<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 2, 1996
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
COMMISSION FILE NUMBER 0-3085
WYMAN-GORDON COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1992780
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
244 WORCESTER STREET, BOX 8001, NO. GRAFTON, MASSACHUSETTS 01536-8001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 508-839-4441
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past
90 days.
Yes X No
Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of the latest
practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class March 2, 1996
<S> <C>
Common Stock, $1 Par Value 35,342,972
</TABLE>
Page 1 of 16<PAGE>
<PAGE> 2
PART I.
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MAR. 2, MAR. 4, MAR. 2, MAR. 4,
1996 1995 1996 1995
(000's omitted, except per share data)
<S> <C> <C> <C> <C>
Revenue $121,517 $96,238 $353,674 $286,937
Less:
Cost of goods sold 103,210 83,623 298,222 254,878
Selling, general and
administrative expenses 9,107 8,995 27,775 27,668
Other charges 110 - 1,010 -
$112,427 $92,618 $327,007 $282,546
Income from operations 9,090 3,620 26,667 4,391
Other deductions:
Interest expense 2,727 2,621 8,267 7,836
Miscellaneous, net 286 443 1,172 1,342
3,013 3,064 9,439 9,178
Net income (loss) $ 6,077 $ 556 $ 17,228 $ (4,787)
Net income (loss) per share $ .17 $ .02 $ .48 $ (.14)
Shares used to compute
earnings (loss) per share 36,269 35,051 36,061 34,770
</TABLE>
The accompanying notes to the consolidated condensed financial
statements are an integral part of these financial statements.
-2-<PAGE>
<PAGE> 3
<TABLE>
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
MARCH 2, JUNE 3,
1996 1995
(000's omitted)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 13,670 $ 13,856
Accounts receivable 88,529 79,219
Inventories 85,653 78,813
Prepaid expenses 10,031 15,671
Total current assets 197,883 187,559
Property, plant and equipment, at cost 392,142 385,372
Less accumulated depreciation 255,958 243,975
Net property, plant and equipment 136,184 141,397
Intangible assets 24,767 25,295
Other assets 17,173 14,813
$376,007 $369,064
LIABILITIES
Borrowings due within one year $ 2,064 $ 3,915
Accounts payable 37,878 34,729
Accrued liabilities and other 41,938 45,634
Accrued restructuring, integration,
disposal and environmental 6,847 10,219
Total current liabilities 88,727 94,497
Restructuring, integration, disposal
and environmental 17,291 19,648
Long-term debt 90,308 90,308
Pension liability 9,560 9,589
Deferred income tax and other 18,688 21,699
Postretirement benefits 52,349 52,468
STOCKHOLDERS' EQUITY
Preferred stock - none issued - -
Common stock issued - 37,052,720 shares 37,053 37,053
Capital in excess of par value 36,302 40,118
Retained earnings 55,818 39,763
129,173 116,934
Less treasury stock at cost
March 2, 1996 - 1,709,748 shares
June 3, 1995 - 2,044,178 shares 30,089 36,079
99,084 80,855
$376,007 $369,064
</TABLE>
The accompanying notes to the consolidated condensed financial
statements are an integral part of these financial statements.
-3-<PAGE>
<PAGE> 4
<TABLE>
WYMAN-GORDON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
NINE MONTHS ENDED
MARCH 2, MARCH 4,
1996 1995
(000's omitted)
<S> <C> <C>
Operating activities:
Net income (loss) $17,228 $ (4,787)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 12,785 13,872
Provision for equity investment 1,010 -
Changes in assets and liabilities:
Accounts receivable (9,310) (4,486)
Inventories (6,840) 703
Prepaid expenses and other assets 2,270 8,661
Accrued restructuring, disposal
and environmental (5,729) (8,614)
Income and other taxes 2,267 702
Accounts payable and accrued
liabilities (5,942) (7,781)
Net cash provided (used) by
operating activities 7,739 (1,730)
Investing activities:
Capital expenditures (9,742) (15,512)
Proceeds from sale of fixed assets 1,686 1,289
Other, net (191) (1,351)
Net cash provided (used) by
investing activities (8,247) (15,574)
Financing activities:
Cash paid to Cooper Industries for
factored accounts receivable - (20,561)
Net proceeds from issuance of
common stock 2,174 2,259
(Decrease) Increase in borrowings
due within one year (1,852) 3,703
Net cash provided (used) by
financing activities 322 (14,599)
Decrease in cash (186) (31,903)
Cash, beginning of year 13,856 42,179
Cash, end of period $13,670 $ 10,276
</TABLE>
The accompanying notes to the consolidated condensed financial
statements are an integral part of these financial statements.
-4-<PAGE>
<PAGE> 5
WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 2, 1996
NOTE A - BASIS OF PRESENTATION
In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments necessary to present fairly its financial position at
March 2, 1996 and its results of operations for the three months
and nine months ended March 2, 1996 and March 4, 1995 and cash
flows for the nine months ended March 2, 1996 and March 4, 1995.
All such adjustments are of a normal recurring nature.
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with Article 10 of
Securities and Exchange Commission Regulation S-X and, therefore,
do not include all information and footnotes necessary for a fair
presentation of the financial position, results of operations and
cash flows in conformity with generally accepted accounting
principles. In conjunction with its June 3, 1995 Annual Report
on Form 10-K/A, the Company filed audited consolidated financial
statements which included all information and footnotes necessary
for a fair presentation of its financial position at June 3, 1995
and May 28, 1994 and its results of operations and cash flows for
the year ended June 3, 1995, the five months ended May 28, 1994
and the years ended December 31, 1993 and 1992 in conformity with
generally accepted accounting principles. Where appropriate,
prior period amounts have been reclassified to permit comparison.
NOTE B - INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
MARCH 2, 1996 JUNE 3, 1995
(000's omitted)
<S> <C> <C>
Raw material $32,839 $26,440
Work-in-process 54,989 54,310
Supplies 2,306 3,228
90,134 83,978
Less progress payments 4,481 5,165
$85,653 $78,813
</TABLE>
If all inventories valued at LIFO cost had been valued at first-
in, first-out (FIFO) cost or market which approximates current
replacement cost, inventories would have been $21,584,000 higher than
reported at March 2, 1996 and June 3, 1995.
LIFO inventory credits to cost of goods sold in the three months
ended March 4, 1995 were $780,000. LIFO inventory credits to cost of
goods sold in the nine months ended March 4, 1995 were $2,793,000.
-5-<PAGE>
<PAGE> 6
WYMAN-GORDON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
March 2, 1996
NOTE C - COMMITMENTS AND CONTINGENCIES
At March 2, 1996, certain lawsuits arising in the normal
course of business were pending. The Company denies all material
allegations of these complaints. In the opinion of management,
the outcome of legal matters will not have a material adverse
effect on the Company's financial position, results of operations
or liquidity.
The Company is subject to extensive, stringent and changing
federal, state and local environmental laws and regulations,
including those regulating the use, handling, storage, discharge
and disposal of hazardous substances and the remediation of
alleged environmental contamination. Accordingly, the Company is
involved from time to time in administrative and judicial
inquiries and proceedings regarding environmental matters.
Nevertheless, the Company believes that compliance with these
laws and regulations will not have a material adverse effect on
the Company's operations as a whole.
The Company had foreign exchange contracts totalling
$11,930,000 at March 2, 1996. These contracts hedge certain
normal operating purchase and sales transactions. The exchange
contracts generally mature within six months and require the
Company to exchange U.K. pounds for non-U.K. currencies or non-
U.K. currencies for U.K. pounds. Transaction gains and losses
included in the Consolidated Condensed Statements of Operations
for the three month and nine month periods ended March 2, 1996
and March 4, 1995, respectively, were not material.
-6-<PAGE>
<PAGE> 7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
"FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY"
Certain statements in Management's Discussion and Analysis
of Financial Condition and Results of Operations contain
"forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involves risk and
uncertainty, including discussions of continuing raw material
prices and availability and their impact on gross margins and
business trends as well as liquidity and sales volume. Actual
future results and trends may differ materially depending on a
variety of factors, including the Company's successful
negotiation of long-term customer pricing contracts and raw
material prices and availability. For a discussion identifing
important factors that could cause actual results to differ
materially from those anticipated in forward-looking statements,
see the Company's SEC filings, in particular see "Risk Factors"
on pages 7-10 of the Company's prospectus relating to the
registration of 15,000,000 shares of the Company's common stock,
which may be delivered by Cooper Industries, Inc. ("Cooper")
pursuant to the terms of Cooper's 6.0% Exchangeable Notes Due
January 1, 1999, dated December 14, 1995.
<TABLE>
The principal markets served by the Company are aerospace
and power generation. Revenue by market for the respective
periods was as follows (thousands):
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 2, 1996 MARCH 4, 1995
% OF % OF
AMOUNT TOTAL AMOUNT TOTAL
<S> <C> <C> <C> <C>
Aerospace $ 87,325 72% $ 73,141 76%
Power generation 23,783 20% 14,436 15%
Other 10,409 8% 8,661 9%
$121,517 100% $ 96,238 100%
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
MARCH 2, 1996 MARCH 4, 1995
% OF % OF
AMOUNT TOTAL AMOUNT TOTAL
<S> <C> <C> <C> <C>
Aerospace $258,546 73% $218,072 76%
Power generation 68,615 19% 43,041 15%
Other 26,513 8% 25,824 9%
$353,674 100% $286,937 100%
</TABLE>
-7-<PAGE>
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS AND FINANCIAL CONDITION THREE MONTHS ENDED
MARCH 2, 1996 ("third quarter of fiscal year 1996") COMPARED TO
THREE MONTHS ENDED MARCH 4, 1995 ("third quarter of fiscal year
1995")
The Company's revenue increased 26.3% to $121.5 million in
the third quarter of fiscal year 1996 from $96.2 million in the
third quarter of fiscal year 1995 due to higher sales volume in
the Company's aerospace power generation and other markets.
These sales volume increases during the third quarter of fiscal
year 1996 as compared to the third quarter of fiscal year 1995
are reflected by market as follows: a $14.2 million (19.4%)
increase in aerospace, a $9.3 million (64.7%) increase in power
generation and a $1.7 million (20.2%) 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 fourth quarter of fiscal
year 1996 revenues. Revenues in the third quarter of fiscal year
1995 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 $500.7 million at March 2, 1996
from $457.5 million at March 4, 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 15.1% in the third quarter
of fiscal year 1996 as compared to 13.1% in the third quarter of
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 Forged Products Company ("Cameron")
contributed to this higher ratio. There were no LIFO credits
recorded during the third quarter of fiscal year 1996. Gross
margins benefitted from LIFO credits of $0.8 million during the
third quarter of fiscal year 1995.
The Company's gross margins in the third quarter of fiscal
year 1996 of 15.1% were below the 16% average gross margin during
the first two quarters of the year. 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,
-8-<PAGE>
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS AND FINANCIAL CONDITION THREE MONTHS ENDED
MARCH 2, 1996 ("third quarter of fiscal year 1996") COMPARED TO
THREE MONTHS ENDED MARCH 4, 1995 ("third quarter of fiscal year
1995")(Continued)
the Company must purchase raw materials at market prices. The
current rebound in demand for many of these raw materials,
especially nickel and titanium, have 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 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.
These new LTAs are anticipated to begin in January 1997. Until
the new LTAs are finalized, the Company may continue to
experience pressures on its gross margins.
Selling, general and administrative expenses were $9.1
million during the third quarter of fiscal year 1996 and $9.0
million during the third quarter of fiscal year 1995. However,
selling, general and administrative expenses as a percentage of
revenues improved to 7.5% in the third quarter of fiscal year
1996 from 9.4% in the third quarter of fiscal year 1995. The
improvement as a percent of revenues is the result of the
Company's general company-wide cost containment efforts, cost
reductions associated with the integration of Cameron Forged
Products Company ("Cameron") with the Company's forging
operations and higher revenues.
Interest expense was $2.7 million in the third quarter of
fiscal year 1996 as compared to $2.6 million in the third quarter
of fiscal year 1995. The increase in interest expense during the
third quarter of fiscal 1996 as compared to the same period of
fiscal 1995 is due to interest on borrowings on the Company's
U.K. Credit Agreement.
The Company recorded no provision for income taxes in the
third quarters of fiscal years 1996 and 1995.
Net income was $6.1 million, or $.17 per share, in the third
quarter of fiscal year 1996 and $0.6 million, or $.02 per share
in the third quarter of fiscal year 1995. The $5.5 million
improvement results from the items described above.
-9-<PAGE>
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS AND FINANCIAL CONDITION NINE MONTHS ENDED
MARCH 2, 1996 ("first nine months of fiscal year 1996") COMPARED
TO NINE MONTHS ENDED MARCH 4, 1995 ("first nine months of fiscal
year 1995")
The Company's revenue increased 23.3% to $353.7 million in
the first nine months of fiscal year 1996 from $286.9 million in
the first nine months of fiscal year 1995 due to higher sales
volume in the Company's aerospace, power generation and other
markets. These sales volume increases during the first nine
months of fiscal year 1996 as compared to the first nine months
of fiscal year 1995 are reflected by market as follows: a $40.5
million (18.6%) increase in aerospace, a $25.6 million (59.4%)
increase in power generation and a $0.7 million (2.7%) 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 fourth quarter of
fiscal year 1996 revenues. Revenues in the first nine months of
fiscal year 1995 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 $500.7 million at March
2, 1996 from $457.5 million at March 4, 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 15.7% in the first nine
months of fiscal year 1996 as compared to 11.1% in the first nine
months of 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. There
were no LIFO credits recorded during the first nine months of
fiscal year 1996. Gross margins benefitted from LIFO credits of
$2.8 million during the first nine months of fiscal year 1995.
Selling, general and administrative expenses for the first
nine months of fiscal 1996 increased slightly to $27.8 million
from $27.7 million as compared to the same period of fiscal 1995.
However, selling, general and administrative expenses as a
percentage of revenues improved to 7.9% in the first nine months
of fiscal year 1996 from 9.6% in the first nine months of 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.
-10-<PAGE>
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS AND FINANCIAL CONDITION NINE MONTHS ENDED
MARCH 2, 1996 ("first nine months of fiscal year 1996") COMPARED
TO NINE MONTHS ENDED MARCH 4, 1995 ("first nine months of fiscal
year 1995")(Continued)
During the first nine months of fiscal year 1996, the
Company provided $0.9 million in order to recognize its 25.0%
share of the net losses of its Australian Joint Venture and to
reserve for amounts loaned to the Australian Joint Venture during
the first quarter of fiscal year 1996. Additionally, the Company
provided $0.1 million relating to expenditures for an investment
in an additional joint venture.
Interest expense was $8.3 million in the first nine months
of fiscal year 1996 as compared to $7.8 million during the first
nine months of fiscal year 1995. The increase in interest
expense during the first nine months of fiscal 1996 as compared
to the first nine months of fiscal 1995 is due to interest on
borrowings on the Company's U.K. Credit Agreement.
The Company recorded no provision for income taxes in the
first nine months of fiscal years 1996 and 1995.
Net income was $17.2 million, or $.48 per share, in the
first nine months of fiscal year 1996 and net loss was $(4.8)
million, or $(.14) per share in the first nine months of fiscal
year 1995. The $22.0 million improvement results from the items
described above.
LIQUIDITY AND CAPITAL RESOURCES
The decrease in the Company's cash of $0.2 million to $13.7
million at March 2, 1996 from $13.9 million at June 3, 1995
resulted from cash provided by operating activities of $7.7
million offset by cash used by investing activities of $8.2
million and cash provided by financing activities of $0.3
million.
As of June 3, 1995, the Company estimated the remaining cash
requirements for the integration of Cameron and direct costs
associated with the acquisition of Cameron to be $8.6 million.
Of such amount, the Company expects to spend approximately $6.5
million during its fiscal year ending June 1, 1996 ("fiscal year
1996") and $2.1 million thereafter. In the first nine months of
fiscal year 1996, spending related to the integration of Cameron
and associated direct costs amounted to $4.2 million.
The 1991 restructuring plan is substantially complete. The
Company expects to expend an additional $3.8 million over the
next several years related to the 1991 restructuring plan,
approximately $1.9 million in fiscal year 1996 and $1.9 million
thereafter. In the first nine months of fiscal year 1996,
spending related to the 1991 restructure plan amounted to $1.0
million.
-11-<PAGE>
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES, (Continued)
As of June 3, 1995, the Company expected to spend $1.8
million in fiscal year 1996 and $15.1 million thereafter on non-
capitalizable environmental activities. In the first nine months
of fiscal year 1996, $0.1 million was expended for non-
capitalizable environmental projects and the Company believes
that expenditures will not exceed $0.6 million during fiscal year
1996. However, total future expenditures are still estimated to
be $16.8 million. 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 $18.7 million for the year ended June 3,
1995 ("fiscal year 1995"). Although capital expenditures in the
first nine months of fiscal year 1996 amounted to $9.7 million,
capital expenditures in the foreseeable future are expected to
increase somewhat from fiscal year 1995 levels.
As of March 2, 1996, the Company had invested $4.5 million
in cash towards its share of the capital requirements of the
Australian Joint Venture for the production of nickel-based
superalloy. The book value of the Company's investment in the
Australian Joint Venture as of March 2, 1996 is approximately
$2.2 million. As of March 22, 1996, the Australian Joint Venture
has entered into a $3.0 million loan agreement with a bank. The
Company has guaranteed 50% of the Australian Joint Venture's
obligations under the loan agreement. This guarantee expires on
February 28, 1997. The Australian Joint Venture has not
generated sufficient cash flow to service its debt, and if the
operations do not become profitable in the future, the Company
may be required to write-off all or a portion of the remaining
book value of its investment and repay up to 50% of the joint
ventures debt under the loan agreement which is guaranteed by the
Company.
The Company's revolving receivables-backed credit facility
(the "Receivables Financing Program") among the Company, certain
subsidiaries and Wyman-Gordon Receivables Company ("WGRC") and a
Revolving Credit Agreement among WGRC and the financial
institutions party thereto provide the Company with an aggregate
maximum borrowing capacity under the Receivables Financing
Program of $65.0 million, with a letter of credit sub-limit of
$35.0 million. The term of the Receivables Financing Program is
five years, with an evergreen feature. As of March 2, 1996,
under the credit facility, the total availability based on
eligible receivables was $45.8 million, there were no borrowings
and letters of credit amounting to $9.4 million were outstanding.
-12-<PAGE>
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES, (Continued)
Wyman-Gordon Limited, the Company's subsidiary located in
Livingston, Scotland, has entered into a credit agreement ("the
U.K. Credit Agreement") with a bank. 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
2.0 million pounds sterling. The term of the U.K. Credit
Agreement is one year with an evergreen feature. There were 1.3
million pounds sterling or $2.0 million of borrowings outstanding
at March 2, 1996 and the Company had issued .9 million pounds
sterling or $1.3 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 1996 to fund operations, anticipated expenditures in
connection with the integration of Cameron, planned capital
expenditures and planned environmental expenditures include
available cash ($13.7 million at March 2, 1996), borrowing
availability under the Company's Receivables Financing Program,
cash generated by operations and reductions in working capital
requirements through planned inventory reductions and accounts
receivable management.
Cash from operations, reductions of working capital
requirements and debt are expected to be the Company's primary
sources of liquidity during fiscal 1997 and beyond. The Company
believes that it has adequate resources to provide for its
operations and the funding of restructuring, integration, capital
and environmental expenditures.
The Company's current plans to improve operating results
include completing the integration of Cameron, further reductions
of personnel and various other cost reduction measures. Programs
to expand the Company's revenue base include participation in new
aerospace programs and expansion of participation in the land-
based gas turbine and extruded pipe markets and other markets in
which the Company has not traditionally participated. The
Company anticipates that, in addition to the growth in commercial
aviation, the aging current commercial airline fleet will require
future orders for its replacement.
ACCOUNTING AND TAX 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 no later than fiscal
year 1997. SFAS 121 prescribes the accounting for the impairment
of long-lived assets that are to be held and used in the business
and similar assets to be disposed of. The Company has not
determined the impact of adopting SFAS 121 on its financial
position or results of operations.
-13-<PAGE>
<PAGE> 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
ACCOUNTING AND TAX MATTERS, (Continued)
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 of all stock-based
awards to employees. The Company has not determined the impact
of adopting SFAS 123 on its financial position or results of
operations.
As of June 3, 1995, the Company had net operating loss
carryforwards ("NOLs") of approximately $67.0 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.
The Company has purchased and is named as beneficiary on
approximately 1,650 life insurance policies with an aggregate
cash surrender value of approximately $11.1 million as of March
2, 1996, issued by Confederation Life Insurance Company (U.S.),
which is currently in rehabilitation. Confederation Life
Insurance Company is continuing to pay benefits under the
policies but has ceased to redeem cash surrender values. No
assurances can be given regarding to what extent the Company will
be able to realize such cash surrender values in the future.
-14-<PAGE>
<PAGE> 15
PART II.
ITEM 6. EXHIBITS AND REPORTS FILED ON FORM 8-K
(a) Exhibits
The following exhibits are being filed as part of this Form
10-Q:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
10 Employment Agreement dated January 17, 1996 by
and between Wyman-Gordon Company and Frank J.
Zugel
27 Financial Data Schedule for the Nine Months
Ended March 2, 1996
</TABLE>
(b) No reports on Form 8-K have been filed with the Commission
during the period covered by this report.
-15-<PAGE>
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WYMAN-GORDON COMPANY
Date: 4/12/96 By: /s/ ANDREW C. GENOR
Andrew C. Genor
Vice President,
Chief Financial Officer and Treasurer
Date: 4/12/96 By: /s/ JEFFREY B. LAVIN
Jeffrey B. Lavin
Assistant Corporate Controller
-16-
<PAGE> 1
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated January 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 desires to have the services of
the Executive as its President, Investment Castings Division; and
WHEREAS, the Executive is willing to serve the Company
as its President, Investment Castings Division, but desires
assurance that he will not be materially disadvantaged by a
change in control of the Company;
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:
-1-<PAGE>
<PAGE> 2
(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, other than
a Major Stockholder on the date of this Agreement,
acting in concert ("Person"), together 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
"Major Stockholder" shall mean all shares beneficially owned by
the Fuller Foundation, the Stoddard Charitable Trust, and
descendants of Harry G. Stoddard and their spouses; 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.
-2-<PAGE>
<PAGE> 3
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:
(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
-3-<PAGE>
<PAGE> 4
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,
and except to the extent that the Company provides
the Executive with substantially equivalent
benefits;
(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.
-4-<PAGE>
<PAGE> 5
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 in Control, whichever is
higher.
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 Certificate of Grant except that such options (and the
alternative common stock appreciation rights) shall be exercised
within three years after the Qualifying Termination.
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.
-5-<PAGE>
<PAGE> 6
ARTICLE III
EFFECT ON 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 application law or
regulation.
SECTION 4.2. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution
by the Company to or for the benefit of the Executive that is
considered paid or payable or distributed or distributable in
connection with a Change in Control (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") or any interest or
penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest and
penalties, being collectively the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes on the Gross-up Payment (including,
without limitation, any income taxes and Excise Tax imposed upon
the Gross-Up Payment and any interest or penalties imposed with
respect to such taxes), the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments (as determined without regard to the Gross-Up Payment).
All determinations required to be made under this Section 4.2,
including whether a Gross-Up Payment is required and the amount
of such Gross-Up Payment, shall be made by a nationally
recognized independent accounting firm selected by the Company
(the "Accounting Firm") which shall provide detailed supporting
calculations to the Company and the Executive within 30 business
days following the date of the Qualifying Termination, if
applicable, or such earlier time as the Company may request. All
fees and expenses of the Accounting Firm shall be borne by the
Company. The Gross-Up Payment, if any, as determined pursuant to
this Section 4.2, shall be paid to the Executive within ten days
following receipt by the Company of the Accounting Firm's
determination. The Accounting Firm shall either make the
determination that a Payment is subject to the Excise Tax or it
shall furnish the Executive with an opinion that failure to
report the Excise Tax on the Executive's applicable Federal
income tax return would not result in the imposition of a
-6-<PAGE>
<PAGE> 7
negligence or similar penalty, and, in the latter case (subject
to the last sentence of this paragraph), no Gross-Up Payment
shall be required. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result
of the uncertainty to the application of Section 4999 of the
Code, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made (an
"Underpayment") or that Gross-Up Payments which have been made by
the Company should not have been made (an "Overpayment"),
consistent with the calculations required to be made hereunder.
The Accounting firm shall determine the amount of any
Underpayment or Overpayment that has occurred and (i) an amount
equal to any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive and (ii) any
amount refunded to the Executive as a result of such Overpayment
shall be promptly paid by the Executive to the Company in an
amount which will result in the Executive being made whole on an
after-tax basis.
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.
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 an 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, 1994, if no Change in Control
has occurred before that date; provided, however, that commencing
on May 1, 1994 and each May 1 thereafter, the term of this
Agreement shall automatically be extended for an additional year
-7-<PAGE>
<PAGE> 8
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 limitation 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 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 6.6 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.
-8-<PAGE>
<PAGE> 9
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 6.6 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, North Grafton, Massachusetts
01613, Attention: V.P., 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 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 this respective
articles and section 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.
-9-<PAGE>
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ATTEST: WYMAN-GORDON COMPANY
/S/WALLACE F. WHITNEY, JR. By: /S/DAVID P. GRUBER
Wallace F. Whitney, Jr. David P. Gruber, President
and Chief Executive Officer
ATTEST:
/S/WALLACE F. WHITNEY, JR. /S/FRANK J. ZUGEL
Wallace F. Whitney, Jr. Frank J. Zugel
-10-
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