time, one (1) NYSE trading day preceding the day on
which the Expiration Date occurs, such Subscription Certificates will
be returned promptly by mail to such subscribers or, if so arranged,
held by the Subscription Agent for pick-up by such subscribers.
D. Exercise of Subscription Certificates. Accept
Subscription Certificates upon the exercise of Rights in
accordance with the terms of the Subscription Certificates and of
the Prospectus up to the Expiration Date.
E. Guaranteed Deliveries: Accept Subscription
Certificates received on or prior to the Expiration Date together
with full payment for the total number of shares of Common Stock
subscribed for, together with a guarantee notice in proper form
from a commercial bank or trust company having an office or
correspondent in the United States or a member of a registered
<PAGE> 5
national securities exchange in the United States or a member of the
National Association of Securities Dealers, Inc. (each an "Eligible
Institution"), and guarantee that the Subscription Certificates and
related Nominee Holder Certification, if applicable, will be delivered
no later than 5:00 p.m. New York City local time, on the fifth NYSE
trading day following the day on which the Expiration Date occurs to
the Subscription Agent, subject to timely receipt of the fully executed
Subscription Certificates, all in the manner and subject to the terms and
conditions set forth in the Prospectus.
F. Subscriptions by Record Date Holders. Accept Subscription
Certificates which have been properly exercised, without further
authorization from SPS Technologies, without procuring supporting legal
papers or other proof of authority to sign (including proof of
appointment of a fiduciary or other person acting in a representative
capacity), and without signature of cofiduciaries:
1. where the Subscription Certificate is
registered in the name of an individual or fiduciary, the
subscription form is executed by such individual or fiduciary,
and the shares of Common Stock are to be issued in the name of
the registered holder of the Subscription Certificate; or
2. where the Subscription Certificate is in the name of
a corporation and the subscription form is executed by a duly
authorized officer thereof, and the shares of Common Stock are to be
issued in the name of such corporation.
G. Subscription by an Agent. Accept Subscription
Certificates executed, as agent for the subscriber, by an
Eligible Institution, upon proof of the authority of such
Eligible Institution to so act.
H. Executions and Defects. Refer to SPS Technologies, for
specific instructions as to acceptance or rejection, Subscription
Certificates received after the Expiration Date, Subscription
Certificates not authorized to be accepted pursuant to the paragraphs
above, and Subscription Certificates otherwise failing to comply in all
respects with the requirements of the Prospectus and the terms of the
Subscription Warrants. Any and all determinations by SPS Technologies
as to the action to be taken with respect thereto shall be final and
binding.
I. Payment Funds. All funds received by Mellon in
payment of Subscription Certificates shall be deposited in an
<PAGE> 6
interest-bearing bank account. The interest income will be paid to SPS
Technologies upon delivery of the funds as provided in subparagraph L
below.
J. Daily Reporting. Advise SPS Technologies daily by
telecopy and confirmed by letter at the address set forth below, as to
the total number of shares of Common Stock subscribed for, and the
amount of funds received, pursuant to the Subscription Privilege, and
the number of such shares so subscribed for which guarantees of
delivery have been received and which remains to be perfected, with
cumulative totals. In addition Mellon shall furnish to SPS Technologies
from time to time such other and additional reports or information as
SPS Technologies shall reasonably request.
K. Rejects. As soon as practicable, return to
subcribing Record Date Holders, without interest or deduction,
any payment tendered to Mellon pursuant to the exercise of Rights
to the extent that (i) such Subscription Certificate is rejected
for any reason, in whole or in part, or (ii) the Rights Offering
is terminated by SPS Technologies.
L. Delivery of Funds and Stock Certificates. As soon as
practicable following the Expiration Date, issue certificates for
shares of Common Stock issuable upon exercise and delivery of funds
representing the Subscription Price for such shares of Common Stock at
such place and in such manner as SPS Technologies shall direct. As soon
as practicable after the Expiration Date, the Subscription Agent shall
advise SPS Technologies in accordance with paragraph I above of the
total number of shares of Common Stock subscribed for in the Rights
Offering.
Certificates for shares of Common Stock, registered in
the names specified by the subscribers, shall be mailed or delivered as
instructed by such subscribers.
M. Delivery of Final Prospectus. Deliver to each
subscriber who was not a Record Date Holder a copy of the
Prospectus concurrently with the delivery of the certificates for
Common Stock representing the shares acquired by such subscriber
on exercise of the Rights.
N. Delivery of the Remaining Shares. Subsequent to the
Expiration Date and upon instruction from SPS Technologies, deliver to
Purchasers all Remaining Shares registered in such form as Purchasers
may direct upon receipt of the Subscription Price for the Remaining
Shares in immediately good funds. The Subscription Agent will deposit
the proceeds from such sale of the Remaining Shares in an
interest-bearing account in the name of SPS Technologies.
<PAGE> 7
Section 4. Subscription Agent Com1pensation. SPS Technologies
agrees that it will pay to Mellon compensation for its services
hereunder in accordance with the Schedule of Fees attached hereto as
Exhibit 4. Mellon agrees that such compensation shall include
compensation for its services as Transfer Agent and Registrar of the
Subscription Certificates. SPS Technologies further agrees that it will
reimburse Mellon for its necessary and reasonable expenses incurred in
the performance of its duties hereunder, including without limitation,
postage, stationery and supplies and attorney's fees (if any). Mellon
agrees that it will not incur any attorney's fees with respect to this
Agreement or its duties hereunder without prior notice to, and consent
of, SPS Technologies, which consent will not be unreasonably withheld.
Section 5. Indemnification. SPS Technologies agrees to
indemnify, protect and hold harmless Mellon and its directors,
officers, employees and agents from and against any claims, losses or
expenses, including attorney's fees, (collectively, "Losses") arising
from Mellon's performance of services under this Agreement; provided,
however, that SPS Technologies shall not be obligated to indemnify
Mellon for Losses resulting from Mellon's gross negligence, bad faith,
willful misconduct or material breach of this Agreement and shall not
be required to indemnify for any amount paid in settlement by Mellon
without the consent of SPS Technologies.
Mellon shall not be responsible for any statements in the
Registration Statement, any Prospectus or in the Subscription Certificates,
nor shall it be deemed to make any representation as to whether any
shares of Common Stock are validly issued, fully paid, non-assessable
or free of preemptive rights; provided, however, Mellon represents to
SPS Technologies that the information set forth in the Registration
Statement with respect to Mellon is accurate.
Mellon shall not be responsible for any action taken in
reliance upon any signature, endorsement, assignment, certificate,
order, request, notice, instruction or other instrument or document
reasonably believed by it in good faith to be valid, genuine and
sufficient in carrying out its duties hereunder. Mellon may, subject to
the limitation contained in the last sentence of Section 6 hereof,
consult with counsel, and Mellon shall be protected in taking or
failing to take any action hereunder in good faith and in accordance
with the opinion of such counsel.
Section 6. Notice. All notices and other
communications in connection herewith shall be in writing and
shall be made by hand delivery, prepaid first class mail, or
telecopier:
<PAGE> 8
(a) if to SPS Technologies, to
Aaron Nerenberg, Esq.
Vice President, General Counsel and Secretary
SPS Technologies, Inc.
Jenkintown Plaza
101 Greenwood Avenue
Suite 470
Jenkintown, PA 19046
Telecopier: (215) 517-2032
(b) if to the Subscription Agent, to
Mellon Bank, N. A.
Commerce Court
4 Station Square, 3rd Floor
Pittsburgh, PA 15219
Telecopier: (412)
-------------------------------------
All such notices and communications shall be deemed to have
been duly given (i) when delivered by hand or personally delivered,
(ii) two business days after being deposited in the mail, postage
prepaid, if mailed as aforesaid, and (iii) when received and
acknowledged, if telecopied.
Section 7. Amendments and Termination. This Agreement
constitutes the full and integrated agreement of the parties hereto
with respect to the subject matter hereof, and may be amended,
supplemented or otherwise modified only by a written instrument
executed and delivered by each of SPS Technologies and Mellon. This
Agreement may be terminated by either party hereto at any time, with or
without cause, by delivery to the other party of a written termination
notice, provided however that Mellon shall be entitled to receive all
fees earned and all reimbursable expenses incurred by it prior to the
termination date.
Section 8. Governing Law. This Agreement shall be
governed by, and construed and interpreted in accordance with the
laws of the Commonwealth of Pennsylvania in effect at the
execution thereof.
Section 9. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which counterparts
shall be deemed an original and all of which counterparts taken
together shall be deemed to constitute one and the same instrument.
<PAGE> 9
Section 10. Definitions. Any term used but not defined herein
shall have the meaning attributed to it in the Prospectus. In the
event of any conflict between the terms of the Rights Offering as set
forth herein and such terms as set forth in the Prospectus, the terms
set forth in the Prospectus shall govern.
If the foregoing is acceptable to you, please indicate
Mellon's acceptance of its appointment as Subscription Agent for the
Rights Offering upon the terms set forth above by signing and returning
the copy of this letter enclosed for that purpose.
Very truly yours,
SPS TECHNOLOGIES, INC.
By:
---------------------------------------
Aaron Nerenberg
Vice President,
General Counsel and
Secretary
Accepted and agreed to as of
- -------------------------------
Date
MELLON BANK, N.A.
By:
----------------------------
AN:jg
Attachments:
b:boardmeetings\8-24-94\mellon.an
<PAGE> 1
Exhibit 5.1 and 23.3
- ------------------------------------------------------------------------------
Corporate Offices AARON NERENBERG
101 Greenwood Avenue Vice President General Counsel
Suite 470 Secretary
Jenkintown
Pennsylvania 19046-2611
(215) 517-2022
Fax (215) 517-2032
November 16, 1994
SPS Technologies, Inc.
101 Greenwood Avenue, Suite 470
Jenkintown, PA 19046-2611
Re: Rights Offering
Ladies and Gentlemen:
I have acted as your counsel in connection with the
preparation and filing with the Securities and Exchange Commission of a
Registration Statement on Form S-3 and Amendment No. 1 thereto
(together, the "Registration Statement") with respect to the rights
offering to its shareholders (the "Rights Offering") by SPS
Technologies, Inc., a Pennsylvania corporation (the "Company"),
consisting of transferable rights (the "Rights") to subscribe for the
purchase of one share of Common Stock, $1.00 par value per share (the
"Common Stock") for every ten shares of Common Stock held as of the
Rights Offering record date, or up to 515,000 shares of Common Stock
(the "Shares") held by the Company as treasury shares, together with a
like number of associated rights (the "Preferred Share Rights")
issuable under the Company's Rights Agreement (the "Rights Plan"),
dated as of November 11, 1988, as amended to date including Amendment
No. 2 thereto, between the Company and Mellon Bank (East) N.A.
I have examined (i) the Registration Statement, (ii) the form
of Standby Purchase Agreement between the Company and the standby
purchase group and certain affiliated investors, (iii) the Amended and
Restated Articles of Incorporation of the Company and its By-Laws, both
documents as amended to date, (iv) minutes of meetings of the Company's
Board of Directors held July 19 and August 24, 1994 respectively, (v) a
form of subscription certificate evidencing the Rights, (vi) the Rights
Plan, and such other documents and records of the Company as I have
deemed necessary for purposes of this opinion.
In my examination of the foregoing documents, I have assureed
the genuineness of all signatures and the authenticity of all documents
submitted to me as originals, the conformity to original documents of
all documents submitted to me as certified or photostatic copies, and
the authenticity of the originals of such latter documents.
<PAGE> 2
I assume that appropriate action will have been taken, prior
to the issuance of the Rights and the offer and sale of the Shares, to
register and qualify the Rights and the Shares for sale under all
applicable state securities or "blue sky" laws unless such issuance and
such offer and sale are otherwise exempt thereunder. I note that the
Preferred Share Rights have been previously registered under applicable
Federal securities law and registered and qualified under all
applicable state securities laws or are otherwise exempt thereunder.
I am a member of the bar of the Commonwealth of Pennsylvania,
and I express no opinion as to any matters insofar as any laws other
than Federal laws and the laws of the Commonwealth of Pennsylvania may
be applicable.
Based upon the foregoing, I am of the opinion that the
Rights, the Shares and the Preferred Share Rights are duly authorized
for issuance and, upon (i) the effectiveness of the Registration
Statement, (ii) the execution and delivery of the Standby Purchase
Agreement by the parties thereto, (iii) the issuance of the Rights and
payment for the Shares in accordance with the terms of the Rights
Offering as set forth in the Registration Statement and payment for any
unsubscribed Shares in accordance with the terms of the Standby
Purchase Agreement, (iv) the issuance of the stock certificates by the
Company evidencing the Shares, and (v) the issuance of the Preferred
Share Rights in accordance with the terms of the Rights Plan, the
Rights, the Shares and the Preferred Share Rights will be validly
issued, fully paid and non-assessable.
In connection with my opinion set forth above with respect to
the Preferred Share Rights, whether the Board of Directors of the
Company might be required to redeem, terminate or otherwise modify the
Preferred Share Rights at some future time will depend upon the facts
and circumstances existing at that time and, accordingly, is beyond the
scope of my opinion.
I hereby consent to the reference to my name under the
heading "Legal Matters" in the prospectus which is part of the
Registration Statement and to the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
By: /s/ Aaron Nerenberg
--------------------
Aaron Nerenberg
AN:jg
b:lG\rightsof\opin2.an
<PAGE> 1 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
Exhibit 10.1
STANDBY PURCHASE AGREEMENT
STANDBY PURCHASE AGREEMENT, dated as of November 16, 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 $24.50 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 November 16, 1994, substantially in the form attached
hereto as Exhibit A ("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 November 16, 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> 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 December 16, 1994, or such further date as the
Expiration Date may be extended to pursuant to Section 1.3 hereof), 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 and the Rights Offering.
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
amended by Amendment No. 1 thereto and as it may be further amended, the
"Registration Statement"), under the 1933 Act, including the prospectus included
therein (as it has been amended by Amendment No. 1 to the Registration Statement
and as it may be further amended, the "Prospectus"), 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> 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 $12,617,500.00 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> 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> 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> 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 November 16, 1994 (i) 5,118,798 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 704,102 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 any amendments thereto) 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, June 30, 1994 and September 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> 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> 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) From the date of commencement of the Rights Offering
until the Closing Date, the Company will not engage in any other public
distribution of any of its securities; and
4.1 (t) 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> 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) An amount equal to 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 as reimbursement to Purchasers for certain
expenses incurred by them in connection with the Rights Offering (the "Expense
Reimbursement"); 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 B.
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> 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> 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 which the Indemnitees may
incur solely as a result of the price at 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> 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> 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 November 16, 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 November 16, 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> 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) November 16, 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> 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> 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> 17 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
8.2 Quorum. Until the earlier of (x) November 16, 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) November 16, 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 November 16, 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. Upon any Disposition of shares of Common Stock
representing 10% or less of the Total Voting Power to any one (1) Person in
any transaction or series of transactions, such shares of Common Stock shall
no longer be subject to the restrictions contained in this Agreement.
<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> 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> 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 November 16, 2000, the provisions of
Section 7 shall survive and continue in full force and effect.
<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 such Common Stock is subject to
restriction pursuant to this Agreement, the certificates
evidencing such Common Stock 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
NOVEMBER 16, 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 such 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 NOVEMBER 16, 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> 22 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
12.2 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> 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, 8 and 13.4
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) November 16, 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 Expense Reimbursement contemplated by Section 5.1(h)
hereof.
<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> 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.
"Expense Reimbursement" has the meaning given in paragraph
5.1(h).
"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> 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> 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.
14.8 Severability. If any provision of this Agreement is, becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction, then,
to the maximum extent permissible, such provision shall be deemed amended to
conform to applicable law so as to be valid and enforceable or, if such
provision cannot be so amended without materially altering the agreement of
the parties, such provision shall be stricken and the remainder of this
Agreement shall remain valid and continue in full force and effect.
<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:
-----------
TINICUM ENTERPRISES, INC.
By:
----------------------------
Name:
Title:
TINICUM INVESTORS
By:
----------------------------
Name:
Title:
RUTCO INCORPORATED
By:
----------------------------
Name:
Title:
TINICUM FOREIGN INVESTMENTS
CORPORATION
By:
----------------------------
Name:
Title:
TINICUM ASSOCIATES, G.P.
By: Tinicum Associates, Inc.,
Managing Partner
By:
----------------------------
Name:
Title:
-------------------------------
PUTNAM L. CRAFTS, JR.
--------------------------------
JAMES H. KASSCHAU
INVESTORS:
----------
RIT CAPITAL PARTNERS plc
By:
----------------------------
Name:
Title:
J. ROTHSCHILD CAPITAL MANAGEMENT
LIMITED
By:
----------------------------
Name:
Title:
ST. JAMES'S PLACE CAPITAL plc
By:
----------------------------
Name:
Title:
<PAGE> 29 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
SCHEDULE 1
TO
STANDBY PURCHASE AGREEMENT
DATED AS OF NOVEMBER 16, 1994
(Names and Addresses of Purchasers)
Tinicum Enterprises, Inc., a Delaware corporation
Tinicum Investors, a Delaware general partnership
Tinicum Associates, G.P., a Delaware general partnership
Tinicum Foreign Investments Corporation, a Delaware Corporation
RUTCO Incorporated, a Delaware corporation
James H. Kasschau
c/o Tinicum Enterprises, Inc.
900 Stewart Avenue
Garden City, NY 11530
Putnam L. Crafts, Jr.
130 Stevens Lane
Far Hills, NJ 07931
<PAGE> 30 Exhibit 10.1 (STANDBY PURCHASE AGREEMENT)
SCHEDULE 2
TO
STANDBY PURCHASE AGREEMENT
DATED AS OF NOVEMBER 16, 1994
(Names and Addresses of Investors)
RIT Capital Partners plc, a United Kingdom corporation
J Rothchild Capital Management Limited, a United Kingdom corporation
St. James's Place Capital plc, a United Kingdom corporation
c/o Tinicum Enterprises, Inc.
900 Stewart Avenue
Garden City, NY 11530
<PAGE> 1
Exhibit 10.3
GEORGESON
& COMPANY INC.
--------------
Wall Street Plaza, New York, NY 10005
212-440-9800 Fax 212-440-9955
NEW YORK -- LONDON -- LOS ANGELES -- PITTSBURGH
August 3, 1994
SPS Technologies, Inc.
Jenkintown Plaza
101 Greenwood Avenue
Suite 470
Jenkintown, PA 19046
LETTER OF AGREEMENT
-------------------
This Letter of Agreement (the "Agreement") sets forth the terms and conditions
under which Georgeson & COmpany Inc. ("Georgeson") has been retained by SPS
Technologies, Inc. ("SPS Technologies") as Information Agent for its upcoming
rights offer (the "Offer"). The term of the Agreement shall be the term of the
Offer, including any extensions thereof.
1. During the term of the Agreement, Georgeson will: provide advice and
consultation with respect to the planning and execution of the Offer;
assist in the preparation and placement of newspaper ads; assist in the
distribution of Offer documents to brokers, banks, nominees, institutional
investors, and other shareholders and investment community accounts;
and answer collect telephone inquiries from shareholders and their
representatives.
2. SPS Technologies will pay Georgeson a fee of $7,500, of which half is
payable in advance per the enclosed invoice and the balance at the
expiration of the Offer, plus an additional fee to be mutually agreed
upon if the offer is extended more than fifteen days beyond the initial
expiration date or if there is a competing offer. In addition, SPS
Technologies will reimburse Georgeson for reasonable costs and expenses
incurred by Georgeson in fulfilling the Agreement, including but not
limited to: expenses incurred by Georgeson in the preparation and
placement of newspaper ads, including typesetting and space charges;
postage and freight charges incurred by Georgeson in the delivery of
Offer documents; printing costs; charges for the production of
shareholder lists (paper, computer cards, etc.), statistical analyses,
mailing labels, or other forms of information requested by SPS
Technologies or its agents and other expenses or disbursements authorized
by SPS Technologies or its agents.
<PAGE> 2
3. Georgeson hereby agrees not to make any representations not included in
the Offer documents.
4. SPS Technologies agrees to indemnify and hold Georgeson harmless against
any loss, damage, expense (including, without limitation, legal and other
related fes and expenses), liability or claim arising out of Georgeson's
fulfillment of the Agreement (except for any loss, damage, expense,
liability or claim arising out of Georgeson's own negligence or
misconduct). At its election, SPS Technologies may assume the defense
of any such action. Georgeson hereby agrees to advise SPS Technologies
of any such liability or claim promptly after receipt of any notice
thereof. The indemnification contained in this paragraph will survive
the term of the Agreement.
5. Georgeson agrees to preserve the confidentiality of all non-public
information provided by SPS Technologies or its agents for our use
in providing services under this Agreement, or information developed
by Georgeson based upon such non-public information.
By executing the Agreement below the undersigned agrees to be bound by its
terms.
ACCEPTED: Sincerely,
SPS TECHNOLOGIES, INC. GEORGESON & COMPANY INC.
By: /s/ Aaron Nerenberg By: /s/ Alan M. Miller
--------------------------------- ---------------------------------
Aaron Nerenberg Alan M. Miller
Title: Vice President Title: Managing Director
------------------------------ -------------------------------
Date: August 25, 1994
-------------------------------
<PAGE> 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
November 10, 1994
<PAGE> 1
Exhibit 23.2
[TO BE UPDATED]
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, except for the third
paragraph of Note 3 as to which the date is November 9, 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/A-1
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
November 10, 1994
