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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 14, 1997
REGISTRATION NO. 33-63459
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Post-Effective Amendment
No. 1 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WYMAN-GORDON COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MASSACHUSETTS 04-1992780
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
</TABLE>
244 WORCESTER STREET, BOX 8001, GRAFTON, MASSACHUSETTS 01536-8001. (508)
839-4441
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
WALLACE F. WHITNEY, JR.
Vice President, General Counsel and Clerk
Wyman-Gordon Company
244 Worcester Street, Box 8001
Grafton, Massachusetts 01536-8001
(508) 839-8110
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<S> <C>
MARGARET L. WOLFF DIANE K. SCHUMACHER
GREGORY A. FERNICOLA Senior Vice President,
Skadden, Arps, Slate, General Counsel and Secretary
Meagher & Flom LLP Cooper Industries, Inc.
919 Third Avenue 600 Travis, Suite 5800,
New York, NY 10022 Houston, TX 77002
(212) 735-3000 (713) 209-8400
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon as
possible after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
DATED AUGUST 14, 1997
PROSPECTUS
15,000,000 SHARES
[WYMAN-GORDON COMPANY LOGO] WYMAN-GORDON COMPANY
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
This Prospectus relates to 15,000,000 shares of Common Stock, par value $1.00
per share (the "Common Stock"), of Wyman-Gordon Company (the "Company"), which
may be delivered by Cooper Industries, Inc. ("Cooper"), at its option, pursuant
to the terms of the 6.0% Exchangeable Notes Due January 1, 1999 (the "Debt
Exchangeable for Common StockSM" or "DECSSM" ). The DECS were offered pursuant
to a prospectus of Cooper (the "DECS Prospectus") covering the sale of
15,000,000 DECS (the "DECS Offering"). The Company will not receive any of the
proceeds from the offering contemplated hereby.
Cooper granted the Underwriters of the DECS a 30-day option to purchase up to an
additional 16,500,000 DECS, which may be exchangeable at their maturity for
additional shares of Common Stock. Such option, which was granted solely to
cover over-allotments, if any, was exercised in full.
This Prospectus also relates to the sale and delivery by Cooper, from time to
time, of up to 16,500,000 shares of Common Stock of the Company to holders of
DECS which are presented to and accepted by Cooper for cancellation prior to the
maturity of the DECS. Any such transaction may be consummated based on
prevailing market prices or at negotiated or fixed prices. In the event that
pursuant to this Prospectus Cooper accepts any DECS for cancellation prior to
maturity, then to the extent that the number of shares of Common Stock delivered
to the holders of such DECS in connection with such cancellation is less than
one share for each DECS cancelled, Cooper also may sell such excess shares of
Common Stock pursuant to this Prospectus. See "Plan of Distribution."
PROSPECTIVE INVESTORS ARE ADVISED TO CONSIDER CAREFULLY THE INFORMATION
CONTAINED UNDER "RISK FACTORS" ON PAGE 3.
In connection with market-making activities in the DECS, Salomon Brothers Inc.
("Salomon") may, subject to certain limitations, from time to time borrow,
return and reborrow up to 1,250,000 shares of Common Stock from Cooper, and this
Prospectus also relates to the offer and sale of such borrowed Common Stock by
Salomon from time to time. Salomon is not under any obligation to engage in any
market-making transactions with respect to the DECS, and any market-making in
the DECS actually engaged in by Salomon may cease at any time. In addition, the
Common Stock is traded on The Nasdaq Stock Market's National Market ("Nasdaq")
under the symbol WYMN. On August 12, 1997, the last reported sale price of
Common Stock was $26.750 per share. See "Price Range of Common Stock and
Dividend Policy."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August , 1997.
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THE COMPANY HAS BEEN ADVISED THAT IN CONNECTION WITH THE OFFERING BY COOPER
OF THE DECS, THE UNDERWRITERS OF THE DECS MAY OVER-ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DECS OR THE COMMON STOCK OF
THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON NASDAQ OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS (AND SELLING GROUP
MEMBERS) AND THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET MAKING
TRANSACTIONS IN THE COMMON STOCK ON NASDAQ IN ACCORDANCE WITH RULE 103 OF
REGULATION M. SEE "PLAN OF DISTRIBUTION."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance with the Exchange Act files reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). The
Company has filed a registration statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with the SEC with respect to the Common Stock offered hereby. This Prospectus,
which constitutes part of the Registration Statement, does not contain all the
information set forth in the Registration Statement and reference is made to the
Registration Statement and the exhibits thereto for further information with
respect to the Company and the Common Stock. Such reports, proxy statements,
Registration Statement and exhibits and other information omitted from this
Prospectus can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549 and at the SEC's Regional Offices located at Seven World Trade Center,
Suite 1300, New York, NY 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, IL 60661-2511. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the SEC, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, the Company is
required to file electronic versions of these documents with the SEC through the
SEC's Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and such
electronic versions are available to the public at the SEC's world-wide web
site, http://www.sec.gov. Such reports, proxy statements and other information
concerning the Company can also be inspected at The Nasdaq Stock Market at 1735
K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended May 31,
1997, the proxy statement dated August 28, 1996, and the Company's Current
Report on Form 8-K filed on April 14, 1997, are incorporated by reference in
this Prospectus. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference into this Prospectus and to be made a
part hereof from the respective dates of filing of such documents. Any statement
in any document incorporated or deemed to be incorporated by reference herein,
shall be deemed to be modified or superseded for purposes of the Registration
Statement and this Prospectus to the extent that a statement contained herein or
in any subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
Copies of the above documents (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference in such documents) may
be obtained upon written or oral request without charge from the Company, 244
Worcester Street, Grafton, Massachusetts 01536, Attention: Clerk, telephone
(508) 839-4441.
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RISK FACTORS
Prospective investors should carefully consider the specific risk factors
set forth below as well as the other information contained in this Prospectus
and the information incorporated herein by reference.
RECENT INDUSTRIAL ACCIDENT AT THE COMPANY'S HOUSTON FACILITY
On December 22, 1996, a serious industrial accident occurred at the
Houston, Texas facility of Wyman-Gordon Forgings, Inc. ("WGFI"), a wholly-owned
subsidiary of the Company. The accident occurred while a crew of ten men was
performing maintenance on the accumulator system that supplies hydraulic power
for WGFI's 35,000 ton press. The maintenance required that the system be
completely depressurized which the crew believed to be the case. However,
subsequent examination has shown that a valve on one of the pressure vessels was
closed thereby containing pressure in that vessel. The crew was in the process
of removing the bolts on the vessel when the few remaining bolts could no longer
hold the pressure and the lid was blown off, killing eight crew members and
seriously injuring two others.
Although no lawsuits have yet been filed, the injured workers and the
decedents' families have all retained attorneys to represent them in the matter
and who have notified the Company that they intend to assert claims against the
Company on behalf of their clients. The Company is cooperating with such
attorneys by providing them information and allowing them and their experts
access to Company facilities. In general under Texas statutory law, an
employee's exclusive remedy against an employer for an on-the-job injury is the
benefits of the Texas Workers Compensation Act. WGFI, the employer of the
deceased employees, has workers compensation insurance coverage and the injured
employees and beneficiaries of the deceased employees are receiving workers
compensation payments. Under applicable law, however, statutory beneficiaries of
employees killed in the course and scope of their employment may recover
punitive (but not compensatory) damages in excess of workers compensation
benefits if they can prove that the employer was grossly negligent. The
protection of the workers compensation exclusive remedy provision does not
extend to WGFI's parent corporation, Wyman-Gordon Company. Therefore, if
lawsuits on behalf of the victims in the Houston accident are brought against
Wyman-Gordon Company and if the evidence supports a finding that Wyman-Gordon
Company acted negligently in its supervision of WGFI and such negligence had a
causal connection with the accident, the plaintiffs would be able to recover
damages, both compensatory and punitive, if applicable, against the parent
company even in the absence of gross negligence. WGFI has also received claims
from several employees of a subcontractor claiming to have been injured at the
time of the accident.
It is not possible at this time to anticipate whether WGFI or Wyman-Gordon
Company could be held liable in connection with the accident and, if so, to
estimate the amount of damages that could be awarded. The Company maintains
general liability and employer's liability insurance for itself and its
subsidiaries under various policies with aggregate coverage limits of
approximately $29 million. WGFI has tendered the defense of the various claims
to the Company's insurance carriers. There can be no assurance that the full
insurance coverage will be available or that the Company's ultimate liability
resulting from the accident will not exceed available insurance coverage by an
amount which could be material to the Company's financial condition or results
of operations.
Following the accident, the Occupational Safety and Health Administration
("OSHA") conducted an investigation of the accident. On June 18, 1997, OSHA
issued a Citation and Notification of Penalty describing violations of the
Occupational Safety and Health Act of 1970. OSHA's principal allegations were
that (i) WGFI had not complied with the OSHA standard on specific lockout/tagout
procedures for the 35,000 ton press and appurtenant equipment, (ii) WGFI failed
to train each authorized employee in lockout/tagout procedures, and (iii) there
were design flaws in the equipment. Although the Company disagrees with the OSHA
findings, on June 18, 1997, WGFI entered into an Informal Settlement with OSHA
in order to avoid the cost and burden of litigation and to resolve disputed
claims arising from OSHA's inspection. Pursuant to the Informal Settlement, WGFI
paid $1.8 million in settlement of the OSHA Citation and agreed not to contest
the Citation. Under the terms of the Informal Settlement, WGFI agreed to (i)
develop and implement a comprehensive, ongoing energy control program in
compliance
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with the OSHA lockout/tagout standard, (ii) train its employees in safety
procedures, (iii) communicate to and to involve its employees in the
implementation of the Informal Settlement, (iv) retain an independent safety
professional to perform a comprehensive safety and health audit, and (v) adhere
to the Secretary of Labor's Voluntary Guidelines for Safety and Health
Management Program at its plants in Houston and Brighton, Michigan. In addition,
the Company agreed to make certain terms of the Informal Settlement applicable
to its forging plants in Massachusetts. WGFI also agreed with the International
Association of Machinists to strengthen the Joint Management Labor Safety
Committee in Houston and to conduct joint employee safety training.
The costs of the accident through May 31, 1997 were approximately $11.9
million, including substantial property damage at the Houston facility and costs
of business interruption as a result of the 35,000 ton press having been out of
operation until the first week of March 1997. The Company has recovered $6.9
million under property damage and business interruption insurance policies it
maintains, leaving approximately $5.0 million of costs that were recorded in the
fiscal year ending May 31, 1997.
COMMERCIAL AEROSPACE INDUSTRY CYCLICALITY; EARNINGS VOLATILITY
Approximately 78% and 73% of the Company's revenues during fiscal years
1997 and 1996, respectively, were derived from the commercial aerospace
industry, an industry that is cyclical in nature and subject to changes based on
general economic conditions and airline profitability. Domestic airlines
suffered significant operating losses from 1990 through 1992 and as a result of
such losses, coupled with the high levels of debt incurred to purchase new
aircraft and the excess capacity within the commercial airline sector, the
commercial aerospace industry experienced reductions of new orders for
commercial aircraft and related spare parts, as well as deferrals, and in some
cases cancellations, of deliveries of previously ordered aircraft. Aircraft
orders declined from 1,116 in 1989 to 295 in 1993. Most domestic airlines are
currently profitable, however, and demand for the products of the Company's
customers -- principally airplanes and jet engines -- has greatly increased.
There can be no assurance, however, that the improved conditions of the
aerospace industry will be sustained.
As a result of the cyclical nature of the commercial aerospace industry,
the Company's earnings are subject to volatility. The Company's net income
increased in each of fiscal years 1995, 1996 and 1997. However, the Company
reported a net loss for the five months ended May 31, 1994, and for the fiscal
year ended December 31, 1993, a period which coincided with a decrease in
airplane orders. Although the Company has implemented structural changes
intended to improve its cost structure and improve efficiency and productivity
at each of its facilities, there can be no assurance that the Company's
operations would remain profitable if a significant downturn in the commercial
aerospace industry reoccurred.
The Company's facility in Grafton, Massachusetts has operated at a loss in
recent years. As a result of improved demand and a variety of structural changes
undertaken by the Company in the past three years, operating results of the
Grafton facility have improved. However, there can be no assurance that these
improvements can be sustained or that the Grafton facility can operate
profitably on a continuing basis, particularly if industry conditions change,
and further restructuring measures, which could result in write-offs and reduced
earnings, may be necessary in the future to increase productivity and lower
costs at the Grafton facility.
RISK OF FLUCTUATIONS IN PRICE AND SHORTAGES OF RAW MATERIALS
The Company's results of operations may be adversely affected by
fluctuations in the prices and shortages in the supply of raw materials used by
the Company. Historically, the Company has not been entirely able to pass these
increased costs along to its customers because 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
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fluctuations in the prices of raw materials. Furthermore, in a strong market the
Company may be required to purchase raw materials in excess of quantities
covered by long-term agreements and to pay current market prices for such raw
materials. During periods of high demand, such as the current one, when both the
Company and its suppliers of metal alloys are operating at close to full
capacity, the Company is also exposed to shortages of and delays in the delivery
of raw materials. When required raw materials are not delivered at the
anticipated time, the Company is required to rearrange its production cycle,
which causes loss of efficiency. During the current upturn in the aerospace
cycle the Company's ability to satisfy its customers' delivery requirements has
been adversely affected by a general lengthening of the delivery times for its
principal raw materials, nickel and titanium alloys, and a decline in the
reliability of suppliers' delivery schedules. Accordingly, the portion of the
Company's backlog consisting of products past their delivery due date has been
increasing. These and other factors, or any significant increase in the price or
decline in the availability of raw materials used by the Company, may have an
adverse impact on the Company's results of operations.
REDUCTIONS IN DEFENSE SPENDING
Approximately 8.2% and 8.6% of the Company's revenues during fiscal years
1997 and 1996, respectively, were derived from the defense aerospace industry,
which 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 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.
DEPENDENCE ON MAJOR CUSTOMERS
The Company is dependent upon a few large aerospace contractors for a
significant percentage of its revenue. Five customers accounted for
approximately 48% and 47% of the Company's revenues during the Company's fiscal
years 1997 and 1996, respectively, and two of the five, General Electric Company
and United Technologies (primarily its Pratt & Whitney Division), accounted for
26% and 10% of fiscal year 1997 total revenues, respectively, and 27% and 11% of
fiscal year 1996 total revenues, respectively. In addition, many of the
Company's sales to its smaller customers are eventually incorporated into
components sold to its major customers. The loss of, or significant reduction
in, purchases by any of the Company's major customers would have a material
adverse effect on the Company's business. In addition, 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.
UNCERTAINTIES OF ACQUISITION STRATEGY
The Company has pursued and intends to continue to pursue acquisitions as
an important component of its strategy. There can be no assurance that suitable
acquisition candidates can be acquired on acceptable terms or that future
acquisitions, if completed, will be successful. Future acquisitions by the
Company could result in the incurrence of additional indebtedness, the
potentially dilutive issuance of equity securities, the assumption of contingent
liabilities and the incurrence of amortization expenses related to goodwill and
other intangible assets, which could be material. The success of any completed
acquisition will depend on the Company's ability to integrate effectively the
acquired businesses into the Company. The process of integrating acquired
businesses may involve significant risks, including difficulties in the
assimilation of operations and products, the diversion of management's attention
and the risks of entering markets in which the Company has limited prior
experience.
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COMPETITION
The Company is subject to intense competition. Competition in the Company's
principal markets typically intensifies during cyclical downturns, when supply
capacity may exceed demand. This phenomenon is especially present in the
aerospace turbine and aerospace structural products markets because of the
cyclical nature of the commercial and defense aerospace industries.
International competition is intensifying and such trend may accelerate because
of two principal factors. Aircraft prime contractors may pursue strategic
alliances with casting and forging enterprises in particular countries or
regions, either because of so called "offset requirements" or "local content
requirements" applicable to products manufactured in or directed to specific
markets, or in an effort to diversify their sources of supply worldwide.
International competition from companies which have the required manufacturing
capabilities and infrastructure may intensify as such companies gain the
technological and financial resources necessary to compete effectively in the
markets served by the Company. There can be no assurance that the Company can
maintain its share of the market for any of its products.
COMPLIANCE WITH ENVIRONMENTAL AND OTHER GOVERNMENT REGULATIONS
The Company's operations are subject to extensive environmental, health and
safety laws and regulations promulgated by federal, state and local governments.
Many of these laws and regulations provide for substantial fines and criminal
sanctions for violations. The nature of the Company's business exposes the
Company to risks of liability as a result of the use and storage of materials
that can cause contamination or personal injury if released into the
environment. In addition, environmental laws may have a significant effect on
the nature, scope and cost of cleanup of contamination at operating facilities.
It is difficult to predict the future development of such laws and regulations
or their impact on future earnings and operations, but the Company anticipates
that these standards will continue to require increased capital expenditures.
There can be no assurance that material costs or liabilities will not be
incurred.
Based upon information presently available, the Company does not expect
that costs for future environmental compliance and remediation will have a
material adverse effect on its competitive or financial position or its ongoing
results of operations. However, it is not possible to predict accurately the
amount or timing of costs of any future environmental remediation requirements.
Such costs could be material to future quarterly or annual results of
operations. In addition, the "Superfund" statutes may impose joint and several
liability for the costs of remedial investigations and actions on the entities
that arranged for disposal of the wastes, the waste transporters that delivered
materials to the disposal sites and the past and present owners and operators of
such sites; responsible parties (or any one of them, including the Company) may
be required to bear all of such costs regardless of fault, legality of the
original disposal or ownership of the disposal site. In such event, the amount
owed by the Company for liabilities at sites could be significantly greater. The
Company is currently involved in proceedings with respect to environmental
matters at five sites.
PRODUCT LIABILITY EXPOSURE
The Company produces many critical engine and structural parts for
commercial and military aircraft. As a result, the Company is potentially
subject to product liability claims involving significant amounts. The Company
maintains product liability insurance, 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 incurred.
ANTI-TAKEOVER PROVISIONS; POSSIBLE ADVERSE EFFECTS OF ISSUANCE OF PREFERRED
STOCK
The Company's Restated Articles of Organization (the "Articles"), By-Laws
and Rights Agreement (as defined herein), as well as Massachusetts law, contain
provisions that could discourage a proxy contest, make more difficult the
acquisition of a substantial block of the Common Stock, which could make the
payment of a premium to shareholders in connection with a change in control less
likely, and
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increase the difficulty of removing incumbent management and board members. In
addition, such provisions could limit the price that investors might be willing
to pay in the future for shares of the Common Stock. The Board of Directors of
the Company is authorized to issue, without stockholder approval, Preferred
Stock with voting, conversion and other rights and preferences that could
adversely affect the voting power or other rights of the holders of Common
Stock. The issuance of Preferred Stock or rights to purchase Preferred Stock
could be used to discourage an unsolicited acquisition proposal. Pursuant to the
Rights Agreement the Company has issued Rights (as defined herein) which provide
that under certain circumstances each holder of a Right will have the right to
receive a number of shares of common stock of an Acquiring Person (as defined
herein) having a market value of two times the Exercise Price (as defined
herein) of the Right. The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company on terms not approved by the
Company's Board of Directors. See "Description of the Company's Capital Stock --
Rights Agreement." The Board of Directors is divided into three "staggered"
classes, with each class serving for a term of three years. Dividing the Board
of Directors in this manner could increase the difficulty of removing incumbent
members and could discourage a proxy contest or the acquisition of a substantial
block of the Common Stock. The Articles also contain a "fair price provision"
that could impede certain business combinations involving the Company.
Massachusetts law contains certain anti-takeover provisions, including Chapter
110F of the Massachusetts General Laws (the "MGL"), a so-called "Business
Combination Statute" that restricts certain stockholders that own (together with
their affiliates) 5% or more of the outstanding voting stock of a Massachusetts
corporation from engaging in certain business combinations with such corporation
("Chapter 110F"), and Chapter 110D of the MGL, a so-called "Control Share
Statute" that limits any person or entity that has acquired 20% or more of a
corporation's stock from voting such shares unless the corporation's
stockholders, other than such acquiring person or entity, authorize such voting
rights by a vote of the holders of the majority of stock of the corporation
entitled to vote on such matters ("Chapter 110D"). Although the Company has
presently selected to "opt-out" of Chapter 110D, the Company remains subject to
Chapter 110F. Such provisions of Massachusetts law could have the effect of
discouraging a potential acquiror from making an offer for the Common Stock,
which would make the payment of a premium to stockholders in connection with a
change in control less likely, and could increase the difficulty of removing
incumbent management and board members. See "Description of the Company's
Capital Stock."
In addition, the Investment Agreement dated January 10, 1994 between Cooper
and the Company (the "Investment Agreement") creates certain obstacles to a
takeover of the Company. See "Restrictions on Voting Control" below.
RESTRICTIONS ON VOTING CONTROL
The Investment Agreement with Cooper, which relates to Cooper's ownership
of 16.5 million shares of Common Stock or 46% of the Common Stock outstanding,
includes provisions (i) requiring Cooper to vote its shares of Common Stock as
recommended by the Company's Board of Directors or at Cooper's option in the
same proportion to votes of the other shareholders, (ii) restricting Cooper's
ability to sell or encumber its shares of Common Stock, and (iii) preventing
Cooper from joining in any proxy contest, making any proposal with respect to
the acquisition of any securities or assets of the Company, initiating or
soliciting proxies for the approval of any shareholder proposals, and tendering
shares of Common Stock that Cooper owns in a tender offer unless the Company's
Board of Directors approves such tender or takes a neutral position on the
offer. See "Relationship Between the Company and Cooper -- Investment
Agreement." Such "standstill" agreements give the Company's Board of Directors
effective voting control over 46% of the Company's outstanding shares of Common
Stock which could make it substantially more difficult for owners of shares of
Common Stock to affect the outcome of shareholder votes.
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IMPACT OF THE DECS ON THE MARKET FOR THE COMPANY'S COMMON STOCK
It is not possible to predict accurately how or whether the DECS will trade
in the secondary market or whether such market will be liquid. Any market that
develops for the DECS is likely to influence and be influenced by, the market
for the Common Stock. For example, the price of the Common Stock could become
more volatile and could be depressed by investors' anticipation of the potential
distribution into the market of substantial additional amounts of Common Stock
at the maturity of the DECS, by possible sales of Common Stock by investors who
view the DECS as a more attractive means of equity participation in the Company
and by hedging or arbitrage trading activity that may develop involving the DECS
and the Common Stock.
RECENT DEVELOPMENTS
On July 25, 1997, the Company filed a Form S-3 Registration Statement to
register $150,000,000 of unsecured debt securities to be issued from time to
time in one or more series, in amounts and at prices and terms to be set forth
in one or more supplements to a Prospectus. The Company intends to use the net
proceeds from the sale of the debt securities for repayment of outstanding
indebtedness and for additional working capital and general corporate purposes.
For additional information with respect to the Company, see the documents
specified under "Incorporation of Certain Documents by Reference".
THE COMPANY
The Company, founded in 1883, is a leading producer of highly engineered,
technically advanced components, primarily for the aerospace industry as well as
for other markets including power generation. The Company uses forging, casting
and composites technologies to produce components to exacting customer
specifications for technically demanding applications such as jet turbine
engines, airframe structures, land-based gas turbines, and extruded seamless
pipe. Components manufactured by the Company are utilized in most of the major
commercial and United States defense aerospace programs. The Company believes
that it is the only firm to provide the aerospace industry with a combination of
forging, casting and composites capabilities for the production of high quality
components and that it produces the broadest offering of aerospace forgings
available on the market. The Company is a Massachusetts corporation. Its
principal office is located at 244 Worcester Street, North Grafton,
Massachusetts 01536-8001 and its telephone number is (508) 839-4441.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock of the Company is listed on the Nasdaq National Market
under the symbol WYMN. The following table sets forth the high and low sales
price of the Common Stock for the calendar periods listed below as reported on
the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
1996
First Quarter...................................... $ 18 3/4 $ 13 3/4
Second Quarter..................................... 18 3/4 15 3/8
Third Quarter...................................... 23 16 3/4
Fourth Quarter..................................... 24 3/8 18 1/2
1997
First Quarter...................................... 22 1/4 17 7/8
Second Quarter..................................... 27 9/16 20 1/8
Third Quarter (through August 12, 1997)............ 28 1/4 25 3/4
</TABLE>
On August 12, 1997, the last reported sale price of the Common Stock was
$26.750 per share.
The Company discontinued dividends on the Common Stock beginning in the
fourth quarter of 1991. While it is the intention of the Board of Directors to
consider the resumption of dividends on the Common
8
<PAGE> 10
Stock from time to time, the declaration of future dividends will be dependent
upon the Company's earnings, financial condition, and other relevant factors.
The Company is limited in the amount of dividends it may pay under the
terms of the indenture dated March 16, 1993, pursuant to which it issued $90.0
million principal amount of 10 3/4% Senior Notes due 2003 (the "Senior Note
Indenture"). Such limitation is provided by the Senior Note Indenture's
limitation on restricted payments, including dividends. The Senior Note
Indenture provides that the Company will not, and will not permit any of its
subsidiaries to, pay dividends or make any other restricted payment if, after
giving effect thereto, the aggregate amount of all restricted payments made from
and after the date of the Senior Note Indenture would exceed the sum of (a) 50%
of consolidated net income of the Company accrued for the period (taken as one
accounting period) commencing with March 29, 1993, to and including the date of
such calculation (or, in the event consolidated net income is a deficit, then
minus 100% of such deficit); (b) the aggregate net proceeds, including the fair
market value of property other than cash, received by the Company from the
issuance or sale of its capital stock, including the issuance of its capital
stock upon conversion of securities other than its capital stock, and options,
warrants and rights to purchase its capital stock (other than redeemable stock)
from and after the date of the Senior Note Indenture; and (c) $5.0 million. The
Senior Note Indenture also contains certain other covenants including
limitations on indebtedness, liens, and disposition of assets.
As of August 13, 1997, the Common Stock was held by 1,550 holders of
record. The number of record holders may not be representative of the number of
beneficial holders because many shares are held by depositories, brokers, or
other nominees.
9
<PAGE> 11
CAPITALIZATION
The following table sets forth as of May 31, 1997, the capitalization of
the Company. The Company will receive no proceeds from the sale of the DECS or
from sales of Common Stock by Cooper pursuant to this Prospectus, if any. This
table should be read in conjunction with the audited consolidated financial
statements of the Company and the related notes thereto incorporated by
reference herein.
<TABLE>
<CAPTION>
MAY 31,
1997
--------
(000'S
OMITTED)
<S> <C>
Borrowings Due Within One Year.............................. $ 77
========
Long-Term Debt:
10 3/4% Senior Notes Due 2003............................. $ 90,000
Other..................................................... 6,154
--------
Total Long-Term Debt...................................... 96,154
--------
Stockholders' Equity:
Preferred Stock, No Par Value:
Authorized 5,000,000 Shares; None Issued............... --
Common Stock, Par Value $1.00
Authorized 70,000,000 Shares; Issued 37,052,720........ 37,053
Capital in Excess of Par Value............................ 27,608
Retained Earnings......................................... 117,720
--------
182,381
Less Treasury Stock at Cost............................... (17,983)
--------
Total Stockholders' Equity............................. 164,398
--------
Total Capitalization........................................ $260,552
========
</TABLE>
10
<PAGE> 12
SELECTED CONSOLIDATED FINANCIAL DATA
The consolidated balance sheet data as of May 31, 1997, 1996, 1995 and 1994
and December 31, 1993 and 1992 and consolidated statement of income data for the
years ended May 31, 1997, 1996, 1995 and years ended December 31, 1993 and 1992
have been derived from the Company's audited consolidated financial statements.
The consolidated statement of income data for the year ended May 28, 1994, has
been derived from the Company's unaudited consolidated financial statements. The
financial data set forth below should be read in conjunction with the
consolidated financial statements of the Company and related notes thereto
incorporated by reference herein.
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, MAY 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994(1) 1993(2) 1992
-------- -------- -------- ----------- ------------ ------------
(UNAUDITED)
(000'S OMITTED, EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA(3):
Revenues.......................... $608,742 $499,624 $396,639 $224,694 $239,761 $298,881
Gross profit...................... 97,634 78,132 49,388 6,878 20,673 55,590
Other charges (credits)(4)........ 23,083 2,717 (710) 35,003 2,453 --
Income (loss) from operations..... 30,322 37,699 13,718 (63,657) (8,428) 27,275
Net income (loss)(5).............. 50,023 25,234 1,039 (72,403) (60,004) 21,795
PER SHARE DATA:
Income (loss) per share before
cumulative effect of changes in
accounting principles........... $ 1.36 $ 0.70 $ 0.03 $ (4.02) $ (0.95) $ 1.21
Net income (loss) per share(5).... 1.36 0.70 0.03 (4.02) (3.34) 1.21
Dividends paid per share.......... -- -- -- -- -- --
Shares used to compute income
(loss) per share................ 36,879 36,128 35,148 17,992 17,965 18,078
BALANCE SHEET DATA (at end of
period)(3):
Working capital................... $166,205 $116,534 $ 93,062 91,688 90,685 96,057
Total assets...................... 454,371 375,890 369,064 394,747 286,634 295,156
Long-term debt.................... 96,154 90,231 90,308 90,385 90,461 70,538
Stockholders' equity.............. 164,398 109,943 80,855 72,483 88,349 149,516
OTHER DATA:
Order backlog (at end of
period)......................... $895,825 $598,438 $468,721 $389,407 $256,259 $309,679
EBITDA(6)......................... 79,064 56,651 29,478 (10,377) 11,841 45,191
</TABLE>
11
<PAGE> 13
- ---------------
(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):
<TABLE>
<S> <C>
Revenue..................................................... $ 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.................................. --
</TABLE>
(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) On May 26, 1994, the Company acquired Cameron Forged Products Company
("Cameron") from Cooper Industries, Inc. (the "Acquisition"). 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 months ended May 31, 1994.
(4) 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.
During the year ended May 31, 1997, the Company recorded other charges
which included $4,600,000 to provide for the costs of workforce reductions
at the Company's Grafton, Massachusetts Forging facility, $3,400,000 for
the write-off and disposal of certain forging equipment, $2,300,000 to
reduce the carrying value and dispose of certain assets of the Company's
titanium castings operations, $1,200,000 to consolidate the titanium
castings operations, $2,500,000 to reduce the carrying value of the
Australian joint venture, $5,700,000 to reduce the carrying value of the
cash surrender value of certain company-owned life insurance policies,
$1,900,000 to reduce the carrying value of a building held for sale and
$250,000 to reduce the carrying value of other assets.
Other charges (credits) in the year ended May 31, 1997 also included a
charge of $1,200,000, net of insurance recovery of $6,900,000, related to
the accident at the Houston, Texas facility of Wyman-Gordon Forgings, Inc.
in December 1996.
(5) 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 benefits obligations to be accounted for on an accrual basis
rather than the "expense
12
<PAGE> 14
as incurred" basis formerly used. The Company elected to recognize the
cumulative effect of these accounting changes in the year ended December
31, 1993.
In the year ended May 31, 1997, net tax benefits of $25,680,000 were
recognized including a refund of prior years' income taxes amounting to
$19,680,000, plus interest of $3,484,000, and $6,500,000 related to the
expected realization of NOLs in future years and $10,250,000 related to
current NOLs benefit offsetting $10,750,000 of current income tax expense.
The refund relates to the carryback of tax net operating losses to tax
years 1981, 1984 and 1986 under the applicable provisions of Internal
Revenue Code Section 172(f).
(6) EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, other charges (credits) 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.
RELATIONSHIP BETWEEN THE COMPANY AND COOPER
STOCK PURCHASE AGREEMENT
Pursuant to a Stock Purchase Agreement dated as of January 10, 1994 (the
"Stock Purchase Agreement"), between the Company and Cooper, the Company
acquired from Cooper on May 26, 1994 (the "Closing Date"), all of the
outstanding shares of common stock of Cameron Forged Products Company
("Cameron") in consideration for 16.5 million shares of the Company's Common
Stock and $5.0 million (the "Cash Purchase Price"). The market price of the
Common Stock on the Closing Date was $6.25 per share.
The Cash Purchase Price consisted of (1) $400,000 in cash paid by the
Company to Cooper on the Closing Date and (2) a promissory note in the principal
amount of $4.6 million (the "Note") executed and delivered to Cooper by the
Company on the Closing Date. The principal amount of the Note is payable in
annual installments, beginning on June 30, 1997 and on each June 30 thereafter
until paid in full, in an amount equal to the lesser of (a) $2.3 million, (b) 25
percent of the Company's Free Cash Flow (as defined in the Note) for the
12-month period ending on the April 30 immediately preceding such June 30 and
(c) the unpaid principal balance of the Note. The Company paid the first
principal installment of $2.3 million during June 1997. The Note will not bear
interest until May 1, 1998, from which date it will bear interest at a floating
rate equal to the 90-day commercial paper rate for high grade unsecured notes
sold through dealers by major corporations, as published by The Wall Street
Journal on that portion of the principal amount of the Note equal to the sum of
all amounts of unpaid principal that would have been payable but for mandatory
debt payments by the Company. The Company may from time to time prepay all or
any portion of the outstanding balance of the Note without penalty or premium.
Cooper may declare the Note to be immediately due and payable in the event that
(i) the Company does not pay any portion of the principal or interest on the
Note within 10 days after such payment becomes due or (ii) a Trigger Event (as
defined below in the discussion of the Investment Agreement) occurs.
In the Stock Purchase Agreement the parties agreed to a cash adjustment in
the Cash Purchase Price based on certain changes in the balance sheet of Cameron
between September 26, 1993, and the Closing Date. Since there was an increase in
the Net Asset Value of Cameron (as defined in the Stock Purchase Agreement)
during that period, the Company paid Cooper $3.6 million in full satisfaction of
this adjustment on September 19, 1994.
Pursuant to the Stock Purchase Agreement, (i) Cooper agreed to indemnify
the Company and its subsidiaries against all taxes of Cameron and its
subsidiaries for any taxable year or taxable period ending on or before the
Closing Date. The Stock Purchase Agreement further provides that any taxes for a
taxable period beginning before the Closing Date and ending after the Closing
Date with respect to Cameron or any of its subsidiaries will be apportioned
between the Company and Cooper based on the
13
<PAGE> 15
actual operations of Cameron or the subsidiary, as the case may be, during the
portion of such period ending on the Closing Date and the portion of such period
following the Closing Date.
Pursuant to the Stock Purchase Agreement, Cooper agreed to retain and
indemnify the Company and its affiliates against (i) certain liabilities under
ERISA with respect to employee benefit plans or arrangements, other than
employee benefit plans or arrangements maintained for the benefit of employees
and former employees of the Business (as defined below), and (ii) pension
benefits under designated plans for periods prior to the Closing Date.
Pursuant to the Stock Purchase Agreement, Cameron assumed Cooper's Cameron
Obligations (as defined below), effective on the Closing Date. For purposes of
the Stock Purchase Agreement, "Cooper's Cameron Obligations" means any
obligation, commitment, liability or responsibility of Cooper, its affiliates or
their predecessors (whether or not also an obligation, commitment, liability, or
responsibility of or claim against, in whole or in part, Cameron or its
subsidiaries C.F.P., Ltd. (the "U.K. Sub") or Cameron Pipeline Inc. (the
"Pipeline Sub")), arising, undertaken or created before the Closing Date in
connection with, on behalf of or for the benefit of any of certain entities, to
the extent that such entities conducted all or part of the Business (as defined
below) (the "Cameron Entities"), or arising from the conduct of the Business,
including without limitation (i) any consulting, employment or severance
agreements, guarantees, letters of credit, performance bonds, or indemnities, or
obligations or indemnities to officers or directors of any Cameron Entity, (ii)
any agreements with any transferors to Cooper, its affiliates, or their
predecessors, of any assets of any Cameron Entity or of the Business, (iii) any
labor or collective bargaining agreements relating to any Cameron Entity, (iv)
any governmental contracts relating to any Cameron Entity, (v) any sales or
purchase agreements relating to any Cameron Entity, (vi) any leases of real or
personal property relating to any Cameron Entity, and (vii) any other agreements
or commitments relating to any Cameron Entity under which Cooper, its affiliates
or predecessors will have any liability after the Closing Date, except that
Cooper's Cameron Obligations exclude the matters that Cooper is required to
indemnify as described herein. "Business" means research, development,
engineering, melting, refining, remelting, forging, extrusion, machining,
manufacturing, distribution, sales, marketing, service or repair operations
associated with the Products. "Products" means closed die forgings (including
rotating parts for aircraft engines or industrial turbines, aircraft landing
gear, structural airframe parts, ordnance and related parts, military and power
plant nuclear forgings, valves, heavy wall pipe and fittings, power generation
forgings and oil field equipment forgings), extrusions (including for aircraft
engines, pipe, oil field equipment, bar stock and ordnance), super alloy powder
products, thermal rail products for steel support member in push slab furnaces
and custom-shaped insulators, other forged products, skid rail reheat systems,
and high velocity burners.
In the Stock Purchase Agreement, the Company and Cooper made customary
representations and warranties to each other. Each of the Company and Cooper
represented to the other that to its knowledge, its representations and
warranties were, subject in certain cases to materiality and supplemental
disclosure schedules, true and correct as of the Closing Date (except for those
representations and warranties that expressly relate only to some other time)
(the "Accuracy Representations"). The parties' representations and warranties
expired at the Closing except that the Accuracy Representations remained in full
force and effect until November 28, 1995. Any claim for indemnification with
respect to the Accuracy Representations not asserted by notice by that date may
not be pursued and has been irrevocably waived and released.
Subject to certain terms and conditions set forth in the Stock Purchase
Agreement, (i) Cooper agreed to indemnify the Company, its affiliates, and their
directors, officers or employees (collectively, the "Company's Group") against
all Losses (as defined in the Stock Purchase Agreement) resulting from (a) any
inaccuracy in the Accuracy Representations given by Cooper or (b) any breach of
Cooper's covenants in the Stock Purchase Agreement and (ii) the Company agreed
to indemnify Cooper, its affiliates, and their directors, officers or employees
(collectively, the "Cooper Group") against all Losses resulting from (a) any
inaccuracy in the Accuracy Representations given by the Company, (b) any breach
of the Company's covenants in the Stock Purchase Agreement and (c) Cooper's
Cameron Obligations.
14
<PAGE> 16
In addition, the Company agreed in the Stock Purchase Agreement to
indemnify the Cooper Group against all Losses resulting from any liabilities or
obligations of or relating to, or claims against, any Cameron Entity or the
Business (other than the Losses that Cooper is required to indemnify) on, before
or after the Closing Date, including without limitation (i) all Losses resulting
from any Product Liability Claims (as defined in the Stock Purchase Agreement)
arising out of or resulting from Products sold or furnished by Cooper, any of
its affiliates or any Cameron Entity (including without limitation any product
liability assumed in connection with the acquisition of any business or product
line) on, before or after the Closing Date; (ii) all Losses resulting from (A)
any noncompliance of the operations, properties or business activities of any
Cameron Entity or the Business with any environmental law on, before or after
the Closing Date or (B) any liabilities or obligations of or relating to, or
claims against, any Cameron Entity or the Business based upon any environmental
law, or arising from the disposal of any regulated materials, on, before, or
after the Closing Date; and (iii) all Losses resulting from (A)any workers'
compensation claim filed against any Cameron Entity on, before or after the
Closing Date, and (B) any employment or severance agreements entered into by
Cooper or Cameron relating to employees of Cameron on, before or after the
Closing Date, other than severance payments under a specified employment
agreement.
Cooper agreed in the Stock Purchase Agreement, other than losses that the
Company is required to indemnify, (i) to indemnify the Company's Group against
all Losses resulting from any liabilities or obligations of or relating to, or
claims against, Cooper or Cooper's subsidiaries to the extent that such
liabilities, obligations or claims (x) do not relate to the Business and (y)
arise from the activity of (a) any Cameron Entity (other than the Company or the
Pipeline Sub) before the Closing Date, or (b) Cooper or any of Cooper's
subsidiaries other than the Cameron Entities, (ii) except to the extent the
actions of the Company, Cameron or their affiliates may cause or increase any
such Losses after the Closing Date, to indemnify the Company's Group against all
Losses resulting from any regulated materials disposed of on, or discharged into
the environment at, a specified manufacturing facility of Cooper or at a
specified Superfund location on or before the Closing Date; and (iii) to
indemnify the Company's Group against all Losses resulting from severance
payments under a specified employment agreement.
Notwithstanding any contrary provision of the Stock Purchase Agreement, no
claim by either party against the other for indemnification will be valid unless
the aggregate amount of Losses associated with such claim exceeds $100,000.
Further, any claims by the indemnified party will be determined net of any tax
benefit actually recognized and utilized to offset or reduce the tax liability
of the indemnified party or the other members of its group.
Cooper agreed in the Stock Purchase Agreement that, until the later to
occur of (i) Cooper's ceasing to own at least 10 percent of the outstanding
shares of the Company's Common Stock and (ii) May 26, 1997, Cooper will not, and
Cooper will not permit any of its subsidiaries (regardless of whether such
person is a subsidiary of Cooper on the date hereof) to, engage in the
manufacturing or marketing of the Products currently manufactured or marketed by
Cameron or the U.K. Sub in competition with the Company or any subsidiary of the
Company (a "Competing Business"), except that (i) Cooper or any affiliate of
Cooper (other than Cameron and the Cameron Subsidiaries) may continue any
existing nonaerospace forging operations and may make any reasonable
maintenance, improvements and refinements thereto and (ii) Cooper or any
affiliate of Cooper may acquire any business that includes ancillary forging
operations in support of its main business. In addition, this noncompetition
provision will not prevent Cooper or its affiliates from acquiring shares in or
the business or assets of any company, business or entity (the "Target") having
a Competing Business (i) if no more than $10.0 million of the Target's sales
revenue (as recorded in the then-latest available audited accounts) arises from
the Competing Business or (ii) if the sales revenue of the Competing Business is
greater than $10.0 million of the Target's sales revenue, if Cooper uses its
reasonable commercial efforts to dispose of the Competing Business within a
two-year period from the date of acquisition of the Target. If Cooper cannot
dispose of the Competing Business on terms reasonably acceptable to it during
such two-year period, Cooper will be free to retain and operate the Competing
Business without any restriction of the Stock Purchase Agreement.
15
<PAGE> 17
INVESTMENT AGREEMENT
In connection with the Stock Purchase Agreement the Company and Cooper
entered into an Investment Agreement dated as of January 10, 1994, which governs
Cooper's ownership of the 16.5 million shares of Common Stock that were issued
to Cooper under the Stock Purchase Agreement. The Investment Agreement is
unaffected by the DECS offering.
In the Investment Agreement, Cooper agreed that, so long as the Investment
Agreement remains in effect, Cooper will not sell or otherwise dispose of or
encumber any Company Voting Securities (as hereinafter defined), except: (a) to
any wholly-owned subsidiary of Cooper which agrees to be bound by the Investment
Agreement; (b) pursuant to a bona fide underwritten offering or other
distribution of such Company Voting Securities registered under the Securities
Act; (c) pursuant to a bona fide underwritten offering or other distribution of
securities of Cooper convertible into or exercisable or exchangeable for Company
Voting Securities registered under the Securities Act; (d) pursuant to Rule 144
of the General Rules and Regulations under the Securities Act, or any successor
rule of similar effect ("Rule 144"); or (e) pursuant to a tender offer or
exchange offer if the board of directors of the Company has (i) recommended that
the shareholders of the Company accept such offer and such recommendation has
not been withdrawn or (ii) expressed no opinion and remains neutral toward such
offer; (f) pursuant to a merger or consolidation in which the Company is
acquired, or a sale of all or substantially all of the Company's assets to
another corporation or any other transaction approved by the board of directors
of the Company. For purposes of the Investment Agreement "Company Voting
Securities" means (i) shares of Common Stock, (ii) any other Company securities
entitled to vote generally for the election of directors of the Company, or
(iii) any securities of the Company convertible into or exchangeable for or
exercisable for Common Stock or any Company securities entitled to vote
generally for the election of directors of the Company.
In any registered offering or Rule 144 transaction, the seller of Company
Voting Securities or securities of Cooper convertible into or exercisable or
exchangeable for Company Voting Securities will be required under the Investment
Agreement to use its reasonable best efforts to effect the sale or transfer of
such securities in a manner which will effect the broadest possible
distribution. Such seller of Company Voting Securities will also be required to
use its reasonable best efforts to avoid making any sales or transfers of such
Company Voting Securities to any one person or group within the meaning of the
Exchange Act who or which after such transfer will own Company Voting Securities
representing more than 4 percent of the voting power for the election of
directors represented by all of the then-outstanding Company Voting Securities
(whether directly or indirectly).
In the Investment Agreement, Cooper agreed to cause all Company Voting
Securities beneficially owned by it or any wholly-owned subsidiary to which it
has transferred any Company Voting Securities, and agrees to use reasonable
efforts to cause all Company Voting Securities known by the Cooper to be
beneficially owned by "affiliates" (as defined in Rule 12b-2 promulgated under
the Exchange Act) of Cooper over which Cooper has control, to be present at all
shareholder meetings of the Company at which the vote of common shareholders is
sought so that they may be counted for the purpose of determining the presence
of a quorum at such meetings.
Cooper also agreed in the Investment Agreement to vote or cause to be voted
all Company Voting Securities beneficially owned by it or any wholly-owned
subsidiary to which it has transferred any Company Voting Securities, and agrees
to use reasonable efforts to cause to be voted all Company Voting Securities
known by Cooper to be beneficially owned by its affiliates over which it has
control, on all matters (including the election of directors) either in the
manner recommended to shareholders by the board of directors of the Company, or,
at Cooper's election, in the same proportion as the vote of the other
shareholders of the Company. Notwithstanding the foregoing, Cooper, such
wholly-owned subsidiaries of Cooper and such affiliates of Cooper over which it
has control will not be obligated so to vote if the matter being voted on by the
shareholders of the Company would, if approved, result in a breach of the
Investment Agreement.
16
<PAGE> 18
Pursuant to the Investment Agreement, so long as the Investment Agreement
remains in effect, Cooper and its controlled affiliates will not, directly or
indirectly, acting alone or in concert with others, unless specifically
requested or approved in advance by the board of directors of the Company:
(1) in any manner acquire or agree, attempt, seek or propose to acquire (or
make any request for permission with respect thereto), by purchase, merger,
through the acquisition of control of another person, by joining a partnership,
limited partnership, syndicate or other "group" (within the meaning of Section
13(d)(3) of the Exchange Act), or otherwise, ownership (including, but not
limited to, beneficial ownership as defined in Rule 13d-3 under the Exchange
Act) of any of the assets or businesses of the Company or any securities issued
by the Company (the "Company Securities"), or any rights or options to acquire
such ownership (including from a third party), except (i) as expressly permitted
by the Investment Agreement or the Stock Purchase Agreement, or (ii) pursuant to
customary business transactions in the ordinary course of the Company's and
Cooper's business or (iii) in the case of Company Securities, in connection with
(A) a stock split or reverse stock split or other reclassification affecting
outstanding Company Securities, or (B) a stock dividend or other pro rata
distribution by the Company to holders of outstanding Company Securities;
(2) make, or cause to be made any proposal for the acquisition of the
Company or any assets or business of the Company or Company Securities or for
any other extraordinary transaction involving the Company, including, without
limitation, any merger, or other business combination, restructuring,
recapitalization, liquidation or similar transaction, except (i) as expressly
permitted by the Investment Agreement or the Stock Purchase Agreement or (ii)
proposals pursuant to customary business transactions in the ordinary course of
the Company's and Cooper's business;
(3) form, join or in any way participate in a "group" (within the meaning
of Section 13(d)(3) of the Exchange Act) with respect to any Company Securities;
(4) make, or in any way cause or participate in, any "solicitation" of
"proxies" to vote (as such terms are defined in Regulation 14A under the
Exchange Act) with respect to the Company, or communicate with, seek to advise,
encourage or influence any person or entity, in any manner, with respect to the
voting of, any Company Securities, or become a "participant" in any "election
contest" (as such terms are defined or used in Rule 14a-11 under the Exchange
Act) with respect to the Company, or execute any written consent with respect to
the Company;
(5) initiate, propose or otherwise solicit shareholders for the approval of
one or more shareholder proposals with respect to the Company or induce or
attempt to induce any other person to initiate any shareholder proposal, or
(except as expressly permitted by the Investment Agreement) seek election to or
seek to place a representative on the board of directors of the Company or seek
the removal of any member of the board of directors of the Company;
(6) in any manner, agree, attempt, seek or propose (or make any request for
permission with respect thereto) to deposit any Company Securities, directly or
indirectly, in any voting trust or similar arrangement or to subject any Company
Voting Securities to any other voting or proxy agreement, arrangement or
understanding;
(7) disclose any intention, plan or arrangement, or make any public
announcement (or request permission to make any such announcement), or induce
any third party to take any action, inconsistent with the foregoing;
(8) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing; or
(9) advise, assist or encourage or finance (or assist or arrange financing
to or for) any other person in connection with any of the foregoing.
Pursuant to the Investment Agreement, the Company agreed that it will use
its best efforts to cause two persons designated by Cooper and reasonably
acceptable to the Company to be elected to the board of directors of the Company
and to serve as directors of the Company until their successors are
17
<PAGE> 19
duly elected and qualified. Cooper has designated H. John Riley, Jr., its
Chairman, President and Chief Executive Officer, and David A. White, Jr., its
Senior Vice President, Strategic Planning, as its current representatives on the
Company's board. In the event that any such designee will cease to serve as a
director for any reason, the Company agreed in the Investment Agreement that it
will use its best efforts to cause such vacancy resulting thereby to be filled
by a designee of Cooper reasonably acceptable to the Company. The Investment
Agreement provides that the Company will vote all shares for which the Company's
management or board of directors holds proxies or is otherwise entitled to vote
in favor of the election of the designees of Cooper except as may otherwise be
provided by shareholders submitting such proxies.
The Investment Agreement provides that the Company will not amend (i)
Article 6(e)(2) (the "Fair Price Provision") of its Articles (except pursuant to
the Fair Price Amendment as defined below) in any manner that adversely affects
Cooper or any other person to whom any of the Common Stock acquired by Cooper
under the Stock Purchase Agreement has been transferred in accordance with the
terms of the Investment Agreement or (ii) the provision of its By-Laws pursuant
to which it has opted out of Chapter 110D of the MGL. Under the Fair Price
Provision, a Business Combination (as defined in the Company's Articles) between
the Company or a subsidiary of the Company and an Interested Stockholder (as
defined in the Company's Articles) requires the approval of at least 85 percent
of the outstanding voting stock of the Company, unless either (i) the Business
Combination has been approved by at least two-thirds of the Company's Continuing
Directors (as defined in the Company's Articles) or (ii) certain minimum price
requirements are satisfied. The Fair Price Amendment exempts Cooper and its
affiliates and associates for so long as such group beneficially owns at least
10 percent or more of the outstanding shares of Common Stock continuously from
and after May 26, 1995, unless such group acquires beneficial ownership of
additional shares of Common Stock in breach of the Investment Agreement. The
Investment Agreement also provides that the Company will not amend its Rights
Agreement (described below under "Description of the Company's Capital Stock")
or adopt any other rights or similar agreement, except that following prior
consultation with Cooper, the Company may amend the Rights Agreement in
accordance with the terms thereof if such amendment does not adversely affect
Cooper or any other person to whom any of the Common Stock acquired by Cooper
under the Stock Purchase Agreement has been transferred in accordance with the
terms of the Investment Agreement.
The Investment Agreement provides that, among others, the limitations on
Cooper and its affiliates described above with respect to restrictions on sales
of shares by Cooper, voting, ownership and certain other matters and the
limitations on the Company described above with respect to amendments to the
Company's Articles and By-Laws will terminate immediately and be of no further
force and effect on the date that a Trigger Event (as defined below) occurs. For
these purposes, "Trigger Event" means the occurrence of one or more of the
following events, without Cooper's prior written consent:
(1) in connection with the issuance of Company Voting Securities (other
than (x) issuances pursuant to the Company's current employee benefit plans or
other customary employee benefit plans of the Company or (y) issuances in
connection with bona fide capital raising programs pursuant to which the
securities are sold for fair value, as approved by the board of directors of the
Company, and the proceeds of which are invested in the businesses in which the
Company or one or more of its subsidiaries are then engaged or (z) issuances for
fair value, as determined by the board of directors of the Company, in
connection with acquisitions by the Company or one of its wholly-owned
subsidiaries primarily involving one or more Similar Businesses (as defined
below)), the failure to provide Cooper with the right to purchase, at the same
price as Company Voting Securities are being issued, that number or amount of
Company Voting Securities which would enable Cooper to maintain its
proportionate interest in the Company following such issuance;
(2) a Change in Control of the Company (as defined below);
(3) a material acquisition or investment by the Company or one of its
subsidiaries, other than an acquisition or investment by the Company or one of
its wholly-owned subsidiaries primarily involving one or more Similar
Businesses;
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<PAGE> 20
(4) a decline of at least 35% in the Consolidated Net Worth of the Company
(as defined in the Investment Agreement) from the Consolidated Net Worth of the
Company immediately following the consummation of the Acquisition after giving
effect to the Acquisition (including the issuance of 16.5 million shares of
Common Stock to Cooper), but not taking into account (A) any reduction in the
Company's Consolidated Net Worth attributable to or taken in connection with or
as a result of the Acquisition or the combination of the business acquired from
Cooper with the Company's business and recorded in the Company's financial
statements for any period ending on (and including) the end of the first full
fiscal year of the Company after the consummation of the Acquisition or (B) any
adjustments following the date of consummation of the Acquisition as a result of
any changes in generally accepted accounting principles (including the
implementation of SFAS 106) or any other regulatory changes or requirements
applicable to the Company or its financial statements or (C) any adjustment
resulting from any liability arising from or growing out of any matter or
circumstance existing as of the time of the consummation of the Acquisition and
relating to the business or assets acquired by the Company from Cooper but not
reflected on the balance sheet of such business and assets or (D) any change in
the translation component of shareholders' equity or (E) adjustments as a result
of sales of the Company's accounts receivables pursuant to a bona fide
receivables securitization program pursuant to which fair value is received for
receivables so sold (as determined by the Company's board of directors, taking
into account, among other things, any discount or credit enhancement features
required by any securities rating agency) or (F) any adjustment resulting from a
SFAS 109 valuation allowance recorded or reserved by the Company with respect to
deferred tax assets that were included in or excluded from the Company's final
Accounting Principles Bulletin No. 16, "Business Combinations," acquisition date
balance sheet;
(5) any default or defaults by the Company or one of its subsidiaries under
any indebtedness of the Company or its subsidiaries for money borrowed with a
principal amount then outstanding, individually or in the aggregate, in excess
of $5.0 million, which default will constitute a failure to pay any portion of
the principal of each indebtedness at final maturity or will have resulted in
such indebtedness becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable without such
indebtedness having been discharged, or such acceleration having been rescinded
or annulled within a period of 30 days after maturity or acceleration;
(6) an Event of Bankruptcy (as defined in the Investment Agreement); or
(7) the failure of the board of directors of the Company to nominate at
least two of Cooper's representatives for election to the Company's board of
directors.
The Investment Agreement further provides that the Company may not issue
any securities having more than one vote per share (other than pursuant to the
Company's Rights Agreement) without the prior written consent of Cooper.
For purposes of the Investment Agreement, (1) a "Change in Control of the
Company means (A) 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 percent of
the stock of the surviving, resulting or acquiring corporation, (B) the
acquisition by an individual, entity or group (excluding the Company or an
employee benefit plan of the Company or a corporation controlled by the
Company's shareholders) of shares of capital stock of the Company entitled to
cast a majority of the votes entitled to be cast on matters submitted to the
shareholders of the Company, or (C) a change in a majority of the members of any
class of the Company's board of directors in connection with an "election
contest" (as used in Rule 14a-11 under the Exchange Act); and (2) "Similar
Businesses" means (A) businesses in which the Company or one or more of its
subsidiaries are engaged, (B) any businesses involving products related to or
complementary to the products of the Company or one or more of its subsidiaries
or (C) any similar businesses providing customers of the Company or one or more
of its subsidiaries with products or services similar to those provided by the
Company or one or more of its subsidiaries.
Pursuant to the Investment Agreement, Cooper and certain of its transferees
have the right to require the Company to file under the Securities Act up to
three demand registrations of the shares of Common
19
<PAGE> 21
Stock acquired by Cooper under the Stock Purchase Agreement (and any other of
the Company's securities issued in respect thereof) at the Company's expense
(except that the Company will not be responsible for underwriting discounts and
commissions or transfer taxes). Cooper also has the right to an unlimited number
of additional demand registrations under the Securities Act at Cooper's expense.
Cooper also has the right, under certain circumstances, to "piggyback"
registrations in the event that the Company registers securities for its own
account or for the account of third parties. Cooper's demand and piggyback
registration rights are subject to customary restrictions and limitations. In
connection with any registration statement filed pursuant to these registration
rights, Cooper and the Company will indemnify each other against certain
liabilities, including certain liabilities under the Securities Act.
The description of the Stock Purchase Agreement and the Investment
Agreement is a summary of the material terms thereof. Copies of the Stock
Purchase Agreement and the Investment Agreement have been filed as exhibits to
the Registration Statement of which this Prospectus is a part.
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
GENERAL
The Company has the authority to issue 70,000,000 shares of Common Stock
and 5,000,000 shares of Preferred Stock, no par value (the "Preferred Stock").
The Company's Board of Directors has authority (without action by shareholders)
to issue the authorized and unissued shares of Preferred Stock in one or more
series and, within certain limitations, to determine the voting rights
(including the right to vote as a series on particular matters), preference as
to dividends and in liquidation, conversion, redemption and other rights of each
such series. The ability of the Board of Directors to issue Preferred Stock,
while providing flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. There are no shares of
Preferred Stock issued or outstanding and the Company has no present plans to
issue any of the Preferred Stock.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all matters
to be voted on by shareholders, including the election of directors.
Shareholders are not entitled to cumulative voting rights, and, accordingly, the
holders of a majority of the shares voting for the election of directors can
elect the entire Board if they choose to do so and, in that event, the holders
of the remaining shares of Common Stock will not be able to elect any person to
the Board of Directors. Pursuant to the Company's By-Laws, the number of
directors of the Company may be not less than seven nor more than 13, as
determined from time to time by the directors. The number of directors is
currently 13. The By-Laws provide that the Board of Directors is divided into
three classes in respect of term of office, each class to contain as near as may
be one-third of the whole number of the Board. At each annual meeting of
shareholders, one class of directors is elected to serve until the annual
meeting of shareholders held three years next following and until their
successors are elected and qualify. In the event any vacancy occurs on the Board
of Directors, the bylaws give the remaining directors the power to fill the
vacancy for the balance of the term of office, except that any vacancy occurring
because of an increase in the number of directors may be filled only until the
next annual meeting of shareholders, at which time the vacancy shall be filled
by vote of the shareholders.
The holders of shares of Common Stock are entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors, in its discretion, from funds legally available therefor and subject
to the prior dividend rights of holders of any shares of Preferred Stock which
may be outstanding. Upon liquidation or dissolution of the Company, subject to
prior liquidation rights of the holders of Preferred Stock, the holders of
shares of Common Stock are entitled to receive on a pro rata basis the remaining
assets of the Company available for distribution. Holders of shares of Common
Stock have no preemptive or other subscription rights, and there are no
conversion rights or redemption or sinking fund provisions with respect to such
shares.
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<PAGE> 22
RIGHTS AGREEMENT
On October 19, 1988, the Board of Directors of the Company declared a
dividend distribution of one right (a "Right") for each outstanding share of
Common Stock to shareholders of record at the close of business on November 30,
1988 (the "Rights Record Date") pursuant to a Rights Agreement dated as of
October 19, 1988 between the Company and The First National Bank of Boston (the
"Original Rights Agreement"). On January 10, 1994, in connection with the Stock
Purchase Agreement, the Original Rights Agreement was amended and restated. The
description and terms of the Rights are set forth in an Amended and Restated
Rights Agreement, dated as of January 10, 1994 (the "Rights Agreement"), between
the Company and State Street Bank & Trust Company, as Rights Agent ("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.
Until the earlier to occur of (i) ten days following a public announcement
that a person or group of affiliated or associated persons has become an
Acquiring Person (as defined below) or (ii) ten business days (or such later
date as may be determined by action of the Board of Directors prior to such time
as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in a person or
group becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by the certificates
representing the shares of Common Stock, with either a copy of the Summary of
Rights that was sent to shareholders in connection with the original issuance of
the Rights (the "Summary of Rights") attached thereto or a notation
incorporating the Rights Agreement by reference. 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 of Common Stock. For purposes of the Rights Agreement, a
person shall generally (subject to certain exceptions) be deemed the "beneficial
owner" of, and shall be deemed to "beneficially own," any Common Stock which
such person or any of such person's affiliates or associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options or otherwise.
However, Cooper 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 of Common Stock
continuously from and after the Closing Date and (B) the Cooper Group does not
acquire beneficial ownership of any shares in breach of the Investment Agreement
(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). In addition, for purposes of applying certain provisions of the
Rights Agreement, no person or entity owning more than 5% of the shares of
Common Stock as of October 19, 1988 will be deemed to be the beneficial owner
of, or to beneficially own, any shares of Common Stock in excess of 5% of the
shares of Common Stock owned by such person or entity as of October 19, 1988.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the shares of Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), share certificates issued after the
Rights Record Date upon transfer or new issuance of shares of Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Rights Record Date, even without such notation or a copy
of the Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the shares of Common Stock represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the shares of Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates alone
will evidence the Rights.
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<PAGE> 23
The Rights are not exercisable until the Distribution Date. 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, in each case, as described below.
The Exercise Price payable, and the number of Series A Shares or other
securities or property issuable, upon the exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Series A
Shares, (ii) upon the grant to holders of the Series A Shares of certain rights
or warrants to subscribe for or purchase Series A Shares at a price, or
securities convertible into Series A Shares with a conversion price, less than
the then-current market price of the Series A Shares or (iii) upon the
distribution to holders of the Series A Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Series A Shares) or subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Series A Shares issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the shares of Common Stock or a
stock dividend on the shares of Common Stock payable in shares or subdivisions,
consolidations or combinations of the shares of Common Stock occurring, in any
case, prior to the Distribution Date.
Series A Shares purchasable upon exercise of the Rights will not be
redeemable. Each Series A Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per share of Common Stock. In the
event of liquidation, the holders of the Series A Shares will be entitled to a
minimum preferential liquidation payment of $100 per share but will be entitled
to an aggregate payment of 100 times the payment made per share of Common Stock.
Each Series A Share will have 100 votes, voting together with the shares of
Common Stock. Finally, in the event of any merger, consolidation or other
transaction in which Shares are exchanged, each Series A Share will be entitled
to receive 100 times the amount received per share of Common Stock. These rights
are protected by customary antidilution provisions.
Because of the nature of the Series A Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Series A Share
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.
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, 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.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-hundredth of a Series A Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Exercise Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Exercise Price. No fractional Series A Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Series A Share,
which may, at the election of the Company, be evidenced by depository receipts)
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Series A Shares on the last trading day prior to the date of
exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Shares, the Board of Directors of the Company
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<PAGE> 24
may redeem the Rights in whole, but not in part, at a price of $.02 per Right
(the "Redemption Price"). The redemption of the Rights may be made effective at
such time on such basis with such conditions as the Board of Directors in its
sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Shares then known
to the Company to be beneficially owned by any person or group of affiliated or
associated persons (other than the Cooper Group for so long as the Cooper Group
is deemed not to be an Acquiring Person) and (ii) 10% except that from and after
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights. Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including without
limitation, the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors since the Rights may be redeemed by the Company at the
Redemption Price prior to the time that a person or group has become an
Acquiring Person.
A copy of the Rights Agreement has been filed with the SEC as an exhibit to
a Registration Statement on Form 8-A/A dated January 21, 1994. A copy of the
Rights Agreement is available to any holder of Common Stock free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
MASSACHUSETTS LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS;
ANTI-TAKEOVER EFFECTS
The Company is subject to Chapter 110F of the MGL, an anti-takeover law.
Under Chapter 110F, a Massachusetts corporation with more than 200 stockholders
may not engage in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
becomes an interested stockholder, unless (i) the interested stockholder obtains
the approval of the Board of Directors prior to becoming an interested
stockholder, (ii) the interested stockholder acquires 90% of the outstanding
voting stock of the corporation (excluding shares held by certain affiliates of
the corporation) at the time it becomes an interested stockholder or (iii) the
business combination is approved by both the Board of Directors and the holders
of two-thirds of the outstanding voting stock of the corporation (excluding
shares held by the interested stockholder). An "interested stockholder" is a
person who, together with affiliates and associates, owns (or, in certain cases,
at any time within the prior three years did own) 5% or more of the outstanding
voting stock of the corporation. A "business combination" includes a merger,
certain stock or asset sales, and certain other specified transactions resulting
in a financial benefit to the interested stockholder.
The By-Laws of the Company include a provision excluding the Company from
the applicability of Chapter 110D of the MGL, which regulates the acquisition of
so-called "control shares." A control share acquisition is the acquisition of
shares which, when added to shares already owned, would (but for the statute)
entitle the acquiring person to vote at least 20% of a corporation's stock.
Shares acquired in such a transaction would, under the statute, have no voting
rights unless a majority of noninterested stockholders voted to grant such
voting rights. In general, the person acquiring such shares, officers of the
Company and those directors of the Company who are also employees, are not
permitted to vote on
23
<PAGE> 25
whether such voting rights shall be granted. The Board of Directors may amend
the By-Laws at any time to subject the Company to this statute prospectively.
MGL Chapter 156B, Section 50A requires that a publicly held Massachusetts
corporation have a classified board of directors consisting of three classes as
nearly equal in size as possible, unless the corporation elects not to be
covered by Section 50A. The Company's By-Laws contain provisions which give
effect to Section 50A.
The By-Laws also provide that the directors and officers of the Company
generally shall be indemnified by the Company to the fullest extent authorized
by Massachusetts law, as it now exists or may in the future be amended, against
all expenses and liabilities reasonably incurred in connection with service for
or on behalf of the Company. In addition, the Articles provide that the
directors of the Company will not be personally liable to the Company or its
stockholders for monetary damages for certain breaches of their fiduciary duty
as directors, unless they violated their duty of loyalty to the Company or its
stockholders, acted in bad faith, knowingly or intentionally violated the law,
authorized illegal dividends or redemptions, approved certain loans to insiders
or derived an improper benefit from their action as directors.
The Company's By-Laws further provide that special meetings of stockholders
may be called only by the Chief Executive Officer, by the Board of Directors or
by the Clerk upon the written request of the holders of at least 10% of the
Company's outstanding Common Stock.
In addition, under the fair price provision of the Articles, a Business
Combination (as defined in the Articles) between the Company or a subsidiary of
the Company and an Interested Stockholder (as defined in the Articles) requires
the approval of at least 85% of the outstanding voting stock of the Company,
unless either (i) the Business Combination has been approved by at least
two-thirds of the Company's Continuing Directors (as defined in the Articles) or
(ii) certain minimum price requirements are satisfied. See "Relationship Between
the Company and Cooper -- Investment Agreement."
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is State Street Bank
& Trust Company, 2 Heritage Drive, North Quincy, Massachusetts, telephone number
(617) 985-3024.
COMMON STOCK OWNERSHIP OF COOPER
Cooper beneficially owns 16.5 million shares of Common Stock, representing
approximately 46% of the outstanding shares of Common Stock. Pursuant to the
terms of the DECS, Cooper may, at its option, consummate the mandatory exchange
at maturity thereof by delivering to holders thereof shares of Common Stock.
Cooper's ownership interest after maturity of the DECS could remain at 46% of
the presently outstanding number of shares of Common Stock if it elects to
deliver cash or could be reduced to less than one percent of the presently
outstanding shares of Common Stock if (a) at maturity of the DECS the Maturity
Price is less than or equal to the Initial Price (each as defined in the DECS
Prospectus) and (b) Cooper elects to deliver its shares of Common Stock instead
of cash and does not acquire any additional shares of Common Stock. However,
Cooper is under no obligation to, and there can be no assurance that Cooper
will, elect to exercise its option to deliver Common Stock pursuant to the terms
of the DECS or, if it so elects, that it will use all or any portion of its
current holdings of Common Stock to make such delivery.
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<PAGE> 26
PLAN OF DISTRIBUTION
The Underwriters severally agreed, subject to the terms and conditions set
forth in the Underwriting Agreement, to purchase from Cooper the aggregate
number of DECS set forth opposite their names below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS DECS
------------ ----------
<S> <C>
Salomon Brothers Inc ....................................... 3,687,500
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 3,687,500
Schroder Wertheim & Co. Incorporated........................ 3,687,500
CS First Boston Corporation................................. 562,500
Dillon, Read & Co. Inc. .................................... 562,500
Lehman Brothers Inc. ....................................... 562,500
J.P. Morgan Securities Inc. ................................ 562,500
NatWest Securities Limited.................................. 562,500
Smith Barney Inc. .......................................... 562,500
S.G. Warburg & Co. Inc...................................... 562,500
----------
Total.................................................. 15,000,000
==========
</TABLE>
In the Underwriting Agreement, the several Underwriters agreed, subject to
the terms and conditions set forth therein, to purchase all of the DECS if any
were purchased.
The Company has been advised that the Underwriters proposed to offer the
DECS to the public initially at the offering price set forth on the cover of the
Cooper Prospectus and to certain dealers at such price less a selling concession
of $0.24 per DECS; that the Underwriters could allow, and each such dealer could
reallow, to other dealers a concession not exceeding $0.10 per DECS; and that,
after the initial public offering, such public offering price and such
concession and reallowance could be changed.
The Company and Cooper agreed not to offer for sale, sell or otherwise
dispose of, except as described below, without the prior written consent of the
Underwriters, any shares of Common Stock or any securities convertible into or
exchangeable for, or warrants to acquire Common Stock until March 13, 1996;
provided, however, that such restriction did not affect the ability of the
Company or Cooper or their respective subsidiaries to take any such actions in
connection with the offering of the DECS made hereby or any exchange at Maturity
pursuant to the terms of the DECS. In addition, the Company retained the right
to issue Common Stock in connection with acquisition transactions and certain
transactions that are exempt from the registration requirements of the
Securities Act.
In connection with the DECS Offering, Cooper or an affiliate thereof,
referred to herein as the "Lender", and Salomon Brothers Inc ("Salomon") entered
into a Securities Loan Agreement (the "Securities Loan Agreement") which
provides that, subject to certain restrictions and with the agreement of the
Lender, Salomon may from time to time borrow, return and reborrow shares of
Common Stock from the Lender (the "Borrowed Securities"); provided, however,
that the number of Borrowed Securities at any time may not exceed 750,000 shares
in the twelve-month period beginning December 20, 1995; 1,000,000 shares in the
twelve-month period beginning December 20, 1996; and 1,250,000 in the period
beginning December 20, 1997 and terminating on the maturity of the DECS, subject
to adjustment to provide antidilution protection. The Securities Loan Agreement
contains limitations on the amount of Borrowed Securities that Salomon can
borrow on any day and from time to time and requires Salomon to return Borrowed
Securities within a specified period of time from the date of borrowing and
prior to any record date. The Securities Loan Agreement is intended to
facilitate market-making activity in the DECS by Salomon. Salomon may from time
to time offer and sell shares of Common Stock borrowed from the Lender under the
Securities Loan Agreement, pursuant to this Prospectus, directly to one or more
purchasers at negotiated prices, at market prices prevailing at the time of sale
or at prices related to such market prices, in connection with such market
making activities. The availability of shares of Common Stock
25
<PAGE> 27
under the Securities Loan Agreement, if any, at any time is not assured and any
such availability does not assure market-making activity with respect to the
DECS and any market-making actually engaged in by Salomon may cease at any time.
The foregoing description of the Securities Loan Agreement does not purport to
be complete and is qualified in its entirety by reference to the Agreement, a
copy of which is filed as an exhibit to the Registration Statement of which the
Prospectus is a part.
Cooper granted to the Underwriters an option, exercisable until January 13,
1996, to purchase up to an additional 1,500,000 DECS, at the per DECS price to
the public less the aggregate underwriting discount set forth on the cover of
the Cooper Prospectus. The Underwriters had the right to exercise such right of
purchase only for the purpose of covering overallotments, if any, incurred in
connection with the sale of DECS being offered. Such option was exercised in
full.
The Company and Cooper agreed in the Underwriting Agreement to indemnify
the Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments the Underwriters may be required to
make in respect thereof.
In connection with the offering of the DECS, the Underwriters and selling
group members (if any) and their respective affiliates may engage in passive
market making transactions in the Common Stock on Nasdaq in accordance with Rule
103 of Regulation M. The passive market making transactions will comply with
applicable volume and price limits and will be identified as such.
As of September 30, 1995, 1,027,600 shares of Common Stock (representing
2.9% of the issued and outstanding shares of Common Stock) were owned by
accounts over which an affiliate of Schroder Wertheim & Co. Incorporated
exercised discretionary authority.
Salomon has provided financial advisory services to the Company in the
past, for which it has received customary fees. Merrill Lynch & Co. has provided
financial advisory services to Cooper in the past, for which it has received
customary fees.
If the over-allotment option had not been exercised by the Underwriters,
Cooper could have, subject to the Investment Agreement and Underwriting
Agreement, sold up to 1.5 million shares of Common Stock pursuant to this
Prospectus. Any such distribution hereunder of the Common Stock by Cooper could
have been effected from time to time in one or more of the following
transactions: (a) through brokers, acting as agent in transactions (which could
have involved block transactions), in special offerings, in the over-the-counter
market, or otherwise, at market prices obtainable at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or at fixed
prices, (b) to underwriters who would acquire the shares of Common Stock for
their own account and resell them in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale (any public offering price and any discount or
concessions allowed or reallowed or paid to dealers could have been changed from
time to time), (c) directly or through brokers or agents in private sales at
negotiated prices, (d) to lenders pledged as collateral to secure loans, credit
or other financing arrangements and any subsequent foreclosure, if any,
thereunder, or, (e) by any other legally available means. Also, offers to
purchase Common Stock could have been solicited by agents designated by Cooper
from time to time.
Cooper may, from time to time, deliver up to 16,500,000 shares of the
Company's Common Stock to holders of DECS which are presented to and accepted by
Cooper for cancellation prior to the maturity of the DECS. Any such transaction
may be consummated based on prevailing market prices or at negotiated or fixed
prices.
In the event that pursuant to this Prospectus Cooper accepts any DECS for
cancellation prior to maturity, then to the extent that the number of shares of
Common Stock delivered to the holders of such DECS in connection with such
cancellation is less than one share for each DECS cancelled, Cooper may sell the
excess shares of Common Stock pursuant to this Prospectus and in accordance with
the terms of the Investment Agreement. Any such sale hereunder of the Common
Stock by Cooper may be effected from time to time in one or more of the
following transactions: (a) through brokers, acting as agent in transactions
(which may involve block transactions), in special offerings, in the
over-the-counter market,
26
<PAGE> 28
or otherwise, at market prices obtainable at the time of sale, at prices related
to such prevailing market prices, at negotiated prices or at fixed prices, (b)
to underwriters who will acquire the shares of Common Stock for their own
account and resell them in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale (any public offering price and any discount or concessions
allowed or reallowed or paid to dealers may be changed from time to time), (c)
directly or through brokers or agents in private sales at negotiated prices, or,
(d) by any other legally available means. Also, offers to purchase Common Stock
may be solicited by agents designated by Cooper from time to time.
Underwriters or other agents participating in an offering made pursuant to
this Prospectus (as amended or supplemented from time to time) may receive
underwriting discounts or commissions under the Securities Act and discounts or
concessions may be allowed or reallowed or paid to dealers, and brokers or
agents participating in such transactions may receive brokerage or agent's
commissions or fees.
At the time a particular offering of any share of Common Stock is made by
Cooper hereunder, to the extent required by law, a Prospectus Supplement will be
distributed which will set forth the amount of Common Stock being offered and
the terms of the offering, including the purchase price or public offering
price, the name or names of any underwriters, dealers or agents, the purchase
price paid by any underwriter for any Common Stock purchased from Cooper, any
discounts, commissions and other items constituting compensation from Cooper and
any discounts, commission or concessions allowed or filed or paid to dealers.
LEGAL MATTERS
Certain legal matters have been passed upon for the Company by Wallace F.
Whitney, Jr., Vice President, General Counsel and Clerk of the Company. As of
August 1, 1997, Mr. Whitney was the beneficial owner of 17,307 shares of Common
Stock of the Company and held options to purchase 150,000 shares of Common
Stock. The Underwriters have been represented by Cravath, Swaine & Moore.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in its Annual Report (Form 10-K) for the year ended May 31, 1997 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
27
<PAGE> 29
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
Risk Factors......................... 3
Recent Developments.................. 8
The Company.......................... 8
Price Range of Common Stock and
Dividend Policy.................... 8
Capitalization....................... 10
Selected Consolidated Financial
Data............................... 11
Relationship between the Company and
Cooper............................. 13
Description of the Company's Capital
Stock.............................. 20
Common Stock Ownership of Cooper..... 24
Plan of Distribution................. 25
Legal Matters........................ 27
Experts.............................. 27
</TABLE>
15,000,000 SHARES
WYMAN-GORDON COMPANY
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
[WYMAN-GORDON LOGO]
PROSPECTUS
DATED AUGUST , 1997
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth various expenses in connection with the sale
and distribution of the securities being registered, other than the underwriting
discounts and commissions. All amounts shown are estimates except the Securities
and Exchange Commission registration fee.
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 71,121
National Association of Securities Dealers, Inc. Fee........ 9,375
Blue Sky Fees and expenses.................................. 1,725
Accounting Fees and Expenses................................ 65,000
Legal Fees and Expenses..................................... 25,000
Printing.................................................... 300,000
Miscellaneous............................................... 20,000
--------
Total..................................................... $492,221
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Section 67 of the Business Corporation Law of the Commonwealth of
Massachusetts provides that indemnification of directors, officers, employees or
other agents may be provided by the corporation. Section 13(b)(1-1/2) of the
Business Corporation Law of the Commonwealth of Massachusetts provides that the
Articles of Organization may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Sections 61 or 62 of the
Massachusetts Business Corporation Law, or (iv) for any transaction form which
the director derived an improper personal benefit.
Article 6(b) of the Company's Restated Articles of Organization states
that:
No director of the Company shall have any personal liability to the Company
or its Stockholders for monetary damages for breach of fiduciary duty as a
director notwithstanding any provision of law imposing such liability; provided,
however, that this Article 6(b) shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the Company or
its Stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 61 or
62 of Chapter 156B of the Massachusetts General Laws, or (iv) for any
transaction from which the director derived an improper personal benefit. The
preceding sentence shall not eliminate or limit the liability of a director for
any act or omission occurring prior to the date upon which this Article 6(b)
becomes effective. No amendment to or repeal of this Article 6(b) shall apply to
or have any effect on the elimination pursuant hereto of liability or alleged
liability of any director of the Company for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal. Nothing
in this Article 6(b) shall limit any lawful right to indemnification existing
independently of this Article.
Article V of the Company's By-laws further states that:
1. RIGHT OF INDEMNIFICATION
Every person who is or was a Director, officer or employee of this
Corporation or of any other corporation which he served at the request of the
Corporation and in which the Corporation owns or
II-1
<PAGE> 31
owned shares of capital stock or of which it is a creditor shall have a right to
be indemnified by this Corporation against all reasonable expenses incurred by
him in connection with or resulting from any action, suit or proceeding in which
he may become involved as a party or otherwise by reason of his being or having
been a Director, officer or employee of the Corporation or such other
corporation, provided (a) said action, suit or proceeding shall be prosecuted to
a final determination and he shall be vindicated on the merits, or (b) in the
absence of such final determination vindicating him on the merits, the Board of
Directors shall determine that he acted in good faith in the reasonable belief
that his action was in the best interests of the Corporation or such other
corporation and that he cooperated effectively with the Corporation in the
defense and disposition of any said action, suit or proceeding, said
determinations to be made by the Board of Directors acting through a quorum of
disinterested directors, or in its absence on the opinion of counsel.
2. DEFINITIONS
For purposes of Section 1 of this Article V: (a) "reasonable expenses"
shall include but not be limited to reasonable counsel fees and disbursements,
amounts of any judgment, fine or penalty, and reasonable amounts paid in
settlement, but in not event shall "reasonable expenses" include any item for
which indemnification would be contrary to law; (b) "action, suit or proceeding"
shall include every claim, action, suit or proceeding, whether civil or
criminal, derivative or otherwise, administrative, judicial or legislative, any
appeal relating thereto, and shall include any reasonable apprehension or threat
of such a claim, action, suit or proceeding; and (c) a settlement, plea of nolo
contendere, consent judgment, adverse civil judgment, or conviction shall not of
itself create a presumption that the person seeking indemnification did not act
in good faith in the reasonable belief that his action was in the best interests
of this Corporation or such other corporation, but the Board of Directors shall
be bound by a civil judgment or conviction which adjudges that the person did
not act in good faith in the reasonable belief that his action was in the best
interests of this Corporation or such other corporation.
3. PERSONS ENTITLED TO INDEMNIFICATION
The right of indemnification shall extend to any person otherwise entitled
to it under this Article V whether or not that person continues to be a director
or officer of this Corporation at the time such liability or expense shall be
incurred. The right of indemnification shall extend to the legal representatives
and heirs of any person otherwise entitled to indemnification. If a person meets
the requirements of this Article V with respect to some matters in an action,
suit or proceeding, but not with respect to others, he shall be entitled to
indemnification as to the former. Advances against liability and expenses may be
made by the Corporation on terms fixed by the Board of Directors subject to an
obligation to repay if indemnification proves unwarranted.
4. BYLAW NOT EXCLUSIVE
This Article V shall not exclude any other rights of indemnification or
other rights to which any Director, officer or employee may be entitled by
contract, by vote of the Board of Directors, or as a matter of law. If any
clause, provision or application of this Article V shall be determined to be
invalid, the other clauses, provisions or applications of these Bylaws shall not
be affected but shall remain in full force and effect. The provisions of this
Article V shall be applicable to actions, suits or proceedings commenced after
the adoption hereof, whether arising from acts or omissions occurring before or
after the adoption hereof.
(b) In addition to the indemnification provided under the Company's
By-laws, the Company has entered into agreements with its directors and certain
of its executive officers which, subject to certain limitations, provide for
indemnification of such directors and executive officers to the full extent
authorized by Section 67 of the Massachusetts Business Corporation Law or
Article V of the By-Laws, whichever is more favorable to the director or
executive officer. In addition, the agreements provide that if the Company
elects not to maintain director and officer liability insurance policies, the
Company will
II-2
<PAGE> 32
indemnify the officer or director to the full extent of the coverage which would
otherwise have been provided pursuant to the insurance policy as it was last in
effect between the insurer and the Company.
(c) Section 10 of the Underwriting Agreement provides for indemnification
by the Underwriters of directors, officers and controlling persons of the
Registrant against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), under certain
circumstances.
(d) The Company maintains insurance covering the directors and executive
officers of the Company and its subsidiaries against certain liabilities.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. TITLE
- ------------- -----
<C> <S>
**1.1 Form of Underwriting Agreement
**2.1 Stock Purchase Agreement dated as of January 10, 1994
between Cooper 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.
**2.2 Investment Agreement dated as of January 10, 1994 between
Cooper 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.
**2.3 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.
**4.1 Restated Articles of Organization of the Company,
incorporated by reference to Exhibit 3A to the Company's
Report on Form 10-K dated September 1, 1995.
**4.2 By-laws of the Company, as amended, incorporated by
reference to Exhibit 3B to the Company's Report on Form 10-K
dated March 26, 1993.
**4.3 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.
**4.4 Indenture dated as of March 16, 1993 among the Company, its
subsidiaries and State Street Bank and Trust Company, as
Trustee, with respect to the Company's 10 3/4% Senior Notes
due 2003, incorporated by reference to Exhibit 4C to the
Company's Report on Form 10-K for the year ended December
31, 1992.
**4.5 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.
**4.6 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.
**5.1 Opinion of Wallace F. Whitney, Jr., Vice President, General
Counsel and Clerk of the Company, with respect to the
legality of the securities being offered.
**23.1 Consent of Wallace F. Whitney, Jr. (included in Exhibit 5.1
hereto)
*23.2 Consent of Ernst & Young LLP
**24.1 Powers of Attorney
</TABLE>
- ---------------
* Filed herewith
** Previously filed
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered,
II-3
<PAGE> 33
the Registrant will, unless in the opinion of counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the information
omitted from the form of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Act shall be deemed to be part of this Registration Statement as of the
time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein and the offering of such securities as that time shall be deemed to
be the initial bona fide offering thereof.
(d) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-4
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Grafton, Commonwealth of Massachusetts, on this 13th
day of August, 1997.
WYMAN-GORDON COMPANY
By: /s/ DAVID P. GRUBER
----------------------------
David P. Gruber,
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board August 13, 1997
- ---------------------------------------------
John M. Nelson
/s/ DAVID P. GRUBER Director, President and August 13, 1997
- --------------------------------------------- Chief Executive Officer
David P. Gruber
* Vice President, August 13, 1997
- --------------------------------------------- Chief Financial Officer
Andrew C. Genor and Treasurer
(Principal Financial Officer)
* Corporate Controller August 13, 1997
- --------------------------------------------- (Principal Accounting Officer)
Jeffrey B. Lavin
* Director August 13, 1997
- ---------------------------------------------
E. Paul Casey
* Director August 13, 1997
- ---------------------------------------------
Warner S. Fletcher
* Director August 13, 1997
- ---------------------------------------------
Robert G. Foster
* Director August 13, 1997
- ---------------------------------------------
Russell E. Fuller
* Director August 13, 1997
- ---------------------------------------------
M Howard Jacobson
</TABLE>
II-5
<PAGE> 35
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director August 13, 1997
- ---------------------------------------------
Judith S. King
Director
- ---------------------------------------------
Charles W. Grigg
* Director August 13, 1997
- ---------------------------------------------
H. John Riley, Jr.
* Director August 13, 1997
- ---------------------------------------------
Jon C. Strauss
Director
- ---------------------------------------------
David A. White, Jr.
</TABLE>
- ---------------
* Wallace F. Whitney, Jr., by signing his name hereto, does hereby execute this
Registration Statement on behalf of the directors and officers of the
Registrant indicated above by asterisks, pursuant to powers of attorney duly
executed by such directors and officers filed with the Registration Statement.
By: /S/ WALLACE F. WHITNEY, JR.
-----------------------------
Wallace F. Whitney, Jr.
Attorney-in-Fact
II-6
<PAGE> 36
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. TITLE
- ------------- -----
<C> <S>
**1.1 Form of Underwriting Agreement
**2.1 Stock Purchase Agreement dated as of January 10, 1994
between Cooper 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.
**2.2 Investment Agreement dated as of January 10, 1994 between
Cooper 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.
**2.3 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.
**4.1 Restated Articles of Organization of the Company,
incorporated by reference to Exhibit 3A to the Company's
Report on Form 10-K dated September 1, 1995.
**4.2 By-laws of the Company, as amended, incorporated by
reference to Exhibit 3B to the Company's Report on Form 10-K
dated March 26, 1993.
**4.3 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.
**4.4 Indenture dated as of March 16, 1993 among the Company, its
subsidiaries and State Street Bank and Trust Company, as
Trustee, with respect to the Company's 10 3/4% Senior Notes
due 2003, incorporated by reference to Exhibit 4C to the
Company's Report on Form 10-K for the year ended December
31, 1992.
**4.5 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.
**4.6 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.
**5.1 Opinion of Wallace F. Whitney, Jr., Vice President, General
Counsel and Clerk of the Company, with respect to the
legality of the securities being offered.
**23.1 Consent of Wallace F. Whitney, Jr. (included in Exhibit 5.1
hereto)
*23.2 Consent of Ernst & Young LLP
**24.1 Powers of Attorney
</TABLE>
- ---------------
* Filed herewith
** Previously filed
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 1 to the Registration Statement (Form S-3; No.
33-63459) and related Prospectus of Wyman-Gordon Company for the registration of
16,500,000 shares of its common stock and to the incorporation by reference
therein of our report dated June 23, 1997 with respect to the consolidated
financial statements and schedule of Wyman-Gordon Company included in its Annual
Report (Form 10-K) for the year ended May 31, 1997, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
August 14, 1997
