x
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Preliminary
Proxy Statement
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¨
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Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
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¨
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Definitive
Proxy Statement
|
¨
|
Definitive
Additional Materials
|
¨
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Soliciting
Material Pursuant to §240.14a-12
|
x
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No
fee required.
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¨
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Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
|
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(4)
|
Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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¨
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Fee
paid previously with preliminary
materials.
|
¨
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
|
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(1)
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Amount
Previously Paid:
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(2)
|
Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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By
Order of the Board of Directors,
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Nicol G. Graham
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Vice President, Chief Financial Officer, Treasurer and Secretary
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Page
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||
ABOUT
THE MEETING
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5
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What
is the purpose of this proxy statement?
|
5
|
|
What
proposals will be voted on at the annual meeting?
|
5
|
|
Who
is entitled to vote?
|
5
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|
What
is the difference between a stockholder of record and a beneficial holder
of shares?
|
5
|
|
Who
can attend the meeting?
|
6
|
|
What
constitutes a quorum?
|
6
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|
How
do I vote?
|
6
|
|
Can
I change my vote after I give my proxy?
|
6
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How
many votes are required for the proposals to pass?
|
6
|
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How
are abstentions and broker non-votes treated?
|
7
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|
What
if I do not specify a choice for a matter when returning a
proxy?
|
7
|
|
Will
anyone contact me concerning this vote?
|
7
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|
What
are the board’s recommendations?
|
7
|
|
What
happens if additional matters are presented at the annual
meeting?
|
7
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|
Who
will tabulate and certify the vote?
|
7
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STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
8
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PROPOSAL NO.
1 — ELECTION OF DIRECTORS
|
10
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|
Nominees
Standing for Election to the Board
|
10
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Board
Recommendation and Stockholder Vote Required
|
11
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CORPORATE
GOVERNANCE AND BOARD COMMITTEES
|
11
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Board
Composition
|
11
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Board
Leadership Structure and Risk Oversight
|
12
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Director
Independence
|
12
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|
Board
Meetings
|
12
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Executive
Sessions
|
12
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Committees
Established by the Board of Directors
|
12
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Compensation
Committee Interlocks and Insider Participation
|
15
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Stock
Ownership Guidelines
|
15
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Communications
with Directors
|
15
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Code
of Business Conduct
|
15
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DIRECTOR
COMPENSATION
|
16
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EXECUTIVE
COMPENSATION
|
17
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REPORT
OF THE COMPENSATION COMMITTEE
|
24
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EQUITY
COMPENSATION PLAN INFORMATION
|
24
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REPORT
OF THE AUDIT COMMITTEE
|
25
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PRINCIPAL
INDEPENDENT ACCOUNTANT FEES AND SERVICES
|
26
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PROPOSAL NO.
2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
|
27
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General
|
27
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Board
Recommendation and Stockholder Vote Required
|
27
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PROPOSAL NO.
3 — RATIFICATION OF STOCKHOLDER RIGHTS PLAN
|
27
|
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Introduction
|
27
|
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Purpose
of the Rights Plan
|
27
|
|
How
the Rights Plan Works
|
27
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Summary
of the Rights Plan
|
28
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|
Board
Recommendation and Stockholder Vote Required
|
29
|
|
ANNUAL
REPORT TO STOCKHOLDERS
|
29
|
|
STOCKHOLDER
PROPOSALS AND NOMINATIONS FOR 2011 ANNUAL MEETING
|
30
|
|
GENERAL
|
30
|
|
OTHER
MATTERS
|
31
|
|
·
|
the
election of seven directors, each to serve until the next annual meeting
and until a successor is duly elected and qualified
(Proposal No. 1);
|
|
·
|
the
ratification of the selection of Ernst & Young LLP as the Company’s
independent registered public accounting firm (Proposal No.
2);
|
|
·
|
the
ratification of the Stockholder Rights Plan (Proposal No. 3);
and
|
|
·
|
any
other business properly coming before the annual meeting and any
adjournment or postponement
thereof.
|
·
|
Telephoning
the toll-free number listed on the proxy
card;
|
·
|
Using
the Internet site listed on the proxy
card; or
|
·
|
Marking,
dating, signing and returning the enclosed proxy
card.
|
·
|
Delivering
to our Secretary at the address on the first page of this proxy statement
a written notice of revocation of your proxy before or at the annual
meeting and prior to voting;
|
·
|
Delivering
a new proxy bearing a later date by telephone, via the Internet or by
submitting a duly executed proxy
card; or
|
·
|
Voting
in person at the annual meeting.
|
·
|
“FOR”
the election of each nominee for director (see
page 10);
|
·
|
“FOR”
the ratification of Ernst & Young LLP as our independent registered
public accounting firm (see page 27);
and
|
·
|
“FOR”
the ratification of the Stockholder Rights Plan
(see page 27).
|
Beneficial Owner
|
Beneficial Ownership
Common Stock
|
5% Stockholders
|
Number of Shares(1)
|
Percentage
|
Royce
& Associates, LLC (2)
|
||
745
Fifth Avenue
|
||
New
York, NY 10151
|
2,118,915
|
12.0%
|
FMR
LLC (3)
|
||
82
Devonshire Street
|
||
Boston,
MA 02109
|
2,020,000
|
11.4%
|
Capital
Research Global Investors (4)
|
||
333
South Hope Street
|
||
Los
Angeles, CA 90071-1406
|
1,946,500
|
11.0%
|
Bank
of America Corporation (5)
|
||
100
North Tryon Street, Floor 25
|
||
Charlotte,
NC 28255
|
1,184,648
|
6.7%
|
BlackRock,
Inc. (6)
|
||
40
East 52nd Street
|
||
New
York, NY 10022
|
978,277
|
5.5%
|
Executive
Officers and Directors
|
||
Charles
A. Sorrentino
|
1,304,438
|
7.4%
|
Nicol
G. Graham(7)
|
183,775
|
1.0%
|
Michael
T. Campbell
|
8,044
|
*
|
I.
Stewart Farwell
|
9,000
|
*
|
Peter
M. Gotsch
|
10,746
|
*
|
Wilson
B. Sexton
|
60,000
|
*
|
William
H. Sheffield
|
5,000
|
*
|
Scott
L. Thompson
|
15,000
|
*
|
All
directors and executive officers as a group (8 persons)(7)
|
1,596,003
|
9.0%
|
*
|
Less
than 1%
|
(1)
|
The
information contained in this table was furnished to us by the individuals
named in the table and reflects the SEC’s definition of beneficial
ownership.
|
(2)
|
As
reported in an amendment to Statement on Schedule 13G filed with the SEC
on behalf of Royce & Associates, LLC on January 25,
2010. Royce & Associates, LLC is deemed to be the
beneficial owner of these shares as a result of its acting as investment
adviser to various investment companies registered under Section 8 of the
Investment Company Act of 1940. One of those investment
companies, Royce Low-Priced Stock Fund, beneficially owned 1,465,700
shares of our common stock.
|
(3)
|
As
reported in an amendment to Statement on Schedule 13G filed with the SEC
on behalf of FMR LLC and Edward C. Johnson 3d, its chairman, on February
16, 2010. Fidelity Management & Research Company, a
wholly-owned subsidiary of FMR LLC, is deemed to be the beneficial owner
of these shares as a result of acting as investment adviser to various
investment companies registered under Section 8 of the Investment Company
Act of 1940. None of these individual investment companies
individually beneficially owned more than 5% of our outstanding common
stock. Fidelity Management & Research Company had no voting
power and shared dispositive power over the shares reflected in the
amendment to Schedule
13G.
|
(4)
|
As
reported in an amendment to Statement on Schedule 13G filed with the SEC
on behalf of Capital Research Global Investors, a division of Capital
Research and Management Company, on February 9, 2010. Capital
Research Global Investors is deemed to be the beneficial owner of these
shares as a result of its acting as investment adviser to various
investment companies registered under Section 8 of the Investment Company
Act of 1940. One of those investment companies, SMALLCAP World
Fund, Inc., beneficially owns more than 5% of our outstanding common
stock.
|
(5)
|
As
reported in a Statement on Schedule 13G filed with the SEC on behalf of
Bank of America Corporation and certain of its affiliates on January 29,
2010. Of the shares reported in such Schedule
13G: (i) Bank of America Corporation had shared voting power as
to 1,083,938 shares and shared dispositive power as to 1,184,648 shares;
(ii) Bank of America, N.A. had shared voting power as to 1,058,029 shares
and shared dispositive power as to 1,158,739 shares; (iii) Columbia Asset
Management Advisors, LLC had sole voting power as to 1,058,029 shares,
sole dispositive power as to 834,189 shares and shared dispositive power
as to 324,550 shares; and (iv) no other affiliate of Bank of America
Corporation individually beneficially owned more than 0.1% of our
outstanding common stock.
|
(6)
|
As
reported in an amendment to Statement on Schedule 13G filed with the SEC
on behalf of BlackRock, Inc. and certain of its affiliates on
January 29, 2010.
|
(7)
|
Includes
(i) 60,772 shares owned by Mr. Graham’s individual retirement account,
(ii) 13,750 shares issuable upon the exercise of options that could be
exercised within 60 days after March 8, 2010 and (iii) 5,000 unvested
restricted shares.
|
·
|
at
its regularly scheduled meetings, the board receives management updates on
our business operations, financial results and strategy and discusses
risks related to the business;
|
·
|
the
Audit Committee assists the board in its oversight of risk management by
discussing with management, particularly, the Chief Executive Officer and
Chief Financial Officer, our guidelines and policies regarding financial
and enterprise risk management and risk appetite, including major risk
exposures, and the steps management has taken to monitor and control such
exposures; and
|
·
|
through
management updates and committee reports, the board monitors our risk
management activities, including the enterprise risk management process,
risks relating to our compensation programs, and financial and operational
risks being managed by the Company.
|
•
|
the
accounting and financial reporting processes of the Company and the audits
of the financial statements of the
Company;
|
•
|
the
independent auditors’ qualifications and independence;
and
|
•
|
the
performance of the independent
auditors.
|
•
|
maintaining
free and open communication between the committee, independent auditors,
and management of the Company;
|
•
|
reviewing
and appraising the fairness of related party
transactions; and
|
•
|
preparing
the report required to be prepared pursuant to the rules of the SEC for
inclusion in the Company’s annual proxy
statement.
|
•
|
identify
persons that the Committee believes are qualified to be directors of the
Company and consider and evaluate other candidates for director brought to
the attention of the Committee, including persons nominated by
stockholders in accordance with the nomination procedures specified in the
Company’s By-laws or otherwise recommended by
stockholders;
|
•
|
recommend
to the board (a) the nominees for election as directors at each annual
meeting of stockholders or at any special meeting of stockholders at which
directors are to be elected and (b) the persons to be appointed by the
board to fill any vacancy on the board (including any vacancy resulting
from an increase in the size of the
board);
|
•
|
review
the committee structure of the board and the membership of the board
committees, and recommend to the board nominees for appointment to each of
the committees;
|
•
|
review
and reassess, at least annually, the adequacy of the Company’s Corporate
Governance Guidelines and recommend to the board for approval any changes
that the Committee deems necessary or
appropriate;
|
•
|
review
any proposals properly submitted by stockholders for inclusion in the
Company’s proxy statement and recommend to the board any action to be
taken in response to such proposals;
and
|
•
|
oversee
the annual evaluation of the
board.
|
|
•
|
make
recommendations to the Board with respect to the CEO’s compensation
level;
|
|
•
|
consider
the Company’s performance and relative stockholder return, the value of
similar incentive awards to the CEOs at comparable companies, and the
awards given to the Company’s CEO in past years when determining the
long-term component of the CEO’s
compensation;
|
|
•
|
review
the CEO’s recommendations on compensation of the executive officers of the
Company and make recommendations to the Board with respect thereto and
with respect to the Company’s major compensation policies and
practices;
|
|
•
|
administer
and review the Houston Wire & Cable Company 2006 Stock Plan, including
approving the number and distribution of options under such plan;
and
|
|
•
|
review
and make recommendations to the Board concerning management
development and succession planning activities, including an
appropriate successor in the event of the unexpected death,
incapacity or resignation of the
CEO.
|
|
•
|
Our
directors, officers and employees are required to avoid situations in
which their personal, family or financial interests conflict with those of
the Company;
|
|
•
|
Our
directors, officers and employees must refrain from engaging in any
activities that compete with the Company, or which may compromise its
interests;
|
|
•
|
Our
directors, officers and employees must refrain from taking any business or
investment opportunity discovered in the course of employment with or
service to the Company that the director, officer or employee knows, or
should have or has reason to know, would benefit the Company;
and
|
|
•
|
Our
directors, officers and employees must comply with all applicable
governmental laws, rules and
regulations.
|
Name
|
Fees Earned
or Paid in Cash
($)
|
Option Awards
($)(1)
|
Total
($)
|
|||||||||
Michael
T. Campbell
|
47,750
|
63,453
|
111,203
|
|||||||||
I.
Stewart Farwell
|
47,250
|
29,895
|
77,145
|
|||||||||
Peter
M. Gotsch
|
52,750
|
29,895
|
82,645
|
|||||||||
Wilson
B. Sexton
|
44,250
|
29,895
|
74,145
|
|||||||||
William
H. Sheffield
|
47,250
|
29,895
|
77,145
|
|||||||||
Scott
L. Thompson
|
70,000
|
59,788
|
129,788
|
(1)
|
This
column shows the dollar amount we recognized for financial statement
reporting purposes in 2009 for all option awards that have been granted to
each of our non-employee directors. See note 8 of the Notes to
our Consolidated Financial Statements contained in our Annual Report on
Form 10-K for the year ended December 31, 2009 for a discussion of the
assumptions we made in the valuation of these options. Each of
Messrs. Campbell, Farwell, Sexton, Sheffield and Gotsch, upon their
re-election to the board at the annual meeting of stockholders on May 8,
2009, received an option to purchase 5,000 shares of our common stock at
an exercise price of $10.32 per share. Mr. Thompson received an
option to purchase 10,000 shares for being elected as chairman of the
board. The grant date fair value of each such director’s 2009 option
award and the number of stock options held at March 8, 2010 by
non-employee directors
was:
|
Name
|
2009 Grant
Date Fair
Value of
Options ($)
|
Cumulative
Stock Options
Held (#)
|
||||||
Michael
T. Campbell
|
20,200
|
20,000
|
||||||
I.
Stewart Farwell
|
20,200
|
30,000
|
||||||
Peter
M. Gotsch
|
20,200
|
10,000
|
||||||
Wilson
B. Sexton
|
20,200
|
30,000
|
||||||
William
H. Sheffield
|
20,200
|
30,000
|
||||||
Scott
L. Thompson
|
40,399
|
20,000(*)
|
|
*
|
In
addition, Mr. Thompson gave 20,000 options to his two adult children. Mr.
Thompson disclaims beneficial ownership of these
options.
|
·
|
If
we achieve less than 85% of the target for the fiscal year, then no
incentive bonus is paid for that fiscal
year.
|
·
|
If
we achieve 100% of the target for the fiscal year, then the incentive
bonus is equal to 50% of Mr. Sorrentino’s base salary as of the end of
that year.
|
·
|
If
we achieve 115% or more of the target for the fiscal year, then the
incentive bonus is equal to 100% of the base salary as of the end of that
year.
|
·
|
If
we achieve a percentage of the target for the fiscal year that is between
any two of the 85%, 100% or 115% thresholds referred to above, then the
incentive bonus is a percentage of the base salary for that fiscal year
calculated on a straight line basis between the percentage that would
apply at those two thresholds.
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(3)
|
Non Equity
Incentive Plan
Compensation
($)(4)
|
All Other
Compensation
($)(5)
|
Total
($)
|
||||||||||
Charles
A. Sorrentino,
|
||||||||||||||||||
President
and Chief Executive
Officer
|
2009
|
475,000
|
—
|
—
|
—
|
—
|
27,632
|
502,632
|
||||||||||
2008
|
469,231
|
—
|
—
|
597,407
|
—
|
24,312
|
1,090,950
|
|||||||||||
2007
|
444,231
|
—
|
—
|
5,986,350
|
10,350
|
23,014
|
6,463,945
|
|||||||||||
Nicol
G. Graham,
|
||||||||||||||||||
Chief
Financial Officer
|
2009
|
191,394
|
—
|
61,050
|
—
|
—
|
12,101
|
264,545
|
||||||||||
2008
|
189,291
|
—
|
—
|
30,253
|
—
|
12,760
|
232,304
|
|||||||||||
2007
|
180,600
|
45,570
|
—
|
40,680
|
—
|
14,636
|
281,666
|
(1)
|
In
2007, the Company did not meet the operating income threshold under the
Senior Management Bonus Program, largely due to certain unbudgeted
expenses, and the Compensation Committee made a discretionary award to Mr.
Graham and other members of senior management (other than Mr. Sorrentino)
equal to 25% of their salaries. The amount shown in this column represents
the discretionary award made to Mr.
Graham.
|
(2)
|
This
column shows the aggregate grant date fair value of the shares of
restricted stock granted. See note 8 of Notes to
Consolidated Financial Statements contained in our Annual Report on Form
10-K for the year ended December 31, 2009 for a discussion of the
assumptions made by the Company in the valuation of these stock
awards.
|
(3)
|
This
column shows the aggregate grant date fair value of the stock options
granted. See note 8 of Notes to Consolidated Financial
Statements contained in our Annual Report on Form 10-K for the year ended
December 31, 2009 for a discussion of the assumptions made by the Company
in the valuation of these option
awards.
|
|
|
(4)
|
The
amounts shown for Mr. Sorrentino represent payments made pursuant to the
terms of his current employment agreement. For a description of
the incentive arrangements, please see “Executive Compensation –
Elements of Company’s Compensation Plan and How Each Element Relates to
Our Objectives – Incentive Cash
Bonuses.”
|
|
|
(5)
|
All
Other Compensation reported for Mr. Sorrentino represents matching
contribution by the Company to our 401(k) Plan of $9,800 in 2009,
$9,000 in 2008 and $8,712 in 2007; group term life and long-term
disability insurance premiums of $5,832 in 2009, $3,312 in 2008 and $3,302
in 2007; and an auto allowance of $12,000 in 2009, $12,000 in 2008 and
$11,000 in 2007. All Other Compensation reported for
Mr. Graham represents matching contribution by the Company to our
401(k) Plan of $7,361 in 2009, $7,039 in 2008 and $6,944 in 2007;
group term life and long-term disability insurance premiums of $817 in
2009, $1,044 in 2008 and $2,032 in 2007; and personal use of an automobile
of $3,923 in 2009, $4,677 in 2008 and $5,660 in
2007.
|
·
|
Estimated
possible payouts under non-equity incentive plan awards for 2009,
and
|
·
|
Restricted
stock granted in 2009.
|
Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards(2)
|
All Other
Stock
Awards:
Number of
Shares of
Stock
|
Grant
Date Fair
Value of
Stock and
Option
|
||||||||||||||||||||||
Name
|
Grant
Date(1)
|
Threshold
($)(3)
|
Target
($)(4)
|
Maximum
($)(5)
|
Or Units
(#)(6)
|
Awards
($)(7)
|
||||||||||||||||||
Charles
A. Sorrentino
|
—
|
—
|
237,500
|
475,000
|
—
|
—
|
||||||||||||||||||
Nicol
G. Graham
|
12/15/09
|
—
|
68,901
|
105,267
|
5,000
|
61,050
|
(1)
|
The
“Grant Date” reflects the date on which the Compensation Committee acted
to approve the grant of the award.
|
|
|
(2)
|
The
amounts shown for Mr. Sorrentino reflect the amounts that were
payable pursuant to his employment agreement and are based on performance
targets established by the Compensation Committee and board of directors
for 2009. Mr. Sorrentino did not receive a payout under his agreement
for 2009. For a description of Mr. Sorrentino’s employment
agreement, please see “Executive Compensation — Elements of Company’s
Compensation Plan and How Each Element Relates to Our Objectives –
Employment Agreements.” The amounts shown for Mr. Graham
represent the potential payout under our Senior Management Bonus Program
for 2009. No payouts were actually made under the Senior
Management Bonus Program in 2009.
|
|
|
(3)
|
Non-Equity Incentive Plan
Awards – Threshold. Pursuant to our employment agreement
with Mr. Sorrentino, he does not receive any incentive payment unless our
performance exceeds the thresholds set in accordance with his
agreement. Pursuant to the Senior Management Bonus Program, in
which Mr. Graham participates, performance at or below a specific
incentive factor will result in no payment with respect to that incentive
factor. Performance above the minimum goals for each incentive
factor result in a payment (based on a percentage of the executive’s
salary) ranging from $1 to the maximum bonus amount for each incentive
factor, depending on the level at which the performance goal was
attained.
|
|
|
(4)
|
Non-Equity Incentive Plan
Awards – Target. Pursuant to our employment agreement
with Mr. Sorrentino, the amount shown in this column for Mr. Sorrentino
represents 50% of his salary for 2009. The Senior Management
Bonus Program, in which Mr. Graham participates, does not specify a target
amount. Where “target” amounts are not determinable, the SEC
rules require the disclosure of representative amounts based on the
previous fiscal year’s performance. Accordingly, we have
disclosed above in the “Target” column the amount that would be paid under
our 2009 Senior Management Bonus Program to Mr. Graham, based on our
performance in 2008.
|
|
|
(5)
|
Non-Equity Incentive Plan
Awards – Maximum. Pursuant to our employment agreement
with Mr. Sorrentino, the amount shown in this column for Mr. Sorrentino
represents 100% of his salary for 2009, the maximum percentage of his
salary that is available to him under his agreement. Pursuant
to the 2009 Senior Management Bonus Program, the amount shown in this
column for Mr. Graham represents 55% of his salary for 2009, the maximum
percentage of his salary that is available to him under the
program.
|
|
|
(6)
|
This
column reflects the number of restricted shares granted to the named
executive officer in 2009.
|
(7)
|
See
footnote 8 to the Consolidated Financial Statements contained in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2009
for a discussion of the assumptions made in the valuation of this
restricted stock award.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)
|
|||||||||||||||
Charles
A. Sorrentino
|
—
|
500,000(1)
|
26.19
|
03/09/2017
|
—
|
—
|
|||||||||||||||
—
|
65,000(2)
|
11.99
|
01/09/2018
|
||||||||||||||||||
—
|
65,000(2)
|
9.27
|
12/17/2018
|
||||||||||||||||||
Nicol
G. Graham
|
3,750
|
1,875(3)
|
2.67
|
12/30/2015
|
5,000(7)
|
61,050
|
|||||||||||||||
6,000
|
4,000(4)
|
21.73
|
12/20/2016
|
||||||||||||||||||
2,000
|
3,000(5)
|
15.40
|
12/18/2017
|
||||||||||||||||||
2,000
|
8,000(6)
|
9.27
|
12/17/2018
|
(1)
|
The
options under this grant vest in equal installments of 250,000 shares per
year on March 9, 2011 and March 9,
2012.
|
(2)
|
The
options under this grant vest in equal installments of 32,500 shares per
year on March 9, 2011 and March 9,
2012.
|
(3)
|
The
remaining options under this grant vest on December 30,
2010.
|
(4)
|
The
remaining options under this grant vest in equal installments of 2,000
shares per year on December 20, 2010 and
2011.
|
(5)
|
The
options under this grant vest in equal installments of 1,000 shares per
year on December 18, 2010, 2011 and
2012.
|
(6)
|
The
options under this grant vest in equal installments of 2,000 shares per
year on December 17, 2010, 2011, 2012 and
2013.
|
(7)
|
The
restricted stock under this grant vests in three equal installments of
1,667 shares per year on December 15, 2012, 2013 and
2014.
|
Peter
M. Gotsch, Chairman
|
|
William
H Sheffield
|
|
Wilson
B. Sexton
|
(a)
|
(b)
|
(c)
|
|||||||
Plan Category
|
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights(3)
|
Number of Securities
Remaining Available
for Issuance under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a)
|
||||||
Equity
compensation plans approved by security holders(1)
|
1,140,000
|
$
|
19.73
|
579,500
|
|||||
Equity
compensation plans not approved by security holders(2)
|
54,896
|
|
$
|
2.32
|
—
|
(1)
|
Amounts
shown in this row relate solely to stock options granted under our 2006
Stock Plan. The 2006 plan provides for discretionary awards of
stock options and restricted stock to selected employees and
directors. Our board may grant non-qualified or incentive stock
options to selected employees and non-qualified stock options to
non-employee directors. The board may set the terms and
conditions applicable to the options, including the exercise price of the
option, type of option and the number of shares subject to the option. In
any event, each option will expire 10 years from the date of
grant.
|
(2)
|
Amounts
shown in this row relate solely to non-qualified stock options granted
under our 2000 Stock Plan. No grants under the 2000 plan have
been made since the Company’s public offering in June 2006 nor will
any be made in the future. Under the 2000 Stock Plan the board
of directors was able to grant non-qualified or incentive stock options to
selected key employees and non-qualified stock options to non-employee
directors. The duration of any option could not exceed
10 years from the grant date. The board was also able to
grant stock awards to key employees and directors for such numbers of
shares, and subject to such vesting requirements, restrictions and other
terms and conditions, as the board determined in its
discretion.
|
(3)
|
Weighted-average
exercise price of outstanding stock
options.
|
Michael
T. Campbell, Chairman
|
|
Peter M. Gotsch
|
|
Wilson B. Sexton
|
|
Scott
L. Thompson
|
·
|
Audit Services consist
of services rendered by an external auditor for the audit of our annual
consolidated financial statements (including tax services performed to
fulfill the auditor’s responsibility under generally accepted auditing
standards) and internal controls and reviews of financial statements
included in Forms 10-Q, and includes services that generally only an
external auditor can reasonably provide, such as comfort letters,
statutory audits, attest services, consents and assistance with and review
of documents filed with the SEC.
|
·
|
Audit-Related Services
consist of assurance and related services by an external auditor that are
reasonably related to audit or review of financial statements, including
employee benefit plan audits, due diligence related to mergers and
acquisitions, and accounting
consultations.
|
·
|
Tax Services consist of
services not included in Audit Services above, rendered by an external
auditor for tax compliance.
|
·
|
Other Non-Audit Services
are any other permissible work that is not an Audit, Audit-Related or Tax
Service.
|
Year
|
Audit Fees(1)
|
Audit-Related Fees(2)
|
Tax Fees(3)
|
All Other Fees
|
Total
|
|||||||||||||
2009
|
$
|
339,492
|
$
|
—
|
$
|
48,550
|
$
|
—
|
$
|
388,042
|
||||||||
2008
|
$
|
419,099
|
$
|
—
|
$
|
51,500
|
$
|
—
|
$
|
470,599
|
(1)
|
Audit
fees include fees for professional services rendered for the audit of our
annual consolidated financial statements (including services related to
the audit of internal control over financial reporting under the
Sarbanes-Oxley Act of 2002) and the reviews of the interim financial
statements included in our Forms
10-Q.
|
(2)
|
There
were no audit-related services for fiscal 2009 and
2008.
|
(3)
|
Tax
fees represent professional services related to tax
compliance.
|
|
·
|
The
tenth day after public announcement that any person or group of affiliated
or associated persons (an “Acquiring Person”) has become the beneficial
owner of 20% or more of the Company’s common stock;
and
|
|
·
|
The
tenth business day (or such later date as the board may designate before a
person or group has become the beneficial owner of 20% or more of the
Company’s common stock) after the date of the commencement of, or public
announcement of the intent of any person to commence, a tender or exchange
offer that would, if consummated, result in such person becoming the
beneficial owner of 20% or more of the Company’s common
stock.
|
|
·
|
Flip-In. If
an Acquiring Person becomes the beneficial owner of 20% or more of the
common stock, then each Right (other than Rights beneficially owned by the
Acquiring Person and certain affiliated persons) will entitle the holder
to purchase, for $40, a number of shares of the Company’s common stock
having a market value of $80.
|
|
·
|
Flip-Over. If,
after any person has become an Acquiring Person, (1) the Company is
involved in a merger or other business combination in which the Company is
not the surviving corporation or its common stock is exchanged for other
securities or assets or (2) the Company or one or more of its subsidiaries
sells or otherwise transfers assets or earning power aggregating more than
50% of the assets or earning power of the Company and its subsidiaries,
taken as a whole, then each Right (other than Rights beneficially owned by
the Acquiring Person and certain affiliated persons) will entitle the
holder to purchase, for $40, a number of shares of common stock of the
other party to such business combination or sale (or in certain
circumstances, an affiliate) having a market value of
$80.
|
|
·
|
will
not be redeemable;
|
|
·
|
will
entitle holders to receive, when, as and if declared by the board of
directors, quarterly dividend payments in an amount per share equal to the
greater of, (a) $0.0001 or (b) the aggregate amount paid with
respect to one share of common
stock;
|
|
·
|
will
entitle holders upon liquidation to $1.00 per
share;
|
|
·
|
will
entitle holders to the same voting power as one share of common stock on
all matters submitted to a vote of the stockholders of the Company;
and
|
|
·
|
will
entitle holders to a per share payment equal to the aggregate amount of
stock, securities, cash and any other property (payable in kind), as the
case may be, into which or for which each share of common stock is changed
or exchanged via merger, consolidation, or a similar
transaction.
|
·
|
accessing
the Investor Relations section of our website at http://www.houwire.com
and clicking on the “SEC Filings”
link;
|
·
|
writing
to:
|
·
|
telephoning
us at: (713) 609-2200.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
|
Nicol
G. Graham
|
|
Vice
President, Chief Financial Officer, Treasurer and
Secretary
|
Page
|
||||
SECTION
1.
|
Definitions
|
1
|
||
SECTION
2.
|
Appointment
of Rights Agent
|
6
|
||
SECTION
3.
|
Issuance
of Right Certificates
|
6
|
||
SECTION
4.
|
Form
of Right Certificates
|
8
|
||
SECTION
5.
|
Countersignature
and Registration
|
8
|
||
SECTION
6.
|
Transfer
and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates
|
9
|
||
SECTION
7.
|
Exercise
of Rights; Purchase Price; Expiration Date of Rights
|
9
|
||
SECTION
8.
|
Cancellation
and Destruction of Right Certificates
|
11
|
||
SECTION
9.
|
Reservation
and Availability of Capital Stock
|
11
|
||
SECTION
10.
|
Preferred
Stock Record Date
|
12
|
||
SECTION
11.
|
Adjustment
of Purchase Price, Number and Kind of Shares or Number of
Rights
|
13
|
||
SECTION
12.
|
Certificate
of Adjusted Purchase Price or Number of Shares
|
19
|
||
SECTION
13.
|
Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
|
20
|
||
SECTION
14.
|
Fractional
Rights and Fractional Shares
|
22
|
||
SECTION
15.
|
Rights
of Action
|
24
|
||
SECTION
16.
|
Agreement
of Right Holders
|
24
|
||
SECTION
17.
|
Right
Certificate Holder Not Deemed a Stockholder
|
25
|
||
SECTION
18.
|
Concerning
the Rights Agent
|
25
|
||
SECTION
19.
|
Merger
or Consolidation or Change of Name of Rights Agent
|
26
|
||
SECTION
20.
|
Duties
of Rights Agent
|
26
|
||
SECTION
21.
|
Change
of Rights Agent
|
28
|
||
SECTION
22.
|
Issuance
of New Right Certificates
|
29
|
||
SECTION
23.
|
Redemption
|
29
|
||
SECTION
24.
|
Exchange
|
30
|
||
SECTION
25.
|
Notice
of Proposed Actions
|
30
|
||
SECTION
26.
|
Notices
|
31
|
||
SECTION
27.
|
Supplements
and Amendments
|
32
|
||
SECTION
28.
|
Successors
|
32
|
||
SECTION
29.
|
Determinations
and Actions by the Board of Directors, etc
|
32
|
Page
|
||||
SECTION
30.
|
Benefits
of this Agreement
|
33
|
||
SECTION
31.
|
Severability
|
33
|
||
SECTION
32.
|
Governing
Law
|
33
|
||
SECTION
33.
|
Counterparts
|
33
|
||
SECTION
34.
|
Descriptive
Headings
|
33
|
Term
|
Section
|
|
Adjustment
Shares
|
11(a)(ii)
|
|
Agreement
|
Preamble
|
|
Board
of Directors
|
Recital
|
|
common
stock equivalents
|
11(a)(iii)(B)
|
|
Company
|
Preamble
|
|
current
market price
|
11(d)(i)(B)
|
|
equivalent
preferred stock
|
11(b)
|
|
Exchange
Ratio
|
24(a)
|
|
Existing
Holder
|
Definition
of “ Acquiring
Person ”
|
|
Original
Rights
|
Definition
of “ Beneficial
Owner ”
|
|
Principal
Party
|
13(b)
|
|
Redemption
Price
|
23(a)
|
|
Right
|
Recital
|
|
Rights
Agent
|
Preamble
|
|
Right
Certificates
|
4(a)
|
|
Record
Date
|
Recital
|
|
Section
11(a)(ii) Event
|
11(a)(ii)
|
|
Substitution
Period
|
11(a)(iii)(c)
|
|
(x)
|
the
Company shall consolidate with, merge into, or otherwise combine with, any
other Person, and the Company shall not be the continuing or surviving
corporation of such consolidation, merger or
combination;
|
(y)
|
any
Person shall merge into, or otherwise combine with, the Company, and the
Company shall be the continuing or surviving corporation of such merger or
combination and, in connection with such merger or combination, all or
part of the outstanding shares of Common Stock shall be changed into or
exchanged for other stock or securities of the Company or any other
Person, cash or any other property;
or
|
(z)
|
the
Company or one or more of its Subsidiaries shall sell or otherwise
transfer, in one transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries, taken as a whole, to any other Person
or Persons (other than the Company or one or more wholly-owned
Subsidiaries of the Company),
|
HOUSTON
WIRE & CABLE COMPANY
|
|||
By:
|
/s/
Nicol G. Graham
|
||
Name:
|
Nicol
G. Graham
|
||
Title:
|
Vice
President and Chief Executive
Officer
|
AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC, as Rights
Agent
|
|||
By:
|
/s/
Herbert J. Lemmer
|
||
Name:
|
Herbert
J. Lemmer
|
||
Title:
|
Vice
President
|
HOUSTON
WIRE & CABLE COMPANY
|
||
By:
|
||
Name:
|
||
Title:
|
Attest:
|
|
Name:
|
|
Title:
|
No.
R-
|
_____________
Rights
|
1
|
If applicable, insert this
portion of the legend and delete the preceding
sentence.
|
HOUSTON
WIRE & CABLE COMPANY
|
||
By:
|
||
Name:
|
||
Title:
|
By:
|
|
Name:
|
|
Title:
|
FOR
VALUE RECEIVED
|
hereby
sells, assigns and transfers unt
|
(Please
print name and address of transferee)
|
this
Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of
substitution.
|
(1)
|
the Rights evidenced by this
Right Certificate [ ] are [ ] are not being assigned by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights
Agreement);
|
(2)
|
after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
|
(1)
|
the
Rights evidenced by this Right Certificate [ ] are [ ] are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
|
after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ]
did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring
Person.
|
Prior
to the Distribution Date 1 , the Rights will be
evidenced by the certificates for (or, for uncertificated shares, by the
book-entry account that evidences ownership of) the Common Stock and will
be transferred with the Common Stock, and the registered holders of the
Common Stock will be deemed to be the registered holders of the
Rights.
|
|
After
the Distribution Date, the Rights Agent will mail separate certificates
evidencing the Rights to each record holder of the Common Stock as of the
close of business on the Distribution Date (or, if the Common Stock is
uncertificated, by appropriate changes to the book-entry account that
evidences record ownership of such Common Stock), and thereafter the
Rights will be transferable separately from the Common
Stock.
|
(1)
|
the tenth day after public
announcement that any person or group has become the beneficial owner of
20% or more of the Company’s Common Stock;
and
|
the tenth business day (or such
later date as the Board may designate before a person or group has become
the beneficial owner of 20% or more of the Company’s Stock) after the date
of the commencement of, or public announcement of the intent of any person
to commence, a tender or exchange offer that would, if consummated, result
in such person becoming the beneficial owner of 20% or more of the
Company’s Common Stock;
|
Prior
to the Distribution Date, the Rights will not be
exercisable.
|
|
After
the Distribution Date, each Right will be exercisable to purchase, for
$40.00(the “Purchase Price”), one one-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $0.001 per share, of the
Company.
|
|
Flip-In
|
If
any person or group of affiliated or associated persons (an “Acquiring
Person”) becomes the beneficial owner of 20% or more of the Common Stock
after the date of the Rights Agreement (other than as a result of
repurchases of stock by the Company or certain inadvertent actions and
excluding certain holders of more than 20% of the outstanding Common Stock
as of the date of the Rights Agreement who do not acquire any additional
shares of Common Stock after that date that would cause such holders to
exceed their percentage ownership (rounded up to the nearest whole
percentage point) of outstanding Common Stock as of the date of the Rights
Agreement), then, after the Distribution Date, each Right (other than
Rights beneficially owned by the Acquiring Person and certain affiliated
persons) will entitle the holder to purchase, for the Purchase Price, a
number of shares of the Common Stock having a market value of twice the
Purchase Price.
|
When
calculating a person’s or group of affiliated or associated persons’
beneficial ownership to determine whether such person or group has become
an Acquiring Person, if the person or any of that person’s affiliates or
associates holds any option, warrant, convertible security, stock
appreciation right or other contractual right or derivative with an
exercise or conversion privilege or a settlement payment or mechanism at a
price related to, or a value determined in reference to, Common Stock and
that increases in value as the value of Common Stock increases or that
provides the holder with an opportunity to profit from any increase in the
value of Common Stock (a “Synthetic Long Position”), then that person
shall be deemed to beneficially own the Common Stock in respect of (i) any
Synthetic Long Position that is disclosed pursuant to a Schedule 13D under
the Exchange Act; and (ii) any Synthetic Long Position if not so disclosed
on a Schedule 13D, if and only if the Board determines that such person
shall be deemed to beneficially own the Common Stock in respect of such
Synthetic Long Position.
|
If,
after any person has become an Acquiring Person, (1) the Company is
involved in a merger or other business combination in which the Company is
not the surviving corporation or its Common Stock is exchanged for other
securities or assets or (2) the Company or one or more of its subsidiaries
sell or otherwise transfer assets or earning power aggregating more than
50% of the assets or earning power of the Company and its subsidiaries,
taken as a whole, then each Right (other than Rights beneficially owned by
the Acquiring Person and certain affiliated persons) will entitle the
holder to purchase, for the Purchase Price, a number of shares of common
stock of the other party to such business combination or sale (or in
certain circumstances, an affiliate) having a market value of twice the
Purchase Price.
|
|
Exchange
|
At
any time on or after a Person has become an Acquiring Person (but before
any person becomes the beneficial owner of 50% or more of the outstanding
Common Stock), the Board of Directors may exchange all or part of the
Rights (other than the Rights beneficially owned by the Acquiring Person
and certain affiliated and associated persons) for shares of Common Stock
at an exchange ratio of one share of Common Stock per
Right.
|
Redemption
|
The
Board of Directors may redeem all of the Rights at a price of $0.001 per
Right at any time before a Person has become an Acquiring
Person.
|
Expiration
|
The
Rights will expire on May 18, 2012, unless earlier exchanged or
redeemed.
|
Amendments
|
For
so long as the Rights are redeemable, the Rights Agreement may be amended
in any respect.
|
At
any time after the Rights are no longer redeemable, the Rights Agreement
may be amended by the Board of Directors in any respect that does not (i)
adversely affect the Rights holders (other than any Acquiring Person and
certain affiliated or associated persons), (ii) cause the Rights Agreement
again to become amendable other than in accordance with this paragraph or
(iii) cause the Rights again to become redeemable.
|
|
Voting
Rights
|
Rights
holders have no rights as a stockholder of the Company, including no right
to vote and no right to receive dividends.
|
Antidilution
Provisions
|
The
Rights Agreement includes antidilution provisions designed to prevent
efforts to diminish the efficacy of the
Rights.
|
Taxes
|
While
the dividend of the Rights will not be taxable to stockholders or to the
Company, stockholders or the Company may, depending upon the
circumstances, recognize taxable income if the Rights become exercisable
as set forth above.
|