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Form 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the fiscal year ended May 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
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 of (I.R.S. Employer
incorporation or organization) Identification No.)
244 WORCESTER STREET, BOX 8001, GRAFTON, MASSACHUSETTS 01536-8001
(Address of Principal Executive Offices) (Zip Code)
508-839-4441
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1 Par Value
(Title of Class)
Indicate by a 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,
and (2) has been subject to such filing requirements for the past
90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of the voting stock held by non-
affiliates of the registrant as of August 2, 1996: $224,000,000.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
CLASS OUTSTANDING AT AUGUST 2, 1996
Common Stock, $1 Par Value 35,706,713 Shares
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's "Proxy Statement for Annual
Meeting of Stockholders" on October 16, 1996 are incorporated
into Part III.
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PART I
ITEM 1. BUSINESS
GENERAL
Wyman-Gordon Company is a leading producer of highly
engineered, technically advanced components for both the
commercial and defense aerospace market and the commercial power
generation and energy market. The Company uses die forging,
extrusion and investment casting processes to produce metal
components to exacting customer specifications for technically
demanding applications such as jet turbine engines, airframes and
land-based gas turbine engines. The Company also extrudes
seamless thick wall steel pipe for use primarily in commercial
power generation plants, and designs and produces prototype
aircraft using composite technologies. The Company produces
components for most of the major commercial and U.S. defense
aerospace programs. Metallurgical skills, a unique asset base
and a broad offering of capabilities allow the Company to serve
competing customers effectively and to lead the development and
use of new metal technologies for its customers' uses.
The Company is the leading producer of rotating components
for use in turbine aircraft engines. These parts are forged from
purchased billets and from superalloy metal powders which are
produced, consolidated and extruded into billet entirely at the
Company's facilities. Forging is conducted in Massachusetts,
Texas and Scotland on a number of hydraulic presses with
capacities ranging from 8,000 to 55,000 tons. The Company forges
these engine components primarily from alloys of high-temperature
nickel. Additionally, the Company uses modern, automated, high-
volume production equipment and both air-melt and vacuum-melt
furnaces in its investment casting operations to produce complex
non-rotating jet engine parts from high-temperature nickel-based
alloys.
Structural airframe components are produced from alloys of
steel, aluminum and titanium on the Company's forging presses and
by its investment casting process. The Company uses its
metallurgical and manufacturing capabilities to design new
products to accommodate its customers' needs for larger, stronger
structural parts forged from new superalloy metals. The Company
produces smaller, near net-shape structural parts for aircraft
through its investment castings business.
The Company produces a variety of mechanical and structural
tubular forged products, primarily in the form of extruded
seamless pipe, for the domestic and international power
generation and energy markets, which include nuclear and fossil
fueled power plants, cogeneration projects and retrofit and life
extension applications. These tubular forged products also have
ordnance and other military applications. Aluminum, steel,
titanium and superalloy products are manufactured at the
Company's Houston, Texas forging facility where one of the
world's largest vertical extrusion presses extrudes pipe up to 48
inches in diameter and 7 inches in wall thickness and bar stock
from 6 to 32 inches in diameter. Lengths of pipe and bar stock
vary from 10 to 45 feet with a maximum forged weight of 20 tons.
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Similar equipment and capabilities are in operation at the
Company's Livingston, Scotland forging facility. Additionally,
the Houston press extrudes powder billets for use in aircraft
turbine engine forgings.
The Company's composite operation, Scaled Composites, Inc.,
plans, designs, fabricates and tests composite airframe
structures for the aerospace market.
MARKETS AND PRODUCTS
The principal markets served by the Company are aerospace
and power generation and energy. Revenue by market for the
respective periods were as follows (000's omitted, except
percentages):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 1996 MAY 31, 1995
% OF % OF
REVENUE TOTAL REVENUE TOTAL
<S> <C> <C> <C> <C>
Aerospace $362,706 73% $300,143 76%
Power generation
and energy 92,991 19 66,892 17
Other 43,927 8 29,604 7
Total $499,624 100% $396,639 100%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 1994 DECEMBER 31, 1993
% OF % OF
REVENUE TOTAL REVENUE TOTAL
<S> <C> <C> <C> <C>
Aerospace $188,518 84% $205,077 85%
Power generation
and energy 15,616 7 14,719 6
Other 20,560 9 19,965 9
Total $224,694 100% $239,761 100%
</TABLE>
AEROSPACE
The Company manufactures products utilized in general
aviation, defense and business jet aircraft. The Company
manufactures numerous forged and cast components for jet engines
produced by all of the major manufacturers, including General
Electric Company ("GE"), Pratt & Whitney, and Rolls-Royce. The
Company's forged engine parts include fan discs, compressor
discs, turbine discs, seals, spacers, shafts, hubs and cases.
Cast engine parts include thrust reversers, valves and fuel
system parts such as combustion chamber swirl guides. Jet
engines may produce in excess of 100,000 pounds of thrust and may
subject parts produced by the Company to temperatures reaching
1,350 degrees Fahrenheit. Components for such extreme conditions
require precision manufacturing and expertise with high-purity
titanium and nickel-based superalloys. Rotating parts such as
fan, compressor and turbine discs must be manufactured to precise
quality specifications.
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The Company manufactures forged and cast structural parts
for fixed-wing aircraft and helicopters. These products include
wing spars, engine mounts, struts, landing gear beams, landing
gear, wing hinges, wing and tail flaps, housings, and bulkheads.
These parts may be made of titanium, steel, aluminum and other
alloys, as well as composite materials. The Company also
produces dynamic rotor forgings for helicopters. Forging is
particularly well-suited for airframe parts because of its
ability to impart greater proportional strength to metal than
other manufacturing processes. Investment casting can produce
complex shapes to precise, repeatable dimensions.
The Company forges landing gear beams, landing gear and
other airframe structural components for the Boeing 737, 747,
757, 767 and 777, the McDonnell Douglas MD-11 and the Airbus A330
and A340. The Company produces structural forgings for the F-15,
F-16 and F/A-18 fighter aircraft and the Black Hawk helicopter
produced by the Sikorsky Aircraft Corporation. The Company also
produces large, one-piece bulkheads for Lockheed/ Boeing for the
F-22 next generation air superiority fighter aircraft.
The commercial aerospace industry is cyclical in nature and
subject to changes based on general economic conditions and
airline profitability. In 1990 through 1992, domestic airlines
suffered significant operating losses. Although it appears that
the health of the airline industry has improved in recent years,
based on profitability, there can be no assurances that any
improvement in the commercial aerospace market will be
substantial or that improved conditions would be sustained.
The defense aerospace industry is dependent upon government
defense budgets and, in particular, the United States defense
budget. In general, defense budgets in the United States have
been declining in recent years, resulting in reduced demand for
new aircraft and spare parts. While the effect of the United
States defense budget reductions may be offset in part by foreign
military sales, such sales are affected by United States
governmental regulation, regulation by the purchasing government
and political uncertainties in the United States and abroad.
There can be no assurance that United States defense budgets and
the related demand for defense equipment will not continue to
decline or that sales of defense equipment to foreign governments
will continue at present levels.
POWER GENERATION
The Company is a major supplier of extruded seamless thick
wall pipe for the critical piping systems in both fossil fuel and
nuclear commercial power plants worldwide as well as offshore
petroleum exploration applications. The Company believes it is
the leading supplier in the U.S. and the U.K., of large diameter,
seamless thick wall pipe. The Company produces components for
steam turbine and gas turbine generators and forged valves for
land-based power generation applications. The Company also
manufactures shafts, cases, and compressor and turbine discs for
marine gas turbines.
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OTHER PRODUCTS
The Company supplies products to builders of military bombs
and missiles. Examples of these products include breech block
and breech rings for large cannons and forged steel casings for
bombs, rockets and expendable launch vehicles. For naval defense
applications, the Company supplies components for propulsion
systems for nuclear submarine and aircraft carriers as well as
pump, valve, structural and non nuclear propulsion forgings.
The Company also manufactures extruded missile, rocket and
bomb cases and supplies extruded products for nuclear submarines
and aircraft carriers including thick wall piping for nuclear
propulsion systems, torpedo tubes and catapult launch tubes.
The Company's investment castings operations produce
products for commercial applications such as: components for golf
clubs, pistol frames, bicycles, food processing equipment, diesel
turbo-chargers, land-based military equipment such as tanks, and
various other applications.
The Company also supplies extruded powders for other
superalloy powder manufacturers. The Company is actively seeking
to identify additional applications for its capabilities, such as
in the automotive and other commercial markets.
CUSTOMERS
The Company has approximately 300 active customers that
purchase forgings, approximately 600 active customers that
purchase investment castings and approximately 20 active
customers that purchase composite structures. The Company's
principal customers are similar across all of these production
processes. Five customers accounted for 47% and 50% of the
Company's revenues for the years ended May 31, 1996 and 1995,
respectively, 51% for the five months ended May 31, 1994, and 56%
for the year ended December 31, 1993. GE and United Technologies
(primarily its Pratt & Whitney and Sikorsky divisions) each
accounted for more than 10% of revenues for the years ended May
31, 1996, 1995 and 1994 and the year ended December 31, 1993, as
follows:
<TABLE>
<CAPTION>
(000's omitted, except percentages)
YEAR ENDED YEAR ENDED
MAY 31, 1996 MAY 31, 1995
% OF % OF
TOTAL TOTAL
REVENUE REVENUE REVENUE REVENUE
<S> <C> <C> <C> <C>
GE $134,830 27% $101,261 26%
United
Technologies 53,116 11 58,873 15
</TABLE>
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<TABLE>
<CAPTION>
(000's omitted, except percentages)
YEAR ENDED YEAR ENDED
MAY 31, 1994 DECEMBER 31, 1993
% OF % OF
TOTAL TOTAL
REVENUE REVENUE REVENUE REVENUE
<S> <C> <C> <C> <C>
GE $48,286 22% $55,585 23%
United
Technologies 39,100 17 37,060 16
</TABLE>
Boeing, McDonnell Douglas and Rolls-Royce are also
significant customers of the Company. The loss of, or
significant reduction in, purchases by any of the Company's major
customers would adversely affect the Company. Because of the
relatively small number of customers for some of the Company's
principal products, those customers exercise significant
influence over the Company's prices and other terms of trade.
The Company has organized its operations into product groups
which focus on specific customers or groups of customers with
similar needs. The Company has become actively involved with its
aerospace customers through joint development relationships and
cooperative research and development, engineering, quality
control, supply chain management, just-in-time inventory control
and computerized design programs. This involvement begins with
the design of the tooling and processes to manufacture the
customer's components to its precise specifications.
MARKETING AND SALES
The Company markets its products principally through its own
sales engineers and makes only limited use of manufacturers'
representatives. Substantially all sales are made directly to
original equipment manufacturers.
The Company's sales are not subject to significant seasonal
fluctuations.
A substantial portion of the Company's revenues are derived
from long-term, fixed price contracts with major engine and
aircraft manufacturers. These contracts are typically
"requirements" contracts under which the purchaser commits to
purchase a given portion of its requirements of a particular
component from the Company. Actual purchase quantities are
typically not determined until shortly before the year in which
products are to be delivered.
BACKLOG
The Company's firm backlog includes the sales prices of all
undelivered units covered by customers' orders for which the
Company has production authorization. The Company's firm backlog
in the various markets served by the Company has been as follows
(000's omitted, except percentages):
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<TABLE>
<CAPTION>
MAY 31, 1996 MAY 31, 1995
% OF % OF
BACKLOG TOTAL BACKLOG TOTAL
<S> <C> <C> <C> <C>
Aerospace $499,103 83% $382,982 82%
Power generation
and energy 66,341 11 57,248 12
Other 32,994 6 28,531 6
Total $598,438 100% $468,761 100%
</TABLE>
<TABLE>
<CAPTION>
MAY 31, 1994
% OF
BACKLOG TOTAL
<S> <C> <C>
Aerospace $342,007 88%
Power generation
and energy 33,700 9
Other 13,700 3
Total $389,407 100%
</TABLE>
At May 31, 1996 approximately $437.0 million of total firm
backlog was scheduled to be shipped within one year and the
remainder in subsequent years. (Sales during any period include
sales which were not part of backlog at the end of the prior
period.) Customer orders in firm backlog are subject to
rescheduling or termination for customer convenience and due to
market fluctuations in the commercial aerospace industry.
However, in certain cases the Company is entitled to an
adjustment in contract amounts.
MANUFACTURING PROCESSES
The Company employs three manufacturing processes: forging,
investment casting and composites production.
FORGING
Forging is the process by which desired shapes,
metallurgical characteristics, and mechanical properties are
imparted to metal by heating and shaping it through pressing or
extrusion. The Company forges alloys of nickel, titanium, steel
and aluminum.
The Company manufactures most of its forgings at its
facilities in Grafton and Worcester, Massachusetts, Houston,
Texas and Livingston, Scotland. The Company also operates a
superalloy powder metal facility in Brighton, Michigan and vacuum
arc remelting facilities in Houston, Texas and Millbury,
Massachusetts which produce steel, nickel and titanium ingots,
and a plasma arc melting facility for the production of high
quality titanium ingots and nickel powder in Millbury,
Massachusetts. The Company has six large closed die hydraulic
forging presses rated as follows: 18,000 tons, 35,000 tons and
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50,000 tons in Grafton Massachusetts; 29,000 tons and 35,000 tons
in Houston, Texas and 30,000 tons in Livingston, Scotland. The
35,000 ton vertical extrusion press in Houston can be modified to
a 55,000 ton hydraulic forging press. The Company also operates
an open die cogging press rated at 2,000 tons at its Grafton,
Massachusetts location and a hydraulic isothermal forging press
rated at 8,000 tons at its Worcester, Massachusetts location.
The Company employs a variety of forging processes,
including the following:
OPEN-DIE FORGING. In this process, the metal is forged
between dies that never completely surround the metal, thus
allowing the metal to be observed during the process. Typically,
open-die forging is used to create relatively simple, preliminary
shapes to be further processed by closed die forging.
CLOSED-DIE FORGING. Closed-die forging involves pressing
heated metal into the required shapes and size determined by
machined impressions in specially prepared dies which exert three
dimensional control on the metal. In hot-die forging, a type of
closed-die process, the dies are heated to a temperature
approaching the transformation temperature of the materials being
forged so as to allow the metal to flow more easily within the
die cavity which produces forgings with superior surface
conditions, metallurgical structures, tighter tolerances,
enhanced repeatability of the part shapes and greater
metallurgical control. Both titanium and nickel-based
superalloys are forged using this process, in which the dies are
heated to a temperature of approximately 1,300 degrees
Fahrenheit.
CONVENTIONAL/MULTI-RAM. The closed-die, multiple-ram
process featured on the Company's 30,000 ton press enables the
Company to produce extremely complex forgings with multiple
cavities in a single heating and pressing cycle. Dies may be
split either on a vertical or a horizontal plane and shaped
punches may be operated by side rams, piercing rams, or both.
Multi-ram forging enables the Company to produce a wide variety
of shapes, sizes, and configurations utilizing less input weight.
The process also optimizes grain flow and uniformity of
deformation, reduces machining requirements, and minimizes
overall costs.
ISOTHERMAL FORGING. Isothermal forging is a closed-die
process in which the dies are heated to the same temperature as
the metal being forged, typically in excess of 1,900 degrees
Fahrenheit. The forged material typically has been derived from
nickel-based superalloy powders. Because of the extreme
temperatures necessary for forming these alloys, the dies must be
made of refractory metal (such as molybdenum) so that the die
retains its strength and shape during the forging process.
Because the dies may oxidize at these elevated temperatures, the
forging process is carried on in a vacuum or inert gas
atmosphere. The Company's isothermal press also allows it to
produce near-net shape components (requiring less machining by
the customer) made from titanium alloys, which can be an
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important competitive advantage in times of high titanium prices.
The Company carries on this process in its 8,000-ton isothermal
press.
EXTRUSION. The Company's 35,000 ton vertical extrusion
press is one of the largest and most advanced presses in the
world. Extrusions are produced for applications in the oil and
gas industry, including tension leg platforms, riser systems and
production manifolds. The extrusion process is facilitated by
manipulators capable of handling work pieces weighing up to 20
tons, rotary hearth furnaces and a 14,000 ton blocking press. It
is capable of producing thick wall seamless pipe with outside
diameters up to 48 inches and wall thicknesses from 1/2 inch up
to 7 inches. Solid extrusions can be manufactured from 6 to 32
inches in diameter. Typical lengths vary from 10 to 45 feet.
Powder materials can also be compacted and extruded into forging
billets utilizing this press. The 30,000 ton press has similar
extrusion capabilities in addition to its multi-ram forging
capabilities.
RAW MATERIAL PRODUCTION. The Company utilizes vacuum arc
remelting technology to produce titanium alloy suitable for
structural and turbine aerospace applications. Titanium produced
in this manner is utilized in both the Company's forging and
castings operations.
The Company's Brighton, Michigan powder metal facility has
the capability to atomize, process, and consolidate (by hot
isostatic pressing) superalloy metal powders for use in
aerospace, medical implant, petrochemical, hostile environment
oil and gas drilling and production, and other high technology
applications. This facility has an annual production capacity of
up to 500,000 pounds of superalloy powder. In addition, the
Company has the capacity to consolidate powdered metals by
extrusion using its 30,000 ton and 35,000 ton presses. Extruded
billets are further processed and either sold to other forge
shops or forged into critical jet engine components on the
Company's 8,000 ton isothermal press.
The Company's plasma arc melting ("PAM") facility in
Millbury, Massachusetts is capable of producing high quality
titanium ingot and nickel-based superalloy powder. The Company
is currently pursuing certifications by certain customers for use
of this technology in high performance jet engines.
The Company's vacuum arc remelt ("VAR") shop in Houston,
Texas has five computer-controlled VAR furnaces which process
electrodes up to 42 inches in diameter that weigh up to 40,000
pounds. The Houston VAR furnaces are used to remelt purchased
electrodes into high purity alloys for internal use in severe
applications. In addition, the VAR furnaces are used for toll
melting. These vacuum metallurgy techniques provide consistently
high levels of purity, low gas content, and precise control over
the solidification process. This minimizes segregation in
complex alloys and results in improved mechanical properties, as
well as hot and cold workability.
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The Company has entered into a joint venture with Pratt &
Whitney and certain Australian investors to produce nickel-based
superalloy ingots in Perth, Australia (the "Australian Joint
Venture"). These ingots will be utilized as raw materials for
the Company's forging and casting products.
SUPPORT OPERATIONS. The Company manufactures many of its
own forging dies out of high-strength steel and molybdenum.
These dies can weigh in excess of 100 tons and can be up to 25
feet in length. In manufacturing its dies, the Company takes its
customers' drawings and engineers the dies using CAD/CAM
equipment and sophisticated metal flow computer models that
simulate metal flow during the forging process. This activity
improves die design and process control and permits the Company
to enhance the metallurgical characteristics of the forging.
The Company also has at its three major forging locations,
machine shops with computer aided profiling equipment, vertical
turret lathes and other equipment that it employs to machine
products to a shape allowing inspection of the products. The
Company also operates rotary and car-bottom heat treating
furnaces that enhance the performance characteristics of the
forgings. These furnaces have sufficient capacity to handle all
the Company's forged products. The Company subjects its products
to extensive quality inspection and contract qualification
procedures involving zyglo, chemical etching, ultrasonic, red
dye, and electrical conductivity testing facilities.
TESTING. Because the Company's products are for high
performance end uses, rigorous testing is necessary and is
performed internally by Company engineers. Throughout the
manufacturing process, numerous tests and inspections are
performed to insure the final quality of each product;
statistical process control techniques are also applied
throughout the entire manufacturing process.
INVESTMENT CASTINGS
The Company's investment castings operations use modern,
automated, high volume production equipment and both air-melt and
vacuum-melt furnaces to produce a wide variety of complex
investment castings. Castings are made of a range of metal
alloys including aluminum, magnesium, steel, titanium and nickel-
based superalloys.
The Company's castings operations are conducted in
facilities located in Connecticut, New Hampshire, Nevada and
California. These plants house air and vacuum-melt furnaces, wax
injection machines and investment dipping tanks. Because of the
growth in demand for the Company's high quality titanium
castings, the Company has started its Franklin, New Hampshire
facility which it closed in 1993. The Company has installed and
is currently beginning operation of a new state-of-the-art
titanium melting furnace for the Franklin plant. Additionally,
the Company has expanded its Groton, Connecticut facility for the
production of high quality titanium castings.
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Investment castings are produced in four major stages.
First, molten wax is injected into an aluminum mold, known as a
"tool," in the shape of the ultimate component to be produced.
These tools are produced to the specifications of the customer
and are primarily purchased from outside die makers, although the
Company maintains internal tool-making capabilities. In the
second stage, the wax patterns are mechanically coated with a
sand and silicate-bonded slurry in a process known as investment.
This forms a ceramic shell which is subsequently air-dried under
controlled environmental conditions. The wax inside this shell
is then melted and removed in a high temperature steam autoclave
and the molten wax is recycled. In the third, or foundry stage,
metal is melted in an electric furnace in either an air or vacuum
environment and poured into the ceramic shell. After cooling,
the ceramic shells are removed by vibration. The metal parts are
then cleaned in a high temperature caustic bath, followed by
water rinsing. In the fourth, or finishing stage, the castings
are finished to remove excess metal. The final product then
undergoes a lengthy series of testing (radiography, fluorescent
penetrant, magnetic particle and dimensional) to ensure quality
and consistency.
COMPOSITES
The Company's composites operation, Scaled Composites, Inc.,
plans, designs, fabricates and tests composite airframe
structures for the aerospace market.
FACILITIES
The following table sets forth certain information with
respect to the Company's major facilities at May 31, 1996. The
Company believes that its facilities are well-maintained, are
suitable to support the Company's business and are adequate for
the Company's present and anticipated needs. On average during
the Company's fiscal year 1996, the Company's forging, investment
castings and composites facilities were operating at
approximately 80%, 65% and 95% of their total productive
capacity, respectively.
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<TABLE>
<CAPTION>
APPROX.
SQUARE
LOCATION FOOTAGE PRIMARY FUNCTION
<S> <C> <C>
FORGINGS:
Brighton, Michigan 34,500 Superalloy Powder
Production
Grafton, Massachusetts 85,420 Administrative Offices
Grafton, Massachusetts 843,200 Forging
Houston, Texas 1,283,800 Forging
Livingston, Scotland 405,200 Forging
Livingston, Scotland 112,000 Currently idle
Millbury, Massachusetts 104,125 Research and
Development,
Metals Production
Worcester, Massachusetts 43,200 Currently idle
Worcester, Massachusetts 22,300 Forging
Worcester, Massachusetts 301,400 Currently idle
CASTINGS:
Carson City, Nevada 46,000 Casting
Franklin, New Hampshire 43,200 Casting
Groton, Connecticut
(2 plants) 162,550 Casting
San Leandro, California 45,000 Casting
Tilton, New Hampshire 94,000 Casting
COMPOSITES:
Mojave, California 67,000 Composites
</TABLE>
RAW MATERIALS
Raw materials used by the Company in its forgings and
castings include alloys of titanium, nickel, steel, aluminum,
magnesium and other high-temperature alloys. The composites
operation uses high strength fibers such as fiberglass or
graphite, as well as materials such as foam and epoxy, to
fabricate composite structures. The major portion of metal
requirements for forged and cast products are purchased from
major metal suppliers producing forging and casting quality
material as needed to fill customer orders. The Company has two
or more sources of supply for all significant raw materials. The
Company satisfies some of its nickel and titanium requirements
internally by producing titanium alloy from titanium scrap and
"sponge". The Company's powder metal facility and PAM units
produce nickel-based superalloy powder and high quality titanium
ingot. In addition the Company is a participant in the
Australian Joint Venture to produce nickel-based ingots, and the
Company utilizes a portion of the output of the joint venture for
its own use.
The titanium and nickel-based superalloys utilized by the
Company have a relatively high dollar value. Accordingly, the
Company attempts to recover and recycle scrap materials such as
machine turnings, forging flash, scrapped forgings, test pieces
and casting sprues, risers and gates.
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In the event of customer cancellation, the Company may,
under certain circumstances, obtain reimbursement from the
customer if the material cannot be diverted to other uses. Costs
of material already on hand, along with any conversion costs
incurred, are generally billed to the customer unless
transferable to another order. As demand for the Company's
products grew during fiscal year 1995, and prices of raw
materials rose, the Company experienced certain raw material
shortages and production delays which had a negative impact on
overall revenues. The Company's most significant raw materials
consist of nickel and titanium alloys. Its principal suppliers
of nickel alloys include Special Metals Corporation, Teledyne
Allvac Corporation, and Carpenter Technologies Corporation. Its
principal suppliers of titanium alloys are Titanium Metals
Corporation of America, Oregon Metallurgical Corp., and RMI
Titanium, Inc. Each of these suppliers has experienced increases
in the market prices of the elements (e.g., nickel, titanium,
cobalt), that they use in fabricating their products. The
Company often has fixed-price contracts with its suppliers.
Because the Company's suppliers generally have alternative
markets for their products where they may have greater ability to
increase their prices, production has in some cases been diverted
to alternative markets. As a result of the Company's lead time
for deliveries from its suppliers has expanded from 20 weeks to
40 weeks or more in the case of titanium alloys and from 22 weeks
to 44 weeks or more in the case of nickel-based alloys. The
Company has sought price increases and other financial
considerations from its customers which would permit it to
increase the price it pays to suppliers; is considering producing
a greater amount of its requirements in its own facilities,
including the Australian Joint Venture; and has sought
alternative sources of supply such as from the Republics formerly
comprising the Soviet Union. In addition, the Company, its
customers and suppliers have undertaken active programs for
supply chain management which should reduce the overall lead
times.
The Company's results of operations are affected by
significant fluctuations in the prices of raw materials used by
the Company. Many of the Company's customer contracts have fixed
prices for extended time periods and do not provide complete
price adjustments for changes in the prices of raw materials such
as metals. The Company attempts to reduce its risk with respect
to its customer contracts by procuring long-term contracts with
suppliers of metal alloys, but the Company's supply contracts
typically do not completely insulate the Company from
fluctuations in the prices of raw materials. Significant
increases in the prices or scarcity of supply of raw materials
used by the Company may have an adverse impact on the Company's
results of operations.
ENERGY USAGE
The Company is a large consumer of energy. Energy is
required primarily for heating metals to be forged and melting
metals to be cast, melting of ingots, heat-treating materials
after forging and casting, operating forging presses, melting
furnaces, die-sinking, mechanical manipulation and pollution
-14-<PAGE>
<PAGE> 15
control equipment and space heating. The Company uses natural
gas, oil and electricity in varying amounts at its manufacturing
facilities. Supplies of natural gas, oil and electricity have
been sufficient and there is no anticipated shortage for the
future.
EMPLOYEES
As of May 31, 1996, the Company had approximately 3,300
employees of whom 835 were executive, administrative,
engineering, research, sales and clerical and 2,465 production
and craft. Approximately 53% of the production and craft
employees, consisting of employees in the forging business, are
represented by unions. The Company has entered into collective
bargaining agreements with these union employees as follows:
<TABLE>
<CAPTION>
NUMBER OF
EMPLOYEES
COVERED BY
BARGAINING INITIATION EXPIRATION
LOCATION AGREEMENTS DATE DATE
<S> <C> <C> <C>
Grafton and
Worcester,
Massachusetts 512 March 27, 1995 March 30, 1997
Houston, Texas 517 August 7, 1995 August 9, 1998
32 August 7, 1995 September 27, 1998
Livingston, Scotland 193 December 1, 1995 November 30, 1998
51 February 1, 1996 January 31, 1999
Total 1,305
</TABLE>
The Company believes it has good relations with its
employees although it has experienced a one week strike in August
1995 in connection with the negotiation of its current collective
bargaining agreement with the union representing most of its
factory workforce in Houston, Texas. There are no assurances
that the Company will not experience strikes or other work
stoppages, or that acceptable collective bargaining agreements
can be negotiated when the existing collective bargaining
agreements expire.
RESEARCH AND PATENTS
The Company maintains research and development departments
at both Millbury, Massachusetts and Houston, Texas which are
engaged in applied research and development work primarily
relating to the Company's forging operations. The Company works
closely with customers, universities and government technical
agencies in developing advanced forging and casting materials and
processes. The Company's composites operation conducts research
and development related to aerospace composite structures at the
Mojave, California facility. The Company spent approximately
$1.6 million, $2.2 million, $0.7 million and $2.8 million on
applied research and development work during the years ended May
31, 1996 and 1995, the five months ended May 31, 1994, and the
-15-<PAGE>
<PAGE> 16
year ended December 31, 1993, respectively. Although the Company
owns patents covering certain of its processes, the Company does
not consider that these patents are of material importance to the
Company's business as a whole. Most of the Company's products
are manufactured to customer specifications and, consequently,
the Company has few proprietary products.
COMPETITION
Most of the Company's production capabilities are possessed
in varying degrees by other companies in the industry, including
both domestic and foreign manufacturers. Competition is intense
among the companies currently involved in the industry.
Competitive advantages are afforded to those with high quality
products, low cost manufacturing, excellent customer service and
delivery and engineering and production expertise. The Company
considers that it is in a leading position in these areas,
however, there can be no assurance that the Company can maintain
its share of the market for any of its products.
ENVIRONMENTAL REGULATIONS
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. However, it is not possible
to predict accurately the amount or timing of costs of any future
environmental remediation requirements. The Company continues to
design and implement a system of programs and facilities for the
management of its raw materials, production processes and
industrial waste to promote compliance with environmental
requirements. In the fourth quarter of 1991, the Company
recorded a pre-tax charge of $7.0 million with respect to
environmental investigation and remediation costs at the Grafton
facility and a pre-tax charge of $5.0 million against potential
environmental remediation costs upon the eventual sale of the
Worcester facility. During the five month fiscal period ended
May 31, 1994, the Company provided an additional $2.0 million for
potential environmental investigation and remediation costs and
established a $3.5 million purchase accounting reserve related to
the environmental issues at Cameron. As of May 31, 1996,
aggregate environmental reserves amounted to $16.7 million and
have been provided for expected cleanup expenses estimated
between $6.0 million and $7.0 million upon the eventual sale of
the Worcester facility, certain environmental issues at Cameron
amounting to approximately $3.5 million and the exposures noted
in the following paragraphs, which include certain capitalizable
amounts for environmental management and remediation projects.
-16-<PAGE>
<PAGE> 17
Pursuant to an agreement entered into with the U.S. Air
Force upon the acquisition of the Grafton facility from the
federal government in 1982, the Company agreed to make additional
expenditures totalling $20.8 million for environmental management
and remediation at that site during the period 1982 through 1999,
of which $5.9 million remained as of May 31, 1996. These
expenditures will not resolve the Company's obligations to
federal and state regulatory authorities, who are not parties to
the agreement, however, and the Company expects to incur an
additional amount, currently estimated at $3.5 million, to comply
with current federal and state environmental requirements
governing the investigation and remediation of contamination at
the site. In connection with these requirements, the Company is
evaluating and planning for closure of 46 solid waste management
units on the site. In addition, the Company is subject to an
administrative consent order issued by the Environmental
Protection Agency in 1991 that requires the Company to close
several wastewater and water treatment facilities and construct a
Runoff Management Facility to treat process water and stormwater,
which was completed in January 1995 at a cost of $5.5 million.
The Company's Grafton facility is included in the U.S.
Nuclear Regulatory Commission's ("NRC") May 1992 Site
Decommissioning Management Plan for low-level radioactive waste.
In a draft 1992 long-range dose assessment, the NRC determined
that the site should be remediated. As a result, the Company has
challenged the draft assessment, believing it to be flawed. The
Company has provided $1.5 million for the estimated cost of
remediation and disposal if the NRC requires it to take these
actions. However, the Company may be required to dispose of the
wastes at a more expensive disposal facility, which could
increase the remediation and disposal costs beyond the provision
that the Company has established. The Company believes that it
may have meritorious claims for contribution from the U.S. Air
Force in respect of any liabilities it may have for such
remediation.
The Company, together with numerous other parties, has been
named a potentially responsible party ("PRP") under the
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") for the cleanup of the following Superfund sites:
Operating Industries, Monterey Park, California; Cedartown
Municipal Landfill, Cedartown, Georgia; PSC Resources, Palmer,
Massachusetts; the Gemme site, Leicester, Massachusetts; and the
Salco, Inc. site, Monroe, Michigan. The Company believes that
any liability it may incur with respect to these sites will not
be material.
At the Gemme site, a proposed agreement would allocate 33%
of the cleanup costs to the Company. In September 1995, a
consulting firm retained by the PRP group made a preliminary
remediation cost estimate of $1.4 million to $2.8 million. The
Company's insurance company is defending the Company's interests,
and the Company believes that any recovery against the Company
would be offset by recovery of insurance proceeds.
-17-<PAGE>
<PAGE> 18
PRODUCT LIABILITY EXPOSURE
The Company produces many critical engine and structural
parts for commercial and military aircraft. As a result, the
Company faces an inherent business risk of exposure to product
liability claims. The Company maintains insurance against
product liability claims, but there can be no assurance that such
coverage will continue to be available on terms acceptable to the
Company or that such coverage will be adequate for liabilities
actually incurred. The Company has not experienced any material
loss from product liability claims and believes that its
insurance coverage is adequate to protect it against any claims
to which it may be subject.
LEGAL PROCEEDINGS
At May 31, 1996, the Company was involved in certain legal
proceedings arising in the normal course of its business. The
Company believes the outcome of these matters will not have a
material adverse effect on the Company.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table set forth certain biographical
information with respect to executive officers of the Company.
<TABLE>
<CAPTION>
NAME POSITION AGE
<S> <C> <C>
John M. Nelson Chairman of the Board of Directors 65
David P. Gruber President, Chief Executive Officer 55
and Director
Andrew C. Genor Vice President, Chief Financial
Officer and Treasurer 54
Sanjay N. Shah Vice President Corporate Strategy 46
Planning & Business Development
J. Douglas Whelan President, Forging Division 57
Wallace F. Whitney, Jr. Vice President, General Counsel
and Clerk 53
Frank J. Zugel President, Investment Castings
Division 51
</TABLE>
John M. Nelson was elected Chairman of the Company in May
1994 having previously served as the Company's Chairman of the
Board and Chief Executive Officer since May 1991. Prior to that
time, he served for many years in a series of executive positions
with Norton Company, a manufacturer of abrasives and ceramics
based in Worcester, Massachusetts, and was Norton's Chairman and
Chief Executive Officer from 1988 to 1990 and its President and
Chief Operating Officer from 1986 to 1988. Mr. Nelson is also
-18-<PAGE>
<PAGE> 19
Chairman of the Board of Directors of the TJX Companies, Inc., a
Director of Brown & Sharpe Manufacturing Company, Cambridge
Biotechnology, Inc., Commerce Holdings, Inc. and Stocker & Yale,
Inc. He is also Chairman of the Board of Trustees of Worcester
Polytechnic Institute and Vice President of the Worcester Art
Museum.
David P. Gruber was elected President and Chief Executive
Officer of the Company in May 1994 having previously served as
President and Chief Operating Officer since October 1991. Prior
to joining the Company, Mr. Gruber served as Vice President,
Advanced Ceramics, of Compagnie de Saint Gobain (which acquired
Norton Company in 1990), a position he held with Norton Company
since 1987. Mr. Gruber previously held various executive and
technical positions with Norton Company since 1978. He is a
Director of Goulds Pumps Inc., a Trustee of the Manufacturers'
Alliance for Productivity and Innovation, and is a member of the
Mechanical Engineering Advisory Committee of Worcester
Polytechnic Institute.
Andrew C. Genor joined the Company as Vice President, Chief
Financial Officer and Treasurer in January 1995. Prior to
joining the Company, Mr. Genor was Chief Financial and Operating
Officer of HNSX Supercomputers, Inc., a Company he co-founded in
1987 to provide support to supercomputer users and vendors.
Prior to that time, he spent 20 years at Honeywell, Inc.,
including service as Vice President and Corporate Treasurer and
Vice President, Finance, Administration and Business Development
for Honeywell Europe.
Sanjay N. Shah was elected Vice President, Corporate
Strategy Planning and Business Development in May 1994 having
previously served as Vice President and Assistant General Manager
of the Company's Aerospace Forgings Division. He has held a
number of executive, research, engineering and manufacturing
positions at the Company since joining the Company in 1975.
J. Douglas Whelan joined the Company in March 1994 and was
elected President, Forgings in May 1994. Prior to joining the
Company he had served for a short time as the President of Ladish
Co., Inc., a forging Company in Cudahy, Wisconsin, and prior
thereto had been Vice President, Operations of Cameron with which
company and its predecessors he had been employed since 1965 in
various executive capacities. Mr. Whelan is Director of SIFCO
Industries, Inc.
Wallace F. Whitney, Jr. joined the Company in 1991. Prior
to that time, he had been Vice President, General Counsel and
Secretary of Norton Company since 1988, where he had been
employed in various legal capacities since 1973.
Frank J. Zugel joined the Company in June 1993 when he was
elected President-General Manager Investment Castings. Prior to
that time, he had served as President of Stainless Steel
Products, Inc., a metal fabricator for aerospace applications,
since 1992 and before then as Vice President of Pacific
Scientific Company, a supplier of components to the aerospace
industry, since 1988.
-19-<PAGE>
<PAGE> 20
None of the executive officers has any family relationship
with any other executive officer. All officers are elected
annually.
ITEM 2. PROPERTIES
The response to ITEM 2. PROPERTIES incorporates by reference
the paragraphs captioned "Facilities" included in ITEM 1.
BUSINESS.
ITEM 3. LEGAL PROCEEDINGS
The response to ITEM 3. LEGAL PROCEEDINGS incorporates by
reference the paragraphs captioned "Environmental Regulations"
and "Legal Proceedings" included in ITEM 1. BUSINESS.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security
holders during the fourth quarter of the year ended May 31, 1996.
-20-<PAGE>
<PAGE> 21
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Wyman-Gordon Company's common stock, par value $1.00 per
share, is traded in the over-the-counter market and prices of its
common stock appear daily in the NASDAQ national market quotation
system. The table below lists the quarterly price range per
share for the years ended May 31, 1996 and 1995. The quarterly
price range per share is based on the high and low sales prices.
The Company has not paid dividends since the fourth quarter of
1991. At May 31, 1996 there were approximately 1,266 holders of
record of the Company's common stock.
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 1996 MAY 31, 1995
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First quarter $13 3/8 $10 3/8 $ 7 $5 3/4
Second quarter 15 1/8 12 3/8 6 1/2 5 3/8
Third quarter 18 3/4 13 6 3/8 4 3/4
Fourth quarter 18 3/4 15 7/8 12 3/8 5 3/4
</TABLE>
-21-<PAGE>
<PAGE> 22
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data and
other operating information of Wyman-Gordon Company. The
selected financial data in the table are derived from the
consolidated financial statements of Wyman-Gordon Company. The
data should be read in conjunction with the consolidated
financial statements, related notes, and other financial
information included herein.
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
MAY 31, MAY 31,
1996 1995
(000's omitted, except per-share amounts)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA(4):
Revenues $499,624 $396,639
Gross profit 78,132 49,388
Other charges (credits) and
environmental charges(5) 2,717 (710)
Income (loss) from operations 37,699 13,718
Net income (loss)(6) 25,234 1,039
PER SHARE DATA:
Income (loss) per share before
cumulative effect of changes in
accounting principles $ 0.70 $ 0.03
Net income (loss) per share(6) 0.70 0.03
Dividends paid per share - -
Shares used to compute income (loss)
per share 36,128 35,148
BALANCE SHEET DATA
(at end of period)(4):
Working capital $116,534 $ 93,062
Total assets 375,890 369,064
Long-term debt 90,231 90,308
Stockholders' equity 109,943 80,855
OTHER DATA:
Order backlog (at end of period) $598,438 $468,721
EBITDA(7) 53,934 30,188
</TABLE>
-22-<PAGE>
<PAGE> 23
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
MAY 31, DEC. 31,
1994(1) 1993(2)
(000's omitted, except per-share amounts)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA(4):
Revenues $224,694 $239,761
Gross profit 6,878 20,673
Other charges (credits) and
environmental charges(5) 35,003 2,453
Income (loss) from operations (63,657) (8,428)
Net income (loss)(6) (72,403) (60,004)
PER SHARE DATA:
Income (loss) per share before
cumulative effect of changes in
accounting principles $ (4.02) $ (0.95)
Net income (loss) per share(6) (4.02) (3.34)
Dividends paid per share - -
Shares used to compute income (loss)
per share 17,992 17,965
BALANCE SHEET DATA
(at end of period)(4):
Working capital $ 91,688 $ 90,685
Total assets 394,747 286,634
Long-term debt 90,385 90,461
Stockholders' equity 72,483 88,349
OTHER DATA:
Order backlog (at end of period) $389,407 $256,259
EBITDA(7) (45,380) 9,388
</TABLE>
-23-<PAGE>
<PAGE> 24
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
DEC. 31, DEC. 31,
1992 1991(3)
(000's omitted, except per-share amounts)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA(4):
Revenues $298,881 $355,390
Gross profit 55,590 28,362
Other charges (credits) and
environmental charges(5) - 106,464
Income (loss) from operations 27,275 (115,160)
Net income (loss)(6) 21,795 (99,681)
PER SHARE DATA:
Income (loss) per share before
cumulative effect of changes in
accounting principles $ 1.21 $ (5.59)
Net income (loss) per share(6) 1.21 (5.59)
Dividends paid per share - 0.30
Shares used to compute income (loss)
per share 18,078 17,831
BALANCE SHEET DATA
(at end of period)(4):
Working capital $ 96,057 $110,859
Total assets 295,156 339,154
Long-term debt 70,538 90,615
Stockholders' equity 149,516 128,088
OTHER DATA:
Order backlog (at end of period) $309,679 $386,905
EBITDA(7) 45,191 (89,960)
</TABLE>
[FN]
(1) On May 24, 1994, the Company's Board of Directors voted to
change the Company's fiscal year end from one which ended on
December 31 to the Saturday nearest to May 31. For
financial reporting purposes, the year end is stated as May
31. The Statement of Operations Data for the year ended May
31, 1994 is unaudited.
The following table sets forth Summary Consolidated
Statement of Operations Data, which has been derived from
the Company's audited financial statements, for the five
months ended May 31, 1994 (000's omitted, except per share
amounts):
Revenues $ 86,976
Gross profit (4,931)
Other charges (credits) and environmental charges 32,550
Income (loss) from operations (55,805)
Net income (loss) (61,370)
Per share data:
Net income (loss) per share $ (3.32)
Dividends paid per share -
-24-<PAGE>
<PAGE> 25
[FN]
(2) Including Cameron's financial results for the year ended
December 31, 1993, the Company's pro forma unaudited
revenues, loss before the cumulative effect of changes in
accounting principles and net loss would have been
$389,300,000, $(39,300,000) and $(82,300,000), respectively.
(3) In the year ended December 31, 1991, the Company divested
its automotive crankshaft operations. Revenues pro forma
for the exclusion of such operations are $306,600,000 for
the year ended December 31, 1991, assuming the divestiture
of the automotive crankshaft operations had taken place as
of the beginning of the period.
(4) On May 26, 1994, the Company acquired Cameron Forged
Products Company ("Cameron") from Cooper Industries, Inc.
The Selected Consolidated Financial Data include the
accounts of Cameron from the date of the Acquisition.
Cameron's operating results from May 26, 1994 to May 31,
1994 are not material to the consolidated statement of
operations for the year and five month period ended May 31,
1994.
(5) During the year ended December 31, 1991, the Company
incurred charges of approximately $88,000,000 and
$11,500,000 in connection with a restructuring program
primarily at its forging operations and disposition of its
automotive crankshaft forging division, respectively.
Additionally, $7,000,000 was provided with respect to
environmental investigation and remediation costs at one of
the Company's facilities.
In November 1993, the Company sold substantially all of the
net assets and business operations of Wyman-Gordon
Composites, Inc. and recorded a non-cash charge on the sale
of $2,500,000.
In May 1994, the Company recorded charges of $6,500,000
related to the closing of a castings facility, $24,100,000
related to restructuring and integration of Cameron and
$2,000,000 for environmental investigation and remediation
costs.
During the year ended May 31, 1996, the Company provided
$1,900,000 in order to recognize its 25.0% share of the net
losses of its Australian Joint Venture and to reduce the
carrying value of such joint venture. Additionally, the
Company provided $800,000 to reduce the carrying value of
the cash surrender value of certain company-owned life
insurance policies.
(6) Includes a charge of $43,000,000 or $2.39 per share in
fiscal year 1993 relating to the Company's adoption of SFAS
106, "Employers' Accounting for Postretirement Benefits
other than Pensions" ("SFAS 106") and SFAS 109, "Accounting
for Income Taxes" ("SFAS 109"). SFAS 106 requires
postretirement benefit obligations to be accounted for on an
accrual basis rather than the "expense as incurred" basis
-25-<PAGE>
<PAGE> 26
[FN]
formerly used. The Company elected to recognize the
cumulative effect of these accounting changes in the year
ended December 31, 1993.
(7) EBITDA is defined as earnings before interest, taxes,
depreciation, amortization and changes in accounting
principles. EBITDA is presented because it may be used as
one indicator of a Company's ability to service debt. The
Company believes that EBITDA, while providing useful
information, should not be considered in isolation or as a
substitute for net income as an indicator of operating
performance or as an alternative to cash flow as a measure
of liquidity, in each case determined in accordance with
generally accepted accounting principles.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
YEAR ENDED MAY 31, 1996 ("FISCAL YEAR 1996") COMPARED TO YEAR
ENDED MAY 31, 1995 ("FISCAL YEAR 1995")
The Company's revenues increased 26.0% to $499.6 million in
fiscal year 1996 from $396.6 million in fiscal year 1995 due to
higher sales volume in the Company's aerospace, power generation
and energy and other markets. These sales volume increases
during fiscal year 1996 as compared to fiscal year 1995 are
reflected by market as follows: a $62.6 million (20.8%) increase
in aerospace, a $26.1 million (39.0%) increase in power
generation and energy and a $14.3 million (48.4%) increase in
other. The cause of the strength in these markets was higher
demands for spares from aerospace engine prime contractors and
higher extruded pipe shipments to energy customers. The higher
spares demand will continue to be reflected in fiscal year 1997
revenues. Revenues in fiscal year 1995 and, to a lesser extent,
in fiscal year 1996 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 $598.4 million at May
31, 1996 from $468.8 million at May 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 15.6% in fiscal year 1996,
as compared to 12.5% in fiscal year 1995. This improvement
resulted from higher production volumes and productivity gains
resulting from the Company's 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.
Additionally, continuing realization of cost reductions from
synergies associated with the integration of Cameron contributed
to this higher ratio. These favorable trends were offset
somewhat by production delays resulting from the raw material
shortages experienced during fiscal years 1995 and 1996.
-26-<PAGE>
<PAGE> 27
Additionally, in the second half of fiscal year 1996, the higher
spares demand referred to above 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 price increases by the Company's vendors 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 benefited from LIFO credits of $4.9 million in
fiscal year 1996 as compared to $6.2 million in fiscal year 1995.
Selling, general and administrative expenses increased 3.7%
to $37.7 million in fiscal year 1996 from $36.4 million in
fiscal year 1995. Selling, general and administrative expenses
improved as a percentage of revenues to 7.6% in fiscal year 1996
from 9.2% in fiscal year 1995. The improvement as a percent of
revenues is the result of general company-wide cost containment
efforts, cost reductions associated with the integration of
Cameron with the Company's forgings operations, and higher
revenues.
Other charges (credits) includes charges of $1.9 million and
$1.4 million in fiscal years 1996 and 1995, respectively, 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. Additionally, other charges (credits) includes a
charge of $0.8 million in fiscal year 1996 to reduce the carrying
value of the cash surrender value of certain company-owned life
insurance policies.
The Company recognized a $2.1 million credit in fiscal year
1995 after determining that Cameron integration costs estimates,
including severance and other personnel costs, could be lowered.
The Company believes that most of the integration activities have
been completed or adequate reserves have been provided.
Interest expense increased to $11.3 million in fiscal year
1996 from $11.0 million in fiscal year 1995 due to higher
interest on borrowings on the Company's U.K. Credit Agreement and
lower amounts of capitalizable interest.
Miscellaneous, net expense was $1.2 million in fiscal year
1996 and $1.7 million in fiscal year 1995. Miscellaneous, net in
fiscal year 1996 includes a $0.3 million gain on the sale of
marketable securities.
-27-<PAGE>
<PAGE> 28
The Company recorded no provision for income taxes in fiscal
years 1996 and 1995. (See "Liquidity and Capital Resources").
Net income was $25.2 million, or $.70 per share, in fiscal
year 1996 compared to a net income of $1.0 million, or $.03 per
share, in fiscal year 1995. The $24.2 million improvement
results from the items described above.
YEAR ENDED MAY 31, 1995 ("FISCAL YEAR 1995") COMPARED TO YEAR
ENDED MAY 31, 1994 ("FISCAL YEAR 1994")
The Company's results of operations for fiscal year 1995
include the results of Cameron which the Company acquired from
Cooper in May 1994. As a result of the acquisition, the Company
has realized substantial operating and processing efficiencies
through the consolidation of systems and facilities and the
reduction of personnel performing duplicate functions.
The Company's revenues increased 76.5% to $396.6 million in
fiscal year 1995 from $224.7 million in fiscal year 1994.
Approximately $151.0 million of this increase was due to the
acquisition of Cameron, which provides a broader revenue base in
the Company's traditional markets of commercial and defense
aerospace and provides diversification into the power generation
market. The remainder of the revenue increase was due to higher
sales volume at the Company's forgings and castings divisions.
The increase in revenues was limited by raw material shortages
and production delays caused by capacity constraints of the
Company's suppliers. Although this situation improved during the
second half of fiscal year 1995, it had a negative impact on
overall revenues. Additionally, fiscal year 1994 contained $4.7
million of revenues from Wyman-Gordon Composites, Inc. which was
sold by the Company during November 1993.
The Company's gross margins were 12.5% in fiscal year 1995,
as compared to 3.1% in fiscal year 1994. Higher production
volumes, particularly in the Company's castings division,
productivity gains in factory operations and realization of
certain synergies associated with the integration of Cameron with
the Company's forgings operations contributed to this higher
ratio. In addition, the gross margins at the Company's
composites divisions for fiscal year 1995 were well above fiscal
year 1994 levels. These favorable trends were offset somewhat by
production delays resulting from raw material shortages
experienced most significantly in the first half of fiscal year
1995. Gross margins benefited from LIFO credits of $6.2 million
in fiscal year 1995 as compared to $8.1 million in fiscal year
1994. Gross margin in fiscal year 1994 was negatively impacted
by significant charges totalling $8.7 million related mainly to a
change in accounting estimate of workers' compensation of $4.2
million and excess inventories of $2.8 million.
Selling, general and administrative expenses increased 2.4%
to $36.4 million in fiscal year 1995 from $35.5 million in fiscal
year 1994. Selling, general and administrative expenses improved
as a percentage of revenues to 9.2% in fiscal year 1995 from
15.8% in fiscal year 1994. Fiscal year 1994 selling, general and
administrative expenses include $7.6 million of significant
-28-<PAGE>
<PAGE> 29
charges. Absent the significant charges, fiscal year 1994
selling, general and administrative expenses were 12.4% of
revenues. The improvement as a percent of revenues is the result
of certain savings associated with the integration of Cameron
with the Company's forgings operations, and higher revenues.
In fiscal year 1994, the Company recognized other charges of
$35.0 million which included $24.1 million for Cameron
integration costs, $6.5 million for castings division
restructuring costs, $2.0 million for anticipated environmental
charges, and $2.4 million related to the disposition of
production facilities. The Company recognized a $2.1 million
credit in fiscal year 1995 after determining that Cameron
integration costs, including severance and other personnel costs
could be lowered. The Company believes that most of the
integration activities have been completed or adequate reserves
have been provided. As of May 31, 1996, unused reserves for
Cameron integration costs and direct costs associated with the
Acquisition amount to $8.6 million.
Other charges (credits) in fiscal year 1995 also includes a
charge of $1.4 million to recognize the Company's 25% share of
the net losses of its Australian Joint Venture and to reduce the
carrying value of such joint venture.
Interest expense decreased 1.0% to $11.0 million in fiscal
year 1995 from $11.1 million in fiscal year 1994. Fiscal year
1995 interest expense includes higher financing fees associated
with the establishment in May 1994 of a receivables backed credit
facility. Fiscal year 1994 interest expense includes the write-
off of financing fees relating to the Company's prior credit
facility amounting to $1.2 million.
Miscellaneous, net was an expense of $1.7 million in fiscal
year 1995 and income of $2.4 million in fiscal year 1994.
Miscellaneous, net in fiscal year 1994 includes a $3.3 million
gain on the sale of marketable securities.
The Company recorded no provision for income taxes in fiscal
years 1995 and 1994. (See "Liquidity and Capital Resources")
Net income was $1.0 million, or $.03 per share, in fiscal
year 1995 compared to a net loss of ($72.4) million, or ($4.02)
per share, in fiscal year 1994. The $73.4 million improvement
results from the items described above.
LIQUIDITY AND CAPITAL RESOURCES
The increase in the Company's cash of $16.3 million to $30.1
million as of May 31, 1996 from $13.9 million as of May 31, 1995
resulted primarily from cash provided by operating activities of
$35.3 million, offset by capital expenditures of $18.3 million.
The increase in the Company's working capital of $23.4
million to $116.5 million as of May 31, 1996 from $93.1 million
as of May 31, 1995 resulted primarily from net income of $25.2
million, a decrease in other assets of $4.5 million, net
-29-<PAGE>
<PAGE> 30
reductions of fixed assets of $1.0 million, a decrease in
intangible assets of $5.4 million, net proceeds from the issuance
of Common Stock of $3.2 million and other changes in
stockholders' equity of $0.7 million, offset by a decrease in
long-term benefit liabilities of $11.1 million, a decrease in
deferred taxes and other of $4.0 million and a decrease in long-
term restructuring, integration, disposal and environmental of
$1.4 million.
Earnings before interest, taxes, depreciation, amortization
and changes in accounting principles ("EBITDA") increased $23.7
million to $53.9 million in the fiscal year 1996 from $30.2
million in fiscal year 1995. This improvement reflects primarily
the $24.2 million improvement in the Company's net income in
fiscal year 1996 as compared to fiscal year 1995.
As of May 31, 1996, the Company estimates the remaining cash
requirements for the integration of Cameron and direct costs
associated with the acquisition of Cameron to be $4.0 million,
and expects to spend approximately $1.8 million during its fiscal
year ending May 31, 1997 ("fiscal year 1997") on movement of
machinery and equipment and $0.7 million on severance in fiscal
year 1997 (see Footnote F to the Consolidated Financial
Statements).
As of May 31, 1996, the Company expects to spend $1.2
million in fiscal year 1997 and $15.5 million thereafter on non-
capitalizable environmental activities. 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, $18.7 million, $2.4
million and $13.9 million in the fiscal years 1996 and 1995, the
five months ended May 31, 1994 and the year ended December 31,
1993, respectively. Capital expenditures in the foreseeable
future are expected to increase from fiscal year 1996 levels.
During fiscal year 1997, the Company expects to reinstall a
20,000 ton multi-ram hydraulic forging press in its Houston,
Texas facility. This will facilitate meeting increasing customer
demands, providing added capacity for aerospace and power and
energy products. Completion of the reinstallation is expected by
May, 1997 and capital expenditures of $5.0 million are
anticipated.
On May 20, 1994, the Company entered into a revolving
receivables-backed credit facility (the "Receivables Financing
Program") among the Company, certain subsidiaries and Wyman-
Gordon Company ("WGRC") and a Revolving Credit Agreement dated as
of May 20, 1994 among WGRC and the financial institutions party
thereto. WGRC is a separate corporate entity from the Company
and its other subsidiaries with its own separate creditors. WGRC
purchases accounts receivable from the Company and certain other
selling subsidiaries ("Sellers") and, using those receivables as
collateral, borrows from the lending banks. WGRC's creditors
-30-<PAGE>
<PAGE> 31
have a claim on its assets prior to those assets becoming
available to any creditors of any of the Sellers. Borrowings are
subject to a formula which is dependent upon certain reserves
relating to the accounts receivable purchased by WGRC and bear
interest at fluctuating rates tied to Eurodollar rates or the
lending banks' prime rates. The aggregate maximum borrowing
capacity under the Receivables Financing Program is $65.0
million, with a letter of credit sub-limit of $35.0 million. The
term of the Receivables Financing Program is five years, with an
evergreen feature. As of May 31, 1996, under this credit
facility, the total availability based on eligible receivables
was $47.9 million, there were no borrowings and letters of credit
amounting to $9.4 million were outstanding.
Wyman-Gordon Limited, the Company's subsidiary located in
Livingston, Scotland, entered into a credit agreement effective
February 20, 1996 (the "U.K. Credit Agreement"). The maximum
borrowing capacity under the U.K. Credit Agreement is 3.0 million
pounds sterling with a separate letter of credit or guarantee
limit of 2.9 million pounds sterling. As of May 31, 1996, there
were no borrowings outstanding and the subsidiary had issued 0.7
million pounds sterling or $1.0 million of letters of credit or
guarantees under the U.K. Credit Agreement.
The primary sources of liquidity available to the Company in
fiscal year 1997 to fund operations, anticipated expenditures in
connection with the integration of Cameron, planned capital
expenditures and planned environmental expenditures include
available cash ($30.1 million as of May 31, 1996), borrowing
availability under the Company's Receivables Financing Program,
cash generated by operations including 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 for the foreseeable
future.
The Company's current plans to further 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.
-31-<PAGE>
<PAGE> 32
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 with its customers generally provide for
fixed prices for finished products with limited protection
against cost increases. The Company would therefore be affected
by changes in the prices of 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, TAX AND OTHER MATTERS
In March 1995, the Financial Accounting Standards Board
issued Statement 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 in fiscal 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 Company has not determined the
impact of adoption on its financial position or results of
operations.
In December 1995, the Financial Accounting Standards Board
Issued Statement No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") which must be adopted by the Company
no later than fiscal year 1997. SFAS 123 prescribes the
accounting and disclosure of compensation related to all stock-
based awards to employees. The Company accounts for its stock
compensation arrangements under the provisions of APB 25,
"Accounting for Stock Issued to Employees," and intends to
continue to do so.
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits" ("SFAS 112"). This standard
provides that the Company follow an accrual method of accounting,
rather than the as-incurred basis formerly used for benefits
payable to employees when they leave the Company for reasons
other than retirement. The adoption, including the cumulative
effect, has not had a material affect on earnings or the
financial position of the Company.
As of May 31, 1996, the Company has net operating loss
carryforwards ("NOLs") of approximately $86.0 million, which
begin expiring in year 2006. The Company is seeking to utilize a
substantial portion of such NOLs to obtain a refund in excess of
$20.0 million of prior years' taxes. To the extent that the
Company is not successful in recovering a refund of prior years'
taxes, the NOLs will be available to offset future taxable
income, if any. A reasonable estimation of the potential
recovery cannot be made at this time and, accordingly, no
adjustment has been made in the financial statements with respect
to the claim for such refund.
-32-<PAGE>
<PAGE> 33
The Company's ability to utilize its NOLs in the future may
be affected by Section 382 of the Internal Revenue Code of 1986,
as amended (the "Code"), which generally limits the use of a
corporation's NOLs following a more than 50 percentage point
change in the ownership of the corporation's equity within any
three-year period (an "ownership change"). An ownership change
could result in the imposition of limitations on the Company's
ability to offset future taxable income with the Company's NOL's.
The Company for several years maintained a program of
company-owned life insurance ("COLI") for certain of its
employees. As of May 31, 1996, the Company is named as
beneficiary on COLI policies with an aggregate cash surrender
value of approximately $6.6 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.
The Company has implemented structural changes designed to
improve its cost structure and increase efficiency and
productivity at its Houston, Texas facility. The Company is now
implementing similar changes at its Grafton, Massachusetts
facility, which has been operating at a loss in recent years.
Rationalization and cost reduction programs include additional
transfers of product and workforce reductions at the Company's
Grafton facility. Additionally, the Company is evaluating its
position with respect to its production of aluminum aerospace
structural components produced at its Grafton facility. As a
result of these initiatives, the Company may implement further
restructuring measures which could result in write-offs and
reduced earnings or losses.
"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. See Part I, Item 1 - "Markets
and Products - Aerospace", "Customers", "Marketing and Sales",
"Raw Materials", "Employees", "Competition", "Environmental
Regulations" and "Product Liability Exposure."
-33-<PAGE>
<PAGE> 34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF MANAGEMENT
To the Stockholders of Wyman-Gordon Company:
We have prepared the financial statements included herein
and are responsible for all information and representations
contained therein. Such financial information was prepared in
accordance with generally accepted accounting principles
appropriate in the circumstances, based on our best estimates and
judgements.
Wyman-Gordon maintains accounting and internal control
systems which are designed to provide reasonable assurance that
assets are safeguarded from loss or unauthorized use and to
produce records adequate for preparation of financial
information. These systems are established and monitored in
accordance with written policies which set forth management's
responsibility for proper internal accounting controls and the
adequacy of these controls subject to continuing independent
review by our external auditors, Ernst & Young LLP.
To assure the effective administration of internal control,
we carefully select and train our employees, develop and
disseminate written policies and procedures and provide
appropriate communication channels. We believe that it is
essential for the Company to conduct its business affairs in
accordance with the highest ethical standards.
The financial statements have been audited by Ernst & Young
LLP, Independent Auditors, in accordance with generally accepted
auditing standards. In connection with their audit, Ernst &
Young LLP has developed an understanding of our accounting and
financial controls, and conducted such tests and related
procedures as it considers necessary to render their opinion on
the financial statements.
The financial data contained in these financial statements
were subject to review by the Audit Committee of the Board of
Directors. The Audit Committee meets periodically during the year
with Ernst & Young LLP and with management to review accounting,
auditing, internal control and financial reporting matters.
We believe that our policies and procedures provide
reasonable assurance that operations are conducted in conformity
with applicable laws and with our commitment to a high standard
of business conduct.
/S/ DAVID P. GRUBER
David P. Gruber
President and
Chief Executive Officer
/S/ ANDREW C. GENOR
Andrew C. Genor
Vice President, Chief Financial
Officer and Treasurer
-34-<PAGE>
<PAGE> 35
WYMAN-GORDON COMPANY
REPORT OF INDEPENDENT AUDITORS
To the Stockholders of Wyman-Gordon Company:
We have audited the accompanying consolidated balance sheets
of Wyman-Gordon Company and subsidiaries as of May 31, 1996 and
1995, and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended May 31,
1996 and 1995, for the five months ended May 31, 1994, and for
the year ended December 31, 1993. Our audits also included the
financial statement schedule of Wyman-Gordon Company listed in
Item 14(a). These consolidated financial statements and schedule
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
consolidated financial position of Wyman-Gordon Company and
subsidiaries at May 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for the years
ended May 31, 1996 and 1995, for the five months ended May 31,
1994, and for the year ended December 31, 1993 in conformity with
generally accepted accounting principles. Also, in our opinion,
the financial statement schedule, when considered in relation to
the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
As discussed in Notes I and J to the consolidated financial
statements, in 1993 the Company changed its method of accounting
for postretirement benefits other than pensions and income taxes.
/S/ERNST & YOUNG LLP
Boston, Massachusetts
June 24, 1996
-35-<PAGE>
<PAGE> 36
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR YEAR YEAR
ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31,
1996 1995 1994
(Unaudited)
(000's omitted, except per share data)
<S> <C> <C> <C>
Revenue $499,624 $396,639 $224,694
Cost of goods sold 421,492 347,251 217,816
Selling, general and
administrative expenses 37,716 36,380 35,532
Other charges (credits) 2,717 (710) 33,003
Environmental charge - - 2,000
461,925 382,921 288,351
Income (loss) from operations 37,699 13,718 (63,657)
Other deductions (income):
Interest expense 11,272 11,027 11,135
Miscellaneous, net 1,193 1,652 (2,389)
12,465 12,679 8,746
Income (loss) before cumulative
effect of changes in accounting
principles 25,234 1,039 (72,403)
Cumulative effect of changes in
accounting principles - - -
Net income (loss) $ 25,234 $ 1,039 $(72,403)
INFORMATION PER SHARE
Income (loss) before cumulative
effect of changes in accounting
principles $ .70 $ .03 $ (4.02)
Cumulative effect of changes in
accounting principles - - -
Net income (loss) $ .70 $ .03 $ (4.02)
Shares used to compute earnings
per share 36,128 35,148 17,992
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-36-<PAGE>
<PAGE> 37
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
<TABLE>
<CAPTION>
FIVE
MONTHS YEAR
ENDED ENDED
MAY 31, DECEMBER 31,
1994 1993
(000's omitted, except per share data)
<S> <C> <C>
Revenue $ 86,976 $239,761
Cost of goods sold 91,907 219,088
Selling, general and
administrative expenses 18,324 26,648
Other charges (credits) 30,550 2,453
Environmental charge 2,000 -
142,781 248,189
Income (loss) from operations (55,805) (8,428)
Other deductions (income):
Interest expense 5,383 10,823
Miscellaneous, net 182 (2,247)
5,565 8,576
Income (loss) before cumulative
effect of changes in accounting
principles (61,370) (17,004)
Cumulative effect of changes in
accounting principles - (43,000)
Net income (loss) $(61,370) $(60,004)
INFORMATION PER SHARE
Income (loss) before cumulative
effect of changes in accounting
principles $ (3.32) $ (.95)
Cumulative effect of changes in
accounting principles - (2.39)
Net income (loss) $ (3.32) $ (3.34)
Shares used to compute earnings
per share 18,490 17,965
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-37-<PAGE>
<PAGE> 38
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 30,134 $ 13,856
Accounts receivable 94,928 79,219
Inventories 65,873 78,813
Prepaid expenses 14,338 15,671
Total current assets 205,273 187,559
Property, plant and equipment, net 140,408 141,397
Intangible assets 19,899 25,295
Other assets 10,310 14,813
Total assets $375,890 $369,064
LIABILITIES
Borrowings due within one year $ 77 $ 3,915
Accounts payable 40,484 34,729
Accrued liabilities and other 48,178 55,853
Total current liabilities 88,739 94,497
Restructuring, integration, disposal
and environmental 18,275 19,648
Long-term debt 90,231 90,308
Pension liability 1,698 9,589
Deferred income taxes and other 17,717 21,699
Postretirement benefits 49,287 52,468
STOCKHOLDERS' EQUITY
Preferred stock, no par value: Authorized
5,000,000 shares; none issued - -
Common stock, par value $1.00 per share:
Authorized 70,000,000 shares; issued
37,052,720 37,053 37,053
Capital in excess of par value 33,291 40,118
Retained earnings 64,934 39,700
Equity adjustments 719 63
Treasury stock, 1,480,448 and 2,044,178
shares at May 31, 1996 and 1995 (26,054) (36,079)
Total stockholders' equity 109,943 80,855
Total liabilities and stockholders'
equity $375,890 $369,064
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-38-<PAGE>
<PAGE> 39
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 25,234 $ 1,039
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Depreciation and amortization 17,428 18,122
Loss from disposal of production
facilities - -
Environmental and other charges (credits) 846 (2,100)
Losses of equity investment 1,871 1,390
Cumulative effect of changes in accounting
principles - -
Changes in assets and liabilities:
Accounts receivable (15,709) (2,200)
Inventories 12,940 (13,076)
Prepaid expenses and other assets 3,118 11,542
Accrued restructuring, integration,
disposal and environmental (6,837) (14,646)
Income and other taxes 3,631 628
Accounts payable and accrued and other
liabilities (7,250) 7,073
Net cash provided (used) by operating
activities 35,272 7,772
INVESTING ACTIVITIES:
Investment in acquired subsidiaries - (3,591)
Capital expenditures (18,331) (18,714)
Deferred program costs - -
Proceeds from sale of fixed assets 1,718 1,563
Other, net (1,664) (415)
Net cash provided (used) by investing
activities (18,277) (21,157)
FINANCING ACTIVITIES:
Cash received from (paid to) Cooper
Industries for factored accounts
receivable - (20,561)
Issuance (payment) of debt (3,915) 3,761
Net proceeds from issuance of common
stock 3,198 1,862
Net cash provided (used) by financing
activities (717) (14,938)
Increase (decrease) in cash 16,278 (28,323)
Cash, beginning of period 13,856 42,179
Cash, end of period $ 30,134 $ 13,856
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-39-<PAGE>
<PAGE> 40
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
FIVE
YEAR MONTHS
ENDED ENDED
MAY 31, MAY 31,
1994 1994
(000's omitted) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $(72,403) $(61,370)
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Depreciation and amortization 15,888 6,782
Loss from disposal of production facilities 2,453 -
Environmental and other charges (credits) 32,550 32,550
Losses of equity investment - -
Cumulative effect of changes in accounting
principles - -
Changes in assets and liabilities net of
purchase price activity:
Accounts receivable 9,545 3,228
Inventories 16,219 4,215
Prepaid expenses and other assets 5,078 2,255
Accrued restructuring, integration,
disposal and environmental (8,224) (1,352)
Income and other taxes 386 1,594
Accounts payable and accrued and other
liabilities 5,515 6,429
Net cash provided (used) by operating
activities 7,007 (5,669)
INVESTING ACTIVITIES:
Investment in acquired subsidiaries (3,450) (3,450)
Capital expenditures (11,888) (2,404)
Deferred program costs 16,408 16,063
Proceeds from sale of fixed assets 4,407 -
Other, net 4,071 2,137
Net cash provided (used) by investing
activities 9,548 12,346
FINANCING ACTIVITIES:
Cash received from (paid to) Cooper
Industries for factored accounts
receivable 20,561 20,561
Issuance (payment) of debt (77) (77)
Net proceeds from issuance of common
stock 572 201
Net cash provided (used) by financing
activities 21,056 20,685
Increase (decrease) in cash 37,611 27,362
Cash, beginning of period 4,568 14,817
Cash, end of period $ 42,179 $ 42,179
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-40-<PAGE>
<PAGE> 41
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
YEAR
ENDED
DEC. 31,
1993
(000's omitted)
<S> <C>
OPERATING ACTIVITIES:
Net income (loss) $(60,004)
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation and amortization 15,569
Loss from disposal of production facilities 2,453
Environmental and other charges (credits) -
Losses of equity investment -
Cumulative effect of changes in accounting
principles 43,000
Changes in assets and liabilities net of
purchase price activity:
Accounts receivable 15,139
Inventories 8,474
Prepaid expenses and other assets (7,114)
Accrued restructuring, integration,
disposal and environmental (9,653)
Income and other taxes (998)
Accounts payable and accrued and other
liabilities 311
Net cash provided (used) by operating
activities 7,177
INVESTING ACTIVITIES:
Investment in acquired subsidiaries -
Capital expenditures (13,866)
Deferred program costs (22)
Proceeds from sale of fixed assets 4,738
Other, net 1,650
Net cash provided (used) by investing
activities (7,500)
FINANCING ACTIVITIES:
Cash received from (paid to) Cooper
Industries for factored accounts
receivable -
Issuance (payment) of debt 14,603
Net proceeds from issuance of common
stock 537
Net cash provided (used) by financing
activities 15,140
Increase (decrease) in cash 14,817
Cash, beginning of period -
Cash, end of period $ 14,817
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-41-<PAGE>
<PAGE> 42
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
COMMON STOCK CAPITAL IN
SHARES PAR EXCESS OF RETAINED
ISSUED VALUE PAR VALUE EARNINGS
(000's omitted)
<S> <C> <C> <C> <C>
Balance, December 31, 1992 20,403 $20,403 $16,049 $160,035
Net loss (60,004)
Stock plans (984)
Savings/Investment Plan
match (769)
Pension equity adjustment
Balance, December 31, 1993 20,403 20,403 14,296 100,031
Net loss (61,370)
Stock plans (429)
Savings/Investment Plan
match (171)
Pension equity adjustment
Issuance of common stock 16,500 16,500 30,188
Balance, May 31, 1994 36,903 36,903 43,884 38,661
Net income 1,039
Stock plans 150 150 (2,354)
Savings/Investment Plan
match (1,412)
Pension equity adjustment
Currency translation
Balance, May 31, 1995 37,053 37,053 40,118 39,700
Net income 25,234
Stock plans (6,486)
Savings/Investment Plan
match (341)
Pension equity adjustment
Currency translation
Balance, May 31, 1996 37,053 $37,053 $33,291 $64,934
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-42-<PAGE>
<PAGE> 43
Wyman-Gordon Company and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (Continued)
<TABLE>
<CAPTION>
EQUITY TREASURY
ADJUSTMENTS STOCK TOTALS
(000's omitted)
<S> <C> <C> <C>
Balance, December 31, 1992 $ (2,323) $(44,648) $149,516
Net loss (60,004)
Stock plans 1,250 266
Savings/Investment Plan
match 1,040 271
Pension equity adjustment (1,700) (1,700)
Balance, December 31, 1993 (4,023) (42,358) 88,349
Net loss (61,370)
Stock plans 546 117
Savings/Investment Plan
match 255 84
Pension equity adjustment (1,385) (1,385)
Issuance of common stock 46,688
Balance, May 31, 1994 (5,408) (41,557) 72,483
Net income 1,039
Stock plans 3,355 1,151
Savings/Investment Plan
match 2,123 711
Pension equity adjustment 3,952 3,952
Currency translation 1,519 1,519
Balance, May 31, 1995 63 (36,079) 80,855
Net income 25,234
Stock plans 8,626 2,140
Savings/Investment Plan
match 1,399 1,058
Pension equity adjustment 1,403 1,403
Currency translation (747) (747)
Balance, May 31, 1996 $ 719 $(26,054) $109,943
</TABLE>
The accompanying Notes to the Consolidated Financial
Statements are an integral part of these financial statements.
-43-<PAGE>
<PAGE> 44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company is engaged principally in the design,
engineering, production and marketing of high-technology forged
and investment cast metal and composite components used for a
wide variety of aerospace and power generation applications.
On May 24, 1994, the Company's Board of Directors voted to
change the Company's fiscal year end from one which ended on
December 31 to one which ends on the Saturday nearest to May 31.
The Company maintains its books using a 52/53 week year ending on
the Saturday nearest to May 31. For purposes of the consolidated
financial statements, the year-end is stated at May 31. The year
ended May 31, 1996 consisted of 52 weeks and each of the quarters
in fiscal 1996 consisted of 13 weeks. The year ended May 31,
1995 consisted of 53 weeks with the additional week included in
the first quarter. The year ended May 31, 1997 will consist of
52 weeks.
On May 26, 1994, the Company acquired Cameron Forged
Products Company ("Cameron") from Cooper Industries. The
accompanying consolidated financial statements include the
accounts of Cameron from the date of the acquisition. Cameron's
operating results from May 26, 1994 to May 31, 1994 are not
material to the consolidated statement of operations for the five
month period ended May 31, 1994. The unaudited statement of
operations and cash flows for the year ended May 31, 1994 are
presented for comparative purposes only.
PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of the Company and all majority-
owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
REVENUE RECOGNITION: Sales and income are recognized at the time
products are shipped.
USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
RECLASSIFICATIONS: Where appropriate, prior year amounts have
been reclassified to permit comparison.
CASH AND CASH EQUIVALENTS: Cash equivalents include short-term
investments with maturities of less than three months at the time
of investment.
INVENTORIES: Inventories are valued at both the lower of first-
in, first-out (FIFO) cost or market, or for certain forgings raw
material and work-in-process inventories, the last-in, first-out
(LIFO) method. On certain orders, usually involving lengthy raw
material procurement and production cycles, progress payments are
reflected as a reduction of inventories. Product repair costs
are expensed as incurred.
-44-<PAGE>
<PAGE> 45
LONG-TERM, FIXED PRICE CONTRACTS: A substantial portion of the
Company's revenues is derived from long-term, fixed price
contracts with major engine and aircraft manufacturers. These
contracts are typically "requirements" contracts under which the
purchaser commits to purchase a given portion of its requirements
of a particular component from the Company. Actual purchase
quantities are typically not determined until shortly before the
year in which products are to be delivered. Losses on such
contracts are provided when available information indicates that
the sales price is less than a fully allocated cost projection.
DEPRECIABLE ASSETS: Property, plant and equipment, including
significant renewals and betterments, are capitalized at cost and
are depreciated on the straight-line method. Generally,
depreciable lives range from 10 to 20 years for land
improvements, 10 to 40 years for buildings and 5 to 15 years for
machinery and equipment. Tooling production costs are primarily
classified as machinery and equipment and are capitalized at cost
less associated reimbursement from customers and depreciated over
5 years. Depreciation expense amounted to $16,723,000,
$17,417,000, $6,058,000, and $14,421,000 in the years ended May
31, 1996 and 1995, the five months ended May 31, 1994 and the
year ended December 31, 1993, respectively.
BANK FEES: Bank fees and related costs of obtaining credit
facilities are recorded as other assets and amortized over the
term of the facilities.
NET INCOME (LOSS) PER SHARE: Per-share data are computed based
on the weighted average number of common shares outstanding
during each year. Common stock equivalents related to
outstanding stock options are included in per-share computations
unless their inclusion would be antidilutive.
CONCENTRATION OF CREDIT RISK: Financial instruments that
potentially subject the Company to concentration of credit risk
consist primarily of temporary cash investments and trade
receivables. The Company restricts investment of temporary cash
investments to financial institutions with high credit standing.
The Company has approximately 900 active customers. However, the
Company's accounts receivable are concentrated with a small
number of Fortune 500 companies with whom the Company has long-
standing relationships. Accordingly, management considers credit
risk to be low. Five customers accounted for 47.3% and 50.0% of
the Company's revenues during the years ended May 31, 1996 and
1995, 50.6% for the five months ended May 31, 1994 and 55.6% for
the year ended December 31, 1993. General Electric Company
("GE")and United Technologies Corporation ("UT") each accounted
for more than 10% of the Company's revenues as follows:
-45-<PAGE>
<PAGE> 46
<TABLE>
<CAPTION>
($000's omitted)
FIVE
YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, DEC 31,
1996 % 1995 % 1994 % 1993 %
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GE $134,830 27 $101,261 26 $17,226 20 $55,585 23
UT 53,116 11 58,873 15 13,930 16 37,060 16
</TABLE>
CURRENCY TRANSLATION: For foreign operations, the local currency
is the functional currency. Assets and liabilities are
translated at year-end exchange rates, and statement of
operations items are translated at the average exchange rates for
the year. Translation adjustments are reported in equity
adjustments as a separate component of stockholders' equity which
also includes exchange gains and losses on certain intercompany
balances of a long-term investment nature.
RESEARCH AND DEVELOPMENT: Research and development expenses,
including related depreciation, amounted to $1,630,000,
$2,213,000, $733,000, and $2,778,000 for the years ended May 31,
1996 and 1995, five months ended May 31, 1994 and for the year
ended December 31, 1993, respectively.
INTANGIBLE ASSETS: Intangible assets consist primarily of costs
of acquired businesses in excess of net assets acquired and are
amortized on a straight line basis over periods up to 35 years.
On a periodic basis, the Company estimates the future
undiscounted cash flows of the businesses to which the costs of
acquired businesses in excess of net assets acquired relate in
order to ensure that the carrying value of such intangible asset
has not been impaired.
ACCOUNTING FOR STOCK-BASED COMPENSATION: The Company accounts
for its stock compensation arrangement under the provisions of
APB25, "Accounting for Stock Issued to Employees," and intends to
continue to do so.
IMPAIRMENT OF LONG-LIVED ASSETS: The Financial Accounting
Standards Board issued Statement of Financial Accounting
Standards No. 121 ("SFAS 121"), Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
SFAS 121 establishes, among other things, accounting standards
for the impairment of long-lived assets and certain identifiable
intangibles. The Company will adopt the new standard in the year
ended May 31, 1997. The Company has not determined the impact of
adoption on its financial position or results of operations.
-46-<PAGE>
<PAGE> 47
B. ACQUISITION
On May 26, 1994, the Company acquired all of the outstanding
stock of Cameron from Cooper Industries Inc. Cameron and its
subsidiaries operate forging facilities in Houston, Texas and
Livingston, Scotland, as well as a powder metal operation in
Brighton, Michigan. The integration of Cameron's operations with
the Company's is progressing substantially as planned. The
acquisition was accounted for as a purchase transaction. The
Company's results of operations for the years ended May 31, 1996
and 1995 include the accounts of Cameron.
The unaudited pro forma combined financial data of the
Company with Cameron as though Cameron had been acquired as of
the beginning of each period presented are as follows:
<TABLE>
<CAPTION>
FIVE MONTHS
ENDED YEAR ENDED
MAY 31, DECEMBER 31,
1994 1993
(000's omitted, except per-share data)
<S> <C> <C>
Revenue $151,834 $389,295
Income (loss) before
cumulative effect of
changes in accounting
principles $(71,525) $(39,271)
Net income (loss) $(71,525) $(82,271)
Income (loss) per share
before cumulative effect
of changes in accounting
principles $ (2.07) $ (1.14)
Net income (loss) per share $ (2.07) $ (2.38)
</TABLE>
-47-<PAGE>
<PAGE> 48
C. BALANCE SHEET INFORMATION
Components of selected captions in the consolidated balance
sheets follow:
<TABLE>
<CAPTION>
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Land, buildings and improvements $103,456 $100,399
Machinery and equipment 282,092 278,691
Under construction 15,160 6,282
400,708 385,372
Less accumulated depreciation 260,300 243,975
$140,408 $141,397
INTANGIBLE ASSETS:
Pension intangible $ 876 $ 5,568
Costs in excess of net assets
acquired 28,786 28,786
Less: Accumulated amortization (9,763) (9,059)
$ 19,899 $ 25,295
OTHER ASSETS:
Cash surrender value of company-
owned life insurance policies $ 6,602 $ 7,974
Other 3,708 6,839
$ 10,310 $ 14,813
ACCRUED LIABILITIES AND OTHER:
Accrued payroll and benefits $ 10,880 $ 11,511
Restructuring, integration,
disposal and environmental
reserves 4,755 10,219
Payroll and other taxes 2,258 3,139
Loss on long-term contracts 3,387 7,407
Other 26,898 23,577
$ 48,178 $ 55,853
DEFERRED INCOME TAXES AND OTHER:
Deferred income taxes $ 4,399 $ 2,623
Loss on long-term contracts - 3,413
Other long-term liabilities 13,318 15,663
$ 17,717 $ 21,699
</TABLE>
-48-<PAGE>
<PAGE> 49
D. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
Raw material $21,608 $26,440
Work-in-process 51,125 54,310
Other 3,168 3,228
75,901 83,978
Less progress payments 10,028 5,165
$65,873 $78,813
</TABLE>
At May 31, 1996 and 1995 approximately 36.0% and 33.0%,
respectively, of inventories are valued at LIFO cost. If all
inventories valued at LIFO cost had been valued at FIFO cost or
market which approximates current replacement cost, inventories
would have been $16,662,000 and $21,584,000 higher than reported
at May 31, 1996 and 1995, respectively.
LIFO inventory quantities were reduced in each of the
periods presented below, resulting in the liquidation of LIFO
inventories carried at the lower costs prevailing in prior years
compared with the cost of current purchases which has a favorable
effect on income from operations. Inflation and deflation have
negative and positive effects on income from operations,
respectively. The effects of lower quantities, inflation or
deflation were as follows:
<TABLE>
<CAPTION>
FIVE
YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, DEC 31,
1996 1995 1994 1993
(000's omitted)
<S> <C> <C> <C> <C>
Lower quantities $5,448 $ 7,567 $2,050 $5,469
(Inflation) deflation (526) (1,393) 1,085 4,450
Net increase to income
from operations $4,922 $ 6,174 $3,135 $9,919
</TABLE>
-49-<PAGE>
<PAGE> 50
E. SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consisted of the following:
<TABLE>
<CAPTION>
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
Borrowings due within one year:
Current portion of long-term debt $ 77 $ 77
Borrowings under U.K. Credit
Agreement - 3,838
Total borrowings due within
one year $ 77 $ 3,915
Long-term debt:
Senior Notes $90,000 $90,000
Other 231 308
Total long-term debt $90,231 $90,308
</TABLE>
During 1993, the Company issued $90,000,000 of 10 3/4%
Senior Notes due March 2003 (the "Senior Notes") under an
indenture between the Company and a bank as trustee. The Senior
Notes pay interest semi-annually. The Senior Notes are general
unsecured obligations of the Company, are non-callable for a five
year period, and are senior to any future subordinated
indebtedness of the Company. The indenture contains certain
covenants including limitations on indebtedness, restrictive
payments including dividends, liens, and disposition of assets.
The estimated fair value of the Senior Notes was $87,400,000
and $86,400,000 at May 31, 1996 and 1995, respectively, based on
third party valuations.
On May 20, 1994, the Company initiated, through a new
subsidiary, Wyman-Gordon Receivables Corporation ("WGRC"), a
revolving credit agreement with a group of five banks
("Receivables Financing Program"). WGRC is a separate corporate
entity from Wyman-Gordon Company and its other subsidiaries, with
its own separate creditors. WGRC's business is the purchase of
accounts receivable from Wyman-Gordon Company and certain of its
subsidiaries ("Sellers"), and neither WGRC on the one hand nor
the Sellers (or subsidiaries or affiliates of the Sellers) on the
other have agreed to pay or make their assets available to pay
creditors of others. WGRC's creditors have a claim on its assets
prior to those assets becoming available to any creditors of any
of the Sellers. The facility provides for a total commitment by
the banks of up to $65,000,000, including a letter of credit
subfacility of up to $35,000,000.
There were no borrowings outstanding under the Receivables
Financing Program at May 31, 1996 and 1995. At May 31, 1996 and
1995, the Company had issued $9,395,000 and $10,009,000 of
letters of credit under the Receivables Financing Program,
respectively. As of May 31, 1996 and 1995, total availability
based on eligible receivables was $47,916,000 and $44,816,000,
respectively.
-50-<PAGE>
<PAGE> 51
Wyman-Gordon Limited, the Company's subsidiary located in
Livingston, Scotland, entered into a credit agreement ("U.K.
Credit Agreement") with a bank ("the Bank") effective February
20, 1996. The maximum borrowing capacity under the U.K. Credit
Agreement is 3,000,000 pounds sterling with a separate letter of
credit or guarantee limit of 2,900,000 pounds sterling.
Borrowings bear interest at 1% over the Bank's base rate. In the
event that borrowings by way of overdraft are allowed to exceed
the agreed limit, interest on the excess borrowings will be
charged at the rate of 1.5% over the Bank's base rate. The
subsidiary is obligated to pay a commitment fee of .35% on
letters of credit issued under the U.K. Credit Agreement. The
U.K. Credit Agreement is secured by a debenture and standard
security from Wyman-Gordon Limited and is senior to any
intercompany loans. There were no borrowings outstanding at May
31, 1996. Borrowings outstanding at May 31, 1995 were 2,415,000
pounds sterling ($3,838,000). At May 31, 1996 and 1995, the
subsidiary had issued 669,000 pounds sterling ($1,037,000) and
380,000 pounds sterling ($604,000) of letters of credit or
guarantees under the U.K. Credit Agreement.
For the years ended May 31, 1996 and 1995, the weighted
average interest rate on short-term borrowings was 7.6% and 7.3%,
respectively.
Annual maturities of long-term debt in the next four years
amount to $77,000 per year and $90,000,000 thereafter. The
Company's promissory note to Cooper Industries, Inc. in the
principal amount of $4,600,000, will be payable in annual
installments beginning on June 30, 1997 and each June 30
thereafter until paid in full in amounts provided under the terms
of the "Stock Purchase Agreement" with Cooper Industries, Inc.
<TABLE>
<CAPTION>
FIVE
YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, DEC 31,
1996 1995 1994 1993
(000's omitted)
<S> <C> <C> <C> <C>
Interest on debt $10,003 $ 9,929 $3,973 $ 8,741
Capitalized interest (262) (397) (152) (544)
Amortization of
financing fees and
other 1,531 1,495 1,562 2,626
Interest expense $11,272 $11,027 $5,383 $10,823
</TABLE>
Total interest paid approximates "Interest on debt" stated
in the table above.
-51-<PAGE>
<PAGE> 52
F. RESTRUCTURING OF OPERATIONS AND OTHER CHARGES (CREDITS)
1991 RESTRUCTURING:
During 1991, the Company incurred charges of $99,464,000 in
connection with a restructuring program.
A significant portion of this charge related to the
consolidation of forging operations, including severance and
other personnel costs. The Company has nearly completed its 1991
restructuring plan with minor consolidation costs remaining,
which are expected to require cash outlays of approximately
$600,000 in the year ended May 31, 1997. Deferred compensation
of approximately $1,400,000 will be payable over the next several
years under the terms of a severance agreement.
1993 DISPOSITION:
In 1993, the Company sold substantially all of the net
assets and business operations of Wyman-Gordon Composites, Inc.
and recorded a non-cash charge on the sale in the fourth quarter
of the year ended December 31, 1993 amounting to $2,453,000.
1994 RESTRUCTURING:
The Company recorded a charge of $6,450,000 in May 1994,
$5,200,000 for restructuring a castings facility, and $1,250,000
to write-down castings fixed assets to their net realizable
value. The non-cash items amounting to $5,350,000 were charged
against the reserve in May 1994. Cash charges totalling $900,000
have been made against the reserve in the years ended May 31,
1995 and 1996 and cash charges of $200,000 are expected to be
incurred in the year ended May 31, 1997.
1994 CAMERON INTEGRATION COSTS:
Based on the Company's plans for the integration of Cameron,
in May 1994, the Company recorded an integration restructuring
charge totalling $24,100,000 which consisted of estimated cash
costs of $12,700,000 and estimated non-cash charges of
$11,400,000 for asset revaluations. Cash costs include
relocating machinery, equipment, tooling and dies of the Company
as well as relocation and severance costs related to personnel of
the Company. Non-cash charges included the write-down of certain
assets of the Company, including portions of metal production
facilities and certain forging, machining and testing equipment
to net realizable value as a result of consolidating certain
systems and facilities, idling certain machinery and equipment,
and eliminating certain processes, departments and operations as
a result of the acquisition.
During the year ended May 31, 1995, after a year of
evaluating the combined forgings operations and concluding that
most of its integration activities had been completed or were
adequately provided for within the remaining integration
restructuring reserves, the Company determined that severance and
other personnel costs were $1,900,000 lower and movement of
-52-<PAGE>
<PAGE> 53
machinery, equipment and tooling and dies costs were $2,500,000
lower than originally estimated. Additionally, certain machinery
and equipment redundancies as a result of the integration of
Cameron's operations with those of the Company's were $2,300,000
higher than original estimates. As a result, the Company took
into income from operations, an integration restructuring credit
in the amount of $2,100,000. There have been no significant
changes to the Company's May 31, 1995 estimates of the remaining
integration activities. The Company made $3,100,000 of cash
charges against these reserves during the year ended May 31,
1996. At May 31, 1996, the Company estimates these remaining
integration activities will require cash outlays of approximately
$1,400,000 in the year ended May 31, 1997 and $1,200,000
thereafter. Most of these future expenditures represent costs
associated with consolidation and reconfiguration of production
facilities and relocation or severance costs.
CAMERON PURCHASE CASH COSTS:
Included as part of the Cameron purchase price allocation
the Company recorded $12,200,000 for direct cash costs related to
the acquisition and integration of Cameron for relocation of
Cameron machinery and dies, severance of Cameron personnel and
other costs. During the year ended May 31, 1995, it was
determined that the cash costs of the acquisition were $5,200,000
lower than originally estimated. There have been no significant
changes to the Company's May 31, 1995 estimates of the remaining
integration activities. The Company made $1,500,000 of cash
charges against these reserves during the year ended May 31,
1996. The remaining activities will require estimated cash
outlays of $1,400,000, of which approximately $1,100,000 will be
spent in the year ended May 31, 1997 and $300,000 thereafter.
A summary of charges made or estimated to be made against
restructuring, integration and disposal reserves is as follows:
-53-<PAGE>
<PAGE> 54
<TABLE>
<CAPTION>
FIVE
MONTHS
ENDED
MAY 31,
TOTAL 1994
(000's omitted)
<S> <C> <C>
1994 RESTRUCTURING:
CASH:
Casting facility restructuring $ 1,100 $ -
NON-CASH:
Casting facility restructuring 4,100 4,100
Other 1,250 1,250
Total non-cash charges 5,350 5,350
Total 1994 Restructuring 6,450 5,350
1994 CAMERON INTEGRATION COSTS:
CASH:
Movement of machinery, equipment and
tooling and dies 4,300 -
Severance and other personnel costs 4,000 -
Total cash charges 8,300 -
NON-CASH:
Asset revaluation 13,700 11,400
Credits to reserves 2,100 -
Total non-cash charges 15,800 11,400
Total 1994 Cameron integration costs 24,100 11,400
Total 1994 Other Charges $30,550 $16,750
CAMERON PURCHASE CASH COSTS:
Cost of relocating Cameron's machinery and
equipment and tooling and dies $ 3,200 $ -
Severance of Cameron personnel 3,800 -
Total Cameron Purchase Cash Costs $ 7,000 $ -
1995 OTHER CHARGES:
NON-CASH:
Credits to 1994 Cameron integration costs $(2,100) $ -
Total 1995 Other Charges $(2,100) $ -
Total Cash $16,400 $ -
Total Non-cash $19,050 $16,750
</TABLE>
-54-<PAGE>
<PAGE> 55
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
MAY 31, MAY 31,
1995 1996
(000's omitted)
<S> <C> <C>
1994 RESTRUCTURING:
CASH:
Casting facility restructuring $ 600 $ 300
NON-CASH:
Casting facility restructuring - -
Other - -
Total non-cash charges - -
Total 1994 Restructuring 600 300
1994 CAMERON INTEGRATION COSTS:
CASH:
Movement of machinery, equipment and
tooling and dies 800 1,500
Severance and other personnel costs 1,800 1,600
Total cash charges 2,600 3,100
NON-CASH:
Asset revaluation 2,300 -
Credits to reserves 2,100 -
Total non-cash charges 4,400 -
Total 1994 Cameron integration costs 7,000 3,100
Total 1994 Other Charges $ 7,600 $ 3,400
CAMERON PURCHASE CASH COSTS:
Cost of relocating Cameron's machinery and
equipment and tooling and dies $ 1,700 $ 300
Severance of Cameron personnel 2,400 1,200
Total Cameron Purchase Cash Costs $ 4,100 $ 1,500
1995 OTHER CHARGES:
NON-CASH:
Credits to 1994 Cameron integration costs $(2,100) $ -
Total 1995 Other Charges $(2,100) $ -
Total Cash $ 7,300 $ 4,900
Total Non-cash $ 2,300 $ -
</TABLE>
-55-<PAGE>
<PAGE> 56
<TABLE>
<CAPTION>
YEAR
ENDED
MAY 31, THERE-
1997 AFTER
(000's omitted)
<S> <C> <C>
1994 RESTRUCTURING:
CASH:
Casting facility restructuring $ 200 $ -
NON-CASH:
Casting facility restructuring -
Other - -
Total non-cash charges - -
Total 1994 Restructuring 200 -
1994 CAMERON INTEGRATION COSTS:
CASH:
Movement of machinery, equipment and
tooling and dies 800 1,200
Severance and other personnel costs 600 -
Total cash charges 1,400 1,200
NON-CASH:
Asset revaluation - -
Credits to reserves - -
Total non-cash charges - -
Total 1994 Cameron integration costs 1,400 1,200
Total 1994 Other Charges $ 1,600 $ 1,200
CAMERON PURCHASE CASH COSTS:
Cost of relocating Cameron's machinery and
equipment and tooling and dies $ 1,000 $ 200
Severance of Cameron personnel 100 100
Total Cameron Purchase Cash Costs $ 1,100 $ 300
1995 OTHER CHARGES:
NON-CASH:
Credits to 1994 Cameron integration costs $ - $ -
Total 1995 Other Charges $ - $ -
Total Cash $ 2,700 $ 1,500
Total Non-cash $ - $ -
</TABLE>
OTHER CHARGES (CREDITS):
Other charges (credits) includes charges of $1,871,000 and
$1,390,000 in the years ended May 31, 1996 and 1995,
respectively, 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. Additionally, other charges
(credits) includes a charge of $846,000 in the year ended May 31,
1996 to reduce the carrying value of the cash surrender value of
certain company-owned life insurance policies.
-56-<PAGE>
<PAGE> 57
G. ENVIRONMENTAL MATTERS
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 continues to
design and implement a system of programs and facilities for the
management of its raw materials, production processes and
industrial waste to promote compliance with environmental
requirements. In 1991, the Company recorded a pre-tax charge of
$7,000,000 with respect to environmental investigation and
remediation costs at the Grafton facility and a pre-tax charge of
$5,000,000 against potential environmental remediation costs upon
the eventual sale of the Worcester facility. During the five-
month fiscal period ended May 31, 1994, the Company provided an
additional $2,000,000 for potential environmental investigation
and remediation costs and established a $3,500,000 purchase
accounting reserve related to environmental issues at Cameron.
As of May 31, 1996, aggregate environmental reserves amounted to
$16,735,000 and have been provided for expected cleanup expenses
estimated between $6,000,000 and $7,000,000 upon the eventual
sale of the Worcester facility, certain environmental issues at
Cameron amounting to approximately $3,500,000 and the exposures
noted in the following paragraphs, which include certain
capitalizable amounts for environmental management and
remediation projects.
Pursuant to an agreement entered into with the U.S. Air
Force upon the acquisition of the Grafton facility from the
federal government in 1982, the Company agreed to make
expenditures totalling $20,800,000 for environmental management
and remediation at the site during the period 1982 through 1999,
of which $5,900,000 remained as of May 31, 1996. These
expenditures will not resolve the Company's obligations to
federal and state regulatory authorities, who are not parties to
the agreement, however, and the Company expects to incur an
additional amount, currently estimated at $3,500,000, to comply
with current federal and state environmental requirements
governing the investigation and remediation of contamination at
the site. In connection with these requirements, the Company is
evaluating and planning for closure of 46 solid waste management
units on the site.
The Company's Grafton facility is included in the U.S.
Nuclear Regulatory Commission's ("NRC") May 1992 Site
Decommissioning Management Plan for low-level radioactive waste.
In a draft 1992 long-range dose assessment, the NRC determined
that the site should be remediated. As a result, the Company has
challenged the draft assessment, believing it to be flawed. The
Company has provided $1,500,000 for the estimated cost of
remediation and disposal if the NRC requires it to take these
-57-<PAGE>
<PAGE> 58
actions. However, the Company may be required to dispose of the
wastes at a more expensive disposal facility, which could
increase the remediation and disposal costs beyond the provision
that the Company has established. The Company believes that it
may have meritorious claims for contribution from the U.S. Air
Force in respect of any liabilities it may have for such
remediation.
The Company, together with numerous other parties, has been
named a potentially responsible party ("PRP") under the
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") for the cleanup of the following Superfund sites:
Operating Industries, Monterey Park, California; Cedartown
Municipal Landfill, Cedartown, Georgia; PSC Resources, Palmer,
Massachusetts; the Gemme site, Leicester, Massachusetts; and the
Salco, Inc. site, Monroe, Michigan. The Company believes that
any liability it may incur with respect to these sites will not
be material.
At the Gemme site, a proposed agreement would allocate 33%
of the cleanup costs to the Company. In September 1995, a
consulting firm retained by the PRP group made a preliminary
remediation cost estimate of $1,400,000 to $2,800,000. The
Company's insurer is defending the Company's interests, and the
Company believes that any recovery against the Company would be
offset by recovery of insurance proceeds.
H. BENEFIT PLANS
The Company and its subsidiaries have pension plans covering
substantially all employees. Benefits are generally based on
years of service and a fixed monthly rate or average earnings
during the last years of employment. Pension plan assets are
invested in equity and fixed income securities, pooled funds
including real estate funds and annuities. Company contributions
are determined based upon the funding requirements of U.S. and
other governmental laws and regulations.
Effective April 30, 1996, two of the Company's pension plans
which had accumulated benefits exceeding assets were merged into
the plan which had assets exceeding the accumulated benefits.
A reconciliation between the amounts recorded on the
consolidated balance sheets and the summary tables of the funding
status of the pension plans are as follows:
<TABLE>
<CAPTION>
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
Pension liability per balance sheet $(1,698) $(9,589)
Prepaid pension expense included in
prepaid expenses in the balance
sheet 3,961 1,639
U.K. pension liability 769 789
Net prepaid pension expense
(pension liability) $ 3,032 $(7,161)
</TABLE>
-58-<PAGE>
<PAGE> 59
U.S. PENSION PLANS
Pension expense for the U.S. pension plans included the
following components:
<TABLE>
<CAPTION>
FIVE
YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, DEC 31,
1996 1995 1994 1993
(000's omitted)
<S> <C> <C> <C> <C>
Service cost $ 3,042 $ 2,938 $ 917 $ 1,720
Interest cost on
projected benefit
obligation 11,662 10,842 4,373 10,955
Actual return on assets (36,188) (8,205) (2,248) (18,107)
Net amortization and
deferral of actuarial
gains (losses) 23,412 (1,385) (1,798) 8,208
Net pension expense $ 1,928 $ 4,190 $ 1,244 $ 2,776
Assumed long-term rate
of return on plan
assets 10.0% 9.0% 9.0% 9.0%
</TABLE>
-59-<PAGE>
<PAGE> 60
A summary of the funding status of the U.S. pension plans
and a reconciliation to the amounts recorded in the consolidated
balance sheets are as follows:
<TABLE>
<CAPTION>
MAY 31, 1996
(000's omitted)
ASSETS ACCUMULATED
EXCEEDING BENEFITS
ACCUMULATED EXCEEDING
BENEFITS ASSETS TOTAL
<S> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested $144,048 $ 6,738 $150,786
Nonvested 1,004 202 1,206
Accumulated benefit obligation 145,052 6,940 151,992
Impact of forecasted salary
increases during future
periods 8,585 276 8,861
Projected benefit obligation
for employee service to date 153,637 7,216 160,853
Current fair market value of
plan assets 159,545 - 159,545
Excess (shortfall) of plan
assets over (under) projected 5,908 (7,216) (1,308)
benefit obligation
Unrecognized net (gain) loss (3,752) (1,565) (5,317)
Unrecognized net (asset)
obligation at transition 2,170 1,351 3,521
Unrecognized prior service cost 5,509 1,418 6,927
Adjustment required to
recognize minimum liability - (929) (929)
Net periodic pension cost
March 30, 1996 to May 31, 1996 (123) (198) (321)
Contributions March 30, 1996 to
May 31, 1996 304 155 459
Net prepaid pension expense
(pension liability) $ 10,016 $ (6,984) $ 3,032
Estimated annual increase in
future salaries 3-5%
Weighted average discount rate 9.0%
</TABLE>
-60-<PAGE>
<PAGE> 61
<TABLE>
<CAPTION>
MAY 31, 1995
(000's omitted)
ASSETS ACCUMULATED
EXCEEDING BENEFITS
ACCUMULATED EXCEEDING
BENEFITS ASSETS TOTAL
<S> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested $ 82,042 $ 46,202 $128,244
Nonvested 349 324 673
Accumulated benefit obligation 82,391 46,526 128,917
Impact of forecasted salary
increases during future
periods 5,737 339 6,076
Projected benefit obligation
for employee service to date 88,128 46,865 134,993
Current fair market value of
plan assets 101,933 30,967 132,900
Excess (shortfall) of plan
assets over (under) projected
benefit obligation 13,805 (15,898) (2,093)
Unrecognized net (gain) loss (10,261) 1,771 (8,490)
Unrecognized net (asset)
obligation at transition (455) 4,912 4,457
Unrecognized prior service cost 5,290 2,456 7,746
Adjustment required to
recognize minimum liability - (8,800) (8,800)
Net periodic pension cost
April 1, 1995 to May 31, 1995 (48) (650) (698)
Contributions April 1, 1995 to
May 31, 1995 - 717 717
Net prepaid pension expense
(pension liability) $ 8,331 $(15,492) $ (7,161)
Estimated annual increase in
future salaries 3-5%
Weighted average discount rate 9.0%
</TABLE>
A measurement date of March 31 has been used for determining
the disclosure information. Expense recognition and
contributions received during the period April 1 through fiscal
year-end are then recognized to bring the accrued or prepaid
expense to May 31, 1996 and May 31, 1995 balances.
-61-<PAGE>
<PAGE> 62
U.K. PENSION PLAN
Pension expense for the U.K. pension plan included the
following:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 1996 MAY 31, 1995
(000's omitted)
<S> <C> <C>
Service cost $ 579 $ 692
Interest cost 1,300 1,189
Expected return on assets (1,283) (1,084)
Net pension expense $ 596 $ 797
</TABLE>
The U.K. pension plan's assets and liabilities were rolled
over from the former Cameron plan during fiscal 1996. The funded
status of the U.K. pension plan is as follows:
<TABLE>
<CAPTION>
MAY 31, 1996 MAY 31,1995
(000's omitted)
<S> <C> <C>
Fair value of plan assets $18,358 $14,682
Projected benefit obligation 17,240 15,247
Plan assets greater than
(less than) projected
benefit obligation 1,118 (565)
Unrecognized net loss (gain) (1,176) 498
Accrued pension cost $ (58) $ (67)
Accumulated benefits $16,090 $13,472
Vested benefits $16,090 $13,472
Assumed long-term rate of return
on plan assets 9.0% 9.0%
Weighted average discount rate 9.0% 9.0%
Rate of salary increase 6.0% 6.0%
</TABLE>
The Company also maintains a 401(k) plan for most full-time
salaried employees. Employer contributions to the defined
contribution plan are made at the Company's discretion and are
reviewed periodically. Cash contributions amounted to $26,000
and $136,000 for the years ended May 31, 1996 and 1995, $591,000
for the five months ended May 31, 1994, and $134,000 for the year
ended December 31, 1993, respectively. Additionally, for the
years ended May 31, 1996 and 1995, the five months ended May 31,
1994 and the year ended December 31, 1993, the Company
contributed 79,426, 120,261, 14,432, and 58,927 shares of common
stock from Treasury to its defined contribution plan,
respectively, and recorded expense relating thereto of $1,058,000
$711,000, $84,000, and $271,000, respectively.
-62-<PAGE>
<PAGE> 63
I. OTHER POSTRETIREMENT BENEFITS
In addition to providing pension benefits, the Company and
its subsidiaries provide most retired employees with health care
and life insurance benefits. The majority of these health care
and life insurance benefits are provided through insurance
companies, some of whose premiums are computed on a cost plus
basis.
Effective January 1, 1993, the Company adopted SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions ("SFAS 106")." This standard requires companies to
accrue postretirement benefits during the years the employees are
working and earning benefits for retirement, as contrasted to the
expense-as-incurred basis that the Company followed in 1992 and
prior years. The Company elected to recognize the cumulative
effect of the accounting change, resulting in a non-cash
reduction in earnings in 1993 of $43,000,000 or $2.39 per share.
Most of the Forgings Division and Corporate retirees and
full-time employees are or become eligible for these
postretirement health care and life insurance benefits if they
meet minimum age and service requirements. There are certain
retirees for which Company cost and liability are affected by
future increases in health care cost. The liabilities have been
developed assuming a medical trend rate for growth in future
health care claim levels from the assumed 1994 level. The change
to the accumulated postretirement benefit obligation for each
1.0% change in these assumptions is $2,187,000. The change in
the annual SFAS 106 expense for each 1.0% change in these
assumptions is $209,000. The weighted average discount rate used
in determining the amortization of the accumulated postretirement
benefit obligation was 7.25% and 9.0% at May 31, 1996 and May 31,
1995, respectively, and the average remaining service life was 20
years.
Net periodic benefit expense consists of the following
components:
<TABLE>
<CAPTION>
FIVE
YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, DECEMBER 31,
1996 1995 1994 1993
($000's omitted)
<S> <C> <C> <C> <C>
Service cost $ 234 $ 350 $ 85 $ 170
Interest on the
accumulated benefit
obligation 4,021 3,990 1,540 3,660
Net amortization and
deferral (53) - - -
Total postretirement
benefit expense $4,202 $4,340 $1,625 $3,830
</TABLE>
-63-<PAGE>
<PAGE> 64
The Company has no plans for funding the liability and will
continue to pay for retiree medical costs as they occur. The
components of the accumulated postretirement benefit obligation
are as follows:
<TABLE>
<CAPTION>
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $43,222 $41,323
Fully eligible active plan
participants 3,564 5,180
Other active plan participants 5,340 7,023
52,126 53,526
Plan assets at fair value - -
Accumulated postretirement benefit
obligation in excess of plan assets 52,126 53,526
Unrecognized net gain (loss) from
past experience different from
that assumed and from changes
in assumptions 885 901
Prior service cost not yet recognized
in net periodic postretirement
benefit cost (4,002) (2,000)
Accrued postretirement benefit cost $49,009 $52,427
</TABLE>
J. FEDERAL, FOREIGN AND STATE INCOME TAXES
As of January 1, 1993, the Company adopted financial
Accounting Standards Board Statement No. 109, "Accounting for
Income Taxes" ("SFAS 109"). As permitted under SFAS 109, the
Company has elected not to restate the financial statements of
prior years. The impact of this change on the results of
operations for the year ended December 31, 1993 was immaterial.
The Company has not recognized an income tax benefit
(provision) during the years ended May 31, 1996 and 1995, the
five months ended May 31, 1994, or the year ended December 31,
1993, respectively.
-64-<PAGE>
<PAGE> 65
The benefit (provision) for income taxes is at a rate other
than the federal statutory tax rate for the following reasons:
<TABLE>
<CAPTION>
FIVE
YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, DEC 31,
1996 1995 1994 1993
(000's omitted)
<S> <C> <C> <C> <C>
Benefit (provision) at
the applicable U.S.
federal and U.K.
statutory tax rate $(8,832) $ (363) $ 21,480 $ 5,781
Recognition of previously
unrecognized deferred
tax assets 8,832 1,749 - -
Tax carryforwards without
current tax benefits
(foreign in 1995 and
U.S. federal in 1994
and 1993) - (1,386) (21,480) (5,781)
Income tax benefit
(provision) $ - $ - $ - $ -
</TABLE>
The Company is in the process of amending prior years' tax
returns which will result in higher tax net operating loss
carryforwards. Including the effect of such amended prior years'
tax returns, the Company has tax net operating loss carryforwards
of $86,000,000 which begin expiring in the year 2006. The
Company has experienced significant operating losses and there is
no assurance that the net operating loss carryforwards will be
utilized, therefore, a valuation allowance of $70,144,000 and
$67,731,000 at May 31, 1996 and May 31, 1995 has been recognized,
respectively.
The Company is seeking to utilize a substantial portion of
such NOLs to obtain a refund in excess of $20,000,000 of prior
years' taxes. To the extent that the Company is not successful
in recovering a refund of prior years' taxes, the NOLs will be
available to offset future taxable income, if any. A reasonable
estimation of the potential recovery cannot be made at this time
and, accordingly, no adjustment has been made in the financial
statements with respect to the claim for such refund.
-65-<PAGE>
<PAGE> 66
The principal components of deferred tax assets and
liabilities were as follows:
<TABLE>
<CAPTION>
MAY 31, 1996 MAY 31, 1995
(000's omitted)
<S> <C> <C>
DEFERRED TAX ASSETS
Provision for postretirement
benefits $20,731 $21,512
Net operating loss carryforwards 30,307 23,585
Restructuring provisions 24,275 26,602
Other 8,807 6,496
84,120 78,195
Valuation allowance (70,144) (67,731)
13,976 10,464
DEFERRED TAX LIABILITIES
Accelerated depreciation 13,897 9,393
Other 4,478 3,694
18,375 13,087
Net deferred tax liability $ 4,399 $ 2,623
</TABLE>
The net deferred tax liability is included in "Deferred
income taxes and other" on the accompanying consolidated balance
sheets.
K. STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS
The Company may grant awards in the form of non-qualified
stock options or incentive stock options to those key employees
it selects to purchase in the aggregate up to 1,750,000 shares of
newly issued or treasury common stock. Options expire after 10
years from the date of grant and generally become exercisable
ratably over a three or four year period commencing from the date
of grant. The exercise price of non-qualified stock options may
not be less than 50% of the fair market value of such shares on
the date of grant or, in the case of incentive stock options,
100% of the fair market value on the date of grant. Awards of
stock appreciation rights ("SAR's") may also be granted, either
in tandem with grants of stock options (and exercisable as an
alternative to the exercise of stock options) or separately.
In addition, the Committee may grant other awards that
consist of or are denominated in or payable in shares or that are
valued by reference to shares, including, for example, restricted
shares, phantom shares, performance units, performance bonus
awards or other awards payable in cash, shares or a combination
thereof at the Committee's discretion. During fiscal 1996 and
1995, awards of 551,000 and 150,000 shares of the Company's
common stock were made subject to restrictions based upon
continued employment and the performance of the Company.
Compensation expense totalling $413,000 and $330,000 relating to
the awards was recorded during the year ended May 31, 1996 and
1995, respectively.
-66-<PAGE>
<PAGE> 67
Option activity in the years ended May 31, 1996 and 1995,
the five months ended May 31, 1994 and the year ended December
31, 1993 was as follows:
<TABLE>
<CAPTION>
OPTION
PRICE RANGE SHARES
<S> <C> <C>
Outstanding at December 31, 1992 3.75 - 29.00 1,893,186
Granted 5.00 - 6.00 285,500
Terminated 3.75 - 29.00 (372,480)
Exercised 3.75 (70,831)
Outstanding at December 31, 1993 1,735,375
Granted 5.13 - 5.63 88,008
Terminated 3.75 - 19.00 (28,185)
Exercised 3.75 - 5.00 (30,943)
Outstanding at May 31, 1994 1,764,255
Granted 5.63 - 10.63 387,000
Terminated 3.75 - 21.50 (102,922)
Exercised 3.75 - 6.25 (190,098)
Outstanding at May 31, 1995 1,858,235
Granted 12.63 - 16.63 861,000
Terminated 5.00 - 21.50 (34,481)
Exercised 3.75 - 16.00 (389,796)
Outstanding at May 31, 1996 2,294,958
</TABLE>
Options for 1,104,000; 1,203,000; 930,000 and 867,000
shares, were exercisable at May 31, 1996, 1995 and 1994 and
December 31, 1993, respectively. At May 31, 1996, 882,000 shares
were available for future grants.
Effective January 1, 1996 the Company adopted a qualified,
noncompensatory Employee Stock Purchase Plan. This plan enables
substantially all employees to subscribe to purchase shares of
the Company's common stock on an annual basis. Such shares are
subscribed at the lower of 90% of their fair market value on the
first day of the plan year, January 1, or 90% of their fair
market value on the last business day of the plan year, usually
December 31. Each eligible employee's participation is limited
to 10% of base wages and a maximum of 450,000 shares are
authorized for subscription. No shares were issued under the
plan in the year ended May 31, 1996.
L. STOCK PURCHASE RIGHTS
On October 19, 1988, the Board of Directors of the Company
declared a dividend distribution of one right (a "Right") for
each outstanding Share to shareholders of record at the close of
business on November 30, 1988 pursuant to a Rights Agreement
dated as of October 19, 1988 (the "Original Rights Agreement").
On January 10, 1994, in connection with the acquisition of
Cameron, the Original Rights Agreement was amended and restated.
The description and terms of the Rights are set forth in an
-67-<PAGE>
<PAGE> 68
Amended and Restated Rights Agreement (the "Rights Agreement"),
between the Company and State Street Bank & Trust Company, as
Rights Agent. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series
A Junior Participating Preferred Stock, no par value (the "Series
A Shares"), of the Company at a price of $50 per one one-
hundredth of a Series A Share (the "Exercise Price"), subject to
adjustment.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person (as defined below), proper
provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of
shares of common stock of the acquiring Company which at the time
of such transaction will have a market value of two times the
exercise price of the Right. In the event that any person or
group of affiliated or associated persons becomes an Acquiring
Person, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Shares having a
market value of two times the exercise price of the Right. For
purposes of the Rights Agreement, an "Acquiring Person" generally
means a person or group of affiliated or associated persons who
have acquired beneficial ownership of 20% or more of the
outstanding Shares. However, Cooper Industries, Inc. and its
affiliates and associates (together, the "Cooper Group") will not
be deemed to be an Acquiring Person for so long as (A) the Cooper
Group beneficially owns at least 10% or more of the outstanding
Shares continuously from and after May 26, 1994 and (B) the
Cooper Group does not acquire beneficial ownership of any Shares
in breach of the Investment Agreement dated as of January 10,
1994 between Cooper Industries, Inc. and the Company (other than
an inadvertent breach which is remedied as promptly as
practicable by a transfer of the Shares so acquired to a person
which is not a member of the Cooper Group.)
The Rights will expire on November 30, 1998 (the "Final
Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed or exchanged by the
Company.
M. COMMITMENTS AND CONTINGENCIES
At May 31, 1996, certain lawsuits arising in the normal
course of business were pending. In the opinion of management,
the outcome of legal matters will not have a material adverse
effect on the Company's financial position and results of
operations.
-68-<PAGE>
<PAGE> 69
The Company has entered into various foreign exchange
contracts to manage its foreign exchange risks. Through its
foreign currency hedging activities, the Company seeks to
minimize the risk that the eventual cash flows resulting from
purchase and sale transactions denominated in other than the
functional currency of the operating unit will be affected by
changes in exchange rates. Foreign currency transaction
exposures generally are the responsibility of the Company's
individual operating units to manage as an integral part of their
business. The Company hedges its foreign currency transaction
exposures based on judgment, generally through the use of forward
exchange contracts. Gains and losses on the Company's foreign
currency transaction hedges are recognized as an adjustment to
the underlying hedged transactions. Deferred gains and losses on
foreign exchange contracts were not significant at May 31, 1996
and 1995. The Company had foreign exchange contracts totalling
$20,900,000 at May 31, 1996. Such contracts include forward
contracts of $16,400,000 for the sale of U.K. pounds and
$4,500,000 for the purchase of U.K. pounds. These contracts
hedge certain normal operating purchase and sales transactions.
The exchange contracts have no material fair market value,
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. Translation and transaction gains
and losses included in the Consolidated Statements of Operations
for the years ended May 31, 1996 and 1995 were not significant.
Approximately 40% of the Company's employees are covered by
collective bargaining agreements. A collective bargaining
agreement currently covering approximately 16% of the Company's
employees expires in March 1997.
N. GEOGRAPHIC AND OTHER INFORMATION
Prior to May 31, 1994 the Company operated solely in the
United States. Transfers between U.S. and international
operations, principally inventory transfers, are charged to the
receiving organization at prices sufficient to recover
manufacturing costs and provide a reasonable return.
-69-<PAGE>
<PAGE> 70
<TABLE>
<CAPTION>
Certain information on a geographic basis follows:
YEAR YEAR
ENDED ENDED
MAY 31, MAY 31,
1996 1995
(000's omitted)
<S> <C> <C>
REVENUES FROM UNAFFILIATED
CUSTOMERS:
United States (including
direct export sales) $447,515 $365,666
United Kingdom 52,109 30,973
$499,624 $396,639
INTER AREA TRANSFERS:
United States $ 14 $ 373
United Kingdom 4,666 2,528
$ 4,680 $ 2,901
EXPORT SALES:
United States direct export sales $ 71,792 $ 50,235
INCOME (LOSS) FROM OPERATIONS:
United States $ 32,042 $ 14,931
United Kingdom 5,657 (1,213)
$ 37,699 $ 13,718
IDENTIFIABLE ASSETS
(EXCLUDING INTERCOMPANY):
United States $309,868 $289,649
United Kingdom 44,287 47,547
General corporate 21,735 31,868
$375,890 $369,064
</TABLE>
-70-<PAGE>
<PAGE> 71
O. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Selected quarterly financial data for fiscal 1996 and fiscal
1995 were as follows:
<TABLE>
<CAPTION>
QUARTER FIRST SECOND THIRD FOURTH
(000's omitted, except per-share data)
<S> <C> <C> <C> <C>
YEAR ENDED MAY 31, 1996
Revenue $114,077 $118,080 $121,517 $145,950
Cost of goods sold 95,898 99,114 103,210 123,270
Other charges (credits) and
environmental charges 900 - 110 1,707
Income from operations 8,083 9,494 9,090 11,032
Net income 5,101 6,050 6,077 8,006
Net income per share .14 .17 .17 .22
YEAR ENDED MAY 31, 1995
Revenue $95,725 $94,974 $96,238 $109,702
Cost of goods sold 86,150 85,105 83,623 92,373
Other charges (credits) and
environmental charges - - - (710)
Income from operations 3 768 3,620 9,327
Net income (loss) (3,321) (2,021) 556 5,825
Net income (loss) per share (.10) (.06) .02 .17
</TABLE>
-71-<PAGE>
<PAGE> 72
<TABLE>
<CAPTION>
WYMAN-GORDON COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(000's omitted)
CHARGED CHARGED
BALANCE AT TO COSTS TO OTHER DEDUCT- BALANCE
BEGINNING AND ACCOUNTS IONS AT END
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD
<S> <C> <C> <C> <C> <C>
YEAR ENDED MAY 31, 1996
Accumulated
Amortization
of Goodwill $9,059 $ 704 - - $9,763
YEAR ENDED MAY 31, 1995
Accumulated
Amortization
of Goodwill $8,354 $ 705 - - $9,059
FIVE MONTHS ENDED MAY 28, 1994
Accumulated
Amortization
of Goodwill $7,630 $ 724 - - $8,354
YEAR ENDED DECEMBER 31, 1993
Accumulated
Amortization
of Goodwill $6,482 $1,148 - - $7,630
YEAR ENDED DECEMBER 31, 1992
Accumulated
Amortization
of Goodwill $5,266 $1,216 - - $6,482
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
-72-<PAGE>
<PAGE> 73
PART III
The information called for by Item 10 (Directors and
Executive Officers of the Registrant), Item 11 (Executive
Compensation), Item 12 (Security Ownership of Certain Beneficial
Owners and Management) and Item 13 (Certain Relationships and
Related Transactions) is incorporated herein by reference to the
registrant's definitive proxy statement for its 1996 Annual
Meeting of Stockholders to be held on October 16, 1996.
-73-<PAGE>
<PAGE> 74
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Documents Filed as a Part of this Report
PAGES
1. Financial Statements:
Report of Management 34
Report of Independent Auditors 35
Consolidated Statements of Operations 36-37
Consolidated Balance Sheets 38
Consolidated Statements of Cash Flows 39-41
Consolidated Statements of Stockholders' Equity 42-43
Notes to Consolidated Financial Statements 44-71
2. FINANCIAL STATEMENT SCHEDULES:
Schedule II - Valuation and Qualifying Accounts 72
All other schedules are omitted because they are not
applicable, not required, or because the required information is
included in the financial statements or notes thereto.
3. EXHIBITS:
Exhibits to the Form 10-K have been included only with the
copies of the Form 10-K filed with the Commission. Upon request
to the Company and payment of a reasonable fee, copies of the
individual exhibits will be furnished.
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
<S> <C> <C>
3.A Restated Articles of Organization of -
Wyman-Gordon Company - incorporated by
reference to Exhibit 3A to the Company's
Form 10-K for the year ended June 3, 1995.
3.B Bylaws of Wyman-Gordon Company, as amended -
through May 24, 1994 - incorporated by
reference to Exhibit 3B to the Company's
Form 10-K for the year ended June 3, 1995.
</TABLE>
-74-<PAGE>
<PAGE> 75
<TABLE>
<CAPTION>
EXHIBIT INDEX (Continued)
EXHIBIT DESCRIPTION PAGE
<S> <C> <C>
4.A Amended and Restated Rights Agreement, dated -
as of January 10, 1994 between the Company and
State Street Bank & Trust Company, as Rights
Agent - incorporated by reference to Exhibit 1
to the Company's Report on Form 8-A/A dated
January 21, 1994.
4.B Indenture dated as of March 16, 1993 among -
Wyman-Gordon Company, its Subsidiaries and
State Street Bank and Trust Company as Trustee
with respect to Wyman-Gordon Company's 10 3/4%
Senior Notes due 2003 - incorporated by
reference to Exhibit 4C to the Company's
Report on Form-10K for the year ended
December 31, 1992.
4.C 10 3/4% Senior Notes due 2003. Supplemental -
Indenture dated May 19, 1994 - incorporated
by reference to Exhibit 5 to the Company's
Report on Form 8-K dated May 26, 1994.
4.D 10 3/4% Senior Notes due 2003. Second -
Supplemental Indenture and Guarantee dated
May 27, 1994 - incorporated by reference to
the Company's Report on Form 8-K dated
May 26, 1994.
4.E Instruments defining the rights of holders -
of long-term debt are omitted pursuant to
paragraph (b)(4)(iii) of Regulation S-K
Item 601. The Company agrees to furnish such
instruments to the Commission upon request.
10.A Andrew C. Genor, Executive Severance E-1
Agreement dated April 17, 1996.
10.B David P. Gruber, Executive Severance E-2
Agreement dated April 17, 1996.
10.C Sanjay N. Shah, Executive Severance E-3
Agreement dated April 17, 1996.
10.D J. Douglas Whelan, Executive Severance E-4
Agreement dated April 17, 1996.
10.E Wallace F. Whitney, Jr., Executive Severance E-5
Agreement dated April 17, 1996.
10.F Frank J. Zugel, Executive Severance E-6
Agreement dated April 17, 1996.
</TABLE>
-75-<PAGE>
<PAGE> 76
<TABLE>
<CAPTION>
EXHIBIT INDEX (Continued)
EXHIBIT DESCRIPTION PAGE
<S> <C> <C>
10.G Andrew C. Genor, Performance Stock Option E-7
Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.H David P. Gruber, Performance Stock Option E-8
Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.I Sanjay N. Shah, Performance Stock Option E-9
Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.J J. Douglas Whelan, Performance Stock Option E-10
Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.K Wallace F. Whitney, Jr., Performance Stock E-11
Option Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.L Frank J. Zugel, Performance Stock Option E-12
Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.M Andrew C. Genor, Performance Share Agreement E-13
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.N David P. Gruber, Performance Share Agreement E-14
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.O Sanjay N. Shah, Performance Share Agreement E-15
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.P J. Douglas Whelan, Performance Share Agreement E-16
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.Q Wallace F. Whitney, Jr., Performance Share E-17
Agreement under the Wyman-Gordon Company
Long-term Incentive Plan dated April 17, 1996.
10.R Frank J. Zugel, Performance Share Agreement E-18
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.S Andrew C. Genor, Stock Option Agreement E-19
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
</TABLE>
-76-<PAGE>
<PAGE> 77
<TABLE>
<CAPTION>
EXHIBIT INDEX (Continued)
EXHIBIT DESCRIPTION PAGE
<S> <C> <C>
10.T David P. Gruber, Stock Option Agreement E-20
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.U Sanjay N. Shah, Stock Option Agreement E-21
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.V J. Douglas Whelan, Stock Option Agreement E-22
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.W Wallace F. Whitney, Jr., Stock Option Agreement E-23
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.X Frank J. Zugel, Stock Option Agreement E-24
under the Wyman-Gordon Company Long-term
Incentive Plan dated April 17, 1996.
10.Y Amendment to Performance Share Agreement under E-25
the Wyman-Gordon Company Long-term Incentive
Plan dated May 24, 1994 between Wyman-Gordon
Company and David P. Gruber.
10.Z Stock Purchase Agreement dated as of January 10, -
1994 between Cooper Industries, Inc. and the
Company incorporated by reference to Annex A
to the Company's preliminary Proxy Statement
filed with the Securities and Exchange
Commission on March 8, 1994.
10.AA Investment Agreement dated as of January 10, -
1994 between Cooper Industries, Inc. and the
Company incorporated by reference to Annex B
to the Company's preliminary Proxy Statement
filed with the Securities and Exchange
Commission on March 8, 1994.
10.AB Amendment dated May 26, 1994 to Investment -
Agreement dated as of January 10, 1994,
between the Company and Cooper - incorporated
by reference to the Company's Report on
Form 8-K dated May 26, 1994.
10.AC Revolving Credit Agreement dated as of May 20, -
1994 among Wyman-Gordon Receivables Corporation,
the Financial Institutions Parties Hereto and
Shawmut Bank N.A. as Issuing Bank, as Facility
Agent and as Collateral Agent - incorporated by
reference to the Company's Report on Form 8-K
dated May 26, 1994.
</TABLE>
-77-<PAGE>
<PAGE> 78
<TABLE>
<CAPTION>
EXHIBIT INDEX (Continued)
EXHIBIT DESCRIPTION PAGE
<S> <C> <C>
10.AD Receivables Purchase and Sale Agreement dated -
as of May 20, 1994 among Wyman-Gordon Company,
Wyman-Gordon Investment Castings, Inc. and
Precision Founders Inc. as the Sellers, Wyman-
Gordon Company as the Servicer and Wyman-Gordon
Receivables Corporation as the Purchaser -
incorporated by reference to the Company's
Report on Form 8-K dated May 26, 1994.
10.AE Performance Share Agreement under the Wyman- -
Gordon Company Long-Term Incentive Plan between
the Company and David P. Gruber dated as of
May 24, 1994 - incorporated by reference to the
Company's Report on Form 8-K dated May 26, 1994.
10.AF Long-term Incentive Plan dated July 19, 1995 -
- incorporated by reference to Appendix A of
the Company's "Proxy Statement for Annual
Meeting of Stockholders" on October 18, 1995.
10.AG Wyman-Gordon Company Non-Employee Director -
Stock Option Plan dated January 18, 1995 -
incorporated by reference to Appendix C of
the Company's "Proxy Statement for Annual
Meeting of Stockholders" on October 18, 1995.
21 List of Subsidiaries E-26
23 Consent of Ernst & Young LLP 79
27 Financial Data Schedule E-27
</TABLE>
NOTE: Exhibits not physically located in this Form 10-K can be
obtained from the Company upon written request to the Clerk at the
address on the cover of this Form 10-K at a cost of $.25 per page.
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Commission during
the fourth quarter of fiscal 1996.
-78-<PAGE>
<PAGE> 79
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statements (Form S-8, File Number 2-56547, 2-75980,
33-26980, 33-48068 and 33-64503) pertaining to the Wyman-Gordon
Company Executive Long-Term Incentive Program (1975) - Amendment
No. 6, the Wyman-Gordon Company Stock Purchase Plan, the Wyman-
Gordon Company Savings/Investment Plan, the Wyman-Gordon Company
Long-Term Incentive Plan and the Wyman-Gordon Company Employee
Stock Purchase Plan; and the Registration Statement (Form S-3, File
Number 33-63459) of Wyman-Gordon Company and in the related
Prospectuses of our report dated June 24, 1996, with respect to the
consolidated financial statements of Wyman-Gordon Company and
subsidiaries included in the Annual Report (Form 10-K) for the year
ended May 31, 1996.
/S/ERNST & YOUNG LLP
Boston, Massachusetts
August 9, 1996
-79-<PAGE>
<PAGE> 80
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
(REGISTRANT)
By /S/ ANDREW C. GENOR August 12, 1996
Andrew C. Genor Date
Vice President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/S/ JOHN M. NELSON Chairman of the August 12, 1996
John M. Nelson Board of Directors Date
/S/ DAVID P. GRUBER President, August 12, 1996
David P. Gruber Chief Executive Officer Date
and Director
/S/ ANDREW C. GENOR Vice President, August 12, 1996
Andrew C. Genor Chief Financial Officer Date
and Treasurer and
Principal Financial Officer
/S/ JEFFREY B. LAVIN Corporate Controller August 12, 1996
Jeffrey B. Lavin and Principal Date
Accounting Officer
/S/ E. PAUL CASEY Director August 12, 1996
E. Paul Casey Date
/S/ WARNER S. FLETCHER Director August 12, 1996
Warner S. Fletcher Date
/S/ ROBERT G. FOSTER Director August 12, 1996
Robert G. Foster Date
/S/ RUSSELL E. FULLER Director August 12, 1996
Russell E. Fuller Date
</TABLE>
-80-<PAGE>
<PAGE> 81
<TABLE>
<CAPTION>
<S> <C> <C>
/S/ M HOWARD JACOBSON Director August 12, 1996
M Howard Jacobson Date
/S/ JUDITH S. KING Director August 12, 1996
Judith S. King Date
/S/ GEORGE S. MUMFORD, JR. Director August 12, 1996
George S. Mumford, Jr. Date
/S/ H. JOHN RILEY, JR. Director August 12, 1996
H. John Riley, Jr. Date
/S/ JON C. STRAUSS Director August 12, 1996
Jon C. Strauss Date
/S/ CHARLES A. ZRAKET Director August 12, 1996
Charles A. Zraket Date
</TABLE>
-81-
<PAGE> 1
EXHIBIT 10.A
AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated April 17, 1996, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and Andrew C. Genor (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an
Executive Severance Agreement dated January 18, 1995 (the "Prior
Agreement"); and
WHEREAS, the parties wish to amend the Prior Agreement as
provided herein;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
SECTION 1.1 QUALIFYING TERMINATION. The Company shall not be
required to provide any benefits to the Executive pursuant to this
Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) the Company terminates the Executive's employment
other than for Cause; or
(ii) the Executive terminates his employment with the
Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
SECTION 1.2 CHANGE IN CONTROL. Except as provided below, a
Change in Control shall be deemed to occur when and only when the
first of the following events occurs:
(a) the acquisition (including by purchase, exchange, merger
or other business combination, or any combination of the
foregoing) by any individuals, firms, corporations or
other entities, acting in concert ("Person"), together
E-1<PAGE>
<PAGE> 2
with all Affiliates and Associates of such Person, of
beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Board of
Directors" shall mean the Board of Directors of the Company and the
term "Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board of
Directors.
SECTION 1.3. TERMINATION FOR CAUSE. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense, or (b)
engages (except (i) by reason of incapacity due to illness or
injury or (ii) in connection with an actual or anticipated
termination of employment by the Executive for Good Reason) in a
material violation of his responsibilities to the Company that
results in a material injury to the Company.
SECTION 1.4 TERMINATION FOR GOOD REASON. The Executive shall
have a Good Reason for terminating employment with the Company only
if one or more of the following occurs after a Change in Control:
-2-<PAGE>
<PAGE> 3
(a) a change in the Executive's status or position (including
for this purpose a change in the principal place of the
Executive's employment on a basis that does not conform
with the Company's present policies for executive
relocation, but excluding required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations)
with the Company that, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased from
time to time;
(e) the failure by the Company to continue in effect any Plan
in which the Executive is participating at the time of
the Change in Control (or plans or arrangements providing
the Executive with substantially equivalent benefits)
other than as a result of the normal expiration of any
such Plan in accordance with its terms as in effect at
the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him if any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code (the "Code"), and except to the
extent that the Company provides the Executive with
substantially equivalent benefits;
-3-<PAGE>
<PAGE> 4
(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as
provided by Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive;
or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of
any deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
SECTION 1.5 DISABILITY. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
SECTION 1.6 NOTICE. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
SECTION 2.1 BASIC SEVERANCE PAYMENT. If the Executive incurs
a Qualifying Termination following a Change in Control that occurs
on or before termination of this Agreement as provided in Section
6.1 hereof, the Company shall pay within 30 days after the date of
the Qualifying Termination to the Executive a single lump sum cash
amount equal to his Total Annual Compensation multiplied by the
lesser of (a) 2.50 or (b) .0833 multiplied by the number of full
months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
-4-<PAGE>
<PAGE> 5
SECTION 2.2 INSURANCE. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs him following the Qualifying Termination.
SECTION 2.3 EXECUTIVE LONG-TERM INCENTIVE PROGRAM. If the
Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Agreement.
SECTION 2.4 NONDUPLICATION. Nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
or service credit that the Company is otherwise required to provide
under any other contract, agreement, policy, plan, or arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
SECTION 3.1 EFFECT ON SEVERANCE POLICY. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall
not be entitled to any benefits under any other Company severance
policy.
ARTICLE IV
TAX MATTERS
SECTION 4.1 WITHHOLDING. The Company may withhold from any
amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
SECTION 4.2 SPECIAL LIMITATION.
(a) If part or all of the payments or benefits payable to the
Executive, when added to other payments payable to the Executive as
a result of a Change in Control, constitute Parachute Payments, the
following limitation shall apply. If the Parachute Payments, net
of the sum of the Excise Tax and the Federal income and employment
taxes, state and local income taxes on the amount of the Parachute
-5-<PAGE>
<PAGE> 6
Payments in excess of the Threshold Amount, are greater than the
Threshold Amount, the Executive shall be entitled to the full
payments and benefits payable under this Agreement. If the
Threshold Amount is greater than the Parachute Payments, net of the
sum of the Excise Tax, and the Federal income and employment taxes,
state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, then the payments and
benefits under this Agreement shall be reduced to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In the event a reduction is required, it
shall be the Executive's choice as to which payments or benefits
shall be so reduced. The Employer shall select a firm of
independent certified public accountants to determine which of the
foregoing alternative provisions shall apply. For purposes of
determining the amount of the Federal income and employment taxes,
and state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, the Executive shall be
deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation applicable to individuals for the calendar
year in which the payments and benefits under this Agreement are
payable and state and local income taxes at the highest marginal
rates of individual taxation in the state and locality of the
Executive's residence for the calendar year in which the payments
and benefits under this Agreement are payable, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) ADDITIONAL DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"PARACHUTE PAYMENTS" shall mean any payment or provision
by the Employer of any amount or benefit to and for the benefit of
the Executive, whether paid or payable or provided or to be
provided under the terms of this Agreement or otherwise, that would
be considered "parachute payments" within the meaning of Section
280G(B)(2)(A) of the Code and the regulations promulgated
thereunder.
"THRESHOLD AMOUNT" shall mean three times the Executive's
"base amount" within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder, less one dollar.
"EXCISE TAX" shall mean the excise tax imposed by Section
4999 of the Code.
ARTICLE V
COLLATERAL MATTERS
SECTION 5.1 NATURE OF PAYMENTS. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
-6-<PAGE>
<PAGE> 7
SECTION 5.2 LEGAL EXPENSES. The Company shall pay all legal
fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
SECTION 5.3 MITIGATION. The Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
SECTION 5.4 AUTHORITY. The execution of this Agreement has
been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 TERM OF AGREEMENT. This Agreement shall become
effective on the date hereof and shall continue in effect until the
earliest of (a) April 30, 1998, if no Change in Control has
occurred before that date; provided, however, that commencing on
May 1, 1998 and each May 1 thereafter, the term of this Agreement
shall automatically be extended for an additional year unless, not
later than January 30 of the same year, the Company shall have
given notice that it does not wish to extend this Agreement; (b)
the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's
termination of the Executive's employment for Cause, or the
Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
SECTION 6.2 GOVERNING LAW. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 6.3 SUCCESSOR TO THE COMPANY. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the business or assets of
the Company, whether by merger, consolidation, sale or otherwise,
but shall not otherwise be assignable by the Company. Without
limitations of the foregoing sentence, the Company shall require
any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
SECTION 6.4 SUCCESSOR TO THE EXECUTIVE. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees, legatees and,
subject to the Section 6.5 hereof, his designees ("Successors").
If the Executive should die while amounts are or may be payable to
him under this Agreement, references hereunder to the "Executive"
shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall supersede the terms
of any plan or arrangement (other than this Agreement) that is
affected by this Agreement.
SECTION 6.5 NONALIENABILITY. No right of or amount payable
to the Executive under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.5 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
SECTION 6.6 NOTICES. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01536,
Attention: Vice President, General Counsel and Clerk. Notices to
the Executive shall be deemed given when personally delivered or
sent by certified or registered mail or overnight delivery service
to the last address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice to the
other, designate an address other than the foregoing for the
receipt of subsequent notices.
SECTION 6.7 AMENDMENT. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
SECTION 6.8 WAIVERS. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
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exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
SECTION 6.9. SEVERABILITY. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
SECTION 6.10. CAPTIONS. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed
in a number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute a single
instrument.
SECTION 6.12. ENTIRE AGREEMENT. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all previous oral
statements and other writings (including the Prior Agreement) with
respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/LYNNE I. MAY By: /S/DAVID P. GRUBER
Lynne I. May David P. Gruber, President
and Chief Executive Officer
ATTEST:
/S/NANCY A. STREICH /S/ANDREW C. GENOR
Nancy A. Streich Andrew C. Genor
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EXHIBIT 10.B
AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated April 17, 1996, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and David P. Gruber (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an
Executive Severance Agreement dated October 16, 1991 (the "Prior
Agreement"); and
WHEREAS, the parties wish to amend the Prior Agreement as
provided herein;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
SECTION 1.1 QUALIFYING TERMINATION. The Company shall not be
required to provide any benefits to the Executive pursuant to this
Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) the Company terminates the Executive's employment
other than for Cause; or
(ii) the Executive terminates his employment with the
Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
SECTION 1.2 CHANGE IN CONTROL. Except as provided below, a
Change in Control shall be deemed to occur when and only when the
first of the following events occurs:
(a) the acquisition (including by purchase, exchange, merger
or other business combination, or any combination of the
foregoing) by any individuals, firms, corporations or
other entities, acting in concert ("Person"), together
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with all Affiliates and Associates of such Person, of
beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Board of
Directors" shall mean the Board of Directors of the Company and the
term "Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board of
Directors.
SECTION 1.3. TERMINATION FOR CAUSE. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense, or (b)
engages (except (i) by reason of incapacity due to illness or
injury or (ii) in connection with an actual or anticipated
termination of employment by the Executive for Good Reason) in a
material violation of his responsibilities to the Company that
results in a material injury to the Company.
SECTION 1.4 TERMINATION FOR GOOD REASON. The Executive shall
have a Good Reason for terminating employment with the Company only
if one or more of the following occurs after a Change in Control:
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(a) a change in the Executive's status or position (including
for this purpose a change in the principal place of the
Executive's employment on a basis that does not conform
with the Company's present policies for executive
relocation, but excluding required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations)
with the Company that, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased from
time to time;
(e) the failure by the Company to continue in effect any Plan
in which the Executive is participating at the time of
the Change in Control (or plans or arrangements providing
the Executive with substantially equivalent benefits)
other than as a result of the normal expiration of any
such Plan in accordance with its terms as in effect at
the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him if any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code (the "Code"), and except to the
extent that the Company provides the Executive with
substantially equivalent benefits;
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(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as
provided by Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive;
or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of
any deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
SECTION 1.5 DISABILITY. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
SECTION 1.6 NOTICE. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
SECTION 2.1 BASIC SEVERANCE PAYMENT. If the Executive incurs
a Qualifying Termination following a Change in Control that occurs
on or before termination of this Agreement as provided in Section
6.1 hereof, the Company shall pay within 30 days after the date of
the Qualifying Termination to the Executive a single lump sum cash
amount equal to his Total Annual Compensation multiplied by the
lesser of (a) 2.50 or (b) .0833 multiplied by the number of full
months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
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SECTION 2.2 INSURANCE. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs him following the Qualifying Termination.
SECTION 2.3 EXECUTIVE LONG-TERM INCENTIVE PROGRAM. If the
Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Agreement.
SECTION 2.4 NONDUPLICATION. Nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
or service credit that the Company is otherwise required to provide
under any other contract, agreement, policy, plan, or arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
SECTION 3.1 EFFECT ON SEVERANCE POLICY. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall
not be entitled to any benefits under any other Company severance
policy.
ARTICLE IV
TAX MATTERS
SECTION 4.1 WITHHOLDING. The Company may withhold from any
amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
SECTION 4.2 SPECIAL LIMITATION.
(a) If part or all of the payments or benefits payable to the
Executive, when added to other payments payable to the Executive as
a result of a Change in Control, constitute Parachute Payments, the
following limitation shall apply. If the Parachute Payments, net
of the sum of the Excise Tax and the Federal income and employment
taxes, state and local income taxes on the amount of the Parachute
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Payments in excess of the Threshold Amount, are greater than the
Threshold Amount, the Executive shall be entitled to the full
payments and benefits payable under this Agreement. If the
Threshold Amount is greater than the Parachute Payments, net of the
sum of the Excise Tax, and the Federal income and employment taxes,
state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, then the payments and
benefits under this Agreement shall be reduced to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In the event a reduction is required, it
shall be the Executive's choice as to which payments or benefits
shall be so reduced. The Employer shall select a firm of
independent certified public accountants to determine which of the
foregoing alternative provisions shall apply. For purposes of
determining the amount of the Federal income and employment taxes,
and state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, the Executive shall be
deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation applicable to individuals for the calendar
year in which the payments and benefits under this Agreement are
payable and state and local income taxes at the highest marginal
rates of individual taxation in the state and locality of the
Executive's residence for the calendar year in which the payments
and benefits under this Agreement are payable, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) ADDITIONAL DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"PARACHUTE PAYMENTS" shall mean any payment or provision
by the Employer of any amount or benefit to and for the benefit of
the Executive, whether paid or payable or provided or to be
provided under the terms of this Agreement or otherwise, that would
be considered "parachute payments" within the meaning of Section
280G(B)(2)(A) of the Code and the regulations promulgated
thereunder.
"THRESHOLD AMOUNT" shall mean three times the Executive's
"base amount" within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder, less one dollar.
"EXCISE TAX" shall mean the excise tax imposed by Section
4999 of the Code.
ARTICLE V
COLLATERAL MATTERS
SECTION 5.1 NATURE OF PAYMENTS. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
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SECTION 5.2 LEGAL EXPENSES. The Company shall pay all legal
fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
SECTION 5.3 MITIGATION. The Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
SECTION 5.4 AUTHORITY. The execution of this Agreement has
been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 TERM OF AGREEMENT. This Agreement shall become
effective on the date hereof and shall continue in effect until the
earliest of (a) April 30, 1998, if no Change in Control has
occurred before that date; provided, however, that commencing on
May 1, 1998 and each May 1 thereafter, the term of this Agreement
shall automatically be extended for an additional year unless, not
later than January 30 of the same year, the Company shall have
given notice that it does not wish to extend this Agreement; (b)
the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's
termination of the Executive's employment for Cause, or the
Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
SECTION 6.2 GOVERNING LAW. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 6.3 SUCCESSOR TO THE COMPANY. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the business or assets of
the Company, whether by merger, consolidation, sale or otherwise,
but shall not otherwise be assignable by the Company. Without
limitations of the foregoing sentence, the Company shall require
any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
SECTION 6.4 SUCCESSOR TO THE EXECUTIVE. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees, legatees and,
subject to the Section 6.5 hereof, his designees ("Successors").
If the Executive should die while amounts are or may be payable to
him under this Agreement, references hereunder to the "Executive"
shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall supersede the terms
of any plan or arrangement (other than this Agreement) that is
affected by this Agreement.
SECTION 6.5 NONALIENABILITY. No right of or amount payable
to the Executive under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.5 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
SECTION 6.6 NOTICES. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01536,
Attention: Vice President, General Counsel and Clerk. Notices to
the Executive shall be deemed given when personally delivered or
sent by certified or registered mail or overnight delivery service
to the last address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice to the
other, designate an address other than the foregoing for the
receipt of subsequent notices.
SECTION 6.7 AMENDMENT. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
SECTION 6.8 WAIVERS. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
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exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
SECTION 6.9. SEVERABILITY. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
SECTION 6.10. CAPTIONS. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed
in a number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute a single
instrument.
SECTION 6.12. ENTIRE AGREEMENT. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all previous oral
statements and other writings (including the Prior Agreement) with
respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/SHIRLEY A. PERO By: /S/JOHN M. NELSON
Shirley A. Pero John M. Nelson, Chairman
ATTEST:
/S/LYNNE I. MAY /S/DAVID P. GRUBER
Lynne I. May David P. Gruber
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EXHIBIT 10.C
AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated April 17, 1996, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and Sanjay N. Shah (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an
Executive Severance Agreement dated July 12, 1991 (the "Prior
Agreement"); and
WHEREAS, the parties wish to amend the Prior Agreement as
provided herein;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
SECTION 1.1 QUALIFYING TERMINATION. The Company shall not be
required to provide any benefits to the Executive pursuant to this
Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) the Company terminates the Executive's employment
other than for Cause; or
(ii) the Executive terminates his employment with the
Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
SECTION 1.2 CHANGE IN CONTROL. Except as provided below, a
Change in Control shall be deemed to occur when and only when the
first of the following events occurs:
(a) the acquisition (including by purchase, exchange, merger
or other business combination, or any combination of the
foregoing) by any individuals, firms, corporations or
other entities, acting in concert ("Person"), together
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with all Affiliates and Associates of such Person, of
beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Board of
Directors" shall mean the Board of Directors of the Company and the
term "Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board of
Directors.
SECTION 1.3. TERMINATION FOR CAUSE. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense, or (b)
engages (except (i) by reason of incapacity due to illness or
injury or (ii) in connection with an actual or anticipated
termination of employment by the Executive for Good Reason) in a
material violation of his responsibilities to the Company that
results in a material injury to the Company.
SECTION 1.4 TERMINATION FOR GOOD REASON. The Executive shall
have a Good Reason for terminating employment with the Company only
if one or more of the following occurs after a Change in Control:
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(a) a change in the Executive's status or position (including
for this purpose a change in the principal place of the
Executive's employment on a basis that does not conform
with the Company's present policies for executive
relocation, but excluding required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations)
with the Company that, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased from
time to time;
(e) the failure by the Company to continue in effect any Plan
in which the Executive is participating at the time of
the Change in Control (or plans or arrangements providing
the Executive with substantially equivalent benefits)
other than as a result of the normal expiration of any
such Plan in accordance with its terms as in effect at
the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him if any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code (the "Code"), and except to the
extent that the Company provides the Executive with
substantially equivalent benefits;
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(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as
provided by Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive;
or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of
any deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
SECTION 1.5 DISABILITY. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
SECTION 1.6 NOTICE. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
SECTION 2.1 BASIC SEVERANCE PAYMENT. If the Executive incurs
a Qualifying Termination following a Change in Control that occurs
on or before termination of this Agreement as provided in Section
6.1 hereof, the Company shall pay within 30 days after the date of
the Qualifying Termination to the Executive a single lump sum cash
amount equal to his Total Annual Compensation multiplied by the
lesser of (a) 2.50 or (b) .0833 multiplied by the number of full
months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
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SECTION 2.2 INSURANCE. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs him following the Qualifying Termination.
SECTION 2.3 EXECUTIVE LONG-TERM INCENTIVE PROGRAM. If the
Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Agreement.
SECTION 2.4 NONDUPLICATION. Nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
or service credit that the Company is otherwise required to provide
under any other contract, agreement, policy, plan, or arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
SECTION 3.1 EFFECT ON SEVERANCE POLICY. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall
not be entitled to any benefits under any other Company severance
policy.
ARTICLE IV
TAX MATTERS
SECTION 4.1 WITHHOLDING. The Company may withhold from any
amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
SECTION 4.2 SPECIAL LIMITATION.
(a) If part or all of the payments or benefits payable to the
Executive, when added to other payments payable to the Executive as
a result of a Change in Control, constitute Parachute Payments, the
following limitation shall apply. If the Parachute Payments, net
of the sum of the Excise Tax and the Federal income and employment
taxes, state and local income taxes on the amount of the Parachute
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Payments in excess of the Threshold Amount, are greater than the
Threshold Amount, the Executive shall be entitled to the full
payments and benefits payable under this Agreement. If the
Threshold Amount is greater than the Parachute Payments, net of the
sum of the Excise Tax, and the Federal income and employment taxes,
state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, then the payments and
benefits under this Agreement shall be reduced to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In the event a reduction is required, it
shall be the Executive's choice as to which payments or benefits
shall be so reduced. The Employer shall select a firm of
independent certified public accountants to determine which of the
foregoing alternative provisions shall apply. For purposes of
determining the amount of the Federal income and employment taxes,
and state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, the Executive shall be
deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation applicable to individuals for the calendar
year in which the payments and benefits under this Agreement are
payable and state and local income taxes at the highest marginal
rates of individual taxation in the state and locality of the
Executive's residence for the calendar year in which the payments
and benefits under this Agreement are payable, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) ADDITIONAL DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"PARACHUTE PAYMENTS" shall mean any payment or provision
by the Employer of any amount or benefit to and for the benefit of
the Executive, whether paid or payable or provided or to be
provided under the terms of this Agreement or otherwise, that would
be considered "parachute payments" within the meaning of Section
280G(B)(2)(A) of the Code and the regulations promulgated
thereunder.
"THRESHOLD AMOUNT" shall mean three times the Executive's
"base amount" within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder, less one dollar.
"EXCISE TAX" shall mean the excise tax imposed by Section
4999 of the Code.
ARTICLE V
COLLATERAL MATTERS
SECTION 5.1 NATURE OF PAYMENTS. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
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SECTION 5.2 LEGAL EXPENSES. The Company shall pay all legal
fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
SECTION 5.3 MITIGATION. The Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
SECTION 5.4 AUTHORITY. The execution of this Agreement has
been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 TERM OF AGREEMENT. This Agreement shall become
effective on the date hereof and shall continue in effect until the
earliest of (a) April 30, 1998, if no Change in Control has
occurred before that date; provided, however, that commencing on
May 1, 1998 and each May 1 thereafter, the term of this Agreement
shall automatically be extended for an additional year unless, not
later than January 30 of the same year, the Company shall have
given notice that it does not wish to extend this Agreement; (b)
the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's
termination of the Executive's employment for Cause, or the
Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
SECTION 6.2 GOVERNING LAW. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 6.3 SUCCESSOR TO THE COMPANY. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the business or assets of
the Company, whether by merger, consolidation, sale or otherwise,
but shall not otherwise be assignable by the Company. Without
limitations of the foregoing sentence, the Company shall require
any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
SECTION 6.4 SUCCESSOR TO THE EXECUTIVE. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees, legatees and,
subject to the Section 6.5 hereof, his designees ("Successors").
If the Executive should die while amounts are or may be payable to
him under this Agreement, references hereunder to the "Executive"
shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall supersede the terms
of any plan or arrangement (other than this Agreement) that is
affected by this Agreement.
SECTION 6.5 NONALIENABILITY. No right of or amount payable
to the Executive under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.5 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
SECTION 6.6 NOTICES. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01536,
Attention: Vice President, General Counsel and Clerk. Notices to
the Executive shall be deemed given when personally delivered or
sent by certified or registered mail or overnight delivery service
to the last address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice to the
other, designate an address other than the foregoing for the
receipt of subsequent notices.
SECTION 6.7 AMENDMENT. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
SECTION 6.8 WAIVERS. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
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exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
SECTION 6.9. SEVERABILITY. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
SECTION 6.10. CAPTIONS. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed
in a number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute a single
instrument.
SECTION 6.12. ENTIRE AGREEMENT. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all previous oral
statements and other writings (including the Prior Agreement) with
respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/LYNNE I. MAY By: /S/DAVID P. GRUBER
Lynne I. May David P. Gruber, President
and Chief Executive Officer
ATTEST:
/S/VIRGINIA M. BROADWELL /S/SANJAY N. SHAH
Virginia M. Broadwell Sanjay N. Shah
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EXHIBIT 10.D
AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated April 17, 1996, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and J. Douglas Whelan (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an
Executive Severance Agreement dated May 1, 1994 (the "Prior
Agreement"); and
WHEREAS, the parties wish to amend the Prior Agreement as
provided herein;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
SECTION 1.1 QUALIFYING TERMINATION. The Company shall not be
required to provide any benefits to the Executive pursuant to this
Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) the Company terminates the Executive's employment
other than for Cause; or
(ii) the Executive terminates his employment with the
Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
SECTION 1.2 CHANGE IN CONTROL. Except as provided below, a
Change in Control shall be deemed to occur when and only when the
first of the following events occurs:
(a) the acquisition (including by purchase, exchange, merger
or other business combination, or any combination of the
foregoing) by any individuals, firms, corporations or
other entities, acting in concert ("Person"), together
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with all Affiliates and Associates of such Person, of
beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Board of
Directors" shall mean the Board of Directors of the Company and the
term "Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board of
Directors.
SECTION 1.3. TERMINATION FOR CAUSE. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense, or (b)
engages (except (i) by reason of incapacity due to illness or
injury or (ii) in connection with an actual or anticipated
termination of employment by the Executive for Good Reason) in a
material violation of his responsibilities to the Company that
results in a material injury to the Company.
SECTION 1.4 TERMINATION FOR GOOD REASON. The Executive shall
have a Good Reason for terminating employment with the Company only
if one or more of the following occurs after a Change in Control:
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(a) a change in the Executive's status or position (including
for this purpose a change in the principal place of the
Executive's employment on a basis that does not conform
with the Company's present policies for executive
relocation, but excluding required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations)
with the Company that, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased from
time to time;
(e) the failure by the Company to continue in effect any Plan
in which the Executive is participating at the time of
the Change in Control (or plans or arrangements providing
the Executive with substantially equivalent benefits)
other than as a result of the normal expiration of any
such Plan in accordance with its terms as in effect at
the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him if any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code (the "Code"), and except to the
extent that the Company provides the Executive with
substantially equivalent benefits;
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(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as
provided by Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive;
or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of
any deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
SECTION 1.5 DISABILITY. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
SECTION 1.6 NOTICE. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
SECTION 2.1 BASIC SEVERANCE PAYMENT. If the Executive incurs
a Qualifying Termination following a Change in Control that occurs
on or before termination of this Agreement as provided in Section
6.1 hereof, the Company shall pay within 30 days after the date of
the Qualifying Termination to the Executive a single lump sum cash
amount equal to his Total Annual Compensation multiplied by the
lesser of (a) 2.50 or (b) .0833 multiplied by the number of full
months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
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SECTION 2.2 INSURANCE. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs him following the Qualifying Termination.
SECTION 2.3 EXECUTIVE LONG-TERM INCENTIVE PROGRAM. If the
Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Agreement.
SECTION 2.4 NONDUPLICATION. Nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
or service credit that the Company is otherwise required to provide
under any other contract, agreement, policy, plan, or arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
SECTION 3.1 EFFECT ON SEVERANCE POLICY. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall
not be entitled to any benefits under any other Company severance
policy.
ARTICLE IV
TAX MATTERS
SECTION 4.1 WITHHOLDING. The Company may withhold from any
amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
SECTION 4.2 SPECIAL LIMITATION.
(a) If part or all of the payments or benefits payable to the
Executive, when added to other payments payable to the Executive as
a result of a Change in Control, constitute Parachute Payments, the
following limitation shall apply. If the Parachute Payments, net
of the sum of the Excise Tax and the Federal income and employment
taxes, state and local income taxes on the amount of the Parachute
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Payments in excess of the Threshold Amount, are greater than the
Threshold Amount, the Executive shall be entitled to the full
payments and benefits payable under this Agreement. If the
Threshold Amount is greater than the Parachute Payments, net of the
sum of the Excise Tax, and the Federal income and employment taxes,
state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, then the payments and
benefits under this Agreement shall be reduced to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In the event a reduction is required, it
shall be the Executive's choice as to which payments or benefits
shall be so reduced. The Employer shall select a firm of
independent certified public accountants to determine which of the
foregoing alternative provisions shall apply. For purposes of
determining the amount of the Federal income and employment taxes,
and state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, the Executive shall be
deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation applicable to individuals for the calendar
year in which the payments and benefits under this Agreement are
payable and state and local income taxes at the highest marginal
rates of individual taxation in the state and locality of the
Executive's residence for the calendar year in which the payments
and benefits under this Agreement are payable, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) ADDITIONAL DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"PARACHUTE PAYMENTS" shall mean any payment or provision
by the Employer of any amount or benefit to and for the benefit of
the Executive, whether paid or payable or provided or to be
provided under the terms of this Agreement or otherwise, that would
be considered "parachute payments" within the meaning of Section
280G(B)(2)(A) of the Code and the regulations promulgated
thereunder.
"THRESHOLD AMOUNT" shall mean three times the Executive's
"base amount" within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder, less one dollar.
"EXCISE TAX" shall mean the excise tax imposed by Section
4999 of the Code.
ARTICLE V
COLLATERAL MATTERS
SECTION 5.1 NATURE OF PAYMENTS. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
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SECTION 5.2 LEGAL EXPENSES. The Company shall pay all legal
fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
SECTION 5.3 MITIGATION. The Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
SECTION 5.4 AUTHORITY. The execution of this Agreement has
been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 TERM OF AGREEMENT. This Agreement shall become
effective on the date hereof and shall continue in effect until the
earliest of (a) April 30, 1998, if no Change in Control has
occurred before that date; provided, however, that commencing on
May 1, 1998 and each May 1 thereafter, the term of this Agreement
shall automatically be extended for an additional year unless, not
later than January 30 of the same year, the Company shall have
given notice that it does not wish to extend this Agreement; (b)
the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's
termination of the Executive's employment for Cause, or the
Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
SECTION 6.2 GOVERNING LAW. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 6.3 SUCCESSOR TO THE COMPANY. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the business or assets of
the Company, whether by merger, consolidation, sale or otherwise,
but shall not otherwise be assignable by the Company. Without
limitations of the foregoing sentence, the Company shall require
any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
SECTION 6.4 SUCCESSOR TO THE EXECUTIVE. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees, legatees and,
subject to the Section 6.5 hereof, his designees ("Successors").
If the Executive should die while amounts are or may be payable to
him under this Agreement, references hereunder to the "Executive"
shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall supersede the terms
of any plan or arrangement (other than this Agreement) that is
affected by this Agreement.
SECTION 6.5 NONALIENABILITY. No right of or amount payable
to the Executive under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.5 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
SECTION 6.6 NOTICES. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01536,
Attention: Vice President, General Counsel and Clerk. Notices to
the Executive shall be deemed given when personally delivered or
sent by certified or registered mail or overnight delivery service
to the last address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice to the
other, designate an address other than the foregoing for the
receipt of subsequent notices.
SECTION 6.7 AMENDMENT. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
SECTION 6.8 WAIVERS. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
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exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
SECTION 6.9. SEVERABILITY. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
SECTION 6.10. CAPTIONS. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed
in a number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute a single
instrument.
SECTION 6.12. ENTIRE AGREEMENT. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all previous oral
statements and other writings (including the Prior Agreement) with
respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/LYNNE I. MAY By: /S/DAVID P. GRUBER
Lynne I. May David P. Gruber, President
and Chief Executive Officer
ATTEST:
/S/G. LESTER ROBERTSON /S/J. DOUGLAS WHELAN
G. Lester Robertson J. Douglas Whelan
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EXHIBIT 10.E
AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated April 17, 1996, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and Wallace F. Whitney, Jr. (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an
Executive Severance Agreement dated July 12, 1991 (the "Prior
Agreement"); and
WHEREAS, the parties wish to amend the Prior Agreement as
provided herein;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
SECTION 1.1 QUALIFYING TERMINATION. The Company shall not be
required to provide any benefits to the Executive pursuant to this
Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) the Company terminates the Executive's employment
other than for Cause; or
(ii) the Executive terminates his employment with the
Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
SECTION 1.2 CHANGE IN CONTROL. Except as provided below, a
Change in Control shall be deemed to occur when and only when the
first of the following events occurs:
(a) the acquisition (including by purchase, exchange, merger
or other business combination, or any combination of the
foregoing) by any individuals, firms, corporations or
other entities, acting in concert ("Person"), together
E-5<PAGE>
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with all Affiliates and Associates of such Person, of
beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Board of
Directors" shall mean the Board of Directors of the Company and the
term "Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board of
Directors.
SECTION 1.3. TERMINATION FOR CAUSE. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense, or (b)
engages (except (i) by reason of incapacity due to illness or
injury or (ii) in connection with an actual or anticipated
termination of employment by the Executive for Good Reason) in a
material violation of his responsibilities to the Company that
results in a material injury to the Company.
SECTION 1.4 TERMINATION FOR GOOD REASON. The Executive shall
have a Good Reason for terminating employment with the Company only
if one or more of the following occurs after a Change in Control:
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(a) a change in the Executive's status or position (including
for this purpose a change in the principal place of the
Executive's employment on a basis that does not conform
with the Company's present policies for executive
relocation, but excluding required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations)
with the Company that, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased from
time to time;
(e) the failure by the Company to continue in effect any Plan
in which the Executive is participating at the time of
the Change in Control (or plans or arrangements providing
the Executive with substantially equivalent benefits)
other than as a result of the normal expiration of any
such Plan in accordance with its terms as in effect at
the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him if any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code (the "Code"), and except to the
extent that the Company provides the Executive with
substantially equivalent benefits;
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(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as
provided by Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive;
or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of
any deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
SECTION 1.5 DISABILITY. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
SECTION 1.6 NOTICE. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
SECTION 2.1 BASIC SEVERANCE PAYMENT. If the Executive incurs
a Qualifying Termination following a Change in Control that occurs
on or before termination of this Agreement as provided in Section
6.1 hereof, the Company shall pay within 30 days after the date of
the Qualifying Termination to the Executive a single lump sum cash
amount equal to his Total Annual Compensation multiplied by the
lesser of (a) 2.50 or (b) .0833 multiplied by the number of full
months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
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SECTION 2.2 INSURANCE. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs him following the Qualifying Termination.
SECTION 2.3 EXECUTIVE LONG-TERM INCENTIVE PROGRAM. If the
Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Agreement.
SECTION 2.4 NONDUPLICATION. Nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
or service credit that the Company is otherwise required to provide
under any other contract, agreement, policy, plan, or arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
SECTION 3.1 EFFECT ON SEVERANCE POLICY. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall
not be entitled to any benefits under any other Company severance
policy.
ARTICLE IV
TAX MATTERS
SECTION 4.1 WITHHOLDING. The Company may withhold from any
amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
SECTION 4.2 SPECIAL LIMITATION.
(a) If part or all of the payments or benefits payable to the
Executive, when added to other payments payable to the Executive as
a result of a Change in Control, constitute Parachute Payments, the
following limitation shall apply. If the Parachute Payments, net
of the sum of the Excise Tax and the Federal income and employment
taxes, state and local income taxes on the amount of the Parachute
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Payments in excess of the Threshold Amount, are greater than the
Threshold Amount, the Executive shall be entitled to the full
payments and benefits payable under this Agreement. If the
Threshold Amount is greater than the Parachute Payments, net of the
sum of the Excise Tax, and the Federal income and employment taxes,
state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, then the payments and
benefits under this Agreement shall be reduced to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In the event a reduction is required, it
shall be the Executive's choice as to which payments or benefits
shall be so reduced. The Employer shall select a firm of
independent certified public accountants to determine which of the
foregoing alternative provisions shall apply. For purposes of
determining the amount of the Federal income and employment taxes,
and state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, the Executive shall be
deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation applicable to individuals for the calendar
year in which the payments and benefits under this Agreement are
payable and state and local income taxes at the highest marginal
rates of individual taxation in the state and locality of the
Executive's residence for the calendar year in which the payments
and benefits under this Agreement are payable, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) ADDITIONAL DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"PARACHUTE PAYMENTS" shall mean any payment or provision
by the Employer of any amount or benefit to and for the benefit of
the Executive, whether paid or payable or provided or to be
provided under the terms of this Agreement or otherwise, that would
be considered "parachute payments" within the meaning of Section
280G(B)(2)(A) of the Code and the regulations promulgated
thereunder.
"THRESHOLD AMOUNT" shall mean three times the Executive's
"base amount" within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder, less one dollar.
"EXCISE TAX" shall mean the excise tax imposed by Section
4999 of the Code.
ARTICLE V
COLLATERAL MATTERS
SECTION 5.1 NATURE OF PAYMENTS. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
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SECTION 5.2 LEGAL EXPENSES. The Company shall pay all legal
fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
SECTION 5.3 MITIGATION. The Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
SECTION 5.4 AUTHORITY. The execution of this Agreement has
been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 TERM OF AGREEMENT. This Agreement shall become
effective on the date hereof and shall continue in effect until the
earliest of (a) April 30, 1998, if no Change in Control has
occurred before that date; provided, however, that commencing on
May 1, 1998 and each May 1 thereafter, the term of this Agreement
shall automatically be extended for an additional year unless, not
later than January 30 of the same year, the Company shall have
given notice that it does not wish to extend this Agreement; (b)
the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's
termination of the Executive's employment for Cause, or the
Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
SECTION 6.2 GOVERNING LAW. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 6.3 SUCCESSOR TO THE COMPANY. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the business or assets of
the Company, whether by merger, consolidation, sale or otherwise,
but shall not otherwise be assignable by the Company. Without
limitations of the foregoing sentence, the Company shall require
any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
SECTION 6.4 SUCCESSOR TO THE EXECUTIVE. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees, legatees and,
subject to the Section 6.5 hereof, his designees ("Successors").
If the Executive should die while amounts are or may be payable to
him under this Agreement, references hereunder to the "Executive"
shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall supersede the terms
of any plan or arrangement (other than this Agreement) that is
affected by this Agreement.
SECTION 6.5 NONALIENABILITY. No right of or amount payable
to the Executive under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.5 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
SECTION 6.6 NOTICES. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01536,
Attention: Vice President, General Counsel and Clerk. Notices to
the Executive shall be deemed given when personally delivered or
sent by certified or registered mail or overnight delivery service
to the last address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice to the
other, designate an address other than the foregoing for the
receipt of subsequent notices.
SECTION 6.7 AMENDMENT. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
SECTION 6.8 WAIVERS. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
-8-<PAGE>
<PAGE> 9
exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
SECTION 6.9. SEVERABILITY. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
SECTION 6.10. CAPTIONS. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed
in a number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute a single
instrument.
SECTION 6.12. ENTIRE AGREEMENT. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all previous oral
statements and other writings (including the Prior Agreement) with
respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/SHIRLEY A. PERO By: /S/DAVID P. GRUBER
Shirley A. Pero David P. Gruber, President
and Chief Executive Officer
ATTEST:
/S/LYNNE I. MAY /S/WALLACE F. WHITNEY,JR.
Lynne I. May Wallace F. Whitney, Jr.
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<PAGE> 1
EXHIBIT 10.F
AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated April 17, 1996, by and
between Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), and Frank J. Zugel (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an
Executive Severance Agreement dated January 17, 1996 (the "Prior
Agreement"); and
WHEREAS, the parties wish to amend the Prior Agreement as
provided herein;
NOW, THEREFORE, in consideration of the Executive's
service to the Company and the mutual agreements herein contained,
the Company and the Executive hereby agree, as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
SECTION 1.1 QUALIFYING TERMINATION. The Company shall not be
required to provide any benefits to the Executive pursuant to this
Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For
purposes of this Agreement, a Qualifying Termination shall occur
only if
(a) a Change in Control occurs, and
(b) within three years after the Change in Control,
(i) the Company terminates the Executive's employment
other than for Cause; or
(ii) the Executive terminates his employment with the
Company for Good Reason;
provided, that a Qualifying Termination shall not occur if the
Executive's employment with the Company terminates by reason of the
Executive's Disability, death, or retirement. For the purposes
hereof "retirement" shall mean any termination of employment which
occurs at or after age 65.
SECTION 1.2 CHANGE IN CONTROL. Except as provided below, a
Change in Control shall be deemed to occur when and only when the
first of the following events occurs:
(a) the acquisition (including by purchase, exchange, merger
or other business combination, or any combination of the
foregoing) by any individuals, firms, corporations or
other entities, acting in concert ("Person"), together
E-6<PAGE>
<PAGE> 2
with all Affiliates and Associates of such Person, of
beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding voting
securities; or
(b) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur pursuant to paragraph (a), above, (i) solely
because 20 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Executive is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Section 1.2, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act"); the terms
"beneficial ownership" and "beneficially owned" shall have the
meaning set forth in section 13(d) of the Exchange Act, as amended,
and in Rule 13d-3 promulgated thereunder, the term "Board of
Directors" shall mean the Board of Directors of the Company and the
term "Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board of
Directors.
SECTION 1.3. TERMINATION FOR CAUSE. The Company shall have
Cause to terminate the Executive's employment with the Company for
purposes of Section 1.1 hereof only if the Executive (a) engages in
unlawful acts intended to result in the substantial personal
enrichment of the Executive at the Company's expense, or (b)
engages (except (i) by reason of incapacity due to illness or
injury or (ii) in connection with an actual or anticipated
termination of employment by the Executive for Good Reason) in a
material violation of his responsibilities to the Company that
results in a material injury to the Company.
SECTION 1.4 TERMINATION FOR GOOD REASON. The Executive shall
have a Good Reason for terminating employment with the Company only
if one or more of the following occurs after a Change in Control:
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<PAGE> 3
(a) a change in the Executive's status or position (including
for this purpose a change in the principal place of the
Executive's employment on a basis that does not conform
with the Company's present policies for executive
relocation, but excluding required travel on the
Company's business to an extent substantially consistent
with the Executive's present business travel obligations)
with the Company that, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status or position in effect immediately
before the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's status or
position in effect immediately before the Change in
Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of
the Executive's employment for Cause or as a result of
the Executive's Disability, death or retirement;
(d) a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in
Control (which shall be deemed, for this purpose, to be
equal to his base salary plus the most recent award that
he has earned under the Company's Incentive Compensation
Plan, as amended from time to time, or any successor
thereto (the "ICP")) or as the same may be increased from
time to time;
(e) the failure by the Company to continue in effect any Plan
in which the Executive is participating at the time of
the Change in Control (or plans or arrangements providing
the Executive with substantially equivalent benefits)
other than as a result of the normal expiration of any
such Plan in accordance with its terms as in effect at
the time of the Change in Control;
(f) any action or inaction by the Company that would
adversely affect the Executive's continued participation
in any Plan on at least as favorable a basis as was the
case at the time of the Change in Control, or that would
materially reduce the Executive's benefits in the future
under the Plan or deprive him if any material benefits
that he enjoyed at the time of the Change in Control,
except to the extent that such action or inaction by the
Company is required by the terms of the Plan as in effect
immediately before the Change in Control, or is necessary
to comply with applicable law or to preserve the
qualification of the Plan under section 401(a) of the
Internal Revenue Code (the "Code"), and except to the
extent that the Company provides the Executive with
substantially equivalent benefits;
-3-<PAGE>
<PAGE> 4
(g) the Company's failure to obtain the express assumption of
this Agreement by any successor to the Company as
provided by Section 6.3 hereof;
(h) any material violation by the Company of any agreement
(including this Agreement) between it and the Executive;
or
(i) the failure by the Company, without the Executive's
consent, to pay to him any portion of his current
compensation, or to pay to the Executive any portion of
any deferred compensation, within 30 days of the date the
Executive notifies the Company that any such compensation
payment is past due.
Notwithstanding the foregoing, no action by the Company shall give
rise to a Good Reason if it results from the Executive's
termination for Cause, death or retirement, and no action by the
Company specified in paragraphs (a) through (d) of the preceding
sentence shall give rise to a Good Reason if it results from the
Executive's Disability. A Good Reason shall not be deemed to be
waived by reason of the Executive's continued employment as long as
the termination of the Executive's employment occurs within the
time prescribed by Section 1.1(b) hereof. For purposes of this
Section 1.4, "Plan" means any compensation plan, such as an
incentive or stock option plan, or any employee benefit plan, such
as a thrift, pension, profit-sharing, stock bonus, long-term
performance award, medical, disability, accident, or life insurance
plan, or any other plan, program or policy of the Company that is
intended to benefit employees.
SECTION 1.5 DISABILITY. For purposes of this Agreement,
"Disability" shall mean illness or injury that prevents the
Executive from performing his duties (as they existed immediately
before the illness or injury) on a full-time basis for six
consecutive months.
SECTION 1.6 NOTICE. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change
in Control within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
SECTION 2.1 BASIC SEVERANCE PAYMENT. If the Executive incurs
a Qualifying Termination following a Change in Control that occurs
on or before termination of this Agreement as provided in Section
6.1 hereof, the Company shall pay within 30 days after the date of
the Qualifying Termination to the Executive a single lump sum cash
amount equal to his Total Annual Compensation multiplied by the
lesser of (a) 2.50 or (b) .0833 multiplied by the number of full
months remaining between termination and his attaining age 65.
"Total Annual Compensation" shall mean the sum of annual base
salary in effect immediately preceding termination or the Change of
Control, whichever is higher, and annual incentive compensation
earned under the "ICP" (annualized in the case of less than a full
year's service) in the last full fiscal year immediately preceding
termination or the Change of Control, whichever is higher.
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<PAGE> 5
SECTION 2.2 INSURANCE. If the Executive incurs a Qualifying
Termination following a Change in Control that occurs on or before
termination of this Agreement as provided in Section 6.1 hereof,
the Company shall provide the Executive, at the Company's expense,
for a period beginning on the date of the Qualifying Termination,
the same medical, accident, disability, life and any other
insurance coverage as was provided to him by the Company
immediately before the Change in Control (or, if greater, as in
effect immediately before the Qualifying Termination occurs); such
coverage shall end upon the earlier of (a) the expiration of 24
months after the Qualifying Termination or (b) with respect to each
coverage, the date on which the Executive first becomes eligible
for insurance coverage of a similar nature provided by a firm that
employs him following the Qualifying Termination.
SECTION 2.3 EXECUTIVE LONG-TERM INCENTIVE PROGRAM. If the
Executive incurs a Qualifying Termination following a Change in
Control that occurs on or before termination of this Agreement as
provided in Section 6.1 hereof, all of the options to purchase
common stock of the Company (and the alternative common stock
appreciation rights) granted to the Executive prior to termination
of this Agreement as provided in Section 6.1 hereof, under the
Executive Long-Term Incentive Program shall become exercisable in
accordance with the terms set forth in the applicable Agreement.
SECTION 2.4 NONDUPLICATION. Nothing in this Agreement shall
require the Company to make any payment or to provide any benefit
or service credit that the Company is otherwise required to provide
under any other contract, agreement, policy, plan, or arrangement.
ARTICLE III
EFFECT OF SEVERANCE POLICY
SECTION 3.1 EFFECT ON SEVERANCE POLICY. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall
not be entitled to any benefits under any other Company severance
policy.
ARTICLE IV
TAX MATTERS
SECTION 4.1 WITHHOLDING. The Company may withhold from any
amount payable to the Executive hereunder all federal, state or
other taxes that the Company may reasonably determine are required
to be withheld pursuant to any applicable law or regulation.
SECTION 4.2 SPECIAL LIMITATION.
(a) If part or all of the payments or benefits payable to the
Executive, when added to other payments payable to the Executive as
a result of a Change in Control, constitute Parachute Payments, the
following limitation shall apply. If the Parachute Payments, net
of the sum of the Excise Tax and the Federal income and employment
taxes, state and local income taxes on the amount of the Parachute
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<PAGE> 6
Payments in excess of the Threshold Amount, are greater than the
Threshold Amount, the Executive shall be entitled to the full
payments and benefits payable under this Agreement. If the
Threshold Amount is greater than the Parachute Payments, net of the
sum of the Excise Tax, and the Federal income and employment taxes,
state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, then the payments and
benefits under this Agreement shall be reduced to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In the event a reduction is required, it
shall be the Executive's choice as to which payments or benefits
shall be so reduced. The Employer shall select a firm of
independent certified public accountants to determine which of the
foregoing alternative provisions shall apply. For purposes of
determining the amount of the Federal income and employment taxes,
and state and local income taxes on the amount of the Parachute
Payments in excess of the Threshold Amount, the Executive shall be
deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation applicable to individuals for the calendar
year in which the payments and benefits under this Agreement are
payable and state and local income taxes at the highest marginal
rates of individual taxation in the state and locality of the
Executive's residence for the calendar year in which the payments
and benefits under this Agreement are payable, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
(b) ADDITIONAL DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"PARACHUTE PAYMENTS" shall mean any payment or provision
by the Employer of any amount or benefit to and for the benefit of
the Executive, whether paid or payable or provided or to be
provided under the terms of this Agreement or otherwise, that would
be considered "parachute payments" within the meaning of Section
280G(B)(2)(A) of the Code and the regulations promulgated
thereunder.
"THRESHOLD AMOUNT" shall mean three times the Executive's
"base amount" within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder, less one dollar.
"EXCISE TAX" shall mean the excise tax imposed by Section
4999 of the Code.
ARTICLE V
COLLATERAL MATTERS
SECTION 5.1 NATURE OF PAYMENTS. All payments to the
Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or
severance payments in consideration of his past services thereto.
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<PAGE> 7
SECTION 5.2 LEGAL EXPENSES. The Company shall pay all legal
fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
SECTION 5.3 MITIGATION. The Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement either by seeking other employment or otherwise. The
amount of any payment provided for herein shall not be reduced by
any remuneration that the Executive may earn from employment with
another employer or otherwise following his Qualifying Termination.
SECTION 5.4 AUTHORITY. The execution of this Agreement has
been authorized by the Board of Directors of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 TERM OF AGREEMENT. This Agreement shall become
effective on the date hereof and shall continue in effect until the
earliest of (a) April 30, 1998, if no Change in Control has
occurred before that date; provided, however, that commencing on
May 1, 1998 and each May 1 thereafter, the term of this Agreement
shall automatically be extended for an additional year unless, not
later than January 30 of the same year, the Company shall have
given notice that it does not wish to extend this Agreement; (b)
the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's
termination of the Executive's employment for Cause, or the
Executive's resignation for other than Good Reason, following a
Change in Control and the Company's and the Executive's fulfillment
of all of their obligations hereunder; and (d) the expiration
following a Change in Control of three years and the fulfillment by
the Company and the Executive of all of their obligations
hereunder. Furthermore, nothing in this Article VI shall cause
this Agreement to terminate before both the Company and the
Executive have fulfilled all of their obligations hereunder.
SECTION 6.2 GOVERNING LAW. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations
hereunder shall be construed and enforced in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 6.3 SUCCESSOR TO THE COMPANY. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Company and any successor thereto, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the business or assets of
the Company, whether by merger, consolidation, sale or otherwise,
but shall not otherwise be assignable by the Company. Without
limitations of the foregoing sentence, the Company shall require
any successor (whether direct or indirect, by merger,
consolidation, sale or otherwise) to all of substantially all of
the business or assets of the Company, by agreement in form
satisfactory to the Executive, expressly, absolutely and
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<PAGE> 8
unconditionally to assume and to agree to perform this Agreement in
the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of
its business or assets that executes and delivers the agreement
provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law.
SECTION 6.4 SUCCESSOR TO THE EXECUTIVE. This Agreement shall
inure to the benefit of and shall be binding upon and enforceable
by the Executive and his personal and legal representatives,
executors, administrators, heirs, distributees, legatees and,
subject to the Section 6.5 hereof, his designees ("Successors").
If the Executive should die while amounts are or may be payable to
him under this Agreement, references hereunder to the "Executive"
shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall supersede the terms
of any plan or arrangement (other than this Agreement) that is
affected by this Agreement.
SECTION 6.5 NONALIENABILITY. No right of or amount payable
to the Executive under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, hypothecation, encumbrance, charge, execution, attachment,
levy or similar process or to setoff against any obligations or to
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately
preceding sentence shall be void. However, this Section 6.5 shall
not prohibit the Executive from designating one or more persons, on
a form satisfactory to the Company, to receive amounts payable to
him under this Agreement in the event that he should die before
receiving them.
SECTION 6.6 NOTICES. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be
deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to Wyman-Gordon
Company, 244 Worcester Street, No. Grafton, Massachusetts 01536,
Attention: Vice President, General Counsel and Clerk. Notices to
the Executive shall be deemed given when personally delivered or
sent by certified or registered mail or overnight delivery service
to the last address for the Executive shown on the records of the
Company. Either the Company or the Executive may, by notice to the
other, designate an address other than the foregoing for the
receipt of subsequent notices.
SECTION 6.7 AMENDMENT. No amendment to this Agreement shall
be effective unless in writing and signed by both the Company and
the Executive.
SECTION 6.8 WAIVERS. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party
giving such waiver. No waiver of a breach under any provision of
this Agreement shall be deemed to be a waiver of such provision or
any other provision of this Agreement or any subsequent breach. No
failure on the part of either the Company or the Executive to
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<PAGE> 9
exercise, and no delay in exercising, any right or remedy conferred
by law or this Agreement shall operate as waiver of such right or
remedy, and no exercise or waiver, in whole or in part, or any
right or remedy conferred by law or herein shall operate as a
waiver of any other right or remedy.
SECTION 6.9. SEVERABILITY. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall not affect any
other provision of this Agreement or part thereof, each of which
shall remain in full force and effect.
SECTION 6.10. CAPTIONS. The captions to the respective
articles and sections of this Agreement are intended for
convenience of reference only and have no substantive significance.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed
in a number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute a single
instrument.
SECTION 6.12. ENTIRE AGREEMENT. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all previous oral
statements and other writings (including the Prior Agreement) with
respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/SHIRLEY A. PERO By: /S/DAVID P. GRUBER
Shirley A. Pero David P. Gruber, President
and Chief Executive Officer
ATTEST:
/S/LYNNE I. MAY /S/FRANK J. ZUGEL
Lynne I. May Frank J. Zugel
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<PAGE> 1
EXHIBIT 10.G
PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Andrew C. Genor (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
April 17, 2006 (the "Expiration Date") an aggregate of 57,500
shares of Common Stock of the Company ("Shares") at a price of
$16.625 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 April 17, 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 April 17, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after October 17, 1996 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.
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<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 2,875
22.00 5,750
23.00 11,500
24.00 20,125
25.00 28,750
26.00 37,375
27.00 46,000
28.00 51,750
29.00 54,625
30.00 or above 57,500
</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>
<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>
<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>
<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 19, 1995, 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 19, 1995 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>
<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>
<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
/S/ANDREW C. GENOR
Grantee's Signature
GRANTEE'S ADDRESS: 175 Beacon Street
Boston, MA 02116
SOCIAL SECURITY NUMBER: ###-##-####
-7-
<PAGE> 1
EXHIBIT 10.H
PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to David P. Gruber (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
April 17, 2006 (the "Expiration Date") an aggregate of 115,000
shares of Common Stock of the Company ("Shares") at a price of
$16.625 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 April 17, 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 April 17, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after October 17, 1996 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-8<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 5,750
22.00 11,500
23.00 23,000
24.00 40,250
25.00 57,500
26.00 74,750
27.00 92,000
28.00 103,500
29.00 109,250
30.00 or above 115,000
</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>
<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>
<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>
<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 19, 1995, 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 19, 1995 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>
<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>
<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/JOHN M. NELSON
John M. Nelson, Chairman
The foregoing Award Agreement is hereby accepted and the
terms thereof hereby agreed to.
GRANTEE
/S/DAVID P. GRUBER
Grantee's Signature
GRANTEE'S ADDRESS: 16 Carding Mill Road
Sudbury, MA 01776
SOCIAL SECURITY NUMBER: ###-##-####
-7-
<PAGE> 1
EXHIBIT 10.I
PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Sanjay N. Shah (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
April 17, 2006 (the "Expiration Date") an aggregate of 57,500
shares of Common Stock of the Company ("Shares") at a price of
$16.625 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 April 17, 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 April 17, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after October 17, 1996 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-9<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 2,875
22.00 5,750
23.00 11,500
24.00 20,125
25.00 28,750
26.00 37,375
27.00 46,000
28.00 51,750
29.00 54,625
30.00 or above 57,500
</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>
<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>
<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>
<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 19, 1995, 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 19, 1995 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>
<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>
<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
/S/SANJAY N. SHAH
Grantee's Signature
GRANTEE'S ADDRESS: 49 Minuteman Way,
Shrewsbury, MA 01545
SOCIAL SECURITY NUMBER: ###-##-####
-7-
<PAGE> 1
EXHIBIT 10.J
PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to J. Douglas Whelan (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 April 17, 2006 (the "Expiration Date") an aggregate of
77,500 shares of Common Stock of the Company ("Shares") at a
price of $16.625 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 April 17, 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 April 17, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after October 17, 1996 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-10<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 3,875
22.00 7,750
23.00 15,500
24.00 27,125
25.00 38,750
26.00 50,375
27.00 62,000
28.00 69,750
29.00 73,625
30.00 or above 77,500
</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>
<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>
<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>
<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 19, 1995, 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 19, 1995 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>
<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>
<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
/S/J. DOUGLAS WHELAN
Grantee's Signature
GRANTEE'S ADDRESS: 15739 Tanya Circle
Houston, TX 77079-5060
SOCIAL SECURITY NUMBER: ###-##-####
-7-
<PAGE> 1
EXHIBIT 10.K
PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Wallace F. Whitney, Jr. (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 April 17, 2006 (the "Expiration Date") an
aggregate of 57,500 shares of Common Stock of the Company
("Shares") at a price of $16.625 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 April 17, 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 April 17, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after October 17, 1996 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-11<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 2,875
22.00 5,750
23.00 11,500
24.00 20,125
25.00 28,750
26.00 37,375
27.00 46,000
28.00 51,750
29.00 54,625
30.00 or above 57,500
</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>
<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>
<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>
<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 19, 1995, 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 19, 1995 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>
<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>
<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
/S/WALLACE F. WHITNEY, JR.
Grantee's Signature
GRANTEE'S ADDRESS: 43 Brooks Station Road
Princeton, MA 01541
SOCIAL SECURITY NUMBER: ###-##-####
-7-
<PAGE> 1
EXHIBIT 10.L
PERFORMANCE STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Frank J. Zugel (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
April 17, 2006 (the "Expiration Date") an aggregate of 77,500
shares of Common Stock of the Company ("Shares") at a price of
$16.625 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 April 17, 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 April 17, 2003;
provided, however, that the option may be exercised by the
Grantee at any time after October 17, 1996 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-12<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
CUMULATIVE
NUMBER OF
STOCK PRICE OPTIONS VESTED
<S> <C>
Below $21.00 0
21.00 3,875
22.00 7,750
23.00 15,500
24.00 27,125
25.00 38,750
26.00 50,375
27.00 62,000
28.00 69,750
29.00 73,625
30.00 or above 77,500
</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>
<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>
<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>
<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 19, 1995, 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 19, 1995 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>
<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>
<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
/S/FRANK J. ZUGEL
Grantee's Signature
GRANTEE'S ADDRESS: 56 Old North Road
Mason Island, CT 06355
SOCIAL SECURITY NUMBER: ###-##-####
-7-
<PAGE> 1
EXHIBIT 10.M
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 17th day of April 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and Andrew C. Genor, 175 Beacon Street, Boston,
Massachusetts 02116 (the "Grantee"), Vice President, Chief
Financial Officer and Treasurer of the Company relating to 14,000
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 April 17, 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
21.00 700
22.00 1,400
23.00 2,800
24.00 4,900
25.00 7,000
26.00 9,100
27.00 11,200
28.00 12,600
29.00 13,300
30.00 and above 14,000
</TABLE>
E-13<PAGE>
<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>
<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 April 17, 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 April 17,
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>
<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>
<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 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>
<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
extend 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
/S/ANDREW C. GENOR
Andrew C. Genor
-6-
<PAGE> 1
EXHIBIT 10.N
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 17th day of April 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and David P. Gruber, 16 Carding Mill Road, Sudbury,
Massachusetts 01776 (the "Grantee"), President and Chief
Executive Officer of the Company relating to 28,500 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 April 17, 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 1,425
22.00 2,850
23.00 5,700
24.00 9,975
25.00 14,250
26.00 18,525
27.00 22,800
28.00 25,650
29.00 27,075
30.00 and above 28,500
</TABLE>
E-14<PAGE>
<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>
<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 April 17, 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 April 17,
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>
<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>
<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 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>
<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
extend 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/JOHN M. NELSON
John M. Nelson
Chairman
/S/DAVID P. GRUBER
David P. Gruber
-6-
<PAGE> 1
EXHIBIT 10.O
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 17th day of April 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and Sanjay N. Shah, 49 Minuteman Way, Shrewsbury,
Massachusetts 01545 (the "Grantee"), Vice President, Corporate
Strategy Planning and Business Development of the Company
relating to 14,000 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 April 17, 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
21.00 700
22.00 1,400
23.00 2,800
24.00 4,900
25.00 7,000
26.00 9,100
27.00 11,200
28.00 12,600
29.00 13,300
30.00 and above 14,000
</TABLE>
E-15<PAGE>
<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>
<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 April 17, 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 April 17,
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>
<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>
<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 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>
<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
extend 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
/S/SANJAY N. SHAH
Sanjay N. Shah
-6-
<PAGE> 1
EXHIBIT 10.P
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 17th day of April 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and J. Douglas Whelan, 15739 Tanya Circle, Houston, TX
77079-5060 (the "Grantee"), President, Forgings Division of the
Company relating to 19,000 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 April 17, 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
21.00 950
22.00 1,900
23.00 3,800
24.00 6,650
25.00 9,500
26.00 12,350
27.00 15,200
28.00 17,100
29.00 18,050
30.00 and above 19,000
</TABLE>
E-16<PAGE>
<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>
<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 April 17, 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 April 17,
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>
<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>
<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 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>
<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
extend 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
/S/J. DOUGLAS WHELAN
J. Douglas Whelan
-6-
<PAGE> 1
EXHIBIT 10.Q
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 17th day of April 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and Wallace F. Whitney, Jr., 43 Brooks Station Road,
Princeton, Massachusetts 01541 (the "Grantee"), Vice President,
General Counsel and Clerk of the Company relating to 14,000
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 April 17, 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
21.00 700
22.00 1,400
23.00 2,800
24.00 4,900
25.00 7,000
26.00 9,100
27.00 11,200
28.00 12,600
29.00 13,300
30.00 and above 14,000
</TABLE>
E-17<PAGE>
<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>
<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 April 17, 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 April 17,
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>
<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>
<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 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>
<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
extend 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
/S/WALLACE F. WHITNEY, JR.
Wallace F. Whitney, Jr.
-6-
<PAGE> 1
EXHIBIT 10.R
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 17th day of April 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and Frank J. Zugel, 56 Old North Road, Mason Island,
Mystic, Connecticut 06355 (the "Grantee"), President, Investment
Castings Division of the Company relating to 19,000 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 April 17, 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
21.00 950
22.00 1,900
23.00 3,800
24.00 6,650
25.00 9,500
26.00 12,350
27.00 15,200
28.00 17,100
29.00 18,050
30.00 and above 19,000
</TABLE>
E-18<PAGE>
<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>
<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 April 17, 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 April 17,
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>
<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>
<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 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>
<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
extend 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
/S/FRANK J. ZUGEL
Frank J. Zugel
-6-
<PAGE> 1
EXHIBIT 10.S
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Andrew C. Genor (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
April 17, 2006 (the "Expiration Date") an aggregate 12,500 shares
of Common Stock of the Company ("Shares") at a price of $16.625
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 April 17, 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-19<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number April 17, 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 April 17, 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.
An additional one quarter of the April 17, 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 Shares
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject April 17, 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>
<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 payments 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>
<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>
<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 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 caused
the 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 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 19, 1995, 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 19, 1995 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>
<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>
<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>
<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
/S/ANDREW C. GENOR
Grantee's Signature
Grantee's Address: 175 Beacon Street
Boston, MA 02116
Social Security Number: ###-##-####
-8-
<PAGE> 1
EXHIBIT 10.T
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to David P. Gruber (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
April 17, 2006 (the "Expiration Date") an aggregate 25,000 shares
of Common Stock of the Company ("Shares") at a price of $16.625
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 April 17, 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-20<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number April 17, 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 April 17, 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.
An additional one quarter of the April 17, 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 Shares
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject April 17, 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>
<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 payments 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>
<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>
<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 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 caused
the 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 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 19, 1995, 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 19, 1995 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>
<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>
<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>
<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/JOHN M. NELSON
John M. Nelson, Chairman
The foregoing Award Agreement is hereby accepted and the
terms thereof hereby agreed to
GRANTEE
/S/DAVID P. GRUBER
Grantee's Signature
Grantee's Address: 16 Carding Mill Road
Sudbury, MA 01776
Social Security Number: ###-##-####
-8-
<PAGE> 1
EXHIBIT 10.U
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Sanjay N. Shah (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
April 17, 2006 (the "Expiration Date") an aggregate 12,500 shares
of Common Stock of the Company ("Shares") at a price of $16.625
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 April 17, 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-21<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number April 17, 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 April 17, 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.
An additional one quarter of the April 17, 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 Shares
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject April 17, 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>
<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 payments 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>
<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>
<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 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 caused
the 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 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 19, 1995, 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 19, 1995 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>
<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>
<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>
<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
/S/SANJAY N. SHAH
Grantee's Signature
Grantee's Address: 49 Minuteman Way
Shrewsbury, MA 01545
Social Security Number: ###-##-####
-8-
<PAGE> 1
EXHIBIT 10.V
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to J. Douglas Whelan (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 April 17, 2006 (the "Expiration Date") an aggregate
17,000 shares of Common Stock of the Company ("Shares") at a
price of $16.625 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 April 17, 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-22<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number April 17, 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 April 17, 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.
An additional one quarter of the April 17, 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 Shares
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject April 17, 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>
<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 payments 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>
<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>
<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 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 caused
the 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 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 19, 1995, 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 19, 1995 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>
<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>
<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>
<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
/S/J. DOUGLAS WHELAN
Grantee's Signature
Grantee's Address: 15739 Tanya Circle
Houston, TX 77079-5060
Social Security Number: ###-##-####
-8-
<PAGE> 1
EXHIBIT 10.W
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Wallace F. Whitney, Jr. (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 April 17, 2006 (the "Expiration Date") an
aggregate 12,500 shares of Common Stock of the Company ("Shares")
at a price of $16.625 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 April 17, 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-23<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number April 17, 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 April 17, 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.
An additional one quarter of the April 17, 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 Shares
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject April 17, 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>
<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 payments 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>
<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>
<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 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 caused
the 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 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 19, 1995, 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 19, 1995 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>
<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>
<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>
<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
/S/WALLACE F. WHITNEY, JR.
Grantee's Signature
Grantee's Address: 43 Brooks Station Road
Princeton, MA 01541
Social Security Number: ###-##-####
-8-
<PAGE> 1
EXHIBIT 10.X
STOCK OPTION AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), hereby grants to Frank J. Zugel (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
April 17, 2006 (the "Expiration Date") an aggregate 17,000 shares
of Common Stock of the Company ("Shares") at a price of $16.625
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 April 17, 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-24<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
INITIAL
NUMBER OF SHARES EXERCISE DATE
<S> <C>
One quarter of the aggregate number April 17, 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 April 17, 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.
An additional one quarter of the April 17, 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 Shares
that was disregarded as a result of
rounding pursuant to the preceding
provision) to the nearest whole Share.
The remaining number of Shares subject April 17, 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>
<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 payments 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>
<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>
<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 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 caused
the 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 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 19, 1995, 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 19, 1995 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>
<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>
<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>
<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
/S/FRANK J. ZUGEL
Grantee's Signature
Grantee's Address: 56 Old North Road
Mason Island, CT 06355
Social Security Number: ###-##-####
-8-
<PAGE> 1
EXHIBIT 10.Y
AMENDMENT
TO
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON COMPANY
LONG-TERM INCENTIVE PLAN
WHEREAS, Wyman-Gordon Company, a Massachusetts corporation
(the "Company"), and David P. Gruber of 16 Carding Mill Road,
Sudbury, Massachusetts (the "Grantee"), entered into a
Performance Share Agreement dated as of May 24, 1994 (the
"Agreement");
WHEREAS, pursuant to the Agreement, the Company has issued
to the Grantee 150,000 shares (the "Shares") of the Company's
common stock, par value $1.00 per share (the "Company Common
Stock");
WHEREAS, Grantee's rights to the Shares shall be forfeited
and revert to the Company if he ceases to be employed by the
Company prior to the end of a restricted period beginning on May
24, 1994 and ending on May 24, 1999 (the "Restricted Period") or
if the closing price of the Company Common Stock does not achieve
the "Target Price" (as defined in Section 3 of the Agreement)
before the end of the Restricted Period; and
WHEREAS, the parties wish to revise the Agreement;
NOW, THEREFORE, the parties agree to revise the Agreement as
follows:
1. Grantee shall return all the Shares to The Company in
exchange for the Company's agreement to transfer the Shares
to an irrevocable rabbi trust (the "Trust").
2. The trustee of the Trust shall issue the Shares to Grantee
at the end of the Restricted Period.
3. While the Shares are held in the Trust, the Grantee shall
have no voting or dividend rights.
4. The provisions of the Agreement that are not amended herein
shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment this 5th day of July, 1996.
WYMAN-GORDON COMPANY
By: /S/JOHN M. NELSON
John M. Nelson, Chairman
/S/DAVID P. GRUBER
David P. Gruber
E-25
<PAGE> 1
WYMAN-GORDON COMPANY
FISCAL 1996 FORM 10-K
EXHIBIT 21
WYMAN-GORDON COMPANY AND SUBSIDIARIES
The following is a list of Wyman-Gordon's subsidiaries as of
May 31, 1996:
<TABLE>
<CAPTION>
PLACE OF
INCORPORATION
NAME OF SUBSIDIARY OR ORGANIZATION
<S> <C>
Cameron Forged Products Limited United Kingdom
Cameron Pipeline, Inc. Texas
ForCast FSC, Ltd. Virgin Islands
Precision Founders, Inc. California
Reisner Metals, Inc. California
Scaled Composites, Inc. California
Wyman-Gordon Composites, Inc. Delaware
Wyman-Gordon Composite Technologies, Inc. California
Wyman-Gordon Forgings, Inc. Delaware
Wyman-Gordon Investment Castings, Inc. Delaware
Wyman-Gordon Limited United Kingdom/
Delaware
Wyman-Gordon Receivables Corporation Delaware
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E-26
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