<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1996
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
COMMISSION FILE NUMBER 0-3085
WYMAN-GORDON COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1992780
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
244 WORCESTER STREET, BOX 8001, NO. GRAFTON, MASSACHUSETTS 01536-8001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 508-839-4441
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
<TABLE>
<CAPTION>
OUTSTANDING AT
CLASS AUGUST 31, 1996
<S> <C>
Common Stock, $1 Par Value 35,714,766
</TABLE>
Page 1 of 16
<PAGE> 2
Part I.
Item 1. FINANCIAL STATEMENTS
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
AUGUST 31, AUGUST 31,
1996 1995
(000's omitted, except per share data)
<S> <C> <C>
Revenue $134,235 $114,077
Less:
Cost of goods sold 122,744 95,897
Selling, general and
administrative expenses 10,052 9,197
Other charges 15,779 900
148,575 105,994
Income (loss) from operations (14,340) 8,083
Other deductions (income):
Interest expense 2,722 2,886
Miscellaneous, net (5,197) 96
(2,475) 2,982
Income (loss) before income taxes (11,865) 5,101
Provision (credit) for income taxes (19,680) -
Net income $ 7,815 $ 5,101
Net income per share $ .21 $ .14
Shares used to compute net income
per share 36,619 35,889
</TABLE>
The accompanying notes to the consolidated condensed
financial statements are an integral part of these financial
statements.
-2-
<PAGE> 3
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
AUGUST 31, MAY 31,
1996 1996
(000's omitted)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 27,904 $ 30,134
Tax and interest receivable 20,258 -
Accounts receivable 89,469 94,928
Inventories 72,820 65,873
Prepaid expenses 11,154 14,338
Total current assets 221,605 205,273
Property, plant and equipment, net 141,928 140,408
Intangible assets 19,723 19,899
Other assets 7,306 10,310
$390,562 $375,890
LIABILITIES
Borrowings due within one year $ 77 $ 77
Accounts payable 43,442 40,484
Accrued liabilities and other 52,563 48,178
Total current liabilities 96,082 88,739
Restructuring, integration, disposal
and environmental 17,569 18,275
Long-term debt 90,231 90,231
Pension liability 5,478 1,698
Deferred income tax and other 14,106 17,717
Postretirement benefits 47,727 49,287
STOCKHOLDERS' EQUITY
Preferred stock - none issued - -
Common stock issued - 37,052,720 shares 37,053 37,053
Capital in excess of par value 32,172 33,291
Retained earnings 73,689 65,653
Less treasury stock at cost
August 31, 1996 - 1,337,954 shares
May 31, 1996 - 1,480,448 shares (23,545) (26,054)
119,369 109,943
$390,562 $375,890
</TABLE>
The accompanying notes to the consolidated condensed
financial statements are an integral part of these financial
statements.
-3-
<PAGE> 4
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
AUGUST 31, AUGUST 31,
1996 1995
(000's omitted)
<S> <C> <C>
Operating activities:
Net income (loss) $ 7,815 $ 5,101
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 4,956 4,227
Other charges 13,045 -
Provision for equity investment 2,734 900
Changes in assets and liabilities net
of purchase price activity:
Accounts receivable 5,261 2,494
Tax and interest receivable (20,258) -
Inventories (7,723) (1,505)
Prepaid expenses and other assets 709 (354)
Accrued restructuring, disposal
and environmental (782) (2,019)
Income and other taxes (4,343) 2,760
Accounts payable and accrued
liabilities 2,241 (4,974)
Net cash provided by operating
activities 3,655 6,630
Investing activities:
Capital expenditures (7,184) (1,840)
Proceeds from sale of fixed assets 323 1,393
Other, net (413) (89)
Net cash used by investing
activities (7,274) (536)
Financing activities:
Issuance (payment) of debt - 897
Net proceeds from issuance of
common stock 1,389 589
Net cash provided (used) by
financing activities 1,389 1,486
Increase (Decrease) in cash (2,230) 7,580
Cash, beginning of year 30,134 13,856
Cash, end of period $27,904 $21,436
</TABLE>
The accompanying notes to the consolidated condensed
financial statements are an integral part of these financial
statements.
-4-
<PAGE> 5
WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
August 31, 1996
NOTE A - BASIS OF PRESENTATION
In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments necessary to present fairly its financial position at
August 31, 1996 and its results of operations and cash flows for
each of the three months ended August 31, 1996 and 1995. All
such adjustments are of a normal recurring nature.
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with Article 10 of
Securities and Exchange Commission Regulation S-X and, therefore,
do not include all information and footnotes necessary for a fair
presentation of the financial position, results of operations and
cash flows in conformity with generally accepted accounting
principles. In conjunction with its May 31, 1996 Annual Report
on Form 10-K, the Company filed audited consolidated financial
statements which included all information and footnotes necessary
for a fair presentation of its financial position at May 31, 1996
and 1995 and its results of operations and cash flows for the
years ended May 31, 1996 and 1995, the five months ended May 31,
1994 and the year ended December 31, 1993 in conformity with
generally accepted accounting principles. Where appropriate,
prior period amounts have been reclassified to permit comparison.
NOTE B - ADOPTION OF RECENT ACCOUNTING STANDARDS
Effective June 1, 1996, the Company adopted Statement of
Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of" ("SFAS 121"). SFAS 121 prescribes the accounting
for the impairment of long-lived assets that are to be held and
used in the business and similar assets to be disposed of. The
adoption has not had a material effect on earnings or the
financial position of the Company.
NOTE C - INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
AUGUST 31, 1996 MAY 31, 1996
(000's omitted)
<S> <C> <C>
Raw material $34,914 $21,608
Work-in-process 44,554 51,125
Supplies 2,710 3,168
82,178 75,901
Less progress payments 9,358 10,028
$72,820 $65,873
</TABLE>
-5-
<PAGE> 6
WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
August 31, 1996
NOTE C - INVENTORIES (Continued)
If all inventories valued at LIFO cost had been valued at
first-in, first-out (FIFO) cost or market which approximates
current replacement cost, inventories would have been $16,662,000
higher than reported at August 31, 1996 and May 31, 1996.
There were no LIFO inventory credits to cost of goods sold
in the three months ended August 31, 1996 or August 31, 1995.
NOTE D - COMMITMENTS AND CONTINGENCIES
At August 31, 1996, certain lawsuits arising in the normal
course of business were pending. The Company denies all material
allegations of these complaints. In the opinion of management,
the outcome of legal matters will not have a material adverse
effect on the Company's financial position, results of operations
or liquidity.
The Company is subject to extensive, stringent and changing
federal, state and local environmental laws and regulations,
including those regulating the use, handling, storage, discharge
and disposal of hazardous substances and the remediation of
alleged environmental contamination. Accordingly, the Company is
involved from time to time in administrative and judicial
inquiries and proceedings regarding environmental matters.
Nevertheless, the Company believes that compliance with these
laws and regulations will not have a material adverse effect on
the Company's operations as a whole.
The Company had foreign exchange contracts totaling
approximately $19,900,000 at August 31, 1996. These contracts
hedge certain normal operating purchase and sales transactions.
The exchange contracts generally mature within six months and
require the Company to exchange U.K. pounds for non-U.K.
currencies or non-U.K. currencies for U.K. pounds. Transaction
gains and losses included in the Consolidated Condensed
Statements of Operations for the three months ended August 31,
1996 and 1995 were not material.
NOTE E - INCOME TAX REFUND
In the three months ended August 31, 1996, the Company
recognized the net benefit of a refund of prior years' income
taxes amounting to $19,680,000, plus interest of $3,484,000. The
refund relates to the carryback of tax net operating losses to
tax years 1981, 1984 and 1986 under the provisions of Internal
Revenue Code Section 172(f). The amount of net operating losses
carried back to such years was approximately $48,500,000. At
August 31, 1996, the Company has approximately $38,000,000 of net
operating loss carryforwards available to offset future taxable
income.
-6-
<PAGE> 7
WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
August 31, 1996
NOTE F - LONG-TERM, FIXED PRICE CONTRACTS
In the three months ended August 31, 1996, the Company's
evaluation of its accruals for losses on long-term, fixed price
contracts took into consideration its new market-focused business
operations management and continuing efforts toward focusing its
factories, current raw material prices and changes in its cost
structure. Based on this evaluation, the Company projected that
the fully allocated cost to produce certain aerospace structural
products at the Company's Grafton, Massachusetts facility exceeds
the sales price provided in the long-term, fixed price contracts
for such products. Cost of goods sold in the three months ended
August 31, 1996 includes a net charge of $5,800,000 to recognize
losses on such products included in the Company's backlog.
NOTE G - OTHER CHARGES
In the three months ended August 31, 1996, the Company
recorded other charges of $15,779,000. Such other charges
include $8,000,000 to provide for the costs of workforce
reductions at the Company's Grafton, Massachusetts facility and
the write-off and disposal of certain equipment. Other charges
also include $2,300,000 to reduce the carrying value of certain
assets of the Company's titanium castings operations, $2,485,000
to recognize the Company's 25.0% share of the net losses of its
Australian Joint Venture and to reduce the carrying value of such
joint venture, $250,000 relating to expenditures for an
investment in another joint venture and $2,745,000 to reduce the
carrying value of the cash surrender value of certain company-
owned life insurance policies.
In the three months ended August 31, 1995, the Company
provided $900,000 in order to recognize its 25.0% share of the
net losses of its Australian Joint Venture and to reserve for
amounts loaned to such joint venture during the first quarter of
fiscal year 1996 and to provide for expenditures for an
investment in an additional joint venture.
-7-
<PAGE> 8
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
"FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY"
Certain statements in Management's Discussion and Analysis
of Financial Condition and Results of Operations contain
"forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involves risk and
uncertainty, including discussions of continuing raw material
prices and availability and their impact on gross margins and
business trends as well as liquidity and sales volume. Actual
future results and trends may differ materially depending on a
variety of factors, including the Company's successful
negotiation of long-term customer pricing contracts and raw
material prices and availability. For a discussion identifying
important factors that could cause actual results to differ
materially from those anticipated in forward-looking statements,
see the Company's SEC filings, in particular see the Company's
Annual Report on Form 10-K for the fiscal year ended May 31, 1996
Part I, Item 1 - "Markets and Products - Aerospace", "Customers",
"Marketing and Sales", "Raw Materials", "Employees",
"Competition", "Environmental Regulations" and "Product Liability
Exposure".
The principal markets served by the Company are aerospace
and power generation. Revenue by market for the respective
periods was as follows (000's omitted):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995
% OF % OF
AMOUNT TOTAL AMOUNT TOTAL
<S> <C> <C> <C> <C>
Aerospace $ 93,062 69% $ 82,211 72%
Power generation 30,636 23% 22,823 20%
Other 10,537 8% 9,043 8%
$134,235 100% $114,077 100%
</TABLE>
-8-
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS THREE MONTHS ENDED AUGUST 31, 1996
("first quarter of fiscal year 1997") COMPARED TO THREE MONTHS
ENDED AUGUST 31, 1995 ("first quarter of fiscal year 1996")
The Company's revenue increased 17.7% to $134.2 million in
the first quarter fiscal year 1997 from $114.1 million in the
first quarter fiscal year 1996 due to higher sales volume at the
Company's Forgings and Castings Divisions. These sales volume
increases during the first quarter of fiscal year 1997 as
compared to the first quarter of fiscal year 1996 are reflected
by market as follows: a $10.9 million (13.2%) increase in
aerospace, a $7.8 million (34.2%) increase in power generation
and a $1.5 million (16.5%) increase in other. The causes of the
strength in these markets was higher engine build rates and
higher demands for spares by aerospace engine prime contractors
and higher extruded pipe shipments to energy customers. Revenues
in the first quarter of fiscal year 1996 and, to a lesser extent,
in the first quarter of fiscal year 1997, were limited by raw
material shortages and production delays caused by capacity
constraints of the Company's suppliers. The revenue increases
mentioned above have occurred while the Company's backlog has
grown to $690.6 million at August 31, 1996 from $477.1 million at
August 31, 1995. The Company believes that the higher order
activity reflects continued higher spares demand and new business
resulting from increasing production rates on commercial aircraft
by commercial airframe primes.
The Company's gross margins were 8.6% in the first quarter
of fiscal year 1997 as compared to 15.9% in the first quarter of
fiscal year 1996. In the first quarter of fiscal year 1997, the
Company's evaluation of its accruals for losses on long-term,
fixed price contracts took into consideration its new market-
focused business operations management and continuing efforts
toward focusing its factories, current raw material prices and
changes in its cost structure. Based on this evaluation, the
Company projected that the fully allocated cost to produce
certain aerospace structural products at the Company's Grafton,
Massachusetts facility exceeds the sales price provided in the
long-term, fixed price contracts for such products. Cost of
goods sold in the three months ended August 31, 1996 includes a
net charge of $5.8 million to recognize losses on such products
included in the Company's backlog. Excluding the $5.8 million
charge discussed above, gross margin was 12.9% in the first
quarter of fiscal year 1997. Higher production volumes and
productivity gains resulting from the Company's continuing
efforts toward focusing forging production of rotating parts for
jet engines in its Houston, Texas facility and forging production
of airframe structures and large turbine parts in its Grafton,
Massachusetts facility and continuing realization of cost
reductions from synergies associated with the integration of
Cameron Forged Products Company ("Cameron") favorably impacted
gross margins in the first quarter of fiscal year 1997. These
improvements have been more than offset by higher raw material
costs. Beginning in the second half of fiscal year 1996, the
-9-
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS THREE MONTHS ENDED AUGUST 31, 1996
("first quarter of fiscal year 1997") COMPARED TO THREE MONTHS
ENDED AUGUST 31, 1995 ("first quarter of fiscal year 1996")
(Continued)
higher spares demand referred to above has required the Company
to purchase certain raw materials under terms not covered by
long-term agreements ("LTAs") with its vendors. The Company
simultaneously entered into supply (customer) and purchase
(vendor) LTAs and minimized its raw material price exposure to an
anticipated volume level. To the extent that the demand is
greater than anticipated by the LTAs, the Company must purchase
raw materials at market prices. The current rebound in demand
for many of these raw materials, especially nickel and titanium,
has resulted in significant market price increases which have
negatively affected the Company's gross margins.
The Company is not likely to see significant pricing relief
for its products until early calendar 1997 when new LTAs that the
Company expects to negotiate with its customers will go into
effect. Until the new LTAs are finalized, the Company may
continue to experience pressures on its gross margins.
Gross margins in the first quarter of fiscal year 1997 were
also negatively impacted by price and demand declines within the
titanium golf club head business during competitor capacity
additions and increasing costs of non-integrated finishing
services.
There were no LIFO credits recorded during the first quarter
of fiscal year 1997 or 1996.
Selling, general and administrative expenses increased 9.3%
to $10.1 million during the first quarter of fiscal year 1997
from $9.2 million during the first quarter of fiscal year 1996.
Selling, general and administrative expenses as a percentage of
revenues improved to 7.5% in the first quarter of fiscal year
1997 from 8.1% in the first quarter of fiscal year 1996. The
improvement as a percent of revenues is the result of higher
revenues.
During the first quarter of fiscal year 1997, the Company
recorded other charges of $15.8 million. Such other charges
include $8.0 million to provide for the costs of workforce
reductions at the Company's Grafton, Massachusetts facility and
the write-off and disposal of certain equipment. Other charges
also include $2.3 million to reduce the carrying value of certain
assets of the Company's titanium castings operations, $2.5
million to recognize the Company's 25.0% share of the net losses
of its Australian Joint Venture and to reduce the carrying value
of such joint venture, $0.3 million relating to expenditures for
an investment in another joint venture and $2.7 million to reduce
the carrying value of the cash surrender value of certain
company-owned life insurance policies.
-10-
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS THREE MONTHS ENDED AUGUST 31, 1996
("first quarter of fiscal year 1997") COMPARED TO THREE MONTHS
ENDED AUGUST 31, 1995 ("first quarter of fiscal year 1996")
(Continued)
During the first quarter of fiscal year 1996, the Company
provided $0.9 million in order to recognize its 25.0% share of
the net losses of its Australian Joint Venture and to reserve for
amounts loaned to the Australian Joint Venture during the first
quarter of fiscal year 1996 and to provide for expenditures for
an investment in an additional joint venture.
Interest expense was $2.7 million in the first quarter of
fiscal year 1997 and $2.9 million in the first quarter of fiscal
year 1996. The decrease results from lower borrowings
outstanding under the Company's U.K. Credit Agreement.
Miscellaneous, net was income of $5.2 million in the first
quarter of fiscal year 1997 as compared to an expense of $0.1
million in the first quarter of fiscal year 1996. Miscellaneous,
net in the first quarter of fiscal year 1997 includes interest
income on the refund of prior years' income taxes amounting to
$3.5 million and a $1.7 million gain on the sale of fixed assets.
Miscellaneous, net in the first quarter of fiscal year 1996
includes a $0.2 million gain on the sale of marketable
securities.
In the first quarter of fiscal year 1997, the Company
recognized the net benefit of a refund of prior years' income
taxes amounting to $19.7 million. The refund relates to the
carryback of tax net operating losses. The Company recorded no
provision or benefit for income taxes in the first quarter of
fiscal year 1996.
Net income was $7.8 million, or $.21 per share, in the first
quarter of fiscal year 1997 and $5.1 million, or $.14 per share
in the first quarter of fiscal year 1996. The $2.7 million
improvement results from the items described above.
LIQUIDITY AND CAPITAL RESOURCES
The decrease in the Company's cash of $2.2 million to $27.9
million at August 31, 1996 from $30.1 million at May 31, 1996
resulted primarily from cash provided by operating activities of
$3.7 million and the issuance of common stock of $1.4 million,
offset by capital expenditures of $7.2 million.
The increase in the Company's working capital of $9.0
million to $125.5 million as of August 31, 1996 from $116.5
million as of May 31, 1996 resulted primarily from net income of
$7.8 million, a decrease in other assets of $3.0 million, a
decrease in intangible assets of $0.2 million, net proceeds from
the issuance of Common Stock of $1.4 million, other changes in
stockholders' equity of $0.2 million and an increase in long-term
-11-
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES (Continued)
benefit liabilities of $2.2 million, offset by net increases in
fixed assets of $1.5 million, a decrease in deferred taxes and
other of $3.6 million and a decrease in long-term restructuring,
integration, disposal and environmental of $0.7 million.
Earnings before interest, taxes, depreciation and
amortization ("EBITDA") decreased $16.4 million to $(4.2) million
in the first quarter of fiscal year 1997 from $12.2 million in
the first quarter of fiscal year 1996. This decrease reflects
primarily the $15.8 million of other charges provided in the
first quarter of fiscal year 1997.
In the first quarter of fiscal year 1997, the Company
recorded other charges of $15.8 million, of which $10.1 million
was non-cash and $5.7 million is expected to require the use of
cash during the remainder of fiscal year 1997 and the fiscal year
ending May 31, 1998, $2.2 million to pay severance and other
employee costs and $3.5 million to dispose of certain equipment.
As of May 31, 1996, the Company estimated the remaining cash
requirements for the integration of Cameron and direct costs
associated with the acquisition of Cameron to be $4.0 million.
Of such amount, the Company expects to spend approximately $2.5
million during its fiscal year ending May 31, 1997 ("fiscal year
1997") and $1.5 million thereafter. In the first quarter of
fiscal year 1996, spending related to the integration of Cameron
and associated direct costs amounted to $0.5 million.
The Company expects to spend $1.2 million in fiscal year
1997 and $15.5 million thereafter on non-capitalizable
environmental activities. In the first quarter of fiscal year
1997, $0.1 million was expended for non-capitalizable
environmental projects. The Company has completed all
environmental projects within established timetables and is
continuing to do so at the present time.
The Company from time to time expends cash on capital
expenditures for more cost effective operations, environmental
projects and joint development programs with customers. Capital
expenditures amounted to $18.3 million for the year ended May 31,
1996 ("fiscal year 1996"). Capital expenditures in the
foreseeable future are expected to increase somewhat from fiscal
year 1996 levels. In the first quarter of fiscal year 1997,
capital expenditures amounted to $7.2 million.
The Company's revolving receivables-backed credit facility
(the "Receivables Financing Program") provides the Company with
an aggregate maximum borrowing capacity under the Receivables
Financing Program of $65.0 million, with a letter of credit sub-
limit of $35.0 million. The term of the Receivables Financing
-12-
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES (Continued)
program is five years, with an evergreen feature. As of August
31, 1996, under the credit facility, the total availability based
on eligible receivables was $42.5 million, there were no
borrowings and letters of credit amounting to $9.0 million were
outstanding.
Wyman-Gordon Limited, the Company's subsidiary located in
Livingston, Scotland, entered into a credit agreement ("the U.K.
Credit Agreement"). The maximum borrowing capacity under the
U.K. Credit Agreement is 6.0 million pounds sterling with a
separate letter of credit or guarantee limit of 1.0 million
pounds sterling. The term of the U.K. Credit Agreement is one
year with an evergreen feature. There were no borrowings
outstanding at August 31, 1996 and the Company had issued 0.9
million pounds sterling or $1.4 million of letters of credit or
guarantees under the U.K. Credit Agreement.
In the first quarter of fiscal year 1997, the Company
recognized the net benefit of a refund of prior years' income
taxes amounting to $19.7 million, plus interest of $3.5 million.
In September of 1996, the Company received $20.3 million relating
to such refund. Previously, the Company had received $2.9
million related to certain refund claims filed. The refund
relates to the carryback of tax net operating losses to tax years
1981, 1994 and 1986 under the provisions of Internal Revenue Code
Section 172(f). The amount of net operating losses carried back
to such years was approximately $48.5 million. At August 31,
1996, the Company has approximately $38.0 million of net
operating loss carryforwards available to offset future taxable
income.
The primary sources of liquidity available to the Company in
fiscal year 1996 to fund operations, anticipated expenditures in
connection with workforce reductions and disposal of certain
equipment, the integration of Cameron, planned capital
expenditures and planned environmental expenditures include
available cash ($27.9 million at August 31, 1996), borrowing
availability under the Company's Receivables Financing Program,
cash generated by operations and reductions in working capital
requirements through planned inventory reductions and accounts
receivable management.
Cash from operations and debt are expected to be the
Company's primary sources of liquidity beyond fiscal year 1997.
The Company believes that it has adequate resources to provide
for its operations and the funding of restructuring, integration,
capital and environmental expenditures.
-13-
<PAGE> 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES (Continued)
The Company's current plans to improve operating results
include completing the integration of Cameron, further reductions
of personnel and various other cost reduction measures. Programs
to expand the Company's revenue base include participation in new
aerospace programs and expansion of participation in the land-
based gas turbine and extruded pipe markets and other markets in
which the Company has not traditionally participated. The
Company anticipates that, in addition to the growth in commercial
aviation, the aging current commercial airline fleet will require
future orders for its replacement.
IMPACT OF INFLATION
The Company's earnings may be affected by changes in price
levels and in particular, changes in the price of basic metals.
The Company's contracts generally provide for fixed prices for
finished products with limited protection against cost increases.
The Company would therefore be affected by changes in prices of
the raw materials during the term of any such contract. The
Company attempts to minimize this risk by entering into fixed
price arrangements with raw material suppliers.
ACCOUNTING AND TAX MATTERS
Effective June 1, 1996, the Company adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of" ("SFAS 121") which must be adopted by the Company no
later than fiscal year 1997. SFAS 121 prescribes the accounting
for the impairment of long-lived assets that are to be held and
used in the business and similar assets to be disposed of. The
adoption has not had a material impact on the earnings or the
financial position of the Company.
The Company for several years maintained a program of
Company-owned life insurance ("COLI") for certain of its
employees. As of August 31, 1996, the Company is named as
beneficiary on COLI policies with an aggregate cash surrender
value of approximately $5.2 million, issued by Confederation Life
Insurance Company (U.S.), which is currently in rehabilitation.
Confederation Life Insurance Company is continuing to pay
benefits under the policies but has ceased to redeem cash
surrender values. No assurances can be given regarding to what
extent the Company will be able to realize such cash surrender
values in the future.
-14-
<PAGE> 15
Part II.
Item 6. EXHIBITS AND REPORTS FILED ON FORM 8-K
(a) Exhibits
The following exhibits are being filed as part of this
Form 10-Q:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
<S> <C> <C>
10.A Form of Performance Stock Option E-1
Agreement under the Wyman-Gordon
Long-term Incentive Plan dated July 16,
1996 granted to 13 employees to the
Company for an aggregate of 485,875
shares of the Company's Common Stock.
10.B Form of Performance Share Agreement E-2
under the Wyman-Gordon Long-term
Incentive Plan dated July 16, 1996
granted to 13 employees of the Company
for an aggregate of 118,300 shares of
the Company's Common Stock.
10.C Form of Stock Option Agreement under E-3
the Wyman-Gordon Long-term Incentive
Plan dated July 16, 1996 granted to 13
employees of the Company for an
aggregate of 105,625 shares of the
Company's Common Stock.
27 Financial Data Schedule for the Three E-4
Months Ended August 31, 1996.
</TABLE>
(b) No reports on Form 8-K have been filed with the Commission
during the period covered by this report.
-15-
<PAGE> 16
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, thereunto duly authorized.
WYMAN-GORDON COMPANY
Date: 10/10/96 By: /S/ANDREW C. GENOR
Andrew C. Genor
Vice President,
Chief Financial Officer
and Treasurer
Date: 10/10/96 By: /S/JEFFREY B. LAVIN
Jeffrey B. Lavin
Corporate Controller and
Chief Accounting Officer
-16-
<PAGE> 1
EXHIBIT 10.A
FORM OF PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to (the "Grantee"), who is now employed
by the Company or by a Subsidiary of the Company, a Non-qualified
Stock Option (the "Option") to purchase prior to July 16, 2006
(the "Expiration Date") an aggregate of 37,375 shares of Common
Stock of the Company ("Shares") at a price of $16.75 per Share
pursuant to the terms and conditions set forth in the Wyman-
Gordon Company Long-Term Incentive Plan as approved by the
stockholders of the Company on October 18, 1995, as it may be
amended from time to time in accordance with its terms (the
"Plan") and this Stock Option Agreement, as it may be amended
from time to time in accordance with its terms (the "Award
Agreement"). By execution of this Award Agreement, the Grantee
acknowledges receipt of copy of the Plan and further agrees to be
bound thereby and by the actions, pursuant to the Plan, of the
Committee referred to in the Plan (the "Committee") and of the
Wyman-Gordon Company Board of Directors.
(1) The Option is in all respects governed by the terms of
the Plan. All of the terms and provisions of the Plan are hereby
incorporated into this Award Agreement by reference and are made
a part of this Award Agreement. For the convenience of the
Grantee, certain but not all of the provisions of the Plan are
also summarized or elaborated upon in this Award Agreement. Each
and every provision of this Award Agreement shall be
administered, interpreted, and construed so that the Option shall
conform to the provisions of the Plan. Any provisions of this
Award Agreement that cannot be so administered, interpreted, or
construed shall be disregarded, and, accordingly, in the event of
any conflict between the Award Agreement and the Plan, the latter
will govern. Any capitalized terms used herein and not defined
herein have the respective meanings ascribed to them in the Plan.
Whenever the word "Grantee" is used herein in a context where the
provision should logically be construed to apply to the Grantee's
Beneficiary, the word "Grantee" shall be deemed to include such
Beneficiary.
(2) The date of grant of the Option is July 16, 1996.
(3) The Option is a Non-qualified Stock Option and is not
an Incentive Stock Option.
(4) Subject to the terms of this Award Agreement, the
Option shall be exercisable from and after July 16, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after January 16, 1997 with respect to the
number of shares set forth below if the average closing price
during a period of 30 consecutive business days of the Common
Stock of the Company, par value $1.00 per share, on the NASDAQ
National Market System, or on any successor market or exchange in
which the Common Stock is publicly traded, as quoted in the WALL
STREET JOURNAL reaches the indicated price levels.
E-1
<PAGE> 2
<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 1,869
22.00 3,738
23.00 7,475
24.00 13,081
25.00 18,688
26.00 24,294
27.00 29,900
28.00 33,368
29.00 35,506
30.00 or above 37,375
</TABLE>
(5) Grantee may exercise the Option only in the following
manner: From time to time prior to the Expiration Date and
subject to the provisions of Paragraph 4 above, the Grantee may
give written notice to the Treasurer of the Company of his
election to purchase some or all of the Shares purchasable at the
time of such notice. Said notice shall specify the number of
Shares to be purchased and shall be accompanied by payment
therefor (a) in U.S. dollars by personal check, bank draft, or
money order payable to the order of the Company; (b) in Shares
that have been held by the Grantee for at least six (6) months
and that have a Fair Market Value equal to the purchase price;
(c) to the extent not limited or prohibited by the Committee, by
payment made by the Grantee's broker, in U.S. dollars by personal
check, bank draft, or money order payable to the order of the
Company, pursuant to the Grantee's instructions; or (d) by a
combination thereof; and by any agreement, statement, or other
evidence that the Committee may require in order to satisfy
itself that the issuance of the Shares being purchased pursuant
to such exercise and any subsequent resale thereof will be in
compliance with applicable laws and regulations relating to the
issuance and sale of securities, including the provisions of the
Securities Act of 1933 and regulations promulgated thereunder.
(6) The exercise of the Option shall be deemed to occur
(a) on the date that the notice of exercise and the personal
check, bank draft, money order or Shares are received by the
Company, or (b) if such notice of exercise and payment are mailed
in the United States, and the United States Postal Service has
stamped its postmark thereon, then on the date of such postmark.
As soon as practicable after each exercise of the Option and
compliance by the Grantee with all applicable conditions,
including any payments to the Company that may be required
pursuant to Paragraphs 5 and 7 hereof, the Company shall mail or
deliver or cause to be mailed or delivered to the Grantee a stock
certificate or certificates for the number of Shares that the
Grantee shall be entitled to receive upon such exercise under the
provisions of this Award Agreement.
-2-
<PAGE> 3
(7) In each case where the Grantee shall exercise the
Option, in whole or in part, the Company will notify the Grantee
of the amount of withholding tax, if any, that must be paid under
Federal and, where applicable, state and local law, by reason of
such exercise. It shall be a condition to any delivery of Shares
or payment to be made to the Grantee hereunder that provision
satisfactory to the Company shall have been made for payment of
any taxes the Company determines, in its reasonable opinion, are
required to be paid or withheld pursuant to any applicable law or
regulation. The Grantee may irrevocably elect to have any
withholding tax obligation satisfied by either of the methods
described in clause (a) or (c) of Paragraph 5, above, or a
combination thereof, whether or not the same method is used to
pay the purchase price of the Option. As an alternative to such
an election with respect to all or any part of the withholding
tax obligation, the Company and its Subsidiaries also shall, to
the extent permitted by law, have the right to deduct from any
payment or transfer of any kind (whether of cash, Shares, or
other property, and whether or not related to the Plan) otherwise
due to the Grantee any such taxes required to be withheld.
(8) This Award Agreement and the Grantee's right to
exercise the Option shall terminate, as to any portion of the
Option not theretofore exercised, whenever the Grantee is for any
reason no longer employed by the Company or a Subsidiary;
subject, however, to the following provisions:
(a) If the Company or a Subsidiary terminates the
Grantee's employment for reasons other than fraud, dishonesty,
willful misconduct, retirement, or disability, or if the Grantee
resigns from the Company and the Subsidiaries (as applicable),
the Grantee shall have a period of 90 days immediately after such
termination in which to exercise the Option to the extent then
exercisable. The Option shall not become exercisable with
respect to any Shares with respect to which it was not
exercisable on the date of such termination of employment.
(b) If the termination of Grantee's employment results
from the Grantee's death, retirement or disability, the Grantee
(or his Beneficiary in the case of his death) shall have a period
of three years following such termination to exercise in whole or
in part the Option with respect to Shares subject to the Option,
to the extent then exercisable. The Option shall not become
exercisable with respect to any Shares with respect to which it
was not exercisable on the date of such termination of
employment.
(c) If the Grantee dies during the three-year period
following retirement or disability referred to in Subsection (b)
above, the Option may be exercised in whole or in part by his
Beneficiary before the expiration of one year after the date of
his death or the expiration of the three-year period following
retirement or disability referred to in Subsection (b) above,
whichever occurs later.
-3-
<PAGE> 4
For purposes of this Paragraph 8, the term "retirement"
shall mean termination of employment after the Grantee has become
eligible for an early, normal or late retirement benefit (but not
a terminated vested or deferred vested benefit) under the tax-
qualified deferred benefit pension plan maintained by the Company
and/or its Subsidiaries that covers the Grantee, and the term
"disability" shall have the meaning ascribed to it in the Wyman-
Gordon Company Savings/Investment Plan.
(9) The Option is nontransferable other than by will or by
the laws of descent and distribution, and the Option may be
exercised during the lifetime of the Grantee only by him.
(10) In the event that there is any change in the Shares
through merger, consolidation, reorganization, recapitalization,
or otherwise; or if there shall be any dividend on the Shares,
payable in Shares, or an extraordinary cash dividend or other
extraordinary distribution; or if there shall be a stock split,
reverse stock split, combination of Shares, exercisability of
stock purchase rights received under the Company's Stockholder
Rights Plan, or other similar corporate transaction or event that
affect the Shares, such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the rights of the Grantee or of the potential
benefits intended to be made available under the Plan, the number
and kind of Shares subject to the Option, the purchase price, and
the other relevant provisions of this Award Agreement shall be
appropriately adjusted as provided in Section 12 of the Plan.
(11) As provided in Section 25 of the Plan in the event of
a Triggering Event, as hereinafter defined, the Option, to the
extent it has not theretofore been exercised, shall be fully
exercisable without regard to the schedule in Paragraph 4 above,
but the Option shall thereupon become a Limited Right, as
hereinafter defined, and the terms thereof shall be modified as
described in the remaining provisions of this Paragraph 11. In
the event of a Triggering Event, the Grantee shall have the right
(the "Limited Right") to have the Company, at the election of the
Grantee (which election for each Triggering Event, as hereinafter
defined, may be made only during the period beginning on the
effective date of such Triggering Event, as hereinafter defined,
and ending on the 45th day following such date), purchase all or
any Shares subject to the Option (to the extent not theretofore
exercised) for an amount (payable entirely in cash) equal to the
number of Shares with respect to which the Limited Right is
exercised, multiplied by the excess of the higher of (a) the
highest Fair Market Value of a Share during the period commencing
on the ninetieth (90th) day preceding the exercise of the Limited
Right and ending on the date of exercise and (b) either (i) if an
event described in clause (a) of the definition of "Triggering
Event," below, has occurred, the highest price per Share paid for
any Share as shown on Schedule 13D (or an amendment thereto)
filed pursuant to Section 13(d) of the 1934 Act by any person or
group (as defined in that definition) whose acquisition cause the
-4-
<PAGE> 5
Triggering Event to occur, or (ii) if an event described in
clause (b) of the definition of "Triggering Event," below, has
occurred, the fixed or formula price specified in the
reorganization agreement (as defined in that definition) if such
price is determinable as of the date of exercise of the Limited
Right over the purchase price of the Option. Such purchase
pursuant to the exercise of a Limited Right shall be deemed to be
an exercise of the Option. Notwithstanding any other provision
of this Award Agreement, no Limited Right may be exercised after
the Expiration Date, but a Limited Right may be exercised within
six months of the date hereof. For purposes of this Paragraph
11, a Triggering Event shall be deemed to occur when and if any
of the following events occurs: (a) stockholder approval of a
merger or consolidation involving the Company or a sale of all or
substantially all of the assets of the Company, in each case
except for a transaction in which the Company's shareholders
receive at least 50% of the stock of the surviving, resulting or
acquiring corporation; (b) any "person" (other than the Company
or an employee benefit plan of the Company or a corporation
controlled by an employee benefit plan of the Company or a
corporation controlled by the Company's shareholders) becomes the
"beneficial owner" of shares of capital stock of the Company
representing a majority of the votes entitled to be cast on
matters submitted to the shareholders of the Company; or (c)
persons who, as of July 16, 1996, constituted the Company's Board
(the "Incumbent Board") cease for any reason, including without
limitation as a result of a tender offer, proxy contest, merger
or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a director of the
Company subsequent to July 16, 1996 whose election was approved
by a least a majority of the directors then comprising the
Incumbent Board shall, for purposes of this Agreement, be
considered a member of the Incumbent Board. For purposes of this
paragraph, the term "person" shall have the meaning used in
Section 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "1934 Act") and "beneficial ownership"
shall have the meaning set forth in Rule 13d-3 of the 1934 Act.
(12) Notices hereunder shall be mailed or delivered to the
Treasurer of the Company at its principal place of business at
Grafton, Massachusetts, and shall be mailed or delivered to
Grantee at his address set forth below or at such other address
as he may subsequently furnish the Treasurer of the Company in
writing.
(13) The Grantee shall not have any rights of a shareholder
by virtue of the Option except with respect to Shares actually
issued to him, and the issuance of Shares shall confer no
retroactive right to dividends.
(14) The Committee may not, without the written consent of
the Grantee, cause this Award Agreement to be revoked, and may
not without such written consent make or change any determination
or change any term, condition or provision affecting the Option
if the determination or change would reduce or adversely affect
the Option or the Grantee's rights thereto.
-5-
<PAGE> 6
(15) Notwithstanding anything herein to the contrary, on or
after the occurrence of a Triggering Event, as defined above, the
Committee may not under any circumstances make or change any
determination or change any term, condition, or provision
affecting the Option if the determination or change would reduce
or adversely affect the Option or the Grantee's rights thereto.
(16) The Grantee shall designate a Beneficiary in writing
and in such manner as is acceptable to the Company. If the
Grantee fails so to designate a Beneficiary, or if no such
designated Beneficiary survives the Grantee, the Grantee's
beneficiary shall be the Grantee's estate.
(17) The exercise of the Option shall be subject to the
condition that if at any time the Company shall determine (in
accordance with the provisions of the following sentence) that it
is necessary as a condition of, or in connection with, such
exercise (a) to satisfy withholding tax or other withholding
liabilities, (b) to effect the listing, registration, or
qualification on any securities exchange or under any state or
Federal law of any Shares otherwise deliverable in connection
with such exercise, or (c) to obtain the consent or approval of
any regulatory body, then in any such event such exercise shall
not be effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company in
its reasonable and good faith judgment. Any such determination
(described in the preceding sentence) by the Company must be
reasonable, must be made in good faith, and must be made without
any intent to postpone or limit such exercise, grant or
distribution beyond the minimum extent necessary and without any
intent otherwise to deny or frustrate the Grantee's rights in
respect of the Option. In seeking to effect or obtain any such
withholding, listing, registration, qualification, consent or
approval, the Company shall act with all reasonable diligence.
Any such postponement or limitation affecting the right to
exercise the Option shall not extend the time within which the
Option may be exercised, unless the Company and the Grantee
choose to amend the terms of this Award Agreement to provide for
such an extension; and neither the Company nor its directors or
officers shall have any obligation or liability to the Grantee
with respect to any Shares with respect to which the Option shall
lapse, because of a postponement or limitation that conforms to
the provisions of this Paragraph 17.
(18) No fractional Shares shall be issued pursuant to this
Award Agreement. The Committee shall determine whether cash,
other securities, or other property shall be paid or transferred
in lieu of fractional Shares, or whether fractional Shares or any
rights thereto shall be canceled, terminated or otherwise
eliminated.
-6-
<PAGE> 7
(19) Nothing in this Award Agreement shall confer upon the
Grantee the right to continue in the employment or service of the
Company or any Subsidiary or affect any right that the Company or
any Subsidiary may have to terminate the employment or service of
(or to demote or to exclude from future Awards under the Plan)
the Grantee at any time for any reason. The grant of the Option
shall not give the Grantee any right to similar grants in future
years.
(20) So long as this Award Agreement shall remain in effect,
the Company shall furnish to the Grantee, as and when available,
a copy of any Prospectus issued with respect to the Shares
covered hereby, and also a copy of all material hereinafter
distributed by the Company to its stockholders generally.
(21) This Award Agreement and the provisions thereof shall
be binding upon, and inure to the benefit of, any successor or
successors of the Company and the person or entity to whom the
Option may have been transferred by will, the laws of descent and
distribution, or beneficiary designation hereunder.
(22) The Award Agreement shall be governed and its
provisions construed, enforced and administered in accordance
with the laws of the Commonwealth of Massachusetts except to the
extent that such laws may be superseded by any Federal law. It
may not be modified orally.
WYMAN-GORDON COMPANY
By: /S/DAVID P. GRUBER
David P. Gruber
President and Chief
Executive Officer
The foregoing Award Agreement is hereby accepted and the
terms thereof hereby agreed to.
GRANTEE
Grantee's Signature
GRANTEE'S ADDRESS:
SOCIAL SECURITY NUMBER:
-7-
??
<PAGE> 1
EXHIBIT 10.B
FORM OF PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 16th day of July 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and (the "Grantee"), relating to 9,100 shares (the
"Shares") of the Company's common stock, par value $1.00 per
share (the "Common Stock") to be issued by the Company to the
Grantee pursuant to the terms and conditions set forth in the
Wyman-Gordon Company Long-Term Incentive Plan, as it may be
amended from time to time in accordance with its terms (the
"Plan") and this Performance Share Agreement, as it may be
amended from time to time in accordance with its terms (the
"Agreement") in consideration of services heretofore rendered and
to be rendered by Grantee to the Company during the term of this
Agreement. By execution of this Agreement, the Grantee
acknowledges receipt of a copy of the Plan and further agrees to
be bound thereby and by the actions, pursuant to the Plan, of the
Committee referred to in the Plan (the "Committee") and of the
Company's Board of Directors.
1. On the date hereof the Company shall issue the Shares to
the Grantee which shall be subject to risk of loss and forfeiture
during a period beginning on the date hereof and ending on July
16, 2001 (the "Term of this Agreement"). During the Term of this
Agreement, the Committee shall determine the average closing
price of the Common Stock on the NASDAQ National Market System,
or on any successor market or exchange in which the Common Stock
is publicly traded, as quoted in the WALL STREET JOURNAL during
each period of 30 consecutive business days during the Term of
this Agreement, each such period being referred to herein as a
"Measurement Period" and the average prices being referred to
herein as the "Target Price." Restrictions on all or a portion
of the Shares will lapse only if the Target Price during a
Measurement Period has reached the amounts set forth below:
<TABLE>
<CAPTION>
CUMULATIVE NUMBER OF
SHARES ON WHICH
TARGET PRICE RESTRICTIONS WILL LAPSE
<S> <C>
Below $21.00 0
21.00 455
22.00 910
23.00 1,820
24.00 3,185
25.00 4,550
26.00 5,915
27.00 7,280
28.00 8,190
29.00 8,645
30.00 and above 9,100
</TABLE>
E-2
<PAGE> 2
Upon achieving a Target Price for a Measurement Period as set
forth above, the restrictions set forth above and in Section 3
below shall lapse with respect to the number of Shares indicated
in the table as to which restrictions have not previously lapsed.
At the end of the Term of this Agreement, Grantee shall forfeit
all right, title and interest in the Shares to the extent that
the Target Price with respect to such Shares has not been
attained.
2. The Grantee acknowledges receipt of a stock certificate
registered in his name for the Shares and bearing a legend
setting forth the restrictions set forth in Section 1 of this
Agreement. The Grantee agrees, concurrently with the execution
of this Agreement, to deposit such stock certificate with the
Company together with a stock power relating thereto endorsed in
blank.
3. The Grantee acknowledges that the Shares may not be
sold, assigned, transferred, conveyed, pledged or otherwise
encumbered during the Term of this Agreement except in accordance
with the provisions of this Agreement. If the Grantee ceases to
be employed by the Company prior to the end of the Term of this
Agreement, his rights to the Shares to the extent restrictions
have not previously lapsed as provided above in Section 1 will
thereupon be forfeited and revert to the Company.
4. Upon the attainment of the Target Price as provided in
Section 1 and the satisfaction of all other conditions contained
in this Agreement, the restrictions applicable to the designated
number of Shares shall lapse and a stock certificate for the
number of Shares with respect to which the restrictions have
lapsed shall be delivered to the Grantee, free of all such
restrictions except any that may be imposed by law. Any Shares
as to which the restrictions shall not have lapsed at the end of
the Term of this Agreement shall be transferred to the Company
without any further action of the Grantee.
5. If an event of a Change of Control, as defined below,
shall occur, the Committee in its sole discretion may, but need
not, determine that the restrictions not previously lapsed and
terminated shall be deemed lapsed and terminated with respect to
some or all of the Shares and such Shares, if any as determined
by the Committee, shall not be forfeited and shall vest in the
Grantee upon such terms and conditions as the Committee may
determine. "Change in Control" means any one of the following
events: (1) stockholder approval of a merger or consolidation
involving the Company or a sale of all or substantially all of
the assets of the Company, in each case except for a transaction
in which the Company's shareholders receive at least 50% of the
stock of the surviving, resulting or acquiring corporation; (2)
any "person" (other than the Company or an employee benefit plan
-2-
<PAGE> 3
of the Company or a corporation controlled by the Company's
employee benefit plan of the Company or a corporation controlled
by the Company's stockholders) becomes the "beneficial owner" of
shares of capital stock of the Company representing a majority of
the votes entitled to be cast on matters submitted to the
shareholders of the Company; or (3) persons who, as of July 16,
1996, constituted the Company's Board (the "Incumbent Board")
cease for any reason, including without limitation as a result of
a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any
person becoming a director of the Company subsequent to July 16,
1996 whose election was approved by at least a majority of the
directors then comprising the Incumbent Board shall for purposes
of this Agreement, be considered a member of the Incumbent Board.
For purposes of this paragraph, the term "person" shall have the
meaning used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 as amended (the "1934 Act"), and "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 of the
1934 Act.
6. The Grantee shall have all voting and dividend rights
with respect to the Shares, provided that non-cash dividends
shall be deposited with the Company together with a stock power
or other appropriate instrument of transfer endorsed in blank and
shall be subject to the same restrictions as the Shares.
7. If the Grantee properly elects, within 30 days of the
date of this Agreement, to include in gross income for federal
income tax purposes an amount equal to the aggregate value of the
Shares subject to the Award based on the closing price of the
Stock on the date of this Agreement, Grantee shall make
arrangements satisfactory to the Committee to pay to the Company
any federal, state or local taxes required to be withheld with
respect to such Shares. If the Grantee shall fail to make such
tax payments as are required, the Company, shall, to the extent
permitted by law, have the right to deduct from any payment of
any kind otherwise due to the Grantee any federal, state or local
taxes of any kind required by law to be withheld with respect to
the Shares.
If the Grantee does not make the election described
above in this Section 7, Grantee shall, no later than the date as
of which the restrictions referred to in Section 1 and such other
restrictions as may have been imposed under this Agreement, shall
lapse, pay to the Company, or make arrangements satisfactory to
the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld with respect to
the Shares, and the Company shall, to the extent permitted by
law, have the right to deduct from any payment of any kind
otherwise due to the Grantee any federal, state or local taxes of
any kind required by law to be withheld with respect to the
Shares.
-3-
<PAGE> 4
Any tax withholding may be satisfied, at the discretion
of the Committee, by the Company's withholding Shares, otherwise
deliverable to Grantee hereunder with a Fair Market Value (as
defined in the Plan) equal to all or a portion of the amount to
be withheld.
At the sole discretion of the Committee, the Company
may make a loan to Grantee in such amount as may be required to
discharge his federal income tax liability on account of the
lapsing of restrictions under Section 1 above assuming the
resulting income is taxable at the maximum applicable individual
federal income tax rate. Such loan shall have such maturity and
other terms and conditions as the Committee shall determine in
its sole discretion, and shall bear interest at the applicable
federal rate under Section 1274(d) of the Internal Revenue Code
of any successor provision thereto.
8. The issuance of the Shares to Grantee shall be subject
to the condition that if at any time the Company shall determine
(in accordance with the provisions of the following sentence)
that it is necessary as a condition of, or in connection with,
such exercise (a) to satisfy withholding tax or other withholding
liabilities, (b) to effect the listing, registration, or
qualification on any securities exchange or under any state or
Federal law of any Shares otherwise deliverable in connection
with such exercise, or (c) to obtain the consent or approval of
any regulatory body, then in any such event such exercise shall
not be effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or
obtained free or any conditions not acceptable to the Company in
its reasonable and good faith judgment.
9. This Agreement is in all respects governed by the terms
of the Plan. All of the terms and provisions of the Plan are
hereby incorporated into this Agreement by reference and are made
a part of this Agreement. Each and every provision of this
Agreement shall be administered, interpreted and construed so
that this Agreement shall conform to the provisions of the Plan.
Any provisions of this Agreement that cannot be so administered,
interpreted, or construed shall be disregarded, and, accordingly,
in the event of any conflict between this Agreement and the Plan,
the latter will govern. Any capitalized terms used herein and
not defined herein have the respective meanings ascribed to them
in the Plan. Whenever the word "Grantee" is used herein in a
context where the provision should logically be construed to
apply to the Grantee's beneficiary, the word "Grantee" shall be
deemed to include such Beneficiary.
-4-
<PAGE> 5
10. In the event that there is any change in the Company
Common Stock through merger, consolidation, reorganization,
recapitalization, or otherwise; or if there shall be any dividend
on the Shares, payable in Shares, or an extraordinary cash
dividend or other extraordinary distribution; or if there shall
be a stock split, reverse stock split, combination of Shares,
exercisability of stock purchase rights received under the
Company's Stockholder Rights Plan, or other similar corporate
transaction or event that affects the Shares, such that an
adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the rights of the
Grantee or of the potential benefits intended to be made
available under this Agreement, the number and kind of Shares and
the other relevant provisions of this Agreement shall be
appropriately adjusted as provided in Section 12 of the Plan.
11. Notices hereunder shall be mailed or delivered to the
Treasurer of the Company at its principal place of business at
Grafton, Massachusetts, and shall be mailed or delivered to
Grantee at his address set forth above or at such other address
as he may subsequently furnish the Treasurer of the Company in
writing.
12. The Committee may not, without the written consent of
the Grantee, cause this Agreement to be revoked, and may not
without such written consent make or change any determination or
change any term, condition or provision hereunder if the
determination or change would reduce or adversely affect the
Grantee's rights hereunder.
13. Notwithstanding anything herein to the contrary, on or
after the occurrence of a Change in Control, as defined above,
the Committee may not under any circumstances make or change any
determination or change any term, condition, or provision
affecting this Agreement if the determination or change would
reduce or adversely affect the Grantee's rights hereunder.
14. The Grantee shall designate a Beneficiary in writing
and in such manner as is acceptable to the Company. If the
Grantee fails so to designate a Beneficiary, or if no such
designated Beneficiary survives the Grantee, the Grantee's
beneficiary shall be the Grantee's estate.
15. Nothing in this Agreement shall confer upon the Grantee
the right to continue in the employment or service of the Company
or affect any right that the Company may have to terminate the
employment or service of (or to demote or to exclude from future
Awards under the Plan) the Grantee at any time for any reason.
-5-
<PAGE> 6
16. So long as this Agreement shall remain in effect, the
Company shall furnish to the Grantee, as and when available, a
copy of any Prospectus issued with respect to the Shares covered
hereby, and also a copy of all material hereinafter distributed
by the Company to its stockholders generally.
17. This Agreement is nontransferable by Grantee other than
by will or by the laws of descent and distribution. This
Agreement and the provisions thereof shall be binding upon, and
inure to the benefit of, any successor or successors of the
Company and the person or entity to whom his rights hereunder may
have been transferred by will, the laws of descent and
distribution, or beneficiary designation hereunder.
18. This Agreement shall be governed and its provisions
construed, enforced and administered in accordance with the laws
of the Commonwealth of Massachusetts except to the extent that
such laws may be superseded by any Federal law. It may not be
modified orally.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
WYMAN-GORDON COMPANY
By: /S/DAVID P. GRUBER
David P. Gruber
President and Chief
Executive Officer
GRANTEE
Grantee's Signature
-6-
??
<PAGE> 1
EXHIBIT 10.C
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to (the "Grantee"), who is now employed
by the Company or by a Subsidiary of the Company, a Non-qualified
Stock Option (the "Option") to purchase prior to July 16, 2006
(the "Expiration Date") an aggregate 8,125 shares of Common Stock
of the Company ("Shares") at a price of $16.75 per Share pursuant
to the terms and conditions set forth in the Wyman-Gordon Company
Long-Term Incentive Plan as approved by the stockholders of the
Company on October 18, 1995, as it may be amended from time to
time in accordance with its terms (the "Plan") and this Stock
Option Agreement, as it may be amended from time to time in
accordance with its terms (the "Award Agreement"). By execution
of this Award Agreement, the Grantee acknowledges receipt of a
copy of the Plan and further agrees to be bound thereby and by
the actions, pursuant to the Plan, of the Committee referred to
in the Plan (the "Committee") and of the Wyman-Gordon Company
Board of Directors.
(1) The Option is in all respects governed by the terms of
the Plan. All of the terms and provisions of the Plan are hereby
incorporated into this Award Agreement by reference and are made
a part of this Award Agreement. For the convenience of the
Grantee, certain but not all of the provisions of the Plan are
also summarized or elaborated upon in this Award Agreement. Each
and every provision of this Award Agreement shall be
administered, interpreted, and construed so that the Option shall
conform to the provisions of the Plan. Any provisions of this
Award Agreement that cannot be so administered, interpreted, or
construed shall be disregarded, and, accordingly, in the event of
any conflict between the Award Agreement and the Plan, the latter
will govern. Any capitalized terms used herein and not defined
herein have the respective meanings ascribed to them in the Plan.
Whenever the word "Grantee" is used herein in a context where the
provision should logically be construed to apply to the Grantee's
Beneficiary, the word "Grantee" shall be deemed to include such
Beneficiary.
(2) The date of grant of the Option is July 16, 1996.
(3) The Option is a Non-qualified Stock Option and is not
an Incentive Stock Option.
(4) Subject to the terms of this Award Agreement, the
Option shall be exercisable from and after each initial exercise
date set forth below with respect to the indicated number of
Shares:
E-3
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number July 16, 1997
of Shares subject to the Option, as
specified above, in the first sentence
of the Award Agreement, rounded down
to the nearest whole Share.
An additional one quarter of the July 16, 1998
aggregate number of Shares subject
to the Option, as specified above,
in the first sentence of the Award
Agreement, rounded down (after taking
into account any fractional Share
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The additional one quarter of the July 16, 1999
aggregate number of Shares subject
to the Option, as specified above,
in the first sentence of the Award
Agreement, rounded down (after taking
into account any fractional Share
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject July 16, 2000
to the Option, as specified above, in
the first sentence of the Award Agreement.
</TABLE>
(5) The Grantee may exercise the Option only in the
following manner: From time to time prior to the Expiration
Date, the Grantee may give written notice to the Treasurer of the
Company of his election to purchase some or all of the Shares
purchasable at the time of such notice. Said notice shall
specify the number of Shares to be purchased and shall be
accompanied by payment therefor (a) in U.S. dollars by personal
check, bank draft, or money order payable to the order of the
Company; (b) in Shares that have been held by the Grantee for at
least six months and that have a Fair Market Value equal to the
purchase price; (c) to the extent not limited or prohibited by
the Committee, by payment made by the Grantee's broker, in U.S.
dollars by personal check, bank draft, or money order payable to
the order of the Company, pursuant to the Grantee's instructions;
or (d) by a combination thereof; and by any agreement, statement,
or other evidence that the Committee may require in order to
satisfy itself that the issuance of the Shares being purchased
pursuant to such exercise and any subsequent resale thereof will
be in compliance with applicable laws and regulations relating to
the issuance and sale of securities, including the provisions of
the Securities Act of 1933 and regulations promulgated
thereunder.
-2-
<PAGE> 3
(6) The exercise of the Option shall be deemed to occur
(a) on the date that the notice of exercise and the personal
check, bank draft, money order and/or Shares are received by the
Company, or (b) if such notice of exercise and payment are mailed
in the United States, and the United States Postal Service has
stamped its postmark thereon, then on the date of such postmark.
As soon as practicable after each exercise of the Option and
compliance by the Grantee with all applicable conditions,
including any payments to the Company that may be required
pursuant to Paragraphs 5 and 7 hereof, the Company shall mail or
deliver or cause to be mailed or delivered to the Grantee a stock
certificate or certificates for the number of Shares that the
Grantee shall be entitled to receive upon such exercise under the
provisions of this Award Agreement.
(7) In each case where the Grantee shall exercise the
Option, in whole or in part, the Company will notify the Grantee
of the amount of withholding tax, if any, that must be paid under
Federal and, where applicable, state and local law, by reason of
such exercise. It shall be a condition to any delivery of Shares
or payment to be made to the Grantee hereunder that provision
satisfactory to the Company shall have been made for payment of
any taxes the Company determines, in its reasonable opinion, are
required to be paid or withheld pursuant to any applicable law or
regulation. The Grantee may irrevocably elect to have any
withholding tax obligation satisfied by either of the methods
described in clause (a) or (c) of Paragraph (5), above, or a
combination thereof, whether or not the same method is used to
pay the purchase price of the Option. As an alternative to such
an election with respect to all or any part of the withholding
tax obligation, the Company and its Subsidiaries also shall, to
the extent permitted by law, have the right to deduct from any
payment or transfer of any kind (whether of cash, Shares, or
other property, and whether or not related to the Plan) otherwise
due to the Grantee any such taxes required to be withheld.
(8) This Award Agreement and the Grantee's right to
exercise the Option shall terminate, as to any portion of the
Option not theretofore exercised, whenever the Grantee is for any
reason no longer employed by the Company or a Subsidiary;
subject, however, to the following provisions:
(a) If the Company or a Subsidiary terminates the
Grantee's employment for reasons other than fraud, dishonesty,
willful misconduct, retirement, or disability, or if the Grantee
resigns from the Company and the Subsidiaries (as applicable),
the Grantee shall have a period of ninety days immediately after
such termination in which to exercise the Option to the extent
then exercisable. The Option shall not become exercisable with
respect to any Shares with respect to which it was not
exercisable on the date of such termination of employment.
-3-
<PAGE> 4
(b) If the termination of Grantee's employment results
from the Grantee's death, retirement or disability, the Grantee
(or his Beneficiary in the case of his death) shall have a period
of three years following such termination to exercise in whole or
in part the Option with respect to Shares subject to the Option,
to the extent then exercisable. The Option shall not become
exercisable with respect to any Shares with respect to which it
was not exercisable on the date of such termination of
employment.
(c) If the Grantee dies during the three-year period
following retirement or disability referred to in Subsection (b)
above, the Option may be exercised in whole or in part by his
Beneficiary before the expiration of one year after the date of
his death or the expiration of the three-year period following
retirement or disability referred to in Subsection (b) above,
whichever occurs later.
For purposes of this Paragraph 8, the term "retirement"
shall mean termination of employment after the Grantee has become
eligible for an early, normal or late retirement benefit (but not
a terminated vested or deferred vested benefit) under the tax-
qualified deferred benefit pension plan maintained by the Company
and/or its Subsidiaries that covers the Grantee, and the term
"disability" shall have the meaning ascribed to it in the Wyman-
Gordon Company Savings/Investment Plan.
(9) The Option is nontransferable other than by will or by
the laws of descent and distribution, and the Option may be
exercised during the lifetime of the Grantee only by him.
(10) In the event that there is any change in the Shares
through merger, consolidation, reorganization, recapitalization,
or otherwise; or if there shall be any dividend on the Shares,
payable in Shares, or an extraordinary cash dividend or other
extraordinary distribution; or if there shall be a stock split,
reverse stock split, combination of Shares, exercisability of
stock purchase rights received under the Company's Stockholder
Rights Plan, or other similar corporate transaction or event that
affects the Shares, such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the rights of the Grantee or of the potential
benefits intended to be made available under the Plan, the number
and kind of Shares subject to the Option, the purchase price, and
the other relevant provisions of this Award Agreement shall be
appropriately adjusted as provided in Section 12 of the Plan.
(11) As provided in Section 25 of the Plan in the event of
a Triggering Event, as hereinafter defined, the Option, to the
extent it has not theretofore been exercised, shall be fully
exercisable without regard to the schedule in Paragraph 4 above,
but the Option shall thereupon become a Limited Right, as
hereinafter defined, and the terms thereof shall be modified as
-4-
<PAGE> 5
described in the remaining provisions of this Paragraph 11. In
the event of a Triggering Event, the Grantee shall have the right
(the "Limited Right") to have the Company, at the election of the
Grantee (which election for each Triggering Event, as hereinafter
defined, may be made only during the period beginning on the
effective date of such Triggering Event, as hereinafter defined,
and ending on the forty-fifth day following such date), purchase
all or any Shares subject to the Option (to the extent not
theretofore exercised) for an amount (payable entirely in cash)
equal to the number of Shares with respect to which the Limited
Right is exercised, multiplied by the excess of the higher of (a)
the highest Fair Market Value of a Share during the period
commencing on the ninetieth (90th) day preceding the exercise of
the Limited Right and ending on the date of exercise and (b)
either (i) if an event described in clause (b) of the definition
of "Triggering Event," below, has occurred, the highest price per
Share paid for any Share as shown on Schedule 13D (or an
amendment thereto) filed pursuant to Section 13(d) of the 1934
Act by any person or group (as defined in that definition) whose
acquisition caused the Triggering Event to occur, or (ii) if an
event described in clause (a) of the definition of "Triggering
Event," below, has occurred, the fixed or formula price specified
in the reorganization agreement (as defined in that definition)
if such price is determinable as of the date of exercise of the
Limited Right over the purchase price of the Option. Such
purchase pursuant to the exercise of a Limited Right shall be
deemed to be an exercise of the Option. Notwithstanding any
other provision of this Award Agreement, no Limited Right may be
exercised after the Expiration Date, but a Limited Right may be
exercised within six months of the date hereof. For purposes of
this Paragraph 11, a Triggering Event shall be deemed to occur
when and if any of the following events occurs: (a) stockholder
approval of a merger or consolidation involving the Company or a
sale of all or substantially all of the assets of the Company
(each a "reorganization"), in each case except for a transaction
in which the Company's shareholders receive at least 50% of the
stock of the surviving, resulting or acquiring corporation; (b)
any "person" (other than the Company or an employee benefit plan
of the Company or a corporation controlled by the Company's
employee benefit plan of the Company or a corporation controlled
by the Company's shareholders) becomes the "beneficial owner" of
shares of capital stock of the Company representing a majority of
the votes entitled to be cast on matters submitted to the
shareholders of the Company; or (c) persons who, as of July 16,
1996, constituted the Company's Board (the "Incumbent Board")
cease for any reason, including without limitation as a result of
a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any
person becoming a director of the Company subsequent to July 16,
1996 whose election was approved by at least a majority of the
directors then comprising the Incumbent Board shall, for purposes
of this Agreement, be considered a member of the Incumbent Board.
For purposes of this paragraph, the term "person" shall have the
meaning used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "1934 Act") and "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 of the
1934 Act.
-5-
<PAGE> 6
(12) Notices hereunder shall be mailed or delivered to the
Treasurer of the Company at its principal place of business at
Grafton, Massachusetts, and shall be mailed or delivered to
Grantee at his address set forth below or at such other address
as he may subsequently furnish the Treasurer of the Company in
writing.
(13) The Grantee shall not have any rights of a shareholder
by virtue of the Option except with respect to Shares actually
issued to him, and the issuance of Shares shall confer no
retroactive right to dividends.
(14) The Committee may not, without the written consent of
the Grantee, cause this Award Agreement to be revoked, and may
not without such written consent make or change any determination
or change any term, condition or provision affecting the Option
if the determination or change would reduce or adversely affect
the Option or the Grantee's rights thereto.
(15) Notwithstanding anything herein to the contrary, on or
after the occurrence of a Triggering Event, as defined above, the
Committee may not under any circumstances make or change any
determination or change any term, condition, or provision
affecting the Option if the determination or change would reduce
or adversely affect the Option or the Grantee's rights thereto.
(16) The Grantee shall designate a Beneficiary in writing
and in such manner as is acceptable to the Company. If the
Grantee fails so to designate a Beneficiary, or if no such
designated Beneficiary survives the Grantee, the Grantee's
beneficiary shall be the Grantee's estate.
(17) The exercise of the Option shall be subject to the
condition that if at any time the Company shall determine (in
accordance with the provisions of the following sentence) that it
is necessary as a condition of, or in connection with, such
exercise (a) to satisfy withholding tax or other withholding
liabilities, (b) to effect the listing, registration, or
qualification on any securities exchange or under any state or
Federal law of any Shares otherwise deliverable in connection
with such exercise, or (c) to obtain the consent or approval of
any regulatory body, then in any such event such exercise shall
not be effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company in
its reasonable and good faith judgment. Any such determination
(described in the preceding sentence) by the Company must be
reasonable, must be made in good faith, and must be made without
any intent to postpone or limit such exercise, grant or
distribution beyond the minimum extent necessary and without any
intent otherwise to deny or frustrate the Grantee's rights in
respect of the Option. In seeking to effect or obtain any such
withholding, listing, registration, qualification, consent or
approval, the Company shall act with all reasonable diligence.
-6-
<PAGE> 7
Any such postponement or limitation affecting the right to
exercise the Option shall not extend the time within which the
Option may be exercised, unless the Company and the Grantee
choose to amend the terms of this Award Agreement to provide for
such an extension; and neither the Company nor its directors or
officers shall have any obligation or liability to the Grantee
with respect to any Shares with respect to which the Option shall
lapse, because of a postponement or limitation that conforms to
the provisions of this Paragraph 17.
(18) No fractional Shares shall be issued pursuant to this
Award Agreement. The Committee shall determine whether cash,
other securities, or other property shall be paid or transferred
in lieu of fractional Shares, or whether fractional Shares or any
rights thereto shall be canceled, terminated or otherwise
eliminated.
(19) Nothing in this Award Agreement shall confer upon the
Grantee the right to continue in the employment or service of the
Company or any Subsidiary or affect any right that the Company or
any Subsidiary may have to terminate the employment or service of
(or to demote or to exclude from future Awards under the Plan)
the Grantee at any time for any reason. The grant of the Option
shall not give the Grantee any right to similar grants in future
years.
(20) So long as this Award Agreement shall remain in
effect, the Company shall furnish to the Grantee, as and when
available, a copy of any Prospectus issued with respect to the
Shares covered hereby, and also a copy of all material
hereinafter distributed by the Company to its stockholders
generally.
(21) This Award Agreement and the provisions thereof shall
be binding upon, and inure to the benefit of, any successor or
successors of the Company and the person or entity to whom the
Option may have been transferred by will, the laws of descent and
distribution, or beneficiary designation hereunder.
-7-
<PAGE> 8
(22) The Award Agreement shall be governed and its
provisions construed, enforced and administered in accordance
with the laws of the Commonwealth of Massachusetts except to the
extent that such laws may be superseded by any Federal law. It
may not be modified orally.
WYMAN-GORDON COMPANY
By: /S/DAVID P. GRUBER
David P. Gruber
President and Chief
Executive Officer
The foregoing Award Agreement is hereby accepted and the
terms thereof hereby agreed to
GRANTEE
Grantee's Signature
Grantee's Address:
Social Security Number:
-8-
??
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> MAY-31-1996
<PERIOD-END> AUG-31-1996
<CASH> 27,904
<SECURITIES> 7
<RECEIVABLES> 87,160
<ALLOWANCES> 0
<INVENTORY> 72,820
<CURRENT-ASSETS> 221,605
<PP&E> 410,366
<DEPRECIATION> 268,438
<TOTAL-ASSETS> 390,562
<CURRENT-LIABILITIES> 96,082
<BONDS> 90,231
0
0
<COMMON> 37,053
<OTHER-SE> 82,316
<TOTAL-LIABILITY-AND-EQUITY> 390,562
<SALES> 133,583
<TOTAL-REVENUES> 134,235
<CGS> 122,744
<TOTAL-COSTS> 122,744
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,607
<INCOME-PRETAX> (11,865)
<INCOME-TAX> (19,680)
<INCOME-CONTINUING> 7,815
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,815
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
</TABLE>
