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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
WYMAN-GORDON COMPANY
(Name of Company)
COMMON STOCK
Par Value $1.00 per Share
(Title of Class of Securities)
983085 10 1
(CUSIP Number)
Diane K. Schumacher
Vice President, Administration
& Corporate Secretary
Cooper Industries, Inc.
P.O. Box 4446
Houston, Texas 77210
(713) 739-5400
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
May 26, 1994
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box ( )
Check the following box if a fee is being paid with this
statement ( X )
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CUSIP No. 983085 10 1
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1) Names of Reporting Persons S.S. or I.R.S. Identification
Nos. of Above Persons:
Cooper Industries, Inc.
31-4156620
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2) Check the Appropriate Box if a Member of a Group:
(a)
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(b) X
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3) SEC Use Only:
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4) Source of funds: 00
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5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e):
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6) Citizenship or Place of Organization: Ohio
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Number of shares 7) Sole Voting Power 16,500,000
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Beneficially Owned 8) Shared Voting Power
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By Each Reporting 9) Sole Dispositive Power 16,500,000
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Person With 10) Shared Dispositive Power
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11) Aggregate Amount Beneficially Owned By Each Reporting
Person: 16,500,000
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares:
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13) Percent of Class Represented By Amount in Row (11) 47.8
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14) Type of Reporting Person: CO
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Item 1. Security and Issuer.
This statement relates to the common stock, par value $1.00 per share
of Wyman-Gordon Company, a Massachusetts corporation (the "Company"). The
address of the principal executive offices of the Company is 244 Worcester
Street, Grafton, Massachusetts 01536.
Item 2. Identity and Background.
This statement is being filed by Cooper Industries, Inc. ("Cooper") an
Ohio corporation. Cooper is a diversified manufacturer of electrical products,
electrical power equipment, tools and hardware, automotive products and
petroleum and industrial equipment. The address of its principal business and
principal office is 1001 Fannin, Suite 4000, Houston, Texas 77002.
Schedule A attached hereto sets forth with respect to each director
and executive officer of Cooper the following information: (a) name; (b)
residence or business address; and (c) present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment is conducted. Each person listed
in Schedule A is a United States citizen, except Sir Ralph H. Robins, a
director of Cooper, who is a citizen of the United Kingdom.
During the last five years, neither Cooper nor any of its executive
officers or directors has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violations with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The 16,500,000 shares of common stock of the Company (the "Shares")
were acquired by Cooper in exchange for all of the stock of Cameron Forged
Products Company, a wholly-owned subsidiary of Cooper, pursuant to a Stock
Purchase Agreement between Cooper and the Company dated as of January 10, 1994
(the "Stock Purchase Agreement").
Item 4. Purpose of Transaction.
The Shares were issued to Cooper in connection with the acquisition by
the Company of all of the shares of common stock of Cameron Forged Products
Company, a wholly-owned subsidiary of
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Cooper. The shares are being held by Cooper for investment purposes. All
dispositions of the Shares will be subject to certain restrictions on
dispositions agreed to by Cooper pursuant to an Investment Agreement between
Cooper and the Company dated as of January 10, 1994 (the "Investment
Agreement").
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 of 1933, as amended (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
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) the Shares, (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 Shares or any other Company securities entitled to vote generally for the
election of directors of the Company.
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 Cooper to be
beneficially owned by "affiliates" (as defined in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934 (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 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
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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.
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:
(a) 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;
(b) make, or cause to be made any proposal for the
acquisition of the Company or any assets or businesses 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;
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(c) 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;
(d) make, or 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;
(e) 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;
(f) 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;
(g) 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;
(h) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing; or
(i) 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 has 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
duly elected and qualified. In the event that any such designee will cease to
serve as a director for any reason, the Company has agreed in the Investment
Agreement that it will use its best efforts to cause
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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 of the Company's Articles of Organization (a fair price provision) in
any manner which adversely affects Cooper or any other person to whom any of
the Shares have been transferred in accordance with the terms of the Investment
Agreement or (ii) the provision of the Company's By-Laws pursuant to which the
Company has opted out of Chapter 110D of the Massachusetts General Laws. The
Investment Agreement also provides that the Company will not amend the Rights
Agreement 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 Shares have been transferred in
accordance with the terms of the Investment Agreement.
The Investment Agreement will terminate on the earlier of (i) May 26,
2004 and (ii) the first date on which Cooper beneficially owns less than 5% of
the outstanding Company Voting Securities.
The Investment Agreement provides that the limitations on Cooper and
its affiliates 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 the Company Voting Securities
are being issued, that number or amount of Company Voting Securities
which would enable Cooper to
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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;
(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 Sale Transaction (as defined in the Investment
Agreement) after giving effect to the Sale Transaction (including the
issuance of 16,500,000 Shares 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 Sale Transaction
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 Sale
Transaction or (B) any adjustments following the date of consummation
of the Sale Transaction 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 Sale
Transaction 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 APB
No. 16 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
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then outstanding, individually or in the aggregate, in excess of $5
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 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% 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 will have the right to require the Company to file under the
Securities Act up to three demand registrations of the Shares acquired by
Cooper in the Acquisition (and any other Company 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).
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Cooper will also have 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 foregoing summary of the Investment Agreement does not purport to
be complete and is subject to the detailed provisions of the Investment
Agreement, a copy of which is attached hereto as Exhibit 1 and is incorporated
herein by reference.
Except as otherwise described herein, neither Cooper, nor to the best
knowledge of Cooper, any of the persons named in response to Item 2, has any
current plans in respect of (i) the acquisition of additional securities of the
Company or the disposition of any such securities, (ii) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries, (iii) a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries, (iv) any
change in the present board of directors or management of the Company, (v) any
material change in the present capitalization or dividend policy of the
Company, (vi) any other material change in the Company's business or corporate
structure, (vii) changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any person, (viii) causing a class of securities of
the Company to be delisted from a national securities exchange, (ix) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act, or (x) any action
similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, Cooper beneficially owns 16,500,000
shares of common stock of the Company, which represents approximately 47.8% of
the outstanding shares of Company's common stock. All Shares are owned
directly by Cooper.
(b) Except as described in Item 4 hereof, Cooper has the sole
power to vote and dispose of the Shares beneficially owned by it.
(c) Except for the acquisition of the Shares in connection with
the disposition of its subsidiary, Cameron Forged Products Company, no
transactions in any shares of common stock of the
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Company have been effected during the past 60 days by Cooper, or to the best
knowledge of Cooper, by any of the persons named in response to Item 2.
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
As described in Item 4 hereof, the ability of Cooper to dispose of and
vote the Shares owned by it and the ability to acquire additional shares of
common stock of the Company is restricted by the terms of the Investment
Agreement. The information with respect to the Investment Agreement set forth
in Item 4 hereof and the Investment Agreement attached as Exhibit 1 hereto are
hereby incorporated by reference.
Other than as set forth above, there are no contracts, arrangements,
understandings or relationships with respect to the securities of the Company
of a nature required to be disclosed by Item 6.
Item 7. Material to be Filed As Exhibits.
Exhibit 1 - Investment Agreement dated as of January 10, 1994 by
and between Cooper Industries, Inc. and Wyman-Gordon
Company
Signature
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Date: June 1, 1994 COOPER INDUSTRIES, INC.
By: /s/ Diane K. Schumacher
Diane K. Schumacher
Vice President, Administration
and Corporate Secretary
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SCHEDULE A
Directors and Executive Officers of Cooper Industries, Inc.
The names, business addresses and present principal occupations of the
directors and executive officers of Cooper Industries, Inc. are set forth
below. If no address is given, the director's or officer's business address is
that of Cooper Industries, Inc. Unless otherwise indicated, each occupation
set forth opposite an individual's name refers to Cooper, and each individual
is a citizen of the United States of America. Directors are indicated by an
asterisk.
Name, Business Address Present
and Citizenship Principal Occupation
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Robert Cizik* Chairman of the Board and
Chief Executive Officer
H. John Riley* President and Chief Operating
Officer
Warren L. Batts* Chairman and Chief Executive
1717 Deerfield Road Officer
Deerfield, IL 60015 Premark International, Inc.
Clifford J. Grum* Chairman and Chief Executive
303 South Temple Drive Officer
P.O. Drawer N Temple-Inland Inc.
Diboll, TX 75941
Harold S. Hook* Chairman and Chief Executive
2929 Allen Parkway Officer
Houston, TX 77019-2155 American General Corporation
Constantine S. Nicandros* President and Chief Executive
600 North Dairy Ashford Rd. Officer
P.O. Box 2197 Conoco Inc.
Houston, TX 77252
Frank A. Olson* Chairman, Chief Executive Officer
225 Brae Boulevard and Chief Operating Officer
Park Ridge, NJ 07656-0713 The Hertz Corporation
John D. Ong* Chairman and Chief Executive
3925 Embassy Parkway Officer
Akron, OH 44333-1799 The BFGoodrich Company
Sir Ralph H. Robins* Chairman
Citizen of the United Rolls-Royce plc
Kingdom
65 Buckingham Gate
London SW1E 6AT England
<PAGE> 13
Name, Business Address Present
and Citizenship Principal Occupation
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A. Thomas Young* President and Chief Operating
6801 Rockledge Drive Officer
Bethesda, MD 20817 Martin Marietta Corporation
Dewain K. Cross Senior Vice President, Finance
Ralph E. Jackson, Jr. Executive Vice President,
Operations
Larry W. McCurdy Executive Vice President,
Operations
Carl J. Plesnicher, Jr. Senior Vice President, Human
Resources
Michael J. Sebastian Executive Vice President,
Operations
Nishan Teshoian Executive Vice President,
Operations
Thomas W. Campbell Vice President, Public Affairs
James A. Chokey Vice President and General Counsel
Walter F. DuPont Vice President, Information
Services
Alan J. Hill Vice President and Treasurer
E. Daniel Leightman Vice President, Taxes
D. Bradley McWilliams Vice President, Finance
Diane K. Schumacher Vice President, Administration and
Corporate Secretary
Donald R. Sheley Vice President and Controller,
Operations
Robert W. Teets Vice President, Environmental
Affairs and Risk Management
David A. White, Jr. Vice President, Corporate Planning
and Development
Joseph D. Chamberlain Controller, Accounting
<PAGE> 14
EXHIBIT INDEX
Page
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Exhibit 1 - Investment Agreement dated as of January 15
10, 1994 by and between Cooper Industries,
Inc. and Wyman-Gordon Company
<PAGE> 1
=========================================================
INVESTMENT AGREEMENT
BETWEEN
COOPER INDUSTRIES, INC.
AND
WYMAN-GORDON COMPANY
_______________
Dated as of January 10, 1994
==========================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preambles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I CERTAIN COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Restrictions on Resale or Other
Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Distribution of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 Undertaking to File Reports and
Cooperate in Rule 144 Transactions. . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4 Delivery of Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.5 Amendments to the Company's
Articles of Organization and
By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II VOTING, OWNERSHIP AND OTHER RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Obligation to be Counted for Quorum . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Voting by Cooper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.3 Cooper Standstill Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.4 Legend and Stop Transfer Order . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2 Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3 Piggyback Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.5 Registration and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.6 Conversion of Other Securities, etc. . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.7 Underwriting; Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.8 Restrictions on Public Sale;
Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.9 Indemnification and Contribution . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV TERM AND EFFECTIVENESS OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.1 Effectiveness of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.2 Term of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.3 Certain Provisions Regarding
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.1 Specific Enforcement; Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.3 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.4 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.5 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.8 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
ii
<PAGE> 4
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT, dated as of January 10, 1994 (the
"Agreement"), between Cooper Industries, Inc., an Ohio corporation ("Cooper"),
and Wyman-Gordon Company, a Massachusetts corporation (the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of
this Agreement, Cooper and the Company are entering into the Stock Purchase
Agreement, dated as of the date hereof (the "Acquisition Agreement"); and
WHEREAS, the Acquisition Agreement provides, among other
things, for the sale by Cooper of all of the outstanding shares of stock of
Cameron Forged Products Company to the Company (the "Sale Transaction"); and
WHEREAS, pursuant to the Acquisition Agreement, as
consideration for the sale of the stock of Cameron Forged Products Company,
Cooper will receive $5 million, payable as provided in the Acquisition
Agreement, and 16,500,000 shares (the "Shares") of common stock, par value
$1.00 per share, of the Company (the "Company Common Stock"); and
WHEREAS, the Shares will represent approximately 48% of the
total number of shares of Company Common Stock that will be outstanding
following consummation of the Sale Transaction; and
WHEREAS, Cooper and the Company wish to provide certain
arrangements with respect to their relationship following consummation of the
Sale Transaction and each of them requires that the other enter into this
Agreement as an inducement to its entering into the Acquisition Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
<PAGE> 5
ARTICLE I
CERTAIN COVENANTS
Section 1.1 Restrictions on Resale or Other Dispositions. So
long as this Agreement remains in effect, Cooper covenants and agrees that it
will not sell, transfer any beneficial interest in, pledge, hypothecate or
otherwise dispose of or encumber any Company Voting Securities (as hereinafter
defined); provided, that Cooper or any of its wholly-owned subsidiaries which
hold Company Voting Securities may sell, transfer, pledge, hypothecate or
otherwise dispose of or encumber Company Voting Securities:
(a) to any direct or indirect wholly-owned
subsidiary of Cooper which agrees to be bound by this Agreement; provided, that
such subsidiary shall remain a direct or indirect wholly-owned subsidiary of
Cooper for so long as it holds any Company Voting Securities or any beneficial
interest therein; or
(b) pursuant to a bona fide underwritten offering or
other distribution of such Company Voting Securities registered under the
Securities Act of 1933, as amended (the "Securities Act"); or
(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;
or
(d) pursuant to Rule 144 of the General Rules and
Regulations under the Securities Act, or any successor rule of similar effect
("Rule 144"); provided, that Cooper shall notify the Company at least two days
prior to the date of entering any sale or transfer order or agreement with
respect to Company Voting Securities pursuant to Rule 144; provided, further
that, if the Company shall thereupon notify Cooper of the pendency of a sale
under any public offering by it of Company Common Stock or any other Company
Voting Securities, neither Cooper nor any of its affiliates shall effect any
sales under Rule 144 within 10 days prior to the commencement of or during such
offering; or
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<PAGE> 6
(e) pursuant to a tender offer or exchange offer if
the Board of Directors of the Company has (i) recommended that 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; or
(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 this Agreement, "Company Voting Securities"
shall mean (i) the Company 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 Company Common Stock or any other Company securities entitled
to vote generally for the election of directors of the Company.
Section 1.2 Distribution of Shares. In any transaction or
transactions described in Section 1.1(b), 1.1(c) or 1.1(d), the seller of
Company Voting Securities or securities of Cooper convertible into or
exercisable or exchangeable for Company Voting Securities will use its
reasonable best efforts to effect the sale or transfer of such securities in a
manner which will effect the broadest possible distribution and such seller of
Company Voting Securities will use its reasonable best efforts to make no sales
or transfers of such Company Voting Securities to any one person or group
within the meaning of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), who or which after such transfer shall own Company Voting
Securities representing more than 4% of the voting power for the election of
directors represented by all of the then-outstanding Company Voting Securities
(whether directly or indirectly). Such seller shall use its reasonable best
efforts to cause any underwriters with respect to any transaction or
transactions described in Section 1.1(b) or 1.1(c) to comply with the
distribution restrictions set forth in the preceding sentence.
Section 1.3 Undertaking to File Reports and Cooperate in Rule
144 Transactions. The Company shall file, on a timely basis, all annual,
quarterly and other
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<PAGE> 7
reports required to be filed under Sections 13 and 15(d) of the Exchange Act,
and the Rules and Regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder, as amended from time to time. In the
event of any proposed sale of Company Voting Securities by Cooper or its
affiliates pursuant to Section 1.1(d) above, the Company shall cooperate with
Cooper so as to enable such sales to be made in accordance with applicable
laws, rules and regulations, the requirements of the Company's transfer agent,
and the reasonable requirements of the broker, if any, through which the sales
are proposed to be executed, and shall, upon request, furnish unlegended
certificates representing Company Voting Securities in such numbers and
denominations as Cooper shall reasonably require for delivery pursuant to such
sales.
Section 1.4 Delivery of Financial Statements. The Company
will deliver to Cooper:
(a) the quarterly consolidated financial statements
of the Company, including any notes thereto, for the first three quarterly
periods of each fiscal year, as soon as available but no later than the date
such quarterly financial information is filed with the Commission;
(b) the audited year-end consolidated financial
statements of the Company, including any notes thereto and the report of the
Company's independent certified public accountants thereon, as soon as
available but no later than the date such audited financial statements are
filed with the Commission; and
(c) a written statement of the Consolidated Net
Worth (as hereinafter defined and calculated in accordance with Section
4.3(a)(iv) hereof) of the Company (the "Net Worth Statement") each time that
financial statements are delivered to Cooper pursuant to Section 1.4(a) or
1.4(b). The principal financial officer of the Company shall certify that the
Net Worth Statement was prepared by him or under his direction and that it
shows the Consolidated Net Worth of the Company as of immediately following the
consummation of the Sale Transaction and the Consolidated Net Worth of the
Company as of the end of the most recent fiscal quarter or fiscal year, as
4
<PAGE> 8
the case may be, based on the financial statements of the Company then being
delivered to Cooper.
Section 1.5 Amendments to the Company's Articles of
Organization and By-Laws. The Company shall not amend, alter or otherwise
modify (i) Article 6 of the Company's Articles of Organization in any manner
which adversely affects Cooper or any other person to whom any of the Shares
have been transferred in accordance with the terms of this Agreement; (ii)
Article VI, Section 14 of the Company's By-Laws pursuant to which the Company
shall have opted-out of Chapter 110D of the Massachusetts General Laws; and
(iii) the Amended and Restated Rights Agreement in the form attached as an
Annex to the Acquisition Agreement (the "Amended and Restated Rights
Agreement") and the Company shall not adopt any other rights or similar
agreement; provided, however, following prior consultation with Cooper, the
Company may amend the Amended and Restated Rights Agreement in accordance with
the terms thereof provided such amendment does not adversely affect Cooper or
any other person to whom any of the Shares have been transferred in accordance
with the terms of this Agreement.
ARTICLE II
VOTING, OWNERSHIP AND OTHER RESTRICTIONS
Section 2.1 Obligation to be Counted for Quorum. Cooper
agrees 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 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.
Section 2.2 Voting by Cooper. Cooper agrees 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
Secu-
5
<PAGE> 9
rities, 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 to vote as provided in
this Section 2.2 if the matter being voted on by the shareholders of the Company
would, if approved, result in a breach of this Agreement.
Section 2.3 Cooper Standstill Agreements. So long as this
Agreement remains in effect, Cooper and its controlled affiliates shall 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:
(a) 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 this Agreement or the Acquisition 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;
(b) make or cause to be made any proposal for the
acquisition of the Company or any assets or businesses of the Company or
Company Securities or for
6
<PAGE> 10
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 this Agreement or the Acquisition Agreement or (ii) proposals
pursuant to customary business transactions in the ordinary course of the
Company's and Cooper's business;
(c) 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;
(d) 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;
(e) 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 this 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;
(f) 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;
(g) disclose any intention, plan or arrangement, or
make any public announcement (or request permission to make any such
announcement), or induce any
7
<PAGE> 11
third party to take any action, inconsistent with the foregoing;
(h) enter into any discussions, negotiations,
arrangements or understandings with any third party with respect to any of the
foregoing; or
(i) advise, assist or encourage or finance (or
assist or arrange financing to or for) any other person in connection with any
of the foregoing.
Section 2.4 Legend and Stop Transfer Order. To assist in
effectuating the provisions of this Agreement, Cooper hereby consents:
(a) to the placement, if appropriate, of the
following legend on all certificates representing the Company Voting Securities
beneficially owned by it until such shares have been sold, transferred or
disposed of:
The securities represented by this certificate are subject to
the provisions of an Agreement between Cooper Industries, Inc. and the
issuer of such securities, and may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except in accordance therewith. A
copy of such Agreement is on file at the office of the clerk of the issuer.
(b) to the entry of a stop transfer order with the
transfer agent or agents of Company Voting Securities against the transfer of
the Company Voting Securities held by Cooper except in compliance with the
requirements of this Agreement, or if the Company is its own transfer agent
with respect to any Company Voting Securities, to the refusal by the Company to
transfer any such securities except in compliance with the requirements of this
Agreement.
ARTICLE III
REGISTRATION RIGHTS
Section 3.1 Certain Definitions. As used in this Article III
the following capitalized terms shall have the following meanings:
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<PAGE> 12
(a) "Holder" means Cooper and any permitted
transferee pursuant to Section 1.1(a).
(b) "Registrable Securities" means the Shares and
any securities issued in respect of or in exchange for any of the Shares,
including, without limitation, by way of any stock split or reverse stock split
or other reclassification or any stock dividend or other pro rata distribution;
provided, that any such Shares or other securities shall not be Registrable
Securities with respect to a proposed offer or sale thereof when a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with the plan of distribution set forth in such registration
statement.
(c) "Registration Expenses" means all expenses in
connection with any registration of securities pursuant to this Agreement
including, without limitation, the following: (i) the reasonable fees,
disbursements and expenses of the Company's and Cooper's counsel(s) (United
States and foreign) and accountants in connection with the registration of the
Registrable Securities to be disposed of under the Securities Act; (ii) all
expenses in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to any underwriters and dealers; (iii) the
cost of printing or producing any agreement(s) among underwriters, underwriting
agreement(s), and blue sky or legal investment memoranda, any selling
agreements and any other documents in connection with the offering, sale or
delivery of the Registrable Securities to be disposed of; (iv) all expenses in
connection with the qualification of the Registrable Securities to be disposed
of for offering and sale under state securities laws, including the reasonable
fees and disbursements of counsel for the Holders of Registrable Securities in
connection with such qualification and in connection with any blue sky and
legal investment surveys; (v) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Registrable Securities to be disposed of; (vi) transfer
agents', depositaries' and registrars' fees and the
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<PAGE> 13
fees of any other agent appointed in connection with such offering; (vii) all
security engraving and security printing expenses; and (viii) all fees and
expenses payable in connection with the listing of the Registrable Securities
on each securities exchange or inter-dealer quotation system on which any class
of Company Voting Securities is then listed.
Section 3.2 Demand Registration. (a) Upon written
notice from a Holder of Registrable Securities in the manner set forth in
Section 6.9 hereof requesting that the Company effect the registration under
the Securities Act of any or all of the Registrable Securities held by such
Holder, which notice shall state that the Holder has a bona fide intent to
dispose of such Registrable Securities and shall specify the intended method or
methods of disposition, the Company will use its reasonable best efforts to
effect (at the earliest possible date), the registration under the Securities
Act of such Registrable Securities for disposition in accordance with the
intended method or methods of disposition stated in such request (but not
including any offering on a delayed or continuous basis pursuant to Rule 415
(or any successor rule to similar effect) promulgated under the Securities
Act); provided, that:
(i) if, upon receipt of a registration request
pursuant to this Section 3.2(a), the Company and the Holder(s) requesting
registration are advised by a nationally recognized investment banking firm
selected by the Company that, in such firm's opinion, a registration at the
time and on the terms requested would materially and adversely affect any
immediately planned underwritten public offering by the Company of its equity
securities or debt securities which are convertible into equity securities of
the Company, which offering had been contemplated by the Company prior to
receipt of notice requesting registration pursuant to this Section 3.2(a) (a
"Transaction Blackout"), the Company, upon giving written notice of a
Transaction Blackout to such Holder(s), shall not be required to effect a
registration pursuant to this Section 3.2(a) until the earliest of (A) the
abandonment of such financing, (B) 90 days after the completion of such
financing, (C) the termination of any "hold back" period obtained by the
underwriter(s) from any person in connection with such financing, and (D) 60
days after receipt by the Holder(s) of written notice
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<PAGE> 14
from the Company of such Transaction Blackout if by such 60th day the Company
shall not have filed a registration statement relating to such financing with
the Commission;
(ii) if, while a registration request is
pending pursuant to this Section 3.2(a), the general counsel of the Company has
determined in good faith that (A) the filing of a registration statement would
require the disclosure of material information which the Company has a bona
fide business purpose for preserving as confidential or (B) the Company is
unable to comply with the Commission's registration requirements, the Company,
upon giving written notice of any such event to the Holder(s) requesting
registration, shall not be required to effect a registration pursuant to this
Section 3.2(a) until the earlier of (1) the date upon which such material
information is disclosed to the public or ceases to be material or the Company
is able to so comply with the Commission's requirements, as the case may be,
and (2) 30 days after the general counsel of the Company makes such good faith
determination; and
(iii) a Holder shall have the right to exercise
registration rights pursuant to this Section 3.2 an unlimited number of times;
provided, each demand will be subject to the following conditions: (A) each
registration will include a minimum of 10% of the Company Voting Securities
initially issued to Cooper in the Sale Transaction (except that this minimum
condition will not be applicable to the Holders' last demand to sell all
remaining Registrable Securities held by the Holders); and (B) the Holders will
not demand more than two registrations in any twelve-month period and there
will be at least 120 days between the effective date of a prior registration
statement of the Company and the Holders' demand for a subsequent registration.
(b) Notwithstanding any other provision of this
Agreement to the contrary, a registration requested by a Holder of Registrable
Securities pursuant to this Section 3.2 shall not be deemed to have been
effected (and, therefore, not requested for purposes of subsection 3.2(a)), (i)
if it is not declared effective by order of the Commission for any reason other
than a misrepresentation or an omission by such Holder, (ii) if after it has
become effective such registration is interfered with by any stop order,
injunction or other order
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<PAGE> 15
or requirement of the Commission or other governmental agency or court for any
reason other than a misrepresentation or an omission by such Holder and, as a
result thereof, the Registrable Securities requested to be registered cannot be
completely distributed in accordance with the plan of distribution set forth in
the related registration statement, or (iii) if the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived other than by
reason of some act or omission by such Holder.
(c) Notwithstanding clause (i) of subsection 3.2(a),
the Company may not impose a Transaction Blackout during any offering of
Registrable Securities requested by a Holder pursuant to this Section 3.2.
(d) In the event that any registration pursuant to
this Section 3.2 shall involve, in whole or in part, an underwritten offering,
(i) the Company shall have the right to designate one nationally recognized
investment banking firm, reasonably satisfactory to Cooper and the Holder(s)
requesting registration, as the lead managing underwriter of such underwritten
offering, (ii) the Holder(s) requesting registration shall have the right to
designate one nationally recognized investment banking firm, reasonably
satisfactory to the Company, as co-managing underwriter of such underwritten
offering and (iii) any other co-managing underwriters of such underwritten
offering shall be designated jointly by the Company and the Holder(s)
requesting registration.
(e) The Company shall have the right to cause the
registration of additional securities for sale for the account of any person in
any registration of Registrable Securities requested by a Holder pursuant to
this Section 3.2; provided, that the Company shall not have the right to cause
the registration of such additional securities if such Holder and the Company
are advised by a nationally recognized investment banking firm selected by such
Holder that, in such firm's opinion, registration of such additional securities
would materially and adversely affect the offering and sale of the Registrable
Securities then contemplated by such Holder. In the event that any such
registration shall involve, in whole or in part, an underwritten offering, the
Holder may require that any such additional securities be in-
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<PAGE> 16
cluded in the offering proposed by such Holder on the same terms and
conditions as the Registrable Securities are included therein.
Section 3.3 Piggyback Registration. If the Company at any
time proposes to register any of its Common Stock or any other of its common
equity securities (collectively, "Other Securities") under the Securities Act
(other than a registration on Form S-4 or S-8 or any successor or similar
forms), whether or not for sale for its own account, in a manner which would
permit registration of Registrable Securities for sale to the public under the
Securities Act, it will give prompt written notice to the Holders of its
intention to do so and of the rights of the Holders under this Section 3.3 at
least 45 days (or, in the case of a registration on Form S-3 or any successor
or similar form, 10 days) prior to the anticipated filing date of the
registration statement relating to such registration (such notice shall also
specify the anticipated filing date of such registration statement). Upon the
written request of any Holder made within 15 days (or, in the case of a
registration on Form S-3 or any successor or similar form, 5 days) after the
receipt of the Company's notice (which request shall specify the number of
Registrable Securities intended to be disposed of and the intended method of
disposition thereof), the Company will use its reasonable best efforts to
effect, in connection with such registration of the Other Securities, the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register, to the extent required to permit the
disposition (in accordance with such intended methods thereof) of the
Registrable Securities so requested to be registered; provided, that:
(a) if, at any time after giving such written notice
of its intention to register any Other Securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register the Other
Securities, the Company may, at its election, give written notice of such
determination to the Holders and thereupon the Company shall be relieved of its
obligation to register such Registrable Securities in connection with the
registration of such Other Securities (but not from its obligation to pay
Registration Expenses to the extent incurred in connection therewith
13
<PAGE> 17
as provided in Section 3.4 hereof), without prejudice, however, to the rights
of the Holders immediately to request that such registration be effected as a
registration under Section 3.2 hereof;
(b) (i) if the registration referred to in the
first sentence of this Section 3.3 is to be an underwritten primary
registration on behalf of the Company, and the managing underwriter(s)
advise(s) the Company in writing that in their good faith opinion such offering
would be materially and adversely affected by the inclusion therein of the
Registrable Securities requested to be included therein, the Company shall
include in such registration: (1) first, all securities the Company proposes
to sell for its own account ("Company Registrable Securities"), (2) second, up
to the full number of Registrable Securities held by the Holders and requested
to be included in such registration in excess of the number or amount of
Company Registrable Securities which, in the good faith opinion of such
underwriter(s), can be sold without materially and adversely affecting such
offering, and (3) third, the number or amount of other securities, if any,
requested to be included therein in excess of the number or amount of Company
Registrable Securities and such Registrable Securities which, in the opinion of
such underwriter(s), can be sold without materially and adversely affecting
such offering; and (ii) if the registration referred to in the first sentence
of this Section 3.3 is to be an underwritten secondary registration on behalf
of holders of securities (other than Registrable Securities) of the Company
(the "Other Holders"), and the managing underwriter(s) advise(s) the Company in
writing that in their good faith opinion such offering would be materially and
adversely affected by the inclusion therein of the Registrable Securities
requested to be included therein, the Company shall include in such
registration: (1) first, all securities the Other Holders propose to sell for
their own account (the "Secondary Securities") and (2) second, up to the full
number of Registrable Securities held by Holders and requested to be included
in such registration in excess of the number or amount of Secondary Securities
which, in the good faith opinion of such underwriter(s), can be sold without
materially and adversely affecting such offering and (3) third, the number or
amount of other securities, if any, requested to be included therein in excess
of the number or amount of Secondary Securi-
14
<PAGE> 18
ties and such Registrable Securities which, in the good faith opinion of such
underwriter(s), can be sold without materially and adversely affecting such
offering; and
(c) no registration of Registrable Securities
effected under this Section 3.3 shall relieve the Company of its obligation to
effect a registration of Registrable Securities pursuant to Section 3.2 hereof.
Section 3.4 Expenses. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
pursuant to this Agreement, except that after the third demand registration
pursuant to Section 3.2, the Holders will pay all Registration Expenses in
connection with each demand registration of Registrable Securities held by the
Holders. The Holders shall pay all underwriting discounts or commissions or
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by the Holders.
Section 3.5 Registration and Qualification. If and whenever
the Company is required to use its reasonable best efforts to effect the
registration of any Registrable Securities under the Securities Act as provided
in Sections 3.2 or 3.3 hereof, the Company will as promptly as is practicable:
(a) prepare, file and use its reasonable best
efforts to cause to become effective a registration statement under the
Securities Act relating to the Registrable Securities to be offered;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities until the earlier
of (A) such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition set forth in such
registration statement and (B) the expiration of 90 days after such
registration statement becomes effective; provided, that such 90-day period
shall be extended for such number of days that equals the number of days
elapsing from (x) the date the written notice contemplated by Section 3.5(f)
hereof is given by
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<PAGE> 19
the Company to (y) the date on which the Company delivers to the Holders the
supplement or amendment contemplated by Section 3.5(f) hereof; and provided,
further, if such registration is in connection with an offering by the Holders,
pursuant to Section 3.6 hereof, such registration statement shall be kept
effective until the earlier of (A) above or (B) the expiration of the exercise,
exchange or conversion period;
(c) furnish to the Holders and to any underwriter of
such Registrable Securities such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders or such
underwriter may reasonably request, and a copy of any and all transmittal
letters or other correspondence to, or received from, the Commission or any
other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating
to such offering;
(d) use its reasonable best efforts to register or
qualify all Registrable Securities covered by such registration statement under
the securities or blue sky laws of such jurisdictions (domestic or foreign) as
the Holders or any underwriter of such Registrable Securities shall reasonably
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents required in connection therewith, and do
any and all other acts and things which may be necessary or advisable to enable
the Holders or any such underwriter to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such registration
statement; provided, that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to subject itself to taxation
in any such jurisdiction, or to consent to general service of process in any
such jurisdiction; provided, further, that, in the case of any such
registration or qualification in any non-United States juris-
16
<PAGE> 20
diction, (i) the Company shall have no obligation to use its reasonable best
efforts to so register or qualify Registrable Securities if in the good faith
opinion of the general counsel of the Company such registration or
qualification shall impose on the Company an on-going material compliance
obligation and (ii) the Company shall not be obligated to keep any such
registration or qualification in effect except for so long as is necessary or
appropriate in order to dispose of Registrable Securities in such jurisdiction;
(e) furnish to the Holders included in such
registration (i) on the date that the Registrable Securities are delivered to
any underwriters for sale pursuant to such registration statement, an opinion
of counsel representing the Company dated as of such date for the purposes of
such registration, addressed to the underwriters and to the Holders, stating
that such registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Securities Act,
(B) the registration statement, the related prospectus, and each amendment or
supplement thereof, comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the
financial statements or any other financial or statistical data or any
engineering report contained or incorporated therein) and (C) to such other
effects as may reasonably be requested by counsel for the underwriters or by
the Holders or their counsel, and (ii) on the effective date of the
registration statement, the date that the Registrable Securities are delivered
to any underwriters for sale pursuant to such registration statement and on the
effective date of each post-effective amendment to the registration statement,
a "comfort" letter dated such date from the regular independent public
accountants retained by the Company, addressed to the underwriters and to the
Holders registering Registrable Securities thereunder, stating that they are
independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included or incorporated by reference in the registration statement
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<PAGE> 21
or the prospectus, or any amendment or supplement thereto, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act and the published rules and regulations thereunder, and such
letter shall additionally cover such other financial matters (including
information as to the period ending no more than five business days prior to
the date of such letter) included in the registration statement in respect of
which such letter is being given as the underwriters or the Holders registering
Registrable Securities thereunder may reasonably request;
(f) immediately notify the Holders in writing (i) at
any time when a prospectus relating to a registration pursuant to Section 3.2
or 3.3 hereof is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (ii) of any request by the
Commission or any other regulatory body or other body having jurisdiction for
any amendment of or supplement to any registration statement or other document
relating to such offering, and in either such case (i) or (ii) at the request
of any Holder prepare and furnish to such Holder a reasonable number of copies
of an amendment of or a supplement to such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading;
(g) if requested by the underwriters of any
underwritten offering of Registrable Securities, use its reasonable best
efforts to list all such Registrable Securities covered by such registration on
each securities exchange and inter-dealer quotation system (in each case,
domestic or foreign) on which a class of Company Voting Securities is then
listed, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents required in connection therewith,
18
<PAGE> 22
and do any and all other acts and things which may be necessary or advisable to
effect such listing; and
(h) furnish unlegended certificates representing
ownership of the Registrable Securities being sold in such denominations as
shall be requested by the Holders registering Registrable Securities thereunder
or the underwriters.
Section 3.6 Conversion of Other Securities, etc. If Cooper
offers any options, rights, warrants or other securities issued by it that are
offered with, convertible into or exercisable or exchangeable for any
Registrable Securities, the Registrable Securities underlying such options,
rights, warrants or other securities shall be eligible for registration
pursuant to Section 3.2 and Section 3.3 of this Agreement.
Section 3.7 Underwriting; Due Diligence. (a) If requested
by the underwriters for any underwritten offering of Registrable Securities
pursuant to a registration requested under this Agreement, the Company will
enter into an underwriting agreement with such underwriters for such offering,
such agreement to contain such representations and warranties by the Company
and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to the effect
and to the extent provided in Section 3.9 hereof and the provision of opinions
of counsel and accountants' letters to the effect and to the extent provided in
Section 3.5(e) hereof. The representations and warranties in such underwriting
agreement by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of
the Holders on whose behalf the Registrable Securities are to be distributed by
such underwriters.
(b) In the event that any registration pursuant to
Section 3.3 shall involve, in whole or in part, an underwritten offering, the
Company may require the Registrable Securities requested to be registered
pursuant to Section 3.3 to be included in such underwriting on the same terms
and conditions as shall be applicable to the other securities being sold
through underwriters under such registration. If requested by the under-
19
<PAGE> 23
writers for any underwritten offering requested under this Agreement, the
Holders on whose behalf the Registrable Securities are to be distributed by such
underwriters will enter into an underwriting agreement with such underwriters,
such agreement to contain such representations and warranties by such Holders
and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to the effect
and to the extent provided in Section 3.9 hereof. The representations and
warranties in such underwriting agreement by, and the other agreements on the
part of, such Holders to and for the benefit of such underwriters, shall also
be made to and for the benefit of the Company.
(c) In connection with the preparation and filing of
each registration statement registering Registrable Securities under the
Securities Act, the Company will give the Holders of such Registrable
Securities and the underwriters, if any, and their respective counsel and
accountants, such reasonable and customary access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified the Company's financial
statements as shall be necessary, in the reasonable opinion of such Holders and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
Section 3.8 Restrictions on Public Sale; Inconsistent
Agreements. (a) If any registration of Registrable Securities pursuant to
Section 3.2 shall be in connection with an underwritten public offering, the
Company agrees and agrees to cause any controlled affiliates of the Company not
to effect any public sale or distribution of any of its securities of the same
class or series as such Registrable Securities or any securities convertible
into or exchangeable or exercisable for any securities of the same class or
series as such Registrable Securities (other than any such sale or distribution
of such securities in connection with any exchange offer, merger or
consolidation by the Company or a subsidiary of the Company or in connection
with the purchase of all or substantially all the assets of any other person or
in connection with an employee stock option plan, employee
20
<PAGE> 24
stock ownership plan or other benefit plan) during the 30-day period prior to,
and during the 90-day period beginning on, the effective date of such
registration statement (except as part of such registration), or for such
shorter period acceptable to the underwriters of such offering.
(b) The Company agrees that any agreement entered
into after the date of this Agreement pursuant to which the Company issues or
agrees to issue any equity securities or any securities convertible into or
exchangeable or exercisable for any equity securities of the Company which will
be privately placed shall contain (i) a provision under which holders of such
securities agree not to effect any public sale or distribution of any such
securities during the period referred to in Section 3.8(a), including any sale
pursuant to Rule 144 under the Securities Act (except as part of such
registration, if permitted) and (ii) no terms or provisions inconsistent with
any term or provision of this Agreement.
Section 3.9 Indemnification and Contribution. (a) In the
case of each offering of Registrable Securities made pursuant to this Agreement
(whether pursuant to Section 3.2 or Section 3.3), the Company agrees to
indemnify and hold harmless the Holders of Registrable Securities, its officers
and directors, each underwriter of Registrable Securities so offered and each
person, if any, who controls any of the foregoing persons within the meaning of
the Securities Act, from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable legal fees
(including disbursements and related expenses) or other reasonable
out-of-pocket expenses incurred by them in connection with investigating any
claims and defending any actions, insofar as such losses, claims, damages,
liabilities or actions shall arise out of, or shall be based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement (or in any preliminary or final prospectus included
therein), or any amendment thereof or supplement thereto, or in any document
incorporated by
21
<PAGE> 25
reference therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or shall arise out of or be based upon any violation or
alleged violation by the Company of the Securities Act, any blue sky laws,
securities laws or other applicable laws of any state or country in which the
Registrable Securities are offered and relating to action or inaction required
of the Company in connection with such offering; provided, that the Company
shall not be liable to any Holder of Registrable Securities in any such case to
the extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information relating to such Holder furnished to the
Company in writing by or on behalf of such Holder specifically for use in the
preparation of the registration statement (or in any preliminary or final
prospectus included therein), or any amendment thereof or supplement thereto.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Holders of Registrable Securities and
shall survive the transfer of such securities. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to the Holders of Registrable Securities, its officers and directors,
underwriters of the Registrable Securities, or any controlling person of the
foregoing; provided, further, that, in the case of an offering with respect to
which any Holder has designated the lead managing underwriter(s), this
indemnity does not apply to any loss, liability, claim, damage or expense
arising out of or based upon any untrue statement or alleged untrue statement
or omission or alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an underwriter to such
person asserting such loss, claim, damage, liability or action at or prior to
the written confirmation of the sale of the Registrable Securities as required
by the Securities Act and such untrue statement or omission had been corrected
in such prospectus.
(b) In the case of each offering made pursuant to
this Agreement (whether pursuant to Section 3.2 on Section 3.3), each Holder of
Registrable Securities included in such offering, by exercising its
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<PAGE> 26
registration rights hereunder, agrees to indemnify and hold harmless the
Company, its officers and directors and each person, if any, who controls any
of the foregoing within the meaning of the Securities Act (and if requested by
the underwriters, each underwriter who participates in the offering and each
person, if any, who controls any such underwriter within the meaning of the
Securities Act), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable legal fees
(including disbursements and related expenses) or other reasonable
out-of-pocket expenses incurred by them in connection with investigating any
claims and defending any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of, or shall be based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement (or in any preliminary or final prospectus included
therein) or any amendment thereof or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that such untrue statement of a material fact is contained
in, or such material fact is omitted from, information relating to such Holder
furnished in writing to the Company by or on behalf of such Holder specifically
for use in the preparation of such registration statement (or any preliminary
or final prospectus included therein), or any amendment thereof or supplement
thereto. The foregoing indemnity is in addition to any liability which such
Holder may otherwise have to the Company, or any of its directors, officers or
controlling persons; provided, that, in the case of an offering with respect to
which the Company has designated the lead managing underwriter(s), this
indemnity does not apply to any loss, liability, claim, damage or expense
arising out of or based upon any untrue statement or alleged untrue statement
or omission or alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an underwriter to such
person asserting such loss, claim, damage, liability or action at or prior to
the written confirmation of the sale of the Registrable Securities as required
by
23
<PAGE> 27
the Securities Act and such untrue statement or omission had been corrected in
such prospectus.
(c) Procedure for Indemnification. Each party
indemnified under paragraph (a) or (b) of this Section 3.9 shall, promptly
after receipt of notice of any claim or the commencement of any action against
such indemnified party in respect of which indemnity may be sought, notify the
indemnifying party in writing of the claim or the commencement thereof;
provided, that the failure to notify the indemnifying party shall not relieve
it from any liability which it may have to an indemnified party on account of
the indemnity agreement contained in paragraph (a) or (b) of this Section 3.9,
unless the indemnifying party was prejudiced by such failure, and in no event
shall relieve the indemnifying party from any other liability which it may have
to such indemnified party. If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 3.9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, that the indemnified parties,
shall have the right, as a group, to employ one law firm as separate counsel to
represent them if, in the reasonable judgment of the indemnified parties, it is
advisable for them to be represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the indemnifying
party. If the indemnified parties employ such separate counsel they will not
agree to any settlement of any such claim or action without the prior written
consent of the indemnifying party, such consent not to be unreasonably
withheld. If the indemnifying party so assumes the defense thereof, it may not
agree to any settlement of any such claim or action as the result of which any
remedy or relief, other than monetary damages for which the indemnifying party
shall be responsible hereunder, shall be applied to or against the indemnified
24
<PAGE> 28
parties, without the prior written consent of the indemnified parties, such
consent not to be unreasonably withheld. If the indemnifying party does not
assume the defense thereof, it shall be bound by any settlement to which the
indemnified parties agree, irrespective of whether the indemnifying party
consents thereto. In any action hereunder as to which the indemnifying party
has assumed the defense thereof with counsel satisfactory to the indemnified
party, the indemnified party shall continue to be entitled to participate in
the defense thereof, with counsel of its own choice, but, except as set forth
above, the indemnifying party shall not be obligated hereunder to reimburse the
indemnified party for the costs thereof.
If the indemnification provided for in this Section 3.9 shall
for any reason be unavailable to an indemnified party in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, in such proportion as shall be appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted
in such loss, claim, damage or liability, or action in respect thereof, as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not solely by reference to any indemnified party's
stock ownership in the Company. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph shall be deemed to include, for
purposes of this paragraph, any reasonable legal fees (including disbursements
and related expenses) or other reasonable out-of-pocket expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such
25
<PAGE> 29
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE IV
TERM AND EFFECTIVENESS OF AGREEMENT
Section 4.1 Effectiveness of Agreement. This Agreement shall
be effective only upon consummation of the Sale Transaction contemplated by the
Acquisition Agreement. Neither party shall have any obligation to the other
pursuant to this Agreement until such consummation has occurred, and this
Agreement shall terminate simultaneously with any termination of the
Acquisition Agreement in accordance with its terms.
Section 4.2 Term of Agreement. Except as otherwise provided
in Section 4.3, the respective covenants and agreements of Cooper and the
Company contained in Article I and Article II of this Agreement will continue
in full force and effect from the date of effectiveness of this Agreement
pursuant to Section 4.1 until the earlier of (i) the tenth anniversary of such
date, and (ii) the first date on which Cooper beneficially owns less than 5% of
the outstanding Company Voting Securities.
Section 4.3 Certain Provisions Regarding Termination. (a)
The limitations on Cooper and its affiliates set forth in Articles I and II
will terminate immediately and be of no further force and effect on the date
that a "Trigger Event" shall have occurred. For these purposes, "Trigger
Event" shall mean the occurrence of one or more of the following events,
without Cooper's prior written consent:
(i) 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 Direc-
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tors 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 hereinafter defined)) the failure to provide Cooper with the right to
purchase, at the same price as the 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;
(ii) a "Change in Control" of the Company (as
hereinafter defined);
(iii) 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;
(iv) a decline of at least 35% in the
"Consolidated Net Worth" of the Company from the Consolidated Net Worth of the
Company immediately following the consummation of the Sale Transaction after
giving effect to the Sale Transaction (including the issuance of the Shares 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 Sale Transaction 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 Sale Transaction or
(B) any adjustments following the date of consummation of the Sale Transaction
as a result of any changes in generally accepted accounting principles ("GAAP")
(including the implementation of Statement of Financial Accounting Standards
("SFAS") No. 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 Sale Transaction and
relating to the business or assets acquired by the Compa-
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ny 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 No. 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 Practice
Bulletin No. 16 acquisition date balance sheet;
(v) 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 million, which default shall
constitute a failure to pay any portion of the principal of each indebtedness
at final maturity or shall 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;
(vi) an "Event of Bankruptcy" (as hereinafter
defined); or
(vii) 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.
Notwithstanding clause (i) above, the Company may not issue any securities
having more than one vote per share (other than pursuant to the Amended and
Restated Rights Agreement) without the prior written consent of Cooper.
(b) For purposes of this Section 4.3:
(i) A "Change in Control" shall mean a merger
or consolidation involving the Company or a sale
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of all or substantially all of the assets of the Company, in each case except
for a transaction in which the Company's shareholders receive at least 50% of
the stock of the surviving, resulting or acquiring corporation; 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 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).
(ii) "Consolidated Net Worth" shall mean, as at
any date of determination, the consolidated shareholders' equity of the Company
and those of its subsidiaries that would be accounted for as consolidated
subsidiaries in the Company's financial statements in accordance with GAAP (as
in effect from time to time), as determined on a consolidated basis in
accordance with GAAP (as in effect from time to time); provided, that the
Consolidated Net Worth of the Company immediately following the consummation of
the Sale Transaction shall include 60% of the "LIFO reserve" as of that date,
and thereafter for purposes of calculating Consolidated Net Worth the earnings
or loss of the Company shall be computed utilizing the FIFO (first-in,
first-out) method of accounting for inventory.
(iii) An "Event of Bankruptcy" shall mean (A)
the commencement by the Company of a voluntary proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by
the Company to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company, or the
admission by the Company in writing of its inability to pay its debts generally
as they become due; or (B) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable bankruptcy,
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<PAGE> 33
insolvency, reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or
in respect of the Company under any applicable law, or ordering the winding up
or liquidation of the affairs of the Company, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days.
(iv) "Similar Businesses" shall mean businesses in which
the Company or one or more of its subsidiaries are engaged and any businesses
involving products related to or complementary to the products of the Company
or one or more of its subsidiaries or 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.
ARTICLE V
ELECTION OF DIRECTORS
Section 5.1 (a) The Company agrees 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 duly elected and
qualified. In the event that any such designee shall cease to serve as a
director for any reason, the Company will use its best efforts to cause such
vacancy resulting thereby to be filled by a designee of Cooper reasonably
acceptable to the Company. In order to effect the purposes and intent of this
Section 5.1, the Company, among other things, shall 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.
(b) The Company agrees that any designees of Cooper
who are elected to serve on the Company's Board of Directors shall be furnished
with all information
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generally provided to the Company's Board of Directors and shall have access to
information regarding the Company on a basis equal to that of the other outside
or its inside directors. The Company agrees that Cooper's designees serving on
the Company's Board of Directors shall, in connection with the performance of
their duties as directors of the Company, be (i) compensated at a level
commensurate with the compensation of the Company's other outside directors,
(ii) reimbursed for all out-of-pocket charges and expenses incurred, (iii)
entitled to the benefit of insurance policies of the Company which provide
coverage to its other outside directors and (iv) furnished with and entitled to
the same perquisites as the Company's other outside directors.
ARTICLE VI
GENERAL
Section 6.1 Specific Enforcement; Other Remedies. (a) Cooper
acknowledges and agrees that the Company would be irreparably damaged in the
event any of the provisions of this Agreement were not performed by Cooper in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Company shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, in addition to any other
remedy to which the Company may be entitled at law or equity.
(b) The Company acknowledges and agrees that Cooper
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed by the Company in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that Cooper shall
be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof or seek recovery of money damages in any court of the United
States or any state thereof having jurisdiction, in addition to any other
remedy to which Cooper may be entitled at law or equity.
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Section 6.2 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, void, or unenforceable, the remainder of the terms, provisions,
covenants and restrictions shall remain in full force and effect and shall in
no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any
of such which may be hereafter declared invalid, void or unenforceable.
Section 6.3 Definitions. As used herein the term "affiliate"
shall have the meaning set forth in Rule 12b-2 under the Exchange Act and the
term "person" shall mean any individual, partnership, joint venture,
corporation, trust or other entity.
Section 6.4 Amendment and Modification. This Agreement may
be amended, modified or supplemented only by an agreement in writing signed
by both of the parties hereto.
Section 6.5 Descriptive Headings. Descriptive headings are
for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Section 6.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
Section 6.7 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the successors
and permitted assigns of the parties hereto, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
of the parties hereto without the prior written consent of the other party.
Notwithstanding the foregoing, Cooper may assign its rights under this
Agreement to any of its direct or indirect wholly-owned subsidiaries as long
as such subsidiary remains a direct or indirect wholly-owned subsidiary of
Cooper, but no such assignment shall relieve Cooper of its obligations
hereunder.
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Section 6.8 Accounting Matters. The Company will furnish to
Cooper all information that is required by GAAP to enable Cooper to account for
its investment in the Company in whatever manner it shall deem appropriate. To
the extent reasonably requested by Cooper, the Company will, and will cause its
employees, independent public accountants and other representatives to provide
information regarding the Company to, and otherwise cooperate with, Cooper so
as to enable Cooper to prepare financial statements in accordance with
generally accepted accounting principles and to comply with its reporting
requirements and other disclosure obligations under applicable United States
securities laws and regulations.
Section 6.9 Notices. All notices and other communications
provided for herein shall be validly given, made or served, if in writing and
delivered personally, sent by facsimile transmission (receipt of which is
confirmed) or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice; provided
that notices of a change of address shall be effective only upon receipt
thereof):
(i) if to Cooper or a Holder of Registrable Securities, to
Cooper Industries, Inc.
First City Tower, Suite 4000
1001 Fannin
Houston, Texas 77002
Attention: General Counsel
Telephone No.: (713) 739-5902
Facsimile No.: (713) 735-5882
(ii) if to the Company, to
Wyman-Gordon Company
224 Worcester Street
Box 8001
Grafton, Massachusetts 01536
Attention: Wallace F. Whitney, Jr.
Telephone No.: (508) 839-4441
Facsimile No.: (508) 839-7500
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with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich
Telephone No.: (212) 403-1000
Facsimile No.: (212) 403-2000
(iii) if to a Holder of Registrable Securities, to the name
and address as the same appear in the security
transfer books of the Company.
Notice given by facsimile shall be deemed delivered on the business day after
it is sent to the recipient. Notice given by mail as set out above shall be
deemed delivered five calendar days after the date the same is mailed.
Section 6.10 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York without
regard to any applicable principals of conflicts of law.
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IN WITNESS WHEREOF, Cooper and the Company have caused this
Agreement to be duly executed by their respective officers, each of whom is
duly and validly authorized and empowered, all as of the day and year first
above written.
COOPER INDUSTRIES, INC.
By /s/ H. JOHN RILEY, JR.
------------------------------------
Name: H. John Riley, Jr.
Title: President and Chief
Operating Officer
WYMAN-GORDON COMPANY
By /s/ JOHN M. NELSON
------------------------------------
Name: John M. Nelson
Title: Chairman and Chief Executive
Officer
35
