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UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): June 2, 1997 (May 15, 1997)
L.B. Foster Company
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(Exact name of registrant as specified in its charter)
Delaware 0-10436 25-1324733
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
415 Holiday Drive, Pittsburgh, PA 15220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 928-3400
Not Applicable
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(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
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On May 15, 1997, the Board of Directors of L.B. Foster Company
(the "Company") declared a dividend distribution of one right (a
"Right") for each outstanding share of the Company's Class A
Common Stock, par value $0.01 per share ("Common Stock"), to
stockholders of record at the close of business on May 21, 1997.
Except as described below, each Right, when exercisable,
entitles the registered holder to purchase from the Company one
share of Common Stock at a purchase price of $30.00 (the
"Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and American Stock
Transfer & Trust Company, as Rights Agent. The following is a
general description only and is subject to the detailed terms
and conditions of the Rights Agreement. A copy of the Rights
Agreement, including the form of Rights Certificate and the
Summary of Rights to be provided to stockholders of the Company,
has been filed with the Securities and Exchange Commission as
Exhibit 4A to the Company's Registration Statement on Form 8-A
dated May 20,1997 and is incorporated herein by reference.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The 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 other than the Company, its subsidiaries or any person
receiving newly-issued shares of Common Stock directly from the
Company or indirectly via an underwriter in connection with a
public offering by the Company (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), or (ii) 10 business days following
the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 20% or more of
such outstanding shares of Common Stock. Until the Distribution
Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates
issued after May 21, 1997 will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on May 15, 2007, unless
earlier redeemed or exchanged by the Company as described below
(the "Expiration Date").
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
If any person becomes an Acquiring Person other than pursuant
to a Qualifying Offer (as defined below), each holder of a Right
will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right. The Rights Agreement contains an
exemption for any issuance of Common Stock by the Company
directly to any person (for example, in a private placement or
an acquisition by the Company in which Common Stock is used as
consideration) or indirectly via an underwriter in connection
with a public offering by the Company, even if that person would
become the beneficial owner of 20% or more of the outstanding
Common Stock, provided that such person does not acquire any
additional shares of Common Stock. Notwithstanding any of the
foregoing, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void. However, Rights are
not exercisable in any event until such time as the Rights are
no longer redeemable by the Company as set forth below.
A "Qualifying Offer" means a tender offer or exchange offer for
all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the Continuing Directors
(as defined below) who are not officers or employees of the
Company and who are not related (as specified in the Rights
Agreement) to the Person making such offer, to be fair to and in
the best interests of the Company and its stockholders.
If at any time following the Stock Acquisition Date (i) the
Company is acquired in a merger or other business combination
transaction in which the Common Stock is changed or exchanged or
in which the Company is not the surviving corporation (other
than a merger that follows a Qualifying Offer and satisfies
certain other requirements), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights that have been previously
voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or convertible
securities at less than the current market price of the Common
Stock, or (iii) upon the distribution to holders of the Common
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional shares will be issued
and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Common Stock on the last trading date
prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at
a price of $.O5 per Right (payable in cash, Common Stock or
other consideration deemed appropriate by the Board of
Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence
of a majority of the Continuing Directors. Immediately upon the
action of the Board of Directors ordering redemption of the
Rights or at such other time as may be specified by the Board
when it orders redemption, with, where required, the concurrence
of a majority of the Continuing Directors, the Rights will
terminate and the only right of the holders of Rights will be to
receive the $.05 redemption price.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior
to the Stock Acquisition Date, and any person who is
subsequently elected to the Board if such person is recommended
or approved by a majority of the Continuing Directors, but shall
not include an Acquiring Person, or an affiliate or associate of
an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income if the Rights become
exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set
forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the
Company prior to the Distribution Date. After the Distribution
Date, the Rights Agreement may be amended by the Board (in
certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes that
do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten
or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period
governing redemption shall be made at a time when the Rights are
not redeemable.
As of May 15, 1997, there were 10,162,738 shares of Common
Stock outstanding and 759,000 shares of Common Stock reserved
for issuance under outstanding options to purchase Common Stock.
Each outstanding share of Common Stock on May 21, 1997 will
receive one Right. In addition, Rights shall be issued in
respect of all shares of Common Stock that are issued (whether
originally issued or from the Company's treasury) after that
date but prior to the earlier of the Distribution Date or the
Expiration Date and, in certain circumstances as provided in the
Rights Agreement, after the Distribution Date.
Certain Anti-takeover Effects
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The Rights approved by the Board are designed to protect and
maximize the value of the outstanding equity interests in the
Company in the event of an unsolicited attempt by an acquiror to
take over the Company, in a manner or on terms not approved by
the Board of Directors. Takeover attempts frequently include
coercive tactics to deprive a corporation's Board of Directors
and its stockholders of any real opportunity to determine the
destiny of the corporation. The Rights have been declared by
the Board in order to deter such tactics, including a gradual
accumulation of shares in the open market of a 20% or greater
position to be followed by a merger or a partial or two-tier
tender offer that does not treat all stockholders equally.
These tactics unfairly pressure stockholders, squeeze them out
of their investment without giving them any real choice and
deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company
and will not do so. The Rights are not exercisable in the event
of a Qualifying Offer, as described above. The Rights may be
redeemed by the Company at $.05 per Right within ten days (or
such later date as may be determined by a majority of the
Continuing Directors) after the accumulation of 20% or more of
the Company's Common Stock by a single acquiror or group.
Accordingly, the Rights should not preclude any merger or
business combination approved by the Board of Directors.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans.
The issuance of the Rights has no immediate dilutive effect,
will not affect reported earnings per share, should not be
taxable to the Company or to its stockholders and will not
change the way in which the Company's shares are presently
traded. The Company's Board of Directors believes that the
Rights represent a sound and reasonable means of addressing the
complex issues of corporate policy created by the current
takeover environment.
However, the Rights may have the effect of rendering more
difficult or discouraging an acquisition of the Company deemed
undesirable by the Board of Directors. The Rights will cause
substantial dilution to a person or group that attempts to
acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer
conditioned upon the negation, purchase or redemption of the
Rights.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibit is filed as a part of
this report:
4A Rights Agreement, dated as of May 15, 1997, between
L.B. Foster Company and American Stock Transfer & Trust Company,
including the form of Rights Certificate and the Summary of
Rights attached thereto as Exhibits A and B, filed as Exhibit 4A
to the Company's Registration Statement on Form 8-A dated May
20, 1997 and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereto duly authorized.
L.B. FOSTER COMPANY
(Registrant)
Date: June 2, 1997 By: /s/ David L. Voltz
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David L. Voltz
Vice President