PROSPECTUS
SPX CORPORATION
366,418 SHARES OF
COMMON STOCK
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This prospectus relates to the sale, from time to time, of up to
366,418 shares of our common stock by certain selling securityholders who
held warrants issued by GCA Corporation in 1987. In June 1988 GCA was
acquired by General Signal Corporation, and in 1998 General Signal was
acquired by us, and, as a result, the warrants became exercisable for
shares of our common stock. As of February 25, 2002, the warrants
represented the right to purchase an aggregate of 366,418 shares of our
common stock at an exercise price of $94.5114 per share. As of March 21,
2002, warrants to purchase 213,824 shares of our common stock have been
exercised and the remaining 152,594 warrants will expire on April 23, 2002,
if not previously exercised. For a further discussion of the warrants and
the applicable terms, see "The Offering--The Selling Securityholders" and
"Common Stock We May Issue Under the Warrants."
We do not know when or how the selling securityholders intend to sell
the shares of our common stock or what the price, terms or conditions of
any sales will be. The selling securityholders may sell the shares of our
common stock directly or through underwriters, dealers or agents, who may
receive compensation. The selling securityholders may sell the shares of
our common stock in privately negotiated transactions and may also sell the
shares in market transactions. See "Plan of Distribution." We will not
receive any proceeds from the sale of our common stock by the selling
securityholders. However, we will receive the exercise price of the
warrants if and when they are exercised.
Our common stock trades on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "SPW." On March 25, 2002, the last reported
sale price of our common stock on the NYSE was $139.72.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
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The date of this prospectus is March 27, 2002
TABLE OF CONTENTS
Page
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WHERE YOU CAN FIND MORE INFORMATION.........................................1
FORWARD-LOOKING STATEMENTS..................................................2
PROSPECTUS SUMMARY..........................................................2
SPX CORPORATION.............................................................3
THE OFFERING................................................................3
RISK FACTORS................................................................5
USE OF PROCEEDS............................................................13
BUSINESS...................................................................13
COMMON STOCK WE MAY ISSUE UNDER THE WARRANTS...............................15
DESCRIPTION OF COMMON STOCK................................................15
SELLING SECURITYHOLDERS....................................................18
PLAN OF DISTRIBUTION.......................................................21
LEGAL MATTERS..............................................................22
EXPERTS....................................................................22
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports,
statements or other information we file with the SEC at its public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our filings are also available to the public on the
Internet, through a database maintained by the SEC at http://www.sec.gov.
In addition, you can inspect and copy our reports, statements and other
information at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005 or at the offices of the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104.
We filed a registration statement on Form S-3 to register with the SEC
the sale of the common stock described in this prospectus. This prospectus
is part of that registration statement. As permitted by SEC rules, this
prospectus does not contain all the information contained in the
registration statement or the exhibits to the registration statement. You
may refer to the registration statement and accompanying exhibits for more
information about us and our securities.
The SEC allows us to incorporate by reference into this document the
information we filed with it. This means that we can disclose important
business, financial and other information to you by referring you to other
documents separately filed with the SEC. All information incorporated by
reference is part of this document, unless and until that information is
updated and superseded by the information contained in this document or any
information subsequently incorporated by reference.
We incorporate by reference the documents listed below:
1. Our annual report on Form 10-K for the fiscal year ended December
31, 2001;
2. Our current reports on Form 8-K filed on April 13, 2001 and
February 20, 2002; and
3. Our Definitive Proxy Statement on Schedule 14A filed on March 21,
2002.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
SPX Corporation
13515 Ballantyne Corporate Place
Charlotte, North Carolina 28277
Tel: (704) 752-4400, Fax: (704) 752-4405
Exhibits to the filings will not be sent, however, unless those
exhibits have specifically been incorporated by reference.
We also incorporate by reference all future filings we make with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 (i) on or after the date of the filing of the registration
statement containing this prospectus and prior to the effectiveness of such
registration statement and (ii) on or after the date of this prospectus
until all of the shares of our common stock offered by selling
securityholders have been sold. Such documents will become a part of this
prospectus from the date that the documents are filed with the SEC.
Our subsidiary, Inrange Technologies Corporation, completed its
initial public offering on September 27, 2000. Inrange's common stock is
traded on the Nasdaq National Market under the symbol "INRG." You may
obtain information about Inrange from the SEC at the address or website
specified above.
You should rely only on the information contained or incorporated by
reference in this prospectus and any prospectus supplement. We have not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell these securities in any
jurisdiction where the offer and sale is not permitted. You should assume
that the information appearing or incorporated by reference in this
prospectus is accurate only as of the date of the documents containing the
information. Our business, financial condition, results of operation and
prospects may have changed since that date.
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and any documents
incorporated by reference constitute "forward looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial
performance, including, but not limited to, cost savings and other benefits
of acquisitions, including the acquisition of UDI, which involve known and
unknown risks, uncertainties and other factors that may cause our or our
businesses' actual results, levels of activity, performance or achievements
to be materially different from those expressed or implied by any forward
looking statements. In some cases, you can identify forward looking
statements by terminology such as "may," "will," "could," "would,"
"should," "expect," "plan," "anticipate," "intend," "believe," "estimate,"
"predict," "potential" or "continue" or the negative of those terms or
other comparable terminology. These statements are only predictions. Actual
events or results may differ materially because of market conditions in our
industries or other factors. Moreover, we do not, nor does any other
person, assume responsibility for the accuracy and completeness of those
statements. We have no duty to update any of the forward looking statements
after the date of this prospectus to conform them to actual results. All of
the forward looking statements are qualified in their entirety by reference
to the factors discussed under the caption "Factors That May Affect Future
Results" in "Management's Discussion and Analysis of Financial Condition
and Results of Operations" of our most recent Form 10-K (incorporated by
reference in this prospectus) and similar sections in our future filings
which we incorporate by reference in this prospectus, which describe risks
and factors that could cause results to differ materially from those
projected in such forward looking statements.
We caution the reader that these risk factors may not be exhaustive.
We operate in a continually changing business environment, and new risk
factors emerge from time to time. Management cannot predict such new risk
factors, nor can it assess the impact, if any, of such new risk factors on
our businesses or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those projected
in any forward looking statements. Accordingly, forward looking statements
should not be relied upon as a prediction of actual results. In addition,
management's estimates of future operating results are based on our current
complement of businesses, which is constantly subject to change as
management implements its "fix, sell or grow" strategy.
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information appearing elsewhere in this prospectus. The following summary
is qualified in its entirety by the information contained elsewhere or
incorporated by reference in this prospectus.
In this prospectus:
o "SPX," "the company," "we," "us," and "our" refer to SPX
Corporation, a Delaware corporation, and its consolidated
subsidiaries, unless the context otherwise requires;
o "UDI" refers to United Dominion Industries Limited and its
subsidiaries, all of which are subsidiaries of SPX
Corporation, unless the context otherwise requires;
o "February LYONs" refers to our Liquid Yield Option
Notes(TM)due 2021 issued in February 2001; and
o "May LYONs" refers to our Liquid Yield Option Notes(TM) due
2021 issued in May 2001.
SPX CORPORATION
We are a global multi-industry company that is focused on profitably
growing our businesses that have scale and growth potential. Our strategy
is to create market advantages through product and technology leadership,
by expanding our service offerings to full customer solutions and by
building critical mass through strategic acquisitions. We continually
review each of our businesses pursuant to our "fix, sell or grow" strategy.
These reviews could result in selected acquisitions to expand an existing
business or result in the disposition of an existing business. At any given
time, we may engage in discussions with respect to potential acquisitions
or dispositions in related or unrelated industries, asset sales or
dispositions, and joint ventures, some of which may be material. We are a
multinational corporation with operations in 21 countries and over 23,400
employees worldwide.
We are a global provider of technical products and systems, industrial
products and services, flow technology and service solutions. We offer a
diverse collection of products which includes networking and switching
products, fire detection and building life-safety products, TV and radio
broadcast antennas and towers, life science products and services,
transformers, compaction equipment, high-integrity castings, dock products
and systems, cooling towers, air filtration products, valves, back-flow
protection devices and fluid handling, metering and mixing solutions. Our
products and services also include specialty service tools, diagnostic
systems, service equipment and technical information services. Our products
are used by a broad array of customers in various industries, including
chemical processing, pharmaceuticals, infrastructure, mineral processing,
petrochemical, telecommunications, financial services, transportation and
power generation. Our common stock is publicly traded on the New York Stock
Exchange and the Pacific Stock Exchange under the symbol "SPW."
On May 24, 2001, we completed the acquisition of United Dominion
Industries Limited, or UDI, in an all-stock transaction valued at $1,066.9
million. A total of 9.385 million shares were issued (3.890 million from
treasury) to complete the transaction. We also assumed or refinanced $884.1
million of UDI debt bringing the total transaction value to $1,951.0
million. UDI manufactures proprietary engineered and flow technology
products primarily for industrial and commercial markets worldwide. UDI,
which had sales of $2,366.2 million in 2000, is included in our financial
statements beginning May 25, 2001 and is represented in the description of
our company.
We are a Delaware corporation. Our principal executive offices are
located at 13515 Ballantyne Corporate Place, Charlotte, North Carolina 28277,
and our telephone number is (704) 752-4400.
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THE OFFERING
Common stock outstanding as of March 15, 2002..... 40,814,820 shares.*
Common stock being registered for selling
securityholders................................... 366,418 shares.
Use of Proceeds................................... We will not receive any
of the proceeds from the
sales of common stock by
the selling securityholders.
However, if one or more of
the selling securityholders
exercises its rights under
the warrants, we could
receive up to $34,630,678
in gross proceeds
representing the exercise
price for the shares of
common stock underlying the
warrants. All of the
proceeds that we receive,
if any, will be used for
general corporate purposes.
NYSE and PSE symbol............................... SPW.
* The common stock outstanding as of March 15, 2002 excludes the
following: (A) approximately 6.6 million shares issuable upon conversion of
our February LYONs and our May LYONs; (B) approximately 9.8 million shares
issuable upon exercise of outstanding stock options by employees and
non-employee directors; and (C) approximately 4.5 million shares of our
common stock reserved for future issuance of additional options and shares
under our employee stock option plan and non-employee director stock option
plan. Each of the amounts is subject to adjustment as specified in the
appropriate documents.
THE SELLING SECURITYHOLDERS
We have prepared this prospectus in connection with the registration
of the resale of shares of our common stock underlying warrants issued in
1987 by GCA Corporation, a company acquired by General Signal Corporation
in 1988. The warrants were issued to GCA's bank and insurance company
lenders and to one vendor and represented the right to purchase GCA common
stock. As a result of the acquisition of GCA by General Signal and the
subsequent acquisition of General Signal by us, the warrants represented
the right to purchase 366,418 shares of our common stock at an exercise
price of $94.5114 per share. The warrants issued to GCA's bank and
insurance company lenders represented the right to purchase 295,951 shares
of our common stock, and are exercisable through April 23, 2002. As of
March 21, 2002, holders of these warrants had exercised warrants to
purchase 213,824 shares. The warrants issued to the vendor represented the
right to purchase 70,467 shares of our common stock and have been
exercised. We are registering the shares issuable upon exercise of the
warrants in satisfaction of GCA's obligation to register these shares under
registration agreements entered into between these selling securityholders
and GCA in connection with the issuance of the warrants described above.
RISK FACTORS
In evaluating an investment in our common stock, you should carefully
consider all the information included or incorporated by reference in this
prospectus. In particular, you should evaluate the specific risk factors
set forth under "Risk Factors," beginning on page 5 of the prospectus.
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RISK FACTORS
You should carefully consider the risks described below before making
a decision to invest in our common stock. Some of the following factors
relate principally to our business and the industry in which we operate.
Other factors relate principally to your investment in our common stock.
The risks and uncertainties described below are not the only ones facing
our company. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also adversely affect our business
and operations.
If any of the matters included in the following risks were to occur,
our business, financial condition, results of operations, cash flows or
prospects could be materially adversely affected. In such case, the trading
price of our common stock could decline and you could lose all or part of
your investment.
OUR LEVERAGE MAY AFFECT OUR BUSINESS AND MAY RESTRICT OUR OPERATING
FLEXIBILITY.
At December 31, 2001, we had approximately $2,612.4 million in total
indebtedness. On that date, we had $548.3 million of available borrowing
capacity under our revolving senior credit facility after giving effect to
$51.7 million reserved for letters of credit outstanding, which reduce the
availability under our revolving senior credit facility. In addition, at
December 31, 2001, our cash balance was $460.0 million. For the most recent
description of our indebtedness, please see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our annual
report on Form 10-K for the fiscal year ended December 31, 2001 and any
future Forms 10-Q and 10-K which we file, which are incorporated by
reference in this prospectus. Subject to certain restrictions set forth in
the senior credit facility, we may incur additional indebtedness in the
future, including indebtedness incurred to finance, or which is assumed in
connection with, acquisitions. We may in the future renegotiate or
refinance our senior credit facility with agreements that have different or
more stringent terms or split our senior credit facility into two or more
facilities with different terms. The level of our indebtedness could:
o limit cash flow available for general corporate purposes,
such as acquisitions and capital expenditures, due to the
ongoing cash flow requirements for debt service;
o limit our ability to obtain, or obtain on favorable terms,
additional debt financing in the future for working capital,
capital expenditures or acquisitions;
o limit our flexibility in reacting to competitive and other
changes in the industry and economic conditions generally;
o expose us to a risk that a substantial decrease in net
operating cash flows due to economic developments or adverse
developments in our business could make it difficult to meet
debt service requirements; and
o expose us to risks inherent in interest rate fluctuations
because the existing borrowings are and any new borrowings
may be at variable rates of interest, which could result in
higher interest expense in the event of increases in
interest rates.
Our ability to make scheduled payments of principal of, to pay
interest on, or to refinance our indebtedness and to satisfy our other debt
obligations will depend upon our future operating performance, which may be
affected by general economic, financial, competitive, legislative,
regulatory, business and other factors beyond our control. We will not be
able to control many of these factors, such as the economic conditions in
the markets in which we operate and initiatives taken by our competitors.
In addition, there can be no assurance that future borrowings or equity
financing will be available for the payment or refinancing of our
indebtedness. If we are unable to service our indebtedness, whether in the
ordinary course of business or upon acceleration of such indebtedness, we
may be forced to pursue one or more alternative strategies, such as
restructuring or refinancing our indebtedness, selling assets, reducing or
delaying capital expenditures or seeking additional equity capital. There
can be no assurance that any of these strategies could be effected on
satisfactory terms, if at all.
WE MAY NOT BE ABLE TO FINANCE FUTURE NEEDS OR ADAPT OUR BUSINESS PLAN TO
CHANGES IN ECONOMIC OR BUSINESS CONDITIONS BECAUSE OF RESTRICTIONS PLACED
ON US BY OUR SENIOR CREDIT FACILITY AND THE INSTRUMENTS GOVERNING OUR OTHER
INDEBTEDNESS.
Our senior credit facility and other agreements governing our other
indebtedness contain or may contain covenants that restrict our ability to
make distributions or other payments to our investors and creditors unless
certain financial tests or other criteria are satisfied. We also must
comply with certain specified financial ratios and tests. In some cases,
our subsidiaries are subject to similar restrictions that may restrict
their ability to make distributions to us. In addition, our senior credit
facility and these other agreements contain or may contain additional
affirmative and negative covenants. All of these restrictions could affect
our ability to operate our business and may limit our ability to take
advantage of potential business opportunities, such as acquisitions, as
they arise.
If we do not comply with these or other covenants and restrictions
contained in our senior credit facility and other agreements governing our
indebtedness, we could be in default under those agreements, and the debt,
together with accrued interest, could then be declared immediately due and
payable. If we default under our senior credit facility, the lenders could
cause all of our outstanding debt obligations under our senior credit
facility to become due and payable, require us to apply all of our cash to
repay the indebtedness or prevent us from making debt service payments on
any other indebtedness we owe. In addition, any default under our senior
credit facility or agreements governing our other indebtedness could lead
to an acceleration of debt under other debt instruments that contain
cross-acceleration or cross-default provisions. If the indebtedness under
our senior credit facility is accelerated, we may not have sufficient
assets to repay amounts due under our senior credit facility, the February
LYONs, the May LYONs or under other debt securities then outstanding. Our
ability to comply with these provisions of our senior credit facility and
other agreements governing our other indebtedness may be affected by
changes in the economic or business conditions or other events beyond our
control.
OUR FAILURE TO SUCCESSFULLY INTEGRATE UDI AND OTHER RECENT ACQUISITIONS, AS
WELL AS ANY FUTURE ACQUISITIONS, COULD HAVE A NEGATIVE EFFECT ON OUR
OPERATIONS; OUR ACQUISITIONS COULD CAUSE UNEXPECTED FINANCIAL DIFFICULTIES.
As part of our business strategy, we evaluate potential acquisitions
in the ordinary course. Excluding the UDI acquisition, in 2001, we made 15
acquisitions of businesses for an aggregate purchase price of approximately
$478.8 million. Our past acquisitions, particularly the acquisition of UDI,
which had sales of approximately $2,366.2 million for the year ended
December 31, 2000, and any potential future acquisitions, involve a number
of risks and present financial, managerial and operational challenges,
including:
o adverse effects on our reported operating results due to
charges to earnings;
o diversion of management attention from running our existing
businesses;
o difficulty with integration of personnel and financial and
other systems;
o increased expenses, including compensation expenses
resulting from newly-hired employees;
o increased foreign operations that may be difficult to
assimilate;
o assumption of known and unknown liabilities and increased
litigation; and
o potential disputes with the sellers of acquired businesses,
technologies, services or products.
We may not be able to integrate successfully the technology,
operations and personnel of any acquired business. Customer dissatisfaction
or performance problems with an acquired business, technology, service or
product could also have a material adverse effect on our reputation and
business. In addition, any acquired business, technology, service or
product could underperform relative to our expectations. We also could
experience financial or other setbacks if any of the businesses that we
have acquired or may acquire in the future have problems or liabilities of
which we are not aware or that are substantially greater than we
anticipate. In addition, as a result of future acquisitions, we may further
increase our leverage or, if we issue equity securities to pay for the
acquisitions, significantly dilute our existing stockholders.
WE MAY NOT ACHIEVE THE EXPECTED COST SAVINGS AND OTHER BENEFITS OF OUR
ACQUISITIONS, INCLUDING UDI.
As a result of our acquisitions, including the acquisition of UDI, we
incur integration expenses for the incremental costs to exit and
consolidate activities, to involuntarily terminate employees, and for other
costs to integrate operating locations and other activities of these
companies with SPX. Generally accepted accounting principles require that
these acquisition integration expenses, which are not associated with the
generation of future revenues and have no future economic benefit, be
reflected as assumed liabilities in the allocation of the purchase price to
the net assets acquired. On the other hand, these same principles require
that acquisition integration expenses associated with integrating SPX
operations into locations of the acquired company must be recorded as
expense. Accordingly, these expenses are not included in the allocation of
the purchase price of the company acquired. Over the past five years, we
have recorded several special charges to our results of operations
associated with cost reductions, integrating acquisitions and achieving
operating efficiencies. We believe that our actions have been required to
improve our operations and, as described above, we will, if necessary,
record future charges as appropriate to address costs and operational
efficiencies at the combined company.
We believe our anticipated savings from the cost reduction and
integration actions associated with the UDI acquisition should exceed
$120.0 million on an annualized basis. Our current integration plan focuses
on three key areas of cost savings: (1) manufacturing process and supply
chain rationalization, including plant closings, (2) elimination of
redundant administrative overhead and support activities, and (3)
restructuring and repositioning sales and marketing organizations to
eliminate redundancies in these activities. While we believe these cost
savings to be reasonable and significant cost reductions have been
achieved, they are inherently estimates that are difficult to predict and
are necessarily speculative in nature. In addition, we cannot assure you
that unforeseen factors will not offset the estimated cost savings or other
benefits from the acquisition. As a result, our actual cost savings, if
any, and other anticipated benefits could differ or be delayed, compared to
our estimates and the other information contained in this prospectus.
WE MAY NOT BE ABLE TO CONSUMMATE ACQUISITIONS AT OUR PRIOR RATE, WHICH
COULD NEGATIVELY IMPACT US.
We may not be able to consummate acquisitions at similar rates to our
past acquisition rates, which could materially impact our growth rate,
results of operations and stock price. Our ability to continue to achieve
our goals may depend upon our ability to identify and successfully acquire
companies, businesses and product lines, to effectively integrate them and
to achieve cost effectiveness. We also may need to raise additional funds
to consummate these acquisitions. In addition, changes in our stock price
may adversely affect our ability to consummate acquisitions.
THE LOSS OF KEY PERSONNEL AND ANY INABILITY TO ATTRACT AND RETAIN QUALIFIED
EMPLOYEES COULD MATERIALLY ADVERSELY IMPACT OUR OPERATIONS.
We are dependent on the continued services of our management team,
including our Chairman of the Board, President and Chief Executive Officer.
The loss of these personnel without adequate replacement could have a
material adverse effect. Additionally, we need qualified managers and
skilled employees with technical and manufacturing industry experience in
order to operate our business successfully. From time to time there may be
a shortage of skilled labor, which may make it more difficult and expensive
for us to attract and retain qualified employees. If we are unable to
attract and retain qualified individuals or our costs to do so increase
significantly, our operations would be materially adversely affected.
MANY OF THE INDUSTRIES IN WHICH WE OPERATE ARE CYCLICAL AND, ACCORDINGLY,
OUR BUSINESS IS SUBJECT TO CHANGES IN THE ECONOMY; PRESSURE FROM ORIGINAL
EQUIPMENT MANUFACTURERS TO REDUCE COSTS COULD ADVERSELY AFFECT OUR
BUSINESS.
Many of the business areas in which we operate are subject to specific
industry and general economic cycles. Certain businesses are subject to
industry cycles, including, but not limited to, the automotive industries
which influence our Service Solutions and Industrial Products and Services
segments, the electric power and construction and infrastructure markets,
which influence our Industrial Products and Services segment, and process
equipment, chemical and petrochemical markets which influence our Flow
Technology segment. Accordingly, any downturn in these or other markets in
which we participate could materially adversely affect us. A decline in
automotive sales and production also may affect not only sales of
components, tools and services to vehicle manufacturers and their
dealerships, but also sales of components, tools and services to
aftermarket customers, and could result in a decline in our results of
operations or a deterioration in our financial condition. Similar cyclical
changes could also affect aftermarket sales of products in our other
segments. If demand changes and we fail to respond accordingly, our results
of operations could be materially adversely affected in any given quarter.
The business cycles of our different operations may occur
contemporaneously.
Consistent with most multi-industry, capital goods companies, our
businesses have been impacted in 2001 by the soft economic conditions.
There can be no assurance that the economic downturn will not worsen or
that we will be able to sustain existing or create additional cost
reductions to offset economic conditions, and the unpredictability and
changes in the industrial markets in the current environment could continue
and may adversely impact our results. Cost reduction actions often result
in charges against earnings. We expect to take a charge against earnings in
2002, which cannot be fully quantified at this time, but may be material,
in connection with implementing additional cost reduction actions at
certain of our businesses.
There is also substantial and continuing pressure from the major
original equipment manufacturers, particularly in the automotive industry,
to reduce costs, including the cost of products and services purchased from
outside suppliers such as us. If in the future we were unable to generate
sufficient cost savings to offset price reductions, our gross margins could
be materially adversely affected.
IF FUTURE CASH FLOWS ARE INSUFFICIENT TO RECOVER THE CARRYING VALUE OF OUR
GOODWILL, A MATERIAL NON-CASH CHARGE TO EARNINGS COULD RESULT.
At December 31, 2001, we had goodwill and intangible assets of
approximately $3,061.7 million and shareholders' equity of approximately
$1,715.3 million. On an ongoing basis, we evaluate, based on projected
undiscounted cash flows, whether we will be able to recover all or a
portion of the carrying value of goodwill. Based on this method, we expect
to recover the carrying value of goodwill through our future cash flows. If
future cash flows are insufficient to recover the carrying value of our
goodwill, we must write off a portion of the unamortized balance of
goodwill. There can be no assurance that circumstances will not change in
the future that will affect the useful life or carrying value of our
goodwill and, accordingly, require us to take a charge to write off a
portion of our goodwill.
Effective January 1, 2002, we adopted Statement of Financial
Accounting Standards No. 142 "Goodwill and Other Intangible Assets" ("SFAS
No. 142"). SFAS No. 142 states that goodwill and indefinite lived
intangible assets are no longer amortized but are reviewed for impairment
annually (or more frequently if impairment indicators arise). In accordance
with the transition provisions, we recorded an impairment charge of $148.6
million during the first quarter of 2002.
WE ARE SUBJECT TO ENVIRONMENTAL AND SIMILAR LAWS AND POTENTIAL LIABILITY
RELATING TO CERTAIN CLAIMS, COMPLAINTS AND PROCEEDINGS, INCLUDING THOSE
RELATING TO ENVIRONMENTAL AND OTHER MATTERS, ARISING IN THE ORDINARY COURSE
OF BUSINESS.
We are subject to various environmental laws, ordinances, regulations,
and other requirements of government authorities in the United States and
other nations. These requirements may include, for example, those governing
discharges from, and materials handled as part of, our operations, the
remediation of soil and groundwater contaminated by petroleum products or
hazardous substances or wastes, and the health and safety of our employees.
Under certain of these laws, ordinances or regulations, a current or
previous owner or operator of property may be liable for the costs of
investigation, removal or remediation of certain hazardous substances or
petroleum products on, under, or in its property, without regard to whether
the owner or operator knew of, or caused, the presence of the contaminants,
and regardless of whether the practices that resulted in the contamination
were legal at the time they occurred. The presence of, or failure to
remediate properly, these substances may have adverse effects, including,
for example, substantial investigative or remedial obligations and
limitations on the ability to sell or rent that property or to borrow funds
using that property as collateral. In connection with our acquisitions and
divestitures, we may assume or retain significant environmental
liabilities, some of which we may not be aware. In particular, we assumed
additional environmental liabilities in connection with the UDI
acquisition. Future developments related to new or existing environmental
matters or changes in environmental laws or policies could lead to material
costs for environmental compliance or cleanup. There can be no assurance
that these liabilities and costs will not have a material adverse effect on
our results of operations or financial position in the future.
Numerous claims, complaints and proceedings arising in the ordinary
course of business, including but not limited to those relating to
environmental matters, competitive issues, contract issues, intellectual
property matters, personal injury and product liability claims, and
workers' compensation have been filed or are pending against us and certain
of our subsidiaries. Additionally, in connection with our acquisitions, we
may become subject to significant claims of which we were unaware at the
time of the acquisition or the claims that we were aware of may result in
our incurring a significantly greater liability than we anticipated. We
maintain property, cargo, auto, product, general liability, and directors'
and officers' liability insurance to protect us against potential loss
exposures. We expect this insurance to cover a portion of these claims. In
addition, we believe we are entitled to indemnification from third parties
for some of these claims.
In our opinion, these matters are either without merit or are of a
kind as should not have a material adverse effect individually and in the
aggregate on our financial position, results of operations, or cash flows
if disposed of unfavorably. However, we cannot assure you that recoveries
from insurance or indemnification claims will be available or that any of
these claims or other matters will not have a material adverse effect on
our financial position, results of operations or cash flows.
It is our policy to comply fully with applicable environmental
requirements. An estimate of loss, including expenses, from legal actions
or claims is accrued when events exist that make the loss or expenses
probable and we can reasonably estimate them. Our environmental accruals
cover anticipated costs, including investigation, remediation, and
operation and maintenance of clean-up sites. We do not discount
environmental or other legal accruals and do not reduce them by anticipated
insurance recoveries. We believe that our accruals related to environmental
litigation and claims are sufficient and that these items will be resolved
without material effect on our financial position, results of operations
and liquidity, individually and in the aggregate.
On or about October 29, 2001, we were served with a complaint by VSI
Holdings, Inc. seeking enforcement of a merger agreement that we had
terminated. In its complaint, VSI asked the court to require us to complete
the $197.0 million acquisition of VSI, and/or award damages to VSI and its
shareholders. We do not believe the suit has merit and are defending the
claim vigorously. On December 26, 2001, we filed our answer denying VSI's
allegations, raising affirmative defenses, and asserting a counterclaim
against VSI for breach of contract. There can be no assurance that we will
be successful in the litigation. If we are not successful, the outcome
could have a material adverse effect on our financial condition and results
of operations.
OUR INRANGE SUBSIDIARY IS SUBJECT TO VARIOUS RISKS AND ANY MATERIAL ADVERSE
EFFECT ON INRANGE COULD MATERIALLY ADVERSELY AFFECT OUR FINANCIAL RESULTS.
At December 31, 2001, we own approximately 89.5% of the total number
of outstanding shares of common stock of Inrange Technologies Corporation.
Based on the closing price of Inrange's Class B common stock on March 15,
2002, Inrange's market capitalization was approximately $827.35 million.
Inrange is a high technology company and is subject to additional and
different risks, and its public equity trades similarly to other technology
businesses.
The impact to Inrange's business subsequent to the events on September
11, 2001 reduced its third quarter 2001 results and as a consequence,
negatively affected the full 2001 year results. Inrange's business could be
adversely impacted by the continued economic softening. Any adverse effect
on Inrange could affect us.
In addition to the risks described in this prospectus for our business
as a whole, Inrange is subject to the following risks:
Inrange's business will suffer if it fails to develop, successfully
introduce and sell new and enhanced high quality, technologically advanced
cost-effective products that meet the changing needs of its customers on a
timely basis. Inrange's competitors may develop new and more advanced
products on a regular basis. Inrange relies on a sole manufacturer to
produce one of its key products and on sole sources of supply for some key
components in its products. Any disruption in these relationships could
increase product costs and reduce Inrange's ability to provide its products
or develop new products on a timely basis. The price for Inrange's products
may decrease in response to competitive pricing pressures, maturing life
cycles, new product introductions and other factors. Accordingly, Inrange's
profitability may decline unless it can reduce its production and sales
costs or develop new higher margin products.
The foregoing is a summary of the risk factors applicable to Inrange.
For a more complete description of those risks, please see "Factors That
May Affect Future Results" in Inrange's annual report of Form 10-K for the
fiscal year ended December 31, 2001, which section is hereby incorporated
by reference in this prospectus. See "Where You Can Find More Information."
DIFFICULTIES PRESENTED BY INTERNATIONAL ECONOMIC, POLITICAL, LEGAL,
ACCOUNTING AND BUSINESS FACTORS COULD NEGATIVELY AFFECT OUR INTERESTS AND
BUSINESS EFFORT.
In 2001, on a pro forma basis for our acquisition of UDI,
approximately 29% of our sales were international, including export sales.
In addition, in 2001, approximately 40.5% of Inrange's sales were
international, including export sales. We are seeking to increase our sales
outside the United States. Our international operations require us to
comply with the legal requirements of foreign jurisdictions and expose us
to the political consequences of operating in foreign jurisdictions. Our
foreign business operations also are subject to the following risks:
o difficulty in managing, operating and marketing our
international operations because of distance, as well as
language and cultural differences;
o increased strength of the U.S. dollar will increase the
effective price of our products sold in U.S. dollars, which
may have a material adverse effect on sales or require us to
lower our prices and also decrease our reported revenues or
margins in respect of sales conducted in foreign currencies
to the extent we are unable or determine not to increase
local currency prices; likewise, decreased strength of the
U.S. dollar could have a material adverse effect on the cost
of materials and products purchased overseas;
o difficulty entering new international markets due to greater
regulatory barriers than the United States and differing
political systems;
o increased costs due to domestic and foreign customs and
tariffs, potentially adverse tax consequences, including
imposition or increase of withholding and other taxes on
remittances and other payments by subsidiaries, and
transportation and shipping expenses;
o credit risk or financial condition of local customers and
distributors;
o potential difficulties in staffing and labor disputes;
o risk of nationalization of private enterprises;
o increased costs of transportation or shipping;
o ability to obtain supplies from foreign vendors and ship
products internationally during times of crisis or
otherwise;
o potential difficulties in protecting intellectual property;
o potential imposition of restrictions on investments; and
o local political and social conditions, including the
possibility of hyperinflationary conditions and political
instability in certain countries.
As we continue to expand our international operations, including as a
result of the UDI acquisition, these and other risks associated with
international operations are likely to increase. In addition, as we enter
new geographic markets, we may encounter significant competition from the
primary participants in those markets, some of which may have substantially
greater resources than we do.
FUTURE INCREASES IN THE NUMBER OF SHARES OF OUR OUTSTANDING COMMON STOCK
COULD ADVERSELY AFFECT OUR COMMON STOCK PRICE OR DILUTE OUR EARNINGS PER
SHARE.
Sales of a substantial number of shares of common stock into the
public market, or the perception that these sales could occur, could have a
material adverse effect on our stock price. If certain conditions are met,
the February LYONs and May LYONs could be converted into shares of our
common stock. The shares covered by the February LYONs and the May LYONs
have been registered under the Securities Act. Subject to adjustment, the
February LYONs and May LYONs could be converted into an aggregate of 6.6
million shares of common stock. In addition, as of December 31, 2001,
approximately 9.8 million shares of our common stock are issuable upon
exercise of outstanding stock options by employees and non-employee
directors. As of December 31, 2001, under our employee stock option plan
and non-employee director stock option plan, approximately 4.5 million
shares of our common stock are reserved for future issuance of additional
options and shares under these plans. Additionally, we may issue a
significant number of additional shares in connection with our
acquisitions. We also have filed shelf registration statements for 4.3
million shares of common stock that may be issued in acquisitions and we
also have filed a shelf registration statement for a total of $1 billion,
which may be used in connection with an offering of debt securities and/or
common stock for general corporate purposes. Any such additional shares
also could have a dilutive effect on our earnings per share.
PROVISIONS IN OUR CORPORATE DOCUMENTS AND DELAWARE LAW MAY DELAY OR PREVENT
A CHANGE IN CONTROL OF OUR COMPANY, AND, ACCORDINGLY, WE MAY NOT CONSUMMATE
A TRANSACTION THAT OUR STOCKHOLDERS CONSIDER FAVORABLE.
Provisions of our Certificate of Incorporation and By-laws may inhibit
changes in our control not approved by our Board. These provisions include,
for example, a staggered board of directors; a prohibition on stockholder
action by written consent; a requirement that special stockholder meetings
be called only by our Chairman, President and Chief Executive Officer or
our board; advance notice requirements for stockholder proposals and
nominations; limitations on stockholders' ability to amend, alter or repeal
the By-laws; enhanced voting requirements for certain business combinations
involving substantial stockholders; the authority of our board to issue,
without stockholder approval, preferred stock with terms determined in its
discretion; and limitations on stockholders' ability to remove directors.
We also have a rights plan designed to make it more costly and thus more
difficult to gain control of us without the consent of our Board. In
addition, we are afforded the protections of Section 203 of the Delaware
General Corporation Law, which could have similar effects. In general,
Section 203 prohibits us from engaging in a "business combination" with an
"interested stockholder" (each as defined in Section 203) for at least
three years after the time the person became an interested stockholder
unless certain conditions are met.
USE OF PROCEEDS
We will not receive any of the proceeds from the sales of common stock
by the selling securityholders. However, if one or more of the selling
securityholders exercises its rights under the warrants, we could receive
up to $34.6 million in gross proceeds representing the exercise price for
the shares of common stock underlying the warrants. All of the proceeds
that we receive, if any, will be used for general corporate purposes.
BUSINESS
We are a global multi-industry company focused on profitably growing
our businesses that have scale and growth potential. Our strategy is to
create market advantages through product and technology leadership, by
expanding our service offerings to full customer solutions and by building
critical mass through strategic acquisitions. We continually review each of
our businesses pursuant to our "fix, sell or grow" strategy. These reviews
could result in selected acquisitions to expand an existing business or
result in the disposition of an existing business. At any given time, we
may engage in discussions with respect to potential acquisitions or
dispositions in related or unrelated industries, asset sales or
dispositions, and joint ventures, some of which may be material. We are a
multinational corporation with operations in 21 countries and over 23,400
employees worldwide.
We are a global provider of technical products and systems, industrial
products and services, flow technology and service solutions. We offer a
diverse collection of products, which include networking and switching
products, fire detection and building life-safety products, TV and radio
broadcast antennas and towers, life science products and services,
transformers, compaction equipment, high-integrity castings, dock products
and systems, cooling towers, air filtration products, valves, back-flow
protection and fluid handling devices, and metering and mixing solutions.
Our products and services also include specialty service tools, diagnostic
systems, service equipment and technical information services. Our products
are used by a broad array of customers in various industries, including
chemical processing, pharmaceuticals, infrastructure, mineral processing,
petrochemical, telecommunications, financial services, transportation and
power generation.
On May 24, 2001, we completed the acquisition of United Dominion
Industries Limited (UDI) in an all-stock transaction valued at $1,066.9
million including $128.0 million of cash costs related to transaction fees
and corporate change in control payments. We issued a total of 9.385
million shares (3.890 million from treasury) to complete the transaction.
We also assumed or refinanced $884.1 million of UDI debt bringing the total
transaction value to $1,951.0 million. UDI, which had sales of $2,366.2
million for the twelve months ended December 31, 2000, is included, in our
financial statements beginning May 25, 2001, and is represented in the
description of our company.
In the second quarter of 2001, we began reporting our results of
operations in four segments, Technical Products and Systems, Industrial
Products and Services, Flow Technology, and Service Solutions. The new
structure reflects the acquisition of UDI and aligns financial reporting
with the operating structure of the organization.
TECHNICAL PRODUCTS AND SYSTEMS
The Technical Products and Systems segment focuses on solving customer
problems with complete technology-based systems. Our emphasis is on growth
through investment in new technology, new product introductions, alliances
and acquisitions. This segment includes operating units that design and
manufacture networking and switching products for storage; data networks;
fire detection and integrated building life-safety systems; TV and radio
transmission systems; automated fare collection systems; laboratory
centrifuges, incubators, ovens, testing chambers and freezers; electrical
test and measurement solutions; cable and pipe locating devices;
electrodynamic shakers; industrial ovens and equipment for the manufacture
of silicon crystals.
INDUSTRIAL PRODUCTS AND SERVICES
The strategy of the Industrial Products and Services segment is to
provide "Productivity Solutions for Industry". This segment emphasizes
introducing new related services and products, as well as focusing on the
replacement parts and service elements of the segment. This segment
includes operating units that design, manufacture, and market power
transformers, hydraulic systems, high-integrity aluminum and magnesium
die-castings, automatic transmission filters, industrial filtration
products, dock equipment, material handling devices, electric resistance
heaters, industrial ventilation equipment, soil, asphalt and landfill
compactors, specialty farm machinery, and components for the aerospace
industry.
FLOW TECHNOLOGY
The Flow Technology segment designs, manufactures, and markets
solutions and products that are used to process or transport fluids and in
heat transfer applications. This segment includes operating units that
manufacture pumps and other fluid handling machines, valves, cooling
towers, boilers, leak detection equipment, and industrial mixers.
SERVICE SOLUTIONS
Service Solutions includes operations that design, manufacture and
market a wide range of specialty service tools, hand-held diagnostic
systems and service equipment, inspection gauging systems, and technical
and training information, primarily to the franchised vehicle dealer
industry in North America and Europe. Major customers are franchised
dealers of motor vehicle manufacturers, aftermarket vehicle service
facilities, and independent distributors.
COMMON STOCK WE MAY ISSUE UNDER THE WARRANTS
The selling securityholders are selling under this prospectus an
aggregate of up to 366,418 shares of our common stock issuable upon
exercise of the warrants. Of the warrants, 152,594 warrants are exercisable
through April 23, 2002, and 213,824 warrants have been exercised, all at an
exercise price of $94.5114 per share.
The exercise price and number of shares of our common stock which may
be purchased upon exercise of any of the warrants are subject to certain
"anti-dilution" adjustments in the event of any:
o dividend or distribution on shares of common stock payable
in our common stock;
o subdivision, reclassification, combination or consolidation
of our common stock; or
o consolidation or merger, conveyance or transfer of all or
substantially all of our property.
DESCRIPTION OF COMMON STOCK
GENERAL
Our authorized capital stock consists of 100 million shares of common
stock, par value $10.00 per share, and 3 million shares of preferred stock,
without par value. As of March 15, 2002, 40.8 million shares of common
stock were issued and outstanding (not including treasury shares) and 0.5
million shares have been designated as Series A Preferred Stock, of which
none are issued and outstanding. The following description of our common
stock and provisions of our Certificate of Incorporation and By-laws are
only summaries and we encourage you to review complete copies of our
Certificate of Incorporation and By-laws, which we have previously filed
with the SEC.
The holders of our common stock are entitled to have dividends
declared in cash, property, or other securities out of any of our net
profits or net assets legally available therefor as and when declared by
our Board of Directors. In the event of the liquidation or dissolution of
our business, the holders of common stock will be entitled to receive
ratably the balance of net assets available for distribution after payment
of any liquidation or distribution preference payable with respect to any
then outstanding shares of our preferred stock. Each share of common stock
is entitled to one vote with respect to matters brought before the
stockholders, except for the election of any directors who may be elected
by vote of any outstanding shares of preferred stock voting as a class.
The rights and privileges of our common stock may be subordinate to
the rights and preferences of any of our preferred stock. The Board is
authorized to fix by resolution the designation of each series of preferred
stock, and, with respect to each series, the stated value of the shares,
the dividend rate and the dates and other provisions respecting the payment
of dividends, the provisions, if any, for a sinking fund, the preferences
of the shares in the event of the liquidation or dissolution, the
provisions, if any, respecting the redemption of the shares, subject to
applicable law, the voting rights (except that such shares shall not have
more than one vote per share), the terms, if any, upon which the shares
would be convertible into or exchangeable for any other shares, and any
other relative, participating, optional or other special rights,
qualifications, limitations or restrictions. All shares of any series of
preferred stock, as between themselves, rank equally and are identical; and
all series of preferred stock, as between themselves, rank equally and are
identical except as set forth in resolutions of the Board authorizing the
issuance of a particular series.
Our common stock is traded on the New York Stock Exchange and the
Pacific Stock Exchange under the symbol "SPW."
DELAWARE ANTI-TAKEOVER LAW AND CERTAIN CERTIFICATE OF INCORPORATION AND
BYLAW PROVISIONS
The provisions of Delaware law, our Certificate of Incorporation and
By-Laws may have the effect of delaying, deferring or discouraging another
person from acquiring control of our company, including takeover attempts
that might result in a premium over the market price for the shares of
common stock.
Delaware Law
We are subject to the provisions of Section 203 of the Delaware
General Corporation Law regulating corporate takeovers. In general, Section
203 prohibits a publicly-held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of
three years after the time that the person became an interested
stockholder, unless:
o before the person became an "interested stockholder," the
board of directors of the corporation approved the
transaction in which the "interested stockholder" became an
"interested stockholder" or approved the business
combination;
o upon consummation of the transaction that resulted in the
stockholder becoming an "interested stockholder," the
"interested stockholder" owned at least 85% of the voting
stock of the corporation that was outstanding at the time
the transaction commenced. For purposes of determining the
number of shares outstanding, shares owned by directors who
are also officers of the corporation and shares owned by
employee stock plans, in specified instances, are excluded;
or
o at or after the time the person became an "interested
stockholder," the business combination is approved by the
board of directors of the corporation and authorized at an
annual or special meeting of the stockholders by the
affirmative vote of at least 66 2/3% of the outstanding
voting stock which is not owned by the "interested
stockholder."
A "business combination" is defined generally to include mergers or
consolidations between a Delaware corporation and an "interested
stockholder," transactions with an "interested stockholder" involving the
assets or stock of the corporation or any majority-owned subsidiary,
transactions which increase an "interested stockholder's" percentage
ownership of stock of the corporation or any majority-owned subsidiary, and
receipt of various financial benefits from the corporation or any
majority-owned subsidiary. In general, an "interested stockholder" is
defined as any person or entity that is the beneficial owner of at least
15% of a corporation's outstanding voting stock or is an affiliate or
associate of the corporation and was the beneficial owner of 15% or more of
the outstanding voting stock of the corporation at any time within the past
three years.
A Delaware corporation may opt out of this provision with an express
provision in its original certificate of incorporation or an express
provision in its certificate of incorporation or by-laws resulting from a
stockholders' amendment approved by at least a majority of the outstanding
voting shares. However, we have not opted out of this provision. The
statute could prohibit or delay mergers or other takeover or
change-in-control attempts and, accordingly, may discourage attempts to
acquire us.
Certificate of Incorporation and By-Law Provisions
Our Certificate of Incorporation and By-Laws provide:
o a staggered Board of Directors so that it would take three
successive annual meetings to replace all directors;
o a prohibition on stockholder action through written consents;
o a requirement that special meetings of stockholders be called
only by our Chairman, President and Chief Executive Officer or
our Board;
o advance notice requirements for stockholder proposals and
nominations;
o limitations on the ability of stockholders to amend, alter or
repeal the By-laws;
o enhanced voting requirements for certain business combinations
involving substantial stockholders;
o the authority of our Board of Directors to issue, without
stockholder approval, preferred stock with such terms as our
Board may determine; and
o limitations on the ability of stockholders to remove directors.
Limitations of Liability and Indemnification of Directors and Officers
Our Certificate of Incorporation limits the liability of directors
to us and our stockholders to the fullest extent permitted by Delaware law.
Specifically, a director will not be personally liable for monetary damages
for breach of fiduciary duty as a director, except for liability:
o for any breach of the director's duty of loyalty to us or our
stockholders;
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law;
o under Section 174 of the Delaware General Corporation Law, which
concerns unlawful payments of dividends, stock purchases or
redemptions; or
o for any transaction from which the director derived an improper
personal benefit.
The Certificate of Incorporation provides that we shall indemnify our
officers and directors to the fullest extent permitted by the Delaware
General Corporation Law. We believe that these provisions will assist us in
attracting and retaining qualified individuals to serve as directors.
RIGHTS PLAN
On June 25, 1996, our Board of Directors adopted a rights plan. Our
rights plan, as amended, is designed to make it more costly and thus more
difficult to gain control of us without the consent of our Board of
Directors. The description presented below is intended as a summary only
and is qualified in its entirety by reference to the rights agreement, as
amended, which is an exhibit to the registration statement of which this
prospectus is a part.
Our rights plan provides that each of our shares of common stock will
have the right to purchase from us one one-thousandth of a share of a new
Series A Preferred Stock at a price of $200 per one-thousandth of a share,
subject to customary anti-dilution protection adjustment.
The rights are attached to all certificates representing outstanding
shares of our common stock, and no separate right certificates have been
distributed. The rights will separate from the shares of our common stock
approximately 10 days after someone acquires beneficial ownership of 20% or
more of the outstanding common stock, or commences a tender offer or
exchange offer for 20% or more of the outstanding common stock.
After rights separate from our common stock, certificates representing
the rights will be mailed to record holders of our common stock. Once
distributed, the separate right certificates alone will represent the
rights.
The rights are not exercisable until the date rights separate and will
expire on June 25, 2006, unless extended or unless earlier redeemed or
exchanged by us.
The shares of Series A Preferred Stock purchasable upon exercise of
the rights are non-redeemable. Each share of Series A Preferred Stock has a
minimum preferential quarterly dividend payment of $5.00 per share and an
amount equal to 1,000 times the dividend declared per share of common
stock. In the event of liquidation, the holders of Series A Preferred Stock
will be entitled to a minimum preferential liquidation payment of $1,000
per share but will be entitled to an aggregate amount per share equal to
1,000 times the aggregate payment per share made to holders of common
stock.
Each share of Series A Preferred Stock will have 1,000 votes, voting
together with the shares of common stock. In the event of any merger,
consolidation or other transaction in which shares of common stock are
exchanged, each share of Series A Preferred Stock will be entitled to
receive 1,000 times the amount received per share of common stock. The
rights are protected by customary anti-dilution provisions.
If, after any person or group becomes an acquiring person, we are
acquired in a merger or other business combination transaction or 50% or
more of our consolidated assets or earning power are sold, each holder of a
right will have a right to receive upon exercise of a right the number of
shares of common stock of the acquiring company, having a value equal to
two times the exercise price of the right. If any person or group becomes
an acquiring person, each holder of a right will have the right to receive
upon exercise that number of shares of common stock having a market value
of two times the exercise price of the right. Following the occurrence of
the events described above, rights beneficially owned by any acquiring
person at the time of such transaction will be void and may not be
exercised.
At any time after any person or group becomes an acquiring person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of common stock, the Board may exchange the rights
(other than rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of common
stock or one one-thousandth of a share of Series A Preferred Stock (or of a
share of a class or series of our preferred stock having equivalent rights,
preferences and privileges) per right, subject to adjustment.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of
the outstanding shares of common stock, the Board may redeem the rights in
whole, but not in part, at a price of $0.01 per right.
The terms of the rights may generally be amended by the Board without
the consent of the holders of the rights.
Until a right is exercised, the holder will have no rights as a
stockholder.
The rights should not interfere with any merger or other business
combination approved by the Board since the rights may be redeemed by us at
the redemption price prior to the time that a person or group has acquired
beneficial ownership of 20% or more of the common stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is EquiServe.
SELLING SECURITYHOLDERS
This prospectus covers offers and sales by the selling securityholders
of shares of our common stock issued upon exercise of the warrants. The
following table sets forth, as of the date of the prospectus, a list of
each selling securityholder who has completed a questionnaire and requested
inclusion in this prospectus and the number of shares of our common stock
beneficially owned by each of these selling securityholders, as well as the
number of shares offered for resale by each of these selling
securityholders. Shares that are beneficially owned include shares which
the selling securityholders can acquire upon exercise of the warrants (all
of which are currently exercisable) as well as shares they have already
acquired upon exercise, if any, of the warrants and shares they may have
otherwise acquired (although only sales of shares acquired upon exercise of
the warrants are covered by this prospectus). Our registration of these
shares does not necessarily mean that any named selling securityholder will
exercise its warrants or will sell all or any of its shares of common
stock. The "Shares Beneficially Owned After Offering" columns in the table
assumes that all shares covered by this prospectus will be sold by the
selling securityholders and that no additional shares of common stock are
bought or sold by any selling securityholder since the date that it
provided us with the information for the table.
Except as may be set forth in a prospectus supplement, none of the
selling securityholders has held any position or office or had a material
relationship with us or any of its affiliates within the past three years
other than as a result of the ownership of our common stock and warrants to
purchase our common stock.
Information about the selling securityholders may change over time.
Relevant changed or new information about selling securityholders of which
we have knowledge will be set forth in prospectus supplements. Additional
selling securityholders may also be set forth in post-effective amendments.
From time to time, additional information concerning ownership of the
shares of common stock may rest with certain holders thereof not named in
the table below and of whom we are unaware.
SHARES BENEFICIALLY OWNED PRIOR TO OFFERING (1) SHARES TO BE SHARES BENEFICIALLY OWNED AFTER
OR PREVIOUSLY OFFERING (1) (3)
SOLD
BENEFICIAL OWNER NUMBER OF PERCENT NUMBER OF PERCENT
SHARES (2) SHARES (3)
Teachers Insurance 123,505 * 123,505 0 *
and Annuity
Association of
America
Carl Zeiss, Inc. 70,467 * 70,467 0 *
Barclays Capital 19,360 * 19,360 0 *
Securities Limited
Mellon Bank, N.A. 17,811 * 17,811 0 *
Pan-American Life 11,252 * 11,252 0 *
Insurance Company
The Hallwood Group 6,405 * 6,405 0 *
Incorporated
Phoenix Life 5,255 * 5,255 0 *
Insurance Company
The Guardian Life 2,041 * 2,041 0 *
Insurance Company of
America (successor
by merger to
Berkshire Life
Insurance Company)
All other holders of 110,322 * 110,322 0 *
shares that may be
acquired upon
exercise of the
warrants or future
transferees,
pledgees, donees,
assignees or
successors of any
such holders (4)
TOTAL __________ __________ *
366,418 366,418
* Less than one percent (1%), based upon 40,814,820 shares of common stock
outstanding as of March 15, 2002.
(1) Except as otherwise noted herein, the number and percentage of shares
beneficially owned is determined in accordance with Rule 13d-3 of the
Securities Exchange Act, and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under such rule, beneficial
ownership includes any shares as to which the individual or entity has sole
or shared voting power or investment power and also any shares which the
individual or entity has the right to acquire within 60 days of the date of
this prospectus through the exercise of any stock option or other right.
(2) Includes the shares of common stock underlying the warrants which may
be sold under this prospectus.
(3) Assumes the sale of all the shares which may be sold under this prospectus.
(4) Information about other selling securityholders will be set forth in a
post-effective amendment before those selling securityholders make offers
or sales under this prospectus.
PLAN OF DISTRIBUTION
As used in this prospectus, selling securityholder includes donees,
pledgees, transferees and other successors-in-interest who sell shares
received from the selling securityholder after the date of this prospectus
as a gift, pledge, partnership distribution or other non-sale transfer.
The selling securityholders may offer and sell the shares of our
common stock covered by this prospectus from time to time, subject to
certain restrictions. The selling securityholders will act independently of
us in making decisions with respect to the timing, manner and size of each
sale. Sales may be made:
o in the open market;
o on the New York Stock Exchange or the Pacific Stock
Exchange;
o in privately negotiated transactions;
o in an underwritten offering; or
o a combination of such methods.
Such sales may be made at varying prices determined by reference to,
among other things:
o market prices prevailing at the time of sale;
o prices related to the then-prevailing market price; or
o negotiated prices.
Each selling securityholder may also transfer shares owned by it by
gift, and upon any such transfer, the donee would have the same rights as
the selling securityholder. Some of the selling securityholders may
distribute their shares, from time to time, to their limited or general
partners, members or stockholders who may sell shares pursuant to this
prospectus.
Negotiated transactions may include purchases by a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
prospectus, ordinary brokerage transactions and transactions in which a
broker solicits purchasers, or block trades in which a broker-dealer so
engaged will attempt to sell the shares as agent but may take a position
and resell a portion of the block as principal to facilitate the
transaction.
Distribution by the selling securityholders of the common stock
covered by this prospectus may occur over an extended period of time. In
effecting sales, broker-dealers hired by the selling securityholders may
arrange for other broker-dealers to participate. Broker-dealers may receive
commissions or discounts from the selling securityholders in amounts to be
negotiated immediately prior to the sale.
In connection with the sale of common stock covered by this
prospectus, underwriters or agents may receive compensation from the
selling securityholders or from purchasers of the common stock, for which
they may act as agent. Their compensation may be in the form of discounts,
concessions or commissions. If underwriters sell common stock to or through
dealers, then the dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they act as agents. Neither we nor
any selling securityholder can presently estimate the amount of that
compensation. We know of no existing arrangements between any selling
securityholders, any other securityholders, brokers, dealers, underwriters
or agents relating to the sale or distribution of the shares of our common
stock.
We will bear the expenses of registration under the Securities Act of
1933 as well as certain other fees and expenses. The selling
securityholders will bear the cost of any commissions or selling expenses.
LEGAL MATTERS
The validity of any securities issued hereunder will be passed upon
for our company by Fried, Frank, Harris, Shriver & Jacobson (a partnership
including professional corporations), New York, New York.
EXPERTS
The consolidated financial statements of SPX as of December 31, 2001
and 2000 and for each of the three years in the period ended December 31,
2001, have been audited by Arthur Andersen LLP, independent public
accountants. These financial statements and the report of the independent
public accountants, included in SPX's Annual Report on Form 10-K filed on
March 21, 2002, are incorporated by reference in this document.
The consolidated financial statements of UDI as of December 31, 2000
and 1999 and for each of the three years in the period ended December 31,
2000 have been audited by KPMG LLP, independent public accountants. These
financial statements and the report of the independent public accountants,
included in SPX's Current Report on Form 8-K filed on April 13, 2001, are
incorporated by reference in this document.
