<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1996 Commission file number 1-9967
--------------- ------
AMCAST INDUSTRIAL CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 31-0258080
-------------------------------- ------------------------------
(State of Incorporation) (I.R.S. employer
identification no.)
7887 Washington Village Drive, Dayton, Ohio 45459
- --------------------------------------------------------------------------------
(Address of principal executive officers) (Zip Code)
291-7000 (Area Code 937)
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
Common Shares, without par value New York Stock Exchange
Preferred Share Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Aggregate market value of common stock, no par value, held by
non-affiliates of the registrant (assuming only for the purposes of this
computation that directors and officers may be affiliates) as of October 21,
1996--$163,163,072.
Number of common shares outstanding, without par value, as of October 21,
1996--8,618,491 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV--Portions of Annual Report to Shareholders for the year
ended August 31, 1996.
Part III--Portions of Proxy Statement for the Annual Meeting of
Shareholders to be held on December 17, 1996 filed November 6, 1996.
Index to exhibits at page 16 of this report.
<PAGE> 2
PART I
------
ITEM 1 - BUSINESS
- -----------------
Amcast Industrial Corporation, an Ohio corporation organized in 1869, and
its subsidiaries (called collectively "Amcast" or the "Company") are engaged in
the business of producing fabricated metal products, valves and controls, and
cast and tubular metal products, in a variety of shapes, sizes, and metals for
sale to end users directly and through sales representatives and distributor
organizations and to original equipment manufacturers. Manufacturing facilities
are located in six states, primarily in the eastern half of the United States.
The Company's business operations are conducted through three divisions and ten
wholly-owned subsidiaries. Its subsidiaries include Amcast Industrial Ltd., an
Ontario, Canada corporation; Elkhart Products Corporation (Elkhart), an Indiana
corporation; WheelTek, Inc., an Indiana corporation; Amcast Investment Services
Corporation (formerly Amcast Industrial Investment Corporation), a Delaware
corporation; Amcast Automotive, Inc., a Michigan corporation; Amcast Industrial
Financial Services, Inc., an Ohio corporation; Amcast Industrial Sales
Corporation, a U.S. Virgin Islands corporation; Flagg Brass, Inc., an Ohio
corporation; Amcast Casting Technologies, Inc., an Indiana Corporation and
Amcast Precision Products, Inc., a California corporation. Amcast Casting
Technologies, Inc. owns 60% of a jointly controlled partnership formed with
Izumi Industries, Ltd. of Japan.
The Company operates in two business segments--1) Flow Control Products
and (2) Engineered Components. Information concerning the net sales, operating
profit and identifiable assets of each segment for years 1994 through 1996
appears under "Business Segments" in the Notes to Consolidated Financial
Statements in the Company's Annual Report to Shareholders for the year ended
August 31, 1996, such information is incorporated herein by reference and is
filed as Exhibit 13.1 to this report. Amcast has no foreign manufacturing
operations and export sales to customers in foreign countries are not material.
FLOW CONTROL PRODUCTS
- ---------------------
The Flow Control Products segment (Flow Control) includes the business of
the Superior Valve division (Superior Valve), the Elkhart subsidiary, Flagg
Brass Inc., and Amcast Industrial Ltd. Superior Valve manufactures valves and
accessories used in air conditioning and refrigeration systems, and compressed
gas cylinder valves for the welding, specialty, carbonic, and medical gas
industries. Elkhart produces wrot copper fittings for use in residential and
commercial water systems and markets brass pipe fittings. Flagg Brass produces
brass pipe fittings for the marine and industrial markets. Amcast Industrial
Ltd. is the common Canadian marketing arm for Amcast's Flow Control segment
manufacturing units.
The Company's Flow Control business is a leading supplier of pipe
fittings for the industrial, commercial, and residential construction markets,
valves utilized in air conditioning and refrigeration systems, and industrial
compressed gas applications. These products are sold through distributors and
wholesalers. Shipments are made by truck from Company locations directly to
customers. The competition is comprised of a number of manufacturers of parts
for air conditioning, refrigeration, and plumbing systems, and valves and
controls. The Company believes that competition in this segment is based on a
number of factors including product quality, service, delivery, and value.
The Company is one of three major suppliers of copper and brass fittings
to the North American commercial and residential plumbing markets. Products are
sold primarily through
2
<PAGE> 3
ITEM 1 - BUSINESS (cont'd)
- -----------------
FLOW CONTROL PRODUCTS (cont'd)
- ---------------------
plumbing wholesalers, retail hardware stores and home centers and to original
equipment manufacturers and replacement parts distributors in the air
conditioning and commercial refrigeration business. Competition is based on
service levels, pricing and breadth of product offering. The Company's prime
competitors are Mueller Industries, Inc., a publicly owned company listed on the
New York Stock Exchange, and NIBCO Inc., a privately held company headquartered
in Elkhart, Indiana. Both Mueller Industries, Inc. and NIBCO Inc. may have total
financial resources greater than the Company's.
Most of the Flow Control business is based on customer purchase orders
for their current product requirements and such orders are filled from Company
inventory. Orders are not considered firm beyond a 90-day period.
See Properties at Item 2 of this report for information on the Company's
facilities which operate in this segment.
ENGINEERED COMPONENTS
- ---------------------
The Engineered Components segment produces cast and fabricated metal
products principally for sale to original equipment manufacturers in the
transportation, construction, air conditioning, refrigeration, and aerospace
industries. The Company's manufacturing processes involve the melting of raw
materials for casting into metal products having the configuration, flexibility,
strength, weight, and finish required for the customer's end use. The Company
also custom fabricates copper and aluminum tubular parts. The Company
manufactures products on a high-volume, medium-volume, and specialized basis and
its metal capabilities include aluminum, steel, brass, and copper. Products
manufactured by this segment include castings for suspension, air conditioning
and anti-lock braking systems, master cylinders, differential carriers and cast
aluminum wheels for use on automobiles and light trucks, and parts for use in
heating and air conditioning systems. The Company also designs and manufactures
close-tolerance aluminum and specialty steel investment castings and related
items for sale to aviation and aerospace companies. Delivery is mostly by truck
from Amcast locations directly to customers.
Amcast is not solely dependent on a single customer. However, a
significant portion of the Company's Engineered Components business is directly
or indirectly dependent on the major automobile manufacturers. The Company's net
sales to various divisions of General Motors Corporation in 1996 were $114.5
million. No other customer accounted for more than 10% of consolidated sales in
1996.
The Company is a leading supplier of aluminum automotive components and
aluminum wheels for automotive original equipment manufacturers in North
America. Competition in the automotive components industry is global with
numerous competitors. The basis of competition is generally design and
engineering capability, price and quality.
There are approximately 25 competitors in the aluminum automotive
component business serving the North American market. Principal competitors
include Alcoa, CMI International Inc., A-CMI, Stahl Specialty Company, Reliable
Castings Corporation and Kaiser Aluminum Corp., a subsidiary of MAXXAM Inc.,
some of which have significantly greater financial resources than the Company.
3
<PAGE> 4
ITEM 1 - BUSINESS (cont'd)
- -----------------
ENGINEERED COMPONENTS (cont'd)
- ---------------------
There are approximately 18 producers of aluminum wheels which service the
North American market. The largest of these are Superior Industries
International, Inc. and Hayes Wheels International, Inc.. The next tier of
suppliers includes the Company, Reynolds Metals Company, Alcoa and Enkie America
Inc. Some of the Company's competitors in the aluminum wheel business have
significantly greater financial resources than the Company.
The Company's non-aerospace business of the Engineered Components segment
is on a "blanket" order basis and is generally based on supplying a percentage
of the customer's annual requirements for a particular part. Customers issue
firm releases and shipping schedules each month against their blanket orders
depending on their current needs. As a result, order backlog varies from month
to month and is not considered firm beyond a 30-day period. Amcast believes that
price, product quality, and delivery are the principal bases of competition
within the industry.
The order backlog of the aerospace business was $11.2 million at August
31, 1996, and $19.6 million at August 31, 1995. The backlog at August 31, 1996,
is expected to result in revenue of $9.5 million during 1997.
See Properties at Item 2 of this report for information on the Company's
facilities which operate in this segment.
GENERAL INFORMATION
- -------------------
Raw materials essential to the business are purchased from suppliers
located in the general vicinity of each operating facility. Availability of
these materials is judged to be adequate. The Company does not anticipate any
material shortage that will alter production schedules during the coming year.
Aluminum and copper are basic commodities traded in international
markets. Changes in aluminum and copper costs are generally passed through to
the customer. Changes in the cost of aluminum are currently passed through to
the customer based on various formulas as is the custom in the segment of the
automotive industry the Company serves. Copper cost increases and decreases are
generally passed through to the customer in the form of price changes as
permitted by prevailing market conditions. The Company is unable to project
whether these costs will increase or decrease in the future. The Company's
ability to pass through any increased costs to the customer in the future will
be determined by market conditions at that time.
Amcast owns a number of patents and patent applications relating to the
design of its products. While Amcast considers, in the aggregate, these patents
are important to operations, it believes that the successful manufacture and
sale of its products generally depend more on the Company's technological
know-how and manufacturing skills.
Capital expenditures related to compliance with federal, state, and local
environmental protection regulations for 1997 and 1998 are not expected to be
material. Management believes that operating costs related to environmental
protection will not have a materially adverse effect on future earnings or the
Company's competitive position in the industry.
At August 31, Amcast employed approximately 2,600 persons in 1996, 2,400
in 1995, and 2,300 in 1994.
4
<PAGE> 5
ITEM 1 - BUSINESS (cont'd)
- -----------------
No material portion of Amcast's business is seasonal.
RECENT DEVELOPMENTS
- -------------------
None
ITEM 2 - PROPERTIES
- -------------------
The following table provides certain information relating to the Company's
principal facilities as of October 21, 1996:
<TABLE>
<CAPTION>
SQUARE
FACILITY FOOTAGE USE
- ------------------------------ ------- ---------------------------------
Flow Control Products Segment
- -----------------------------
<S> <C> <C>
SUPERIOR VALVE DIVISION 105,600 High and low pressure specialty
Washington, Pennsylvania valve manufacturing plant,
warehouse, sales and general
offices
ELKHART PRODUCTS 222,000 Copper fittings manufacturing
CORPORATION SUBSIDIARY plant, warehouse, and sales and
Elkhart, Indiana general offices
Fayetteville, Arkansas 107,800 Copper fittings manufacturing
plant
AMCAST INDUSTRIAL LTD. 20,214 Distribution warehouse and branch
SUBSIDIARY sales office for Flow Control
Burlington, Ontario Canada Products
FLAGG BRASS, INC. SUBSIDIARY 250,000 Brass foundry, machining
Stowe, Pennsylvania operations, warehouse, and sales
and general offices
Engineered Components Segment
- -----------------------------
ELKHART PRODUCTS 105,748 Custom fabricated copper and
CORPORATION SUBSIDIARY aluminum tubular products
Geneva, Indiana manufacturing plant
AMCAST PRECISION 70,000 Aluminum and specialty steel
PRODUCTS, INC. SUBSIDIARY investment casting foundry
Rancho Cucamonga, California
</TABLE>
5
<PAGE> 6
ITEM 2 - PROPERTIES (cont'd)
- -------------------
<TABLE>
<CAPTION>
SQUARE
FACILITY FOOTAGE USE
- --------------------------- ------- ---------------------------------
<S> <C> <C>
BRAKE & CHASSIS DIVISION 133,000 High-volume, aluminum alloy
Cedarburg, Wisconsin permanent-mold foundry
Richmond, Indiana 97,300 High-volume, aluminum alloy
permanent-mold foundry
WHEELTEK, INC. SUBSIDIARY 139,788 Cast aluminum automotive wheels
Fremont, Indiana
Gas City, Indiana 152,000 Cast aluminum automotive wheels
SUSPENSION DIVISION 188,000 Cast, machined and assembled
Wapakoneta, Ohio aluminum suspension components.
AMCAST AUTOMOTIVE, INC. 8,840 Automotive component sales,
SUBSIDIARY product development and
Southfield, Michigan engineering center offices
Corporate
- ---------
CORPORATE CENTER 16,281 Executive and general offices
Dayton, Ohio
</TABLE>
The land and building in Rancho Cucamonga, California, are leased under a
5-year lease, with a requirement that Amcast purchase the property at the fair
market price at the lease expiration in 1997. The Company is currently in the
process of exercising its purchase option. The land and building in Burlington,
Ontario, are leased under a 3-year lease expiring in 1998. The land in Richmond
and Gas City, Indiana is leased under 99 year leases, expiring in 2091. The
Corporate offices are being leased for five years expiring in 1998. The Amcast
Automotive offices are being leased for five years expiring in the year 2000,
with an option for a five year renewal. All other properties are owned by the
Company.
A portion of the land and building at Fayetteville, Arkansas is subject
to a mortgage in favor of Bank One, Dayton, NA, to secure the payment of a
$5,050,000 bond issue dated December 1, 1991, and maturing December 1, 2004.
The Company's operating facilities are in good condition and are suitable
for the Company's purposes. Utilization of capacity is dependent upon customer
demand. During 1996, productive capacity utilization ranged from 66% to 86%, and
averaged 78% of the Company's total capacity.
6
<PAGE> 7
ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
Refer to "Commitments and Contingencies" in the Notes to Consolidated
Financial Statements of the Company's Annual Report to Shareholders for the year
ended August 31, 1996, Exhibit 13.1, page 191 herein.
The Company's Flagg Brass business resolved its labor negotiations with
the United Steelworkers of America. The National Labor Relations Board complaint
(Case No. 4-CA-23069) relating to these negotiations, was dismissed at the same
time.
Allied Signal, Inc. has brought a superfund private cost recovery and
contribution action against the Company in the United States District Court for
the Southern District of Ohio, Western Division, which is captioned
ALLIED-SIGNAL, INC. V. AMCAST INDUSTRIAL CORPORATION (Case No. C-3-92-013). The
action involves the Goldcamp Disposal Site in Ironton, Ohio. Allied-Signal has
taken the lead in remediating the site and has estimated that its total costs
for the remediation may reach $30 million. Allied is seeking a contribution from
the Company in an amount equal to 50 percent of the final remediation costs. A
trial in this proceeding was completed in February 1995, but no judgment is
anticipated until after certain post-trial proceedings are completed. The
Company believes its responsibility with respect to the Goldcamp Site is
limited, primarily due to the nature of the foundry sand waste it disposed of at
the site. The Company believes that if it has any liability at all in regard to
the Goldcamp Site, that liability would not be material to its financial
position or results of operations.
The lawsuit captioned PUBLIC INTEREST RESEARCH GROUP, INC. ET AL. V.
STANLEY G. FLAGG & CO., ET AL, filed in the United States District Court for the
Eastern District of Pennsylvania (Case No. 89-2137), was concluded by settlement
during the fiscal year. The terms of the settlement require the Company to
donate certain of its property, which is not currently in use or anticipated to
be used in the future by the Company in its operations, to charitable
organizations over a two-year period, and to pay legal expenses and costs
incurred by Pennpirg. The settlement does not have a material adverse effect on
the Company and its operations.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None
ITEM 4A - EXECUTIVE OFFICERS OF REGISTRANT
- ------------------------------------------
John H. Shuey, age 50, has been President and Chief Executive Officer since
March 1995 and a Director since March 1994. Mr. Shuey was President and Chief
Operating Officer from December 1993 to March 1995. Mr. Shuey was Executive Vice
President from February 1991 to December 1993.
Thomas K. Walker, age 55, has been President of Amcast Automotive since
August 1995. From 1992 to 1995, Mr. Walker was President of ITT Automotive's
North American operations. Mr. Walker was also President of Allied Signal
Automotive Catalyst Co. in Tulsa, Oklahoma from 1985 to 1992.
Dennis A. Bertram, age 59, has been Senior Vice President, Operations of
Amcast Automotive since August 1995. From May 1992 until his recent appointment,
he was President and General Manager of the same group. Prior to that, he was
Vice President of Operations for WheelTek.
7
<PAGE> 8
ITEM 4A - EXECUTIVE OFFICERS OF REGISTRANT (cont'd)
- ------------------------------------------
J. Randall Caraway, age 45, has been President of Amcast Precision since
March 1991. From August 1990 to March 1991 he was Vice President/General Manager
of the Ontario Division. From 1988 to 1990 Mr. Caraway was President of
Coastcast in California. Prior to his role of President he was Vice President of
Operations of Coastcast.
Michael N. Powell, age 49, was appointed President of the Flow Control
Products Group, beginning May 1996. From April 1994 until his recent
appointment, he was Vice President/General Manager of Superior Valve Company.
Mr. Powell was President and Chief Operating Officer of Versa Technologies, Inc.
in Racine, Wisconsin from May 1991 to December 1993. Prior to that, he was a
Senior Vice President for Mark Controls Corporation in Skokie, Illinois.
Douglas D. Watts, age 51, has been Vice President, Finance since August
1994. From 1987 to August 1994 Mr. Watts held various financial management
positions with General Cable Corporation, of which the most recent post was Vice
President and Controller. Prior to that, he was Vice President, Finance and
Chief Financial Officer of LCP Chemicals and Plastics Inc., Edison, New Jersey.
William L. Bown, age 50, has been Vice President and Controller since June
1992. From November 1983 to May 1992 Mr. Bown was Controller of Worthington
Industries, Inc. in Columbus, Ohio.
Denis G. Daly, age 54, has been Vice President, General Counsel and
Secretary, since January 1990. From January 1986 to December 1989 he worked in
private practice at the law firm of Thompson, Hine, and Flory.
Robert C. Collevechio, age 44, was appointed Vice President, Human
Resources, beginning September 1996. From 1986 until his recent appointment, he
was Director of Human Resources for Carrier Corporation's Residential Products
Group in Indianapolis, Indiana.
Myron E. Frye, age 57, has been Vice President of Purchasing since November
1992. From March 1983 to November 1992 he was President of Purchasing /
Materials Group, Inc. in Naperville, Illinois.
Michael R. Higgins, age 50, has been Treasurer since January 1987.
Officers of Amcast are elected at the Board of Directors' first meeting
following the annual meeting of shareholders and hold office until the first
meeting of the board following the next Annual Meeting of Shareholders.
8
<PAGE> 9
PART II
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ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- --------------------------------------------------------------
STOCKHOLDER MATTERS
-------------------
Amcast common stock is listed on the New York Stock Exchange, ticker
symbol AIZ. As of August 31, 1996, there were 8,618,491 of the Company's common
shares outstanding, and there were approximately 7,400 shareholders of Amcast's
common stock, including shareholders of record and the Company's estimate of
beneficial holders.
<TABLE>
<CAPTION>
Range of Stock
Prices
------------------------ Dividends
High Low Per Share
---- --- ---------
1996
- ----
<S> <C> <C> <C>
First Quarter $ 20 1/8 $ 16 7/8 $ .14
Second Quarter 19 3/8 17 1/2 .14
Third Quarter 20 1/4 16 3/8 .14
Fourth Quarter 20 1/4 17 .14
1995
- ----
First Quarter $ 23 3/8 $ 19 3/8 $ .13
Second Quarter 22 1/4 18 3/8 .13
Third Quarter 20 5/8 17 1/2 .13
Fourth Quarter 20 16 3/4 .14
</TABLE>
See Long-Term Debt and Credit Arrangement note in the Company's Annual
Report to Shareholders for the year ended August 31, 1996, Exhibit 13.1, page
187 herein for other information required by this item.
ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
See "Selected Data" of the Company's Annual Report to Shareholders for
the year ended August 31, 1996, Exhibit 13.1, page 178 herein.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
($ in thousands except per share amounts)
Results of Operations
- ---------------------
Net sales in 1996 were $343,934, up 4.8% from the prior year. Flow
Control Products sales rose 8.6% due to higher unit volumes, and Engineered
Components sales were slightly ahead of last year. In 1995, sales increased
20.7% to $328,231 from $271,856 in 1994, as higher unit volumes led to increased
sales of Engineered Components and escalating material costs drove higher
pricing in Flow Control.
9
<PAGE> 10
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (cont'd)
-----------------------------------
Results of Operations (cont'd)
- ---------------------
Gross profit increased to $70,596 in 1996 from $68,111 in 1995 due to
increased sales. In 1996, the gross profit percentage was 20.6%, down slightly
from 20.8% in the prior year, primarily due to a less favorable sales mix. In
1995, gross profit increased due to higher sales volume. The gross profit
percent declined in 1995 to 20.8% from 21.8% in 1994 as higher aluminum and
copper costs were passed through to customers. Material costs as a percentage of
sales increased, resulting in a lower gross profit percent.
Selling, general and administrative expenses increased in 1996 to support
higher sales volume and future business expansion in the automotive market. In
1995, selling, general and administrative expenses increased to $41,139
reflecting higher sales and marketing costs to support business expansion.
Interest expense increased to $2,348 in 1996 from $1,387 in 1995, as the
Company borrowed $50 million of senior debt. A large portion of the proceeds
financed plant construction and expansion and accordingly, the interest related
to such long-term projects was capitalized. Interest expense decreased in 1995
as long-term debt was retired. Although borrowing increased in 1995, the
proceeds also financed construction and expansion and the incremental interest
was capitalized.
Other expense increased in 1996 reflecting the Company's equity in the
operating losses of Casting Technology Company (CTC), a joint venture of Amcast
and Izumi Industries of Japan.
The effective tax rate in 1996 was 35.6%, compared to 34.2% in 1995. The
1996 rate is higher due to lower federal tax credits in the current year. The
1995 rate is lower than the statutory rate due to federal tax credits. The 1994
rate is lower than the statutory rate due to the conversion of CTC to a
partnership.
Flow Control Products
- ---------------------
Flow Control Products sales increased 8.6% in 1996 to $159,323 while
operating income of $25,236 equaled the prior year results. Although all
businesses in this segment experienced higher volumes in 1996, the primary
increase in sales came from shipments of brass fittings which sell at lower
margins. In 1995, sales increased 18.2% while operating profits rose 27.9% due
to higher operating efficiencies and the Company's strong market position, which
allowed for improved price realization.
Engineered Components
- ---------------------
In 1996, Engineered Components sales were up slightly from the prior year
as sales of aluminum wheels were higher. This increase was partially offset by
lower demand for other automotive components and volumes lost during a third
quarter labor strike at General Motors, a major customer. Operating profits
increased 5.2% to $9,323, primarily due to improved operating efficiencies. In
1995, sales increased 22.9% due to higher volumes of aluminum wheels and
automotive components, and higher pricing driven by escalating aluminum costs.
Increased unit volumes accounted for approximately one-third of the $33.8
million sales increase. The remainder of the increase resulted from higher
pricing, primarily driven by rising aluminum costs. Operating profits decreased
11.7% due to costs related to launching several new products which offset the
improvements in sales volume. New products in the Engineered Components segment
included, among others, air conditioning components, aluminum wheels, suspension
parts, and
10
<PAGE> 11
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (cont'd)
-----------------------------------
Engineered Components (cont'd)
- ---------------------
aircraft cylinder heads which incurred launch costs of approximately $4 million.
These costs were predominately scrap, and rework expenses and expenses related
to production inefficiencies.
Liquidity
- ---------
Net cash provided by operations was $33,638, $15,464 and $29,578 for the
years 1996, 1995, and 1994, respectively. In each of the three years, cash was
primarily provided by income from operations and depreciation. In 1996, accounts
receivable increased as a result of increased sales while inventories decreased
primarily due to the more efficient management of inventories. In 1995,
inventories and accounts receivables increased to support the increased sales
volume.
Net cash used by investing activities was $51,223, $42,743 and $8,848 for
the years 1996, 1995, and 1994, respectively. To support the business expansion
activities, investments were made in property, plant, and equipment, and Casting
Technology Company.
Net cash provided by financing activities was $21,712 and $13,151 for the
years 1996 and 1995, respectively. In 1996 and 1995, increased borrowings were
used to fund business expansion. In 1994, financing activities used cash of
$7,567 primarily to reduce long-term debt and pay cash dividends.
Capital Resources
- -----------------
Capital expenditures were $48,640, $41,724 and $15,596 in 1996, 1995, and
1994, respectively. In 1996 and 1995, expenditures were funded by additions to
long-term debt, cash provided by operations, and the prior year cash position.
In 1994, the expenditures were funded by cash provided by operations. At August
31, 1996, the Company had $9,624 of commitments for capital expenditures to be
made in 1997, primarily for the Engineered Components segment.
Book value per common share at August 31, 1996, was $15.80, up from
$14.52 the prior year. The ratio of long-term debt as a percent of capital
increased to 30.2% at August 31, 1996, from 19.3% at August 31, 1995. The 1996
increase is due to a private placement of $50 million in senior notes with two
insurance companies, which was used to fund business expansion.
The Company has $127.4 million of unused borrowing capacity under the
most restrictive debt covenant relating to a credit agreement which went into
effect June 7, 1995. One million preferred shares and 6.4 million common shares
are authorized and available for future issuance. Management believes the
Company has adequate financial resources to meet its future needs.
Contingencies. The Company, as is normal for the industry in which it operates,
is involved in certain legal proceedings and subject to certain claims and site
investigations that arise under the environmental laws and which have not been
finally adjudicated. To the extent possible, with the information available, the
Company regularly evaluates its responsibility with respect to environmental
proceedings. The factors considered in this evaluation are described in detail
in the Commitments and Contingencies note to the consolidated financial
statements. At August 31, 1996, the Company had accrued reserves of $2.3 million
for environmental liabilities. The Company is of the opinion that, in light of
its existing reserves, its liability in connection with environmental
proceedings should not have a material adverse effect on its financial condition
or results of operation. The Company is presently unaware of the existence of
any potential material environmental costs that are likely to occur in
connection with disposition of any of its property.
11
<PAGE> 12
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (cont'd)
-----------------------------------
Impact of Recently Issued Accounting Standards. In March 1995, the FASB issued
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. Statement 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. The
Company will adopt Statement 121 in the first quarter of fiscal 1997 and, based
on current circumstances, does not believe the effect of adoption will be
material to the financial position or results of operations.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
See "Financial Statements and Notes", together with the report thereon of
Ernst & Young LLP and "Quarterly Financial Data (Unaudited)" of the Company's
Annual Report to Shareholders for the year ended August 31, 1996, Exhibit 13.1,
pages 179 - 197 herein.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None
PART III
--------
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
The information required by this item relating to directors of the
Company is incorporated herein by reference to that part of the information
under "Election of Directors" beginning on page 2 of the Company's Proxy
Statement for its Annual Meeting of Shareholders to be held on December 17,
1996. Information concerning executive officers of the Company appears under
"Executive Officers of Registrant" at Part I, pages 7 and 8, of this Report.
ITEM 11 - EXECUTIVE COMPENSATION
- --------------------------------
The information required by this item is incorporated herein by reference
to "Executive Compensation" on pages 6 through 12 of the Company's Proxy
Statement for its Annual Meeting of Shareholders to be held on December 17,
1996.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- -------------------------------------------------------------
MANAGEMENT
----------
The information required by this item is incorporated herein by reference
to "Security Ownership of Directors, Nominees and Officers" on page 5 and
"Security Ownership of Certain Beneficial Owners" on page 14 of the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held on December
17, 1996.
12
<PAGE> 13
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
The information required by this item is contained on pages 9 and 12 in
the Company's Proxy Statement for its Annual Meeting of Shareholders to be held
on December 17, 1996, which is incorporated herein by reference.
PART IV
-------
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
- --------------------------------------------------------------
ON FORM 8-K
-----------
(a) Documents filed as part of this report.
1. Financial statements:
The following financial statements of Amcast Industrial Corporation
and subsidiaries, included in the Annual Report to Shareholders for
the year ended August 31, 1996, are incorporated by reference at
Item 8 of this report.
Consolidated Statements of Operations -
Years Ended August 31, 1996, 1995, and 1994.
Consolidated Statements of Financial Condition -
August 31, 1996 and 1995.
Consolidated Statements of Shareholders' Equity -
Years Ended August 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows -
Years Ended August 31, 1996, 1995, and 1994.
Notes to Consolidated Financial Statements
2. Consolidated financial statement schedule:
<TABLE>
<CAPTION>
Schedule Page Number
Number Description In This Report
------ ----------------------------------------------------------- --------------
<S> <C> <C>
II Valuation and qualifying accounts and reserves - August 31,
1996, 1995, and 1994 15
</TABLE>
All other financial statement schedules are omitted because they
are not applicable or because the required information is shown in
the financial statements and notes.
3. Exhibits - See Index to Exhibits (page 16 hereof).
4. Form 8-K - During the quarter ended August 31, 1996, the Company
did not file any reports on Form 8-K.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 25th day of November 1996.
AMCAST INDUSTRIAL CORPORATION
(Registrant)
By /s/John H. Shuey
----------------
John H. Shuey
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------- ------------------------------ ------------------
<S> <C> <C>
/s/John H. Shuey President, Chief Executive November 25, 1996
- ---------------------- Officer, Director
John H. Shuey (Principal Executive Officer)
/s/Douglas D. Watts Vice President, Finance November 25, 1996
- ------------------- (Principal Financial Officer)
Douglas D. Watts
/s/William L. Bown Vice President and Controller November 25, 1996
- ------------------------ (Principal Accounting Officer)
William L. Bown
*Leo W. Ladehoff Chairman of the Board,
Director November 25, 1996
*James K. Baker Director November 25, 1996
*Walter E. Blankley Director November 25, 1996
*Peter H. Forster Director November 25, 1996
*Ivan W. Gorr Director November 25, 1996
*Earl T. O'Loughlin Director November 25, 1996
*William G. Roth Director November 25, 1996
*R. William Van Sant Director November 25, 1996
<FN>
*The undersigned John H. Shuey, by signing his name hereto, does sign and
execute this annual report on Form 10-K on behalf of each of the above-named
directors of the registrant pursuant to powers of attorney executed by each such
director and filed with the Securities and Exchange Commission as an exhibit to
this report.
</TABLE>
By /s/John H. Shuey
---------------------
John H. Shuey
Attorney in Fact
14
<PAGE> 15
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
AMCAST INDUSTRIAL CORPORATION AND SUBSIDIARIES
(Thousands of dollars)
<TABLE>
<CAPTION>
- ---------------------------------------- ----------------- --------------------------------- --------------- -----------------
Col. A Col. B Col. C Col. D Col. E
- ---------------------------------------- ----------------- --------------------------------- --------------- -----------------
Additions
---------------------------------
Balance Charged to Charged to
Beginning Costs and Other Balance at
Description of Period Expenses Accounts Deductions End of Period
- ---------------------------------------- ----------------- --------------- ----------------- --------------- ------------------
<S> <C> <C> <C> <C>
Deducted From Asset Accounts
Reserves for unrealized
losses on properties and other
assets held for sale:
Year ended August 31, 1996 $ 3,071 $ 3,071
Year ended August 31, 1995 $ 3,073 $ 1,136(2) $ (1,138)(3) $ 3,071
Year ended August 31, 1994 $ 11,370 $ (8,297)(1) $ 3,073
<FN>
(1) Includes loss on the sale of assets ($2.2 million) and a revised estimate of
operating losses to disposal ($6.1 million) of the discontinued operations.
(2) Revised estimate of unrealized loss on sale of assets.
(3) Loss on sale of assets.
</TABLE>
15
<PAGE> 16
INDEX OF EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------ ------------------------------------------ -------------
<S> <C> <C>
3 ARTICLES OF INCORPORATION AND BY-LAWS:
3.1 Articles of Incorporation of Amcast Industrial
Corporation. 21
3.2 Code of Regulations of Amcast Industrial
Corporation. 36
4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY
HOLDERS, INCLUDING INDENTURES:
4.1 $60,000,000 amended and restated Revolving Credit
Agreement between Amcast Industrial Corporation and Star
Bank, The First National Bank of Chicago, Bank One,
Dayton, NA, Society National Bank, and National Bank of
Detroit dated June 7, 1995 - incorporated by reference
from Form 10-K for the year ended August 31, 1995.
4.2 Loan Agreement between the City of Elkhart, Indiana,
and Elkhart Products Corporation, dated as of February
1, 1988, for $2,050,000, Economic Development
Revenue Refunding Bonds, Series 1988. +
4.3 $10,000,000 Senior Note Agreement between
Amcast Industrial Corporation and Principal
Mutual Life Insurance Company dated
September 1, 1989, as amended. 41
4.4 Amendment Agreement, dated July 24, 1995, to the
$10,000,000 Senior Note Agreement between Amcast
Industrial Corporation and Principal Mutual Life
Insurance Company, dated September 1, 1989 -
incorporated by reference from Form 10-K for the year
ended August 31, 1995.
4.5 Loan Agreement by and between the City of Fayetteville,
Arkansas, and Amcast Industrial Corporation, dated as of
December 1, 1991, for $5,050,000 City of Fayetteville,
Arkansas, variable/fixed rate demand Industrial
Development Revenue Refunding Bonds, Series 1992. +
4.6 Lease Agreement between PNC Leasing Corp., lessor, and
Amcast Industrial Corporation, lessee, dated July 15,
1992 incorporated by reference from Form 10-K for the
year ended August 31, 1993.
</TABLE>
16
<PAGE> 17
INDEX TO EXHIBITS (cont'd)
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------ --------------------------------------------------------- -------------
<S> <C> <C>
4.7 Lease Agreement between PNC Leasing Corp., lessor,
and Amcast Industrial Corporation, lessee, dated
August 8, 1996. +
4.8 Amcast guarantee of $15,000,000 of the $25,000,000 Credit
and Intercreditor Agreement between Casting Technology
Company (a joint venture partnership between Amcast
Industrial Corporation and Izumi Industries, Ltd.) and
National Bank of Detroit and The Asahi Bank,
Ltd., and a copy of the Creditor and Intercreditor
Agreement, dated July 28, 1995 - incorporated by
reference from Form 10-K for the year ended August 31,1995.
4.9 Amendment Agreement, dated January 5, 1996, to the
$25,000,000 Credit and Intercreditor Agreement between
Casting Technology Company and National Bank of
Detroit and The Asahi Bank, Ltd., dated July 28, 1995. 82
4.10 Amendment Agreement, dated May 31,1996, to the
$25,000,000 Credit and Intercreditor Agreement between
Casting Technology Company and National Bank of Detroit
and The Asahi Bank, Ltd., dated July 28,1995, and amended
Guarantee Agreement which increased Amcast's guarantee
to $21,000,000 of the revised credit amount of $35,000,000. 85
4.11 $50,000,000 Note Agreement between Amcast Industrial
Corporation and Principal Mutual Life Insurance Company
and The Northern Mutual Life Insurance Company, dated
November 1, 1995 - incorporated by reference from Form
. 10-K for the year ended August 31,1995.
10 MATERIAL CONTRACTS:
10.1 Amcast Industrial Corporation Employee Share-
builder Plan effective August 26, 1987. 93
10.2 Amcast Industrial Corporation Annual Incentive
Plan effective September 1, 1982. 103
10.3 Deferred Compensation Agreement for Directors
of Amcast Industrial Corporation. 115
10.4 Executive Agreement between Amcast Industrial
Corporation and Leo W. Ladehoff, Chairman of the Board
and former Chief Executive Officer of the Company,
dated March 3, 1995 incorporated by reference from Form
10-Q for the quarter ended May 28, 1995.
</TABLE>
17
<PAGE> 18
INDEX TO EXHIBITS (cont'd)
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------ --------------------------------------------------- -------------
<S> <C> <C>
10.5 Indemnification Agreement for Directors of
Amcast Industrial Corporation, effective
October 30, 1987. 120
10.6 First Master Benefit Trust Agreement between
Amcast Industrial Corporation and Bank One,
Dayton, NA, effective March 11, 1988. 127
10.7 Amcast Industrial Corporation 1989 Stock
Incentive Plan, effective October 19, 1988 -
as amended, effective December 9, 1992 -
incorporated by reference from Form 10-Q
for the quarter ended February 28, 1994.
10.8 Amcast Industrial Corporation 1989 Director
Stock Option Plan, effective October 19, 1988. 150
10.9 Amcast Industrial Corporation Change of Control
Agreements effective September 1, 1996. 164
10.10 Amcast Industrial Corporation Long-Term Incentive Plan
effective September 1, 1991 - incorporated by reference
from Form 10-K for the year ended August 31, 1992.
10.11 Amcast Industrial Corporation Nonqualified
Supplementary Benefit Plan, effective May 29, 1991 -
incorporated by reference from Form 10-K for the year
ended August 31, 1994.
10.12 Change of Control Agreement between Amcast Industrial
Corporation and John H. Shuey, Chief Executive Officer,
effective August 14, 1995 - incorporated by reference
from Form 10-K for the year ended August 31,1995.
13 ANNUAL REPORT TO SECURITY HOLDERS:
13.1 Amcast Industrial Corporation Annual Report to
Shareholders for year ended August 31, 1996. Those
portions of the Annual Report as are specifically
referenced under Parts I, II, and IV of
this report are filed herein. 178
</TABLE>
18
<PAGE> 19
INDEX TO EXHIBITS (cont'd)
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------ -------------------------------------------------------------- -------------
<S> <C> <C>
21 SUBSIDIARIES OF THE REGISTRANT:
Amcast Industrial Corporation has ten wholly-owned
subsidiaries which are included in the consolidated financial
statements of the Company. Information regarding these
subsidiaries is set forth below:
Amcast Industrial Limited
Jurisdiction of Incorporation: Ontario, Canada
Name Under Which Business Is Done: Amcast Industrial Limited
Elkhart Products Corporation
Jurisdiction of Incorporation: Indiana
Name Under Which Business Is Done: Elkhart Products Corporation
WheelTek, Inc.
Jurisdiction of Incorporation: Indiana
Name Under Which Business Is Done: WheelTek, Inc. and Amcast
Automotive Wheel Division
Amcast Precision Products, Inc.
Jurisdiction of Incorporation: California
Name Under Which Business Is Done: Amcast Precision Products, Inc.
Amcast Investment Services Corporation
Jurisdiction of Incorporation: Delaware
Name Under Which Business Is Done: Amcast Investment Services
Corporation
Amcast Industrial Financial Services, Inc.
Jurisdiction of Incorporation: Ohio
Name Under Which Business is Done: Amcast Industrial
Financial Services, Inc.
Amcast Industrial Sales Corporation
Jurisdiction of Incorporation: U.S. Virgin Islands
Name Under Which Business is Done: Amcast Industrial Sales Corporation
Amcast Automotive, Inc.
Jurisdiction of Incorporation: Michigan
Name Under Which Business is Done: Amcast Automotive, Inc.
Flagg Brass, Inc.
Jurisdiction of Incorporation: Ohio
Name Under Which Business is Done: Flagg Brass, Inc.
Amcast Casting Technologies, Inc.
Jurisdiction of Incorporation: Indiana
Name Under Which Business is Done: Amcast Casting Technologies, Inc.
</TABLE>
19
<PAGE> 20
<TABLE>
<CAPTION>
INDEX TO EXHIBITS (cont'd)
-----------------
Exhibit Located at
Number Description Numbered Page
- ------ ------------------------------------------------------------- -------------
<S> <C> <C>
23 CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Ernst & Young LLP dated
November 22, 1996, with respect to the
incorporation by reference of
their report dated October 8, 1996 into this
Annual Report (Form 10-K), the inclusion of the
financial statement schedule listed in Item 14(a)(2)
to the financial statements covered by their report
dated October 8, 1996, and material incorporated by
reference into Amcast Industrial Corporation's
Post-Effective Amendment No. 1 to Registration
Statement No. 33-2876 on Form S-8, on Registration
Statements on Form S-8 (Registration Nos. 33-18690,
33-28080, 33-28084, 33-38176, 33-61290 and 333-00133),
and on Registration Statement No. 33-28075 on
Form S-3 198
24 POWER OF ATTORNEY:
24.1 Powers of attorney of persons who are indicated
as having executed this Annual Report Form 10-K
on behalf of another. 199
27 FINANCIAL DATA SCHEDULE:
27.1 Article 5 of Regulation S-X Financial Data Schedule
Form 10-K for the year ended August 31, 1996 207
<FN>
+ Indicates that the document relates to a class of indebtedness that does not
exceed 10% of the total consolidated assets of the Company and that the
Company will furnish a copy of the document to the Commission upon its
request.
</TABLE>
20
<PAGE> 1
Exhibit 3.1
CERTIFICATE OF AMENDED
ARTICLES OF INCORPORATION
OF
AMCAST INDUSTRIAL CORPORATION
-----------------------------
The undersigned, Leo W. Ladehoff and Thomas G. Amato, being respectively,
the Chief Executive Officer and Secretary of AMCAST INDUSTRIAL CORPORATION (the
"Corporation"), a corporation for profit organized under the Ohio General
Corporation Law, with its principal office located in the City of Kettering,
Montgomery County, Ohio, do hereby certify that a meeting of the directors of
the Corporation was duly called and held on April 23, 1987, at which meeting a
quorum of the directors was present and acting throughout, and that at such
meeting, the directors unanimously adopted a resolution adopting new Amended
Articles of Incorporation of the Corporation to supercede and consolidate the
original Articles of Incorporation of the Corporation and all amendments thereto
as follows:
"FIRST. The name of said Corporation shall be Amcast Industrial
Corporation.
SECOND. The purpose or purposes of the Corporation shall be:
(a) To manufacture, purchase, lease, or otherwise acquire and to hold,
own, sell, lease, or dispose of, trade in or deal in castings and other
allied, similar or related products of every kind and description.
(b) To engage in any lawful act or activities for which corporations
may be formed under Section 1701.01 to 1701.98, inclusive, of the Ohio
Revised Code.
THIRD. The place in the State of Ohio where the Corporation's
principal office shall be located is Kettering, Montgomery County, Ohio.
FOURTH. The maximum number of shares which the Corporation is
authorized to have outstanding is 16,000,000 shares which shall be
classified as follows:
1,000,000 Preferred Shares without par value (hereinafter called
"Preferred Shares"); and
21
<PAGE> 2
15,000,000 Common Shares without par value (hereinafter called
"Common Shares").
Section 1. The express terms and provisions of the Preferred Shares
are as follows:
1.1 Preferred Shares may be issued in series from time to time. Within
the limitations and restrictions set forth in this Article FOURTH, the
Board of Directors is expressly authorized, at one time or from time to
time, to adopt amendments to the Articles of Incorporation in respect of
any authorized and unissued Preferred Shares to fix or alter the division
of such shares into series, the designation and number of shares of each
series, the dividend rates, redemption rights, redemption prices,
liquidation prices, sinking fund requirements, conversion rights, and
restrictions on issuance of shares of the same series or of any other class
or series. The express terms and provisions of Preferred Shares of
different series shall be identical except that there may be variations in
respect of any or all of the particulars hereinbefore set forth in this
subsection 1.1. In case the stated dividends or the amounts payable on
dissolution, liquidation, or sale of assets of the Corporation are not paid
in full, all Preferred Shares of all series shall participate ratably in
the payment of dividends, including accumulations, if any, in proportion to
the sums which would be payable thereon if all dividends thereon were paid
in full, and, in any distribution of assets other than by way of dividends,
in proportion to the same which would be payable on such distribution if
all sums payable thereon to holders of Preferred Shares were discharged in
full.
1.2 The holders of Preferred Shares shall be entitled to receive when
and as declared out of the surplus of the Corporation, subject to any
limitations prescribed by statute, cash dividends at the respective rates
and on the respective dates fixed by the Board of Directors for the shares
of the several series of Preferred Shares, and no more. Dividends on each
Preferred Share shall be cumulative from the date fixed therefor by the
Board of Directors.
1.3 Except as may be otherwise expressly provided in this Article
FOURTH, the Corporation
22
<PAGE> 3
shall have the right to redeem the Preferred Shares of any one or more
series at any time, either in whole or in such portions, as from time to
time, the Board of Directors may determine, upon the payment to the
respective holders thereof of the "General Redemption Price" thereof. The
General Redemption Price for shares of each series shall be an amount equal
to the sum of (a) the redemption price fixed by the Board of Directors for
the shares of such series prior to the initial issuance of the first shares
of such series; and (b) an amount equivalent to all accumulated and unpaid
dividends on the shares to be redeemed to the date fixed for redemption
(hereinafter referred to as the "Redemption Date"), whether or not such
dividends shall have been earned or declared. In lieu of such payment the
Corporation may deposit the General Redemption Price of the shares to be
redeemed on or prior to the Redemption Date with such responsible bank or
trust company as may be designated by the Board of Directors, in trust, for
payment on or after the date of such deposit (without awaiting the
Redemption Date) to the holders of Preferred Shares then to be redeemed. If
less than the whole amount of outstanding Preferred Shares of any
particular series shall be redeemed at any time, the shares thereof to be
redeemed shall be selected by lot.
Notice of any such redemption, in whole or in part, and of any such
deposit made or to be made of such General Redemption Price, shall be
mailed to each holder of Preferred Shares so to be redeemed, at his address
registered with the Corporation, not less than thirty days prior to the
Redemption Date, and, if less than all of the said shares owned by such
shareholders are to be redeemed, the notice shall specify the number of
shares thereof which are to be redeemed. Such notice having been so given,
or irrevocable written authority to the depositary having been given at the
time of making the deposit provided for herein forthwith to give such
notice, all rights of the respective holders of the said shares as
shareholders of the Corporation by reason of the ownership of such shares,
except the right to receive the General Redemption Price of such shares
upon presentation and surrender of their respective certificates
representing the said shares, shall cease from and after the Redemption
Date (unless default shall be made by the Corporation in providing monies
for the payment of the General Redemption Price), or, if
23
<PAGE> 4
the General Redemption Price shall have been deposited on or prior to the
Redemption Date as above permitted, from and after the date of such
deposit; provided, however, that in lieu of the right to receive the
General Redemption Price, any rights of conversion or exchange may be
exercised up to the close of business on the Redemption Date. If after such
deposit any Preferred Shares so called shall be so converted or exchanged,
the amount theretofore deposited with the depositary for the redemption
thereof shall forthwith be paid over by it to the Corporation. Any other
monies so deposited which shall remain unclaimed by the holders of
Preferred Shares so called for redemption at the end of two years after the
Redemption Date shall be paid by such depositary to the Corporation, after
which the holders of such Preferred Shares shall look only to the
Corporation for payment of the General Redemption Price thereof, without
interest.
1.4 Upon the dissolution, liquidation or sale of all or substantially
all the assets of the Corporation, the holders of Preferred Shares shall be
entitled to receive the following sums, before any payment shall be made to
the holders of Common Shares with respect to payment upon dissolution,
liquidation or sale of assets:
(a) in case of any involuntary dissolution or liquidation or forced
sale of all or substantially all the assets of the Corporation,
each Preferred Share of each series shall be entitled to receive
the amount fixed for such contingency by the Board of Directors
for the shares of such series prior to the issuance of the first
shares of such series, together with a sum, whether or not earned
or declared, equivalent to all accumulated and unpaid dividends
thereon to the date of such payment; or
(b) in case of any voluntary dissolution or liquidation or voluntary
sale of all or substantially all the assets of the Corporation,
each Preferred Share of each series shall be entitled to receive
the amount fixed for such contingency by the Board of
24
<PAGE> 5
Directors for the shares of such series prior to the initial
issuance of the first shares of such series, together with a sum,
whether or not earned or declared, equivalent to all accumulated
and unpaid dividends thereon to the date of such payment.
After all sums payable on the Preferred Shares as herein provided upon
a particular contingency shall have been paid in full, but not prior
thereto, the Common Shares shall be entitled to payment of all other sums
then distributable. For the purposes of this subsection 1.4, a
consolidation or merger of the Corporation with or into any other
corporation, or a consolidation or merger of any other corporation with or
into the Corporation shall not be deemed a dissolution, liquidation or sale
of assets.
1.5 The holders of Preferred Shares shall be entitled to one vote for
each Preferred Share held by them respectively.
1.6 So long as any of the Preferred Shares shall remain outstanding,
no dividend (other than dividends payable in Common Shares) shall be paid,
nor shall any distribution (by purchase, redemption, payment to any sinking
fund, or otherwise, other than stock splits) be made, on any of the Common
Shares unless:
(a) all dividends on all outstanding Preferred Shares shall have been
paid and full dividends thereon for the then current quarterly
dividend period shall have been declared and a sum sufficient for
the payment thereof set apart therefor; and
(b) the Corporation shall not be in arrears in respect of any sinking
fund obligation in respect of any series of Preferred Shares.
1.7 Preferred Shares acquired by the Corporation through the exercise
by the holders thereof of any conversion privilege shall not be reissued
except as hereinafter provided. Such shares and any other Preferred Shares
acquired otherwise than through the operation of any sinking fund and not
used to reduce the amount of any
25
<PAGE> 6
sinking fund installment shall, upon compliance with such provisions of law
relating to the retirement of shares as may be applicable, have the status
of authorized and unissued Preferred Shares which are unclassified into any
series. Preferred Shares acquired by the Corporation through the operation
of any sinking fund or which have been used to reduce the amount of any
sinking fund installment shall be cancelled and not reissued, and the
Corporation shall from time to time take appropriate corporate action to
reduce the authorized number of Preferred Shares accordingly.
Section 2. The express terms and provisions of the Common Shares are
as follows:
2.1 The rights and preferences of the Common Shares shall be subject
in all respects to the rights and preferences of the Preferred Shares in
the manner and to the extent provided in this Article FOURTH.
2.2 The Common Shares shall rank junior to the Preferred Shares with
respect to the payment of dividends. Out of the assets of the Corporation
available for dividends remaining after there shall have been paid or
declared and set apart for payment full dividends on the Preferred Shares,
and subject to the restrictions or limitations contained in the express
terms and provisions of any series of Preferred Shares, dividends may be
declared and paid upon the Common Shares, but only when and as determined
by the Board of Directors.
2.3 The Common Shares shall rank junior to the Preferred Shares with
respect to payment upon dissolution, liquidation or sale of the assets of
the Corporation. Upon the dissolution, liquidation or sale of all or
substantially all the assets of the Corporation, after there shall have
been paid to or set apart for holders of the Preferred Shares the full
preferential amounts to which they are entitled, the holders of Common
Shares shall be entitled to receive pro rata all of the remaining assets of
the Corporation available for distribution to its shareholders.
2.4 The holders of Common Shares shall be entitled to one vote for
each Common Share held by them respectively.
26
<PAGE> 7
Section 3. No shareholder of the Corporation shall have the right to
vote cumulatively in the election of directors of the Corporation.
FIFTH. The Corporation, through its Board of Directors, shall have the
right and power to purchase any of its outstanding shares of stock at such
price and upon such terms as may be agreed upon between the Corporation and
the selling shareholder or shareholders.
SIXTH. Notwithstanding any provision of the Ohio Revised Code now or
hereafter in force providing for any action for the vote, consent, waiver,
or release of the holders of shares entitling them to exercise two-thirds,
or any other proportion, of the voting power of the Corporation or of any
class or classes of shares thereof, such action, unless otherwise expressly
required by statute or by these Amended Articles of Incorporation, may be
taken by the vote, consent, waiver, or release of the holders of shares
entitling them to exercise a majority of the voting power of the
Corporation or of such class or classes .
SEVENTH. Notwithstanding the foregoing, the affirmative vote of the
holders of shares entitling them to exercise at least four-fifths of the
voting power of the Corporation shall be required:
(a) To approve (i) the sale, exchange, lease, transfer, or other
disposition by the Corporation of all, or substantially all, of
its assets or business to a related corporation or an affiliate
of a related corporation, or (ii) the consolidation of the
Corporation with or its merger into a related corporation or an
affiliate of a related corporation, or (iii) the merger into the
Corporation of a related corporation, or (iv) a combination or
majority share acquisition in which the Corporation is the
acquiring corporation and its voting shares are issued or
transferred to a related corporation or an affiliate of a related
corporation or to shareholders of a related corporation or an
affiliate of a related corporation; or
27
<PAGE> 8
(b) to approve any agreement, contract, or other arrangement with a
related corporation providing for any of the transactions
described in subparagraph (a) above.
For the purpose of this Article SEVENTH, (i) a "related corporation"
in respect of a given transaction shall be any corporation which, together
with its affiliates and associated persons, owns of record or beneficially,
directly or indirectly, more than 5% of the shares of any class of
outstanding shares of the Corporation entitled to vote upon such
transaction, as of the record date used to determine the shareholders of
the Corporation entitled to vote upon such transaction; (ii) an "affiliate"
of a related corporation shall be any individual, joint venture, trust,
partnership, or corporation which, directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with the related corporation; (iii) an "associated person" of a
related corporation shall be any officer or director or any beneficial
owner, directly or indirectly, of 10% or more of any class of equity
security of such related corporation or any of its affiliates; (iv) the
terms "combination", or "majority share acquisition" and "acquiring
corporation" shall have the same meaning as that contained in Section 1701
of the Ohio General Corporation Law or any similar provision hereafter
enacted.
The determination of the Board of Directors of the Corporation, based
on information known to the Board of Directors and made in good faith,
shall be conclusive as to whether any corporation is a related corporation
as defined in this Article SEVENTH.
The provisions of this Article SEVENTH shall not be applicable to (i)
any merger or consolidation of the Corporation with or into any other
corporation, or any sale or lease of all, or substantially all, of the
assets of the Corporation to, or any sale or lease to the Corporation, or
any subsidiary thereof, in exchange for securities of the Corporation of
any assets of, any corporation if the Board of Directors of the Corporation
shall by resolution have approved a memorandum of understanding with such
other corporation with
28
<PAGE> 9
respect to and substantially consistent with such transaction prior to the
time that such other corporation shall have become a holder of more than
20% of the outstanding shares of stock of the Corporation entitled to vote
in elections of Directors; or (ii) any merger or consolidation of the
Corporation with, or any sale or lease to the Corporation, or any
subsidiary thereof, of any of the assets of, any corporation of which a
majority of the outstanding shares of all classes of stock entitled to vote
in elections of Directors is owned of record or beneficially by the
Corporation and its subsidiaries.
No amendment to the Articles of Incorporation of the Corporation shall
amend, alter, change, or repeal any of the provisions of this Article
SEVENTH, unless the amendment effecting such amendment, alteration, change,
or repeal shall receive the affirmative vote or consent of the holders of
shares entitling them to exercise at least four-fifths of the voting power
of the Corporation.
EIGHTH. No holder of shares of the Corporation of any class, as such,
shall have any preemptive right to purchase or subscribe for shares of the
Corporation, of any class, or other securities of the Corporation, of any
class, whether now or hereafter authorized.
IN WITNESS WHEREOF, the undersigned, being respectively the Chief Executive
Officer and Secretary of the Corporation, acting for and on behalf of the
Corporation, have executed this Certificate and caused the seal of the
Corporation to be affixed hereto this 12th day of June, 1987.
/s/ Leo W. Ladehoff
--------------------------------
Leo W. Ladehoff, Chief Executive
/s/ Thomas G. Amato
--------------------------------
Thomas G. Amato, Secretary
(SEAL)
29
<PAGE> 10
CERTIFICATE OF AMENDMENT TO
AMENDED ARTICLES OF INCORPORATION
OF
AMCAST INDUSTRIAL CORPORATION
-----------------------------
The undersigned, Leo W. Ladehoff and Thomas G. Amato, being respectively,
the Chairman of the Board and the Secretary of AMCAST INDUSTRIAL CORPORATION
(the "Corporation"), an Ohio corporation, do hereby certify that at a meeting of
the directors of the Corporation duly called and held on February 24, 1988, the
following resolution was unanimously adopted:
NOW, THEREFORE BE IT RESOLVED, that pursuant to the authority vested in the
Board of Directors in accordance with the provisions of Article Fourth of its
Amended Articles of Incorporation, such Article Fourth hereby is amended to set
forth the designation and number of a new series of Preferred Shares and the
powers, preferences, and relative, participating, optional, and other special
rights and the qualifications, limitations, or restrictions thereof, as follows:
Section 4. Series A Preferred Shares.
4.1. DESIGNATION AND AMOUNT. There shall be a series of the Preferred
Shares of the Corporation which shall be designated as the "Series A Preferred
Shares," without par value, and the number of such shares shall be 300,000.
4.2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any shares
of any classes of preferred shares of the Corporation ranking prior and superior
to the Preferred Shares with respect to dividends, the holders of the Preferred
Shares in preference to the holders of Common Shares of the Corporation (the
"Common Shares"), and any other junior shares, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of March, June, September, and December in each year (or, in each case, if not a
date on which the Corporation is open for business, the next date on which the
Corporation is so open) (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
30
<PAGE> 11
after the first issuance of a Preferred Share or fraction thereof, in an amount
per share (rounded to the nearest cent) equal to the greater of (a) $11.00, or
(b) subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in Common Shares or a subdivision of
the outstanding Common Shares (by reclassification or otherwise), declared on
the Common Shares, since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a Preferred Share. In the event the
Corporation at any time after February 24, 1988 (the "Rights Declaration Date")
(i) declares any dividend on Common Shares payable in Common Shares, (ii)
subdivides the outstanding Common Shares, or (iii) combines the outstanding
Common Shares into a smaller number of shares (all of which are hereinafter
referred to as "Common Share Adjustments"), then in each such case the amount to
which holders of the Preferred Shares were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event (such fraction is hereinafter referred to as the "Adjustment
Number").
(B) The Corporation shall declare a dividend or distribution on the
Preferred Shares as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Shares (other than a dividend
payable in Common Shares); provided that, in the event no dividend or
distribution shall have been declared on the Common Shares during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $11.00 per share on the Preferred Shares
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on the outstanding
Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such Preferred Shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly
31
<PAGE> 12
Dividend Payment Date or is a date after the record date for the determination
of holders of Preferred Shares entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of
Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
4.3. VOTING RIGHTS. The holders of the Preferred Shares shall have the
following voting rights:
(A) Each holder of a Preferred Share shall have one vote on all matters
submitted to a vote of the shareholders of the Corporation.
(B) Except as otherwise provided herein or by law, the holders of the
Preferred Shares and the holders of Common Shares shall vote together as one
class on all matters submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, holders of the Preferred Shares shall have
no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Shares as set forth
herein) for taking any corporate action.
4.4. CERTAIN RESTRICTIONS.
(A) So long as any of the Preferred Shares remain outstanding, no dividend
(other than dividends payable in Common Shares) shall be paid, nor shall any
distribution (by purchase, redemption, payment to any sinking fund, or
otherwise, other than stock splits) be made, on any of the Common Shares unless
all dividends on all outstanding Preferred Shares shall have been paid and full
dividends thereon for the then current quarterly dividend period shall have been
declared and a sum sufficient for the payment thereof set apart therefor.
32
<PAGE> 13
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of the Corporation
unless the Corporation could, under paragraph (A) of this Section 4.4, purchase
or otherwise acquire such shares at such time and in such manner.
4.5. REACQUIRED SHARES. Any Preferred Shares purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. Unless otherwise prohibited by
the Corporation's Amended Articles of Incorporation, all such shares shall upon
their cancellation become authorized but unissued Preferred Shares and may be
reissued as part of a new series of Preferred Shares, subject to the conditions
and restrictions on issuance set forth herein.
4.6. LIQUIDATION, DISSOLUTION, OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution, or winding
up of the Corporation, no distribution shall be made to the holders of shares
ranking junior (either as to dividends or upon liquidation, dissolution, or
winding up) to the Preferred Shares unless, prior thereto, the holders of
Preferred Shares shall have received $4,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Liquidation Preference"). Following the
payment of the full amount of the Liquidation Preference, no additional
distributions shall be made to the holders of Preferred Shares unless, prior
thereto, the holders of Common Shares shall have received an amount per share
(the "Common Payment") equal to the quotient obtained by dividing (i) the
Liquidation Preference by (ii) 100 (subject to the provision for adjustment set
forth in subparagraph C). Following the payment of the full amount of the
Liquidation Preference and the Common Payment in respect of all outstanding
Preferred Shares and Common Shares, respectively, holders of Preferred Shares
and holders of Common Shares shall receive their ratable and proportionate share
of the remaining assets to be distributed in the ratio of 100 to 1 with respect
to such Preferred Shares and Common Shares, on a per share basis, respectively
(subject to the provision for adjustment set forth in subparagraph C).
(B) In the event there are not sufficient assets available to permit
payment in full of the Liquidation Preference and the liquidation preferences of
all other classes of preferred shares, if any, which rank on a parity with the
Preferred Shares, then such remaining assets shall
33
<PAGE> 1
Exhibit 3.2
as amended to
July 29, 1987
AMCAST INDUSTRIAL CORPORATION
CODE OF REGULATIONS
-------------------
ARTICLE I
---------
SECTION 1. The Annual Meeting of the Stockholders of the Corporation for
the purposes of electing directors and transacting such other business as may
properly come before the meeting, shall be held at the principal office of the
Corporation or at such other place either within or without the State of Ohio as
may be specified in the notice of the meeting, on such date during the fourth or
fifth month following the end of each fiscal year of the Corporation as shall be
determined by the Board of Directors or, in the absence of such determination,
on the third Wednesday of December of each year.
SECTION 2. Special meetings may be held at the call of the president or a
majority of the Board of Directors. A written or printed notice of each annual
or special meeting of stockholders stating the time, place and purpose or
purposes thereof shall be given either by personal delivery or by mail to each
stockholder of record entitled to notice thereof, not more than sixty (60) days
nor less than seven (7) days before any such meeting.
SECTION 3. At any Stockholders' Meeting, a majority of the stock must be
represented to constitute a quorum for the transaction of business, but less
than quorum may adjourn to a future day.
SECTION 4. Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation.
Nominations of persons for election as directors of the Corporation may be made
at a meeting of shareholders (i) by or at the direction of the Board of
Directors or by any committee or person appointed by the Board of Directors or
(ii) by any shareholder of the Corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedure set forth in
this paragraph. Any nomination other than those governed by clause (i) of the
preceding sentence shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be
36
<PAGE> 2
timely, a shareholder's notice shall be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 50 days nor
more than 75 days prior to the meeting; provided, however, that in the event
that less than 60 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholders to be
timely must be so received not later than the close of business on the 10th day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. Such shareholder's notice to the Secretary
shall set forth (a) as to each person whom the shareholder proposes to nominate
for election as a direction (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of any such shares of the Corporation or any
subsidiary of the Corporation which are beneficially owned by such person and
(iv) any other information relating to such person that is required to be
disclosed in solicitations of proxies for election for directors pursuant to any
then existing rule or regulation promulgated under the Securities Exchange Act
of 1934, as amended; and (b) as to the shareholder giving the notice (i) the
name and record address of such shareholder and (ii) the class and number of
shares of the Corporation which are beneficially owned by such shareholder. The
Corporation may require any proposed nominee to furnish such other information
as may reasonably be required by the Corporation to determine the eligibility of
such proposed nominee to serve as a director. No person shall be eligible for
election as a director unless nominated as set forth herein.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
This Section 4 of Article I may not be altered, repealed, amended or
superseded, and no amendment to this Code of Regulations which is inconsistent
therewith may be adopted without the affirmative vote of holders of record of
shares entitling them to exercise at least 80% of the voting power of the
Corporation.
ARTICLE II
----------
SECTION 1. The business of the Corporation shall be managed by a Board of
nine directors, which shall be
37
<PAGE> 3
divided into three classes, each consisting of three directors. A separate
election shall be held for each class of directors at any meeting of
stockholders at which a member or members of more than one class of directors is
being elected. At each annual election, the directors elected to the class whose
term shall expire in that year shall hold office for a term of three years and
until their respective successors are elected.
SECTION 2. The directors shall elect all the officers of the Corporation
and fix their salaries. In the event of the occurrence of any vacancy or
vacancies in the Board of Directors, however caused, the remaining directors,
though less than a majority of the whole authorized number of directors, may, by
the vote of a majority of their number, fill any such vacancy for the balance of
the unexpired term.
SECTION 3. The regular meeting of the Board of Directors for the election
of officers shall be held immediately after adjournment of each annual meeting
of the stockholders. Other meetings of the Board of Directors shall be held at
such time and place as the Board may designate .
SECTION 4. The Board of Directors may appoint an Executive Committee of not
less than three or more than five of its members, which shall have charge of the
business of the Company between the meetings of the Board, and may also appoint
from time to time, such other committees, standing or special, as it shall deem
best, to consist of not less than three of its members, and may delegate to such
committees such powers and authority as the Board shall deem proper, and revoke
appointments of such committees or restrict or modify their powers.
SECTION 5. A quorum of the Board of Directors at any organization, regular,
or special meeting shall consist of a majority of the directors then in office,
except that a majority of the directors present at a meeting duly held, whether
or not a quorum is present may adjourn the meeting from time to time. At each
meeting of the Board of Directors at which a quorum is present, all questions
and business shall be determined by a majority vote of those present except as
in this Code of Regulations otherwise expressly provided.
SECTION 6. The affirmative vote of the holders of shares entitling them to
exercise at least four-fifths of the voting power of the Corporation entitled to
elect
38
<PAGE> 4
directors shall be required to remove all the directors, or all directors of a
particular class, or any individual director and to elect directors in place of
those removed, provided that unless all directors or all directors of a
particular class are removed, no individual director shall be removed if a
sufficient number of shares is voted against removal which if voted cumulatively
for the election of a director in an election for the entire number of directors
of the Corporation, as then fixed pursuant to Section 1 of this Article II,
would be sufficient to elect at least one director .
SECTION 7. No amendment to the Code of Regulations of the Corporation shall
amend, alter, change or repeal the provisions of this Article II, unless the
amendment effecting such amendment, alteration, change or repeal shall receive
the affirmative vote of shares entitling them to exercise at least four-fifths
of the voting power of the Corporation .
ARTICLE III
-----------
SECTION 1. The officers of this Corporation shall be a president, one or
more vice presidents, a secretary, a treasurer, and, if desired by the Board of
Directors, a chairman of the board, who shall be a director, and such other
officers and assistants as the Board of Directors may from time to time
determine.
Any two or more offices may be held by one person, except the offices of
president and vice president.
SECTION 2. All officers of the Corporation shall be elected by the Board of
Directors and shall hold office until the meeting of the Board of Directors
following the Annual Meeting of Stockholders or until their successors are
elected and qualified. The Board of Directors may remove any officer at any
time, with or without cause. The Board of Directors may fill any vacancy in any
office occurring from whatever cause.
SECTION 3. Each officer and assistant officer shall have such duties,
responsibilities, powers and authority as may be prescribed by law or assigned
to him by the Board of Directors from time to time.
ARTICLE IV
----------
SECTION 1. The Board of Directors may, by resolution, forbid the transfer
of stock for a period not
39
<PAGE> 5
exceeding thirty (30) days prior to a meeting of the stockholders or prior to a
time when a dividend is payable.
ARTICLE V
---------
SECTION 1. These regulations may be amended or repealed at any meeting of
the Corporation.
ARTICLE VI
----------
SECTION 1. The Corporation shall indemnify each person who at any time was
or is a director or officer of the Corporation, or was or is serving at the
request of the Corporation as a director, trustee, or officer, of another
corporation, domestic or foreign, non-profit, partnership, joint venture, trust
or other enterprise, against expenses, including attorneys' fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him in
connection with any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of such service in accordance with and to the full extent then permitted by the
law of Ohio. This right of indemnification shall not be deemed exclusive of any
other rights to which any person seeking indemnification may be entitled in any
capacity under the Articles or the Regulations or any agreement, vote of
stockholders or disinterested directors, or otherwise both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, or officer, and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
SECTION 2. The Board of Directors may authorize the purchase and
maintenance by the Corporation of (1) insurance of the Corporation against loss
caused by the acts of its directors or officers and (2) insurance on behalf of
any person who is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, trustee, or officer of
another corporation, domestic or foreign, non-profit or for profit, partnership,
joint venture, trust, or other enterprise against any liability asserted against
him and incurred by him in any such capacity or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under applicable law.
40
<PAGE> 1
Exhibit 4.3
AMCAST INDUSTRIAL CORPORATION
NOTE AGREEMENT
Dated as of September 1, 1989
Re: $10,000,000 9.0% Senior Notes
Due September 15, 1999
41
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Heading Page
<S> <C> <C>
1. DESCRIPTION OF NOTES AND COMMITMENT..............................1
1.1. Description of Notes.....................................1
1.2. Commitment; Closing Date.................................1
2. PREPAYMENT OF NOTES..............................................2
2.1. Required Prepayments.....................................2
2.2. Optional Prepayments.....................................2
2.3. Prepayment on Failure of Holders to Grant
Certain Consents.......................................2
2.4. Notice of Optional Prepayment............................3
2.5. Surrender of Notes on Prepayment or Exchange.............3
2.6. Direct Payment...........................................3
2.7. Allocation of Payments...................................4
2.8. Payments Due on Saturdays, Sundays and
Holidays...............................................4
3. REPRESENTATIONS..................................................4
3.1. Representations of the Company...........................4
3.2. Representations of the Purchaser........................11
4. CLOSING CONDITIONS..............................................11
4.1. Representations and Warranties..........................11
4.2. Legal Opinions .........................................12
4.3. Events of Default ......................................12
4.4. Legality of Investment .................................12
4.5. Proceedings and Documents ..............................12
4.6. Waiver of Conditions ...................................12
5. INTERPRETATION OF AGREEMENT ....................................12
5.1. Certain Terms Defined ..................................12
5.2. Accounting Principles ..................................17
5.3. Valuation Principles ...................................18
5.4. Direct or Indirect Actions .............................18
6. COMPANY COVENANTS ..............................................18
6.1. Corporate Existence ....................................18
6.2. Insurance ..............................................19
6.3. Taxes, Claims for Labor and Materials ..................19
6.4. Maintenance of Properties ..............................20
</TABLE>
42
<PAGE> 3
<TABLE>
<CAPTION>
Section Heading Page
<S> <C> <C>
6.5. Change in Business .....................................20
6.6. Consolidated Adjusted Net Worth ........................20
6.7. Current Ratio ..........................................20
6.8. Limitations on Indebtedness ............................20
6.9. Limitation on Liens ....................................21
6.10. Restricted Payments ....................................22
6.11. Sale of Assets .........................................23
6.12. Merger .................................................24
6.13. Disposition of Stock of Subsidiaries ...................25
6.14. Maintenance of Records .................................25
6.15. Financial Information and Reports ......................25
6.16. Inspection of Properties and Records ...................27
6.17. Dealings with Affiliates ...............................28
6.18. ERISA ..................................................28
6.19. Compliance with Laws ...................................29
6.20. Consolidated Tax Returns ...............................29
6.21. Acquisition of Notes ...................................29
7. EVENTS OF DEFAULT AND REMEDIES THEREFOR ........................30
7.1. Nature of Events .......................................30
7.2. Remedies on Default ....................................31
7.3. Annulment of Acceleration of Notes .....................32
7.4. Other Remedies . .......................................32
7.5. Conduct No Waiver ......................................32
7.6. Remedies Cumulative ....................................32
7.7. Notice of Default ......................................32
8. AMENDMENTS,WAIVERS AND CONSENTS ................................33
8.1. Matters Subject to Modification ........................33
8.2. Solicitation of Holders of Notes .......................33
8.3. Binding Effect .........................................34
9. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND
REPLACEMENT ....................................................34
9.1. Form of Notes ..........................................34
9.2. Note Register ..........................................34
9.3. Issuance of New Notes upon Exchange or
Transfer ...............................................34
9.4. Replacement of Notes ...................................34
</TABLE>
43
<PAGE> 4
<TABLE>
<CAPTION>
Section Heading Page
<S> <C> <C>
10. MISCELLANEOUS ..................................................35
10.1. Expenses ...............................................35
10.2. Notices ................................................35
10.3. Reproduction of Documents ..............................35
10.4. Successors and Assigns .................................36
10.5. Law Governing ..........................................36
10.6. Headings ...............................................36
10.7. Counterparts . . . . ...................................36
10.8. Reliance on and Survival of Provisions .................36
10.9. Integration and Severability ...........................36
Signature Page .........................................................37
</TABLE>
ATTACHMENTS TO NOTE AGREEMENT:
SCHEDULE I - Name and Address of Purchaser
SCHEDULE II - Certain Employee Benefit Plans
EXHIBIT A - Form of 9.0% Senior Note due September 15, 1999
EXHIBIT B - Description of Closing Opinions of Special
Counsel and Counsel to the Company
ANNEX I - List of the Company and its Subsidiaries
ANNEX II - Description of Liens Securing Indebtedness
ANNEX III - Description of Pending Environmental Matters
44
<PAGE> 5
AMCAST INDUSTRIAL CORPORATION
NOTE AGREEMENT
Re: $10,000,000 9.0% Senior Notes
Due September 15, 1999
Dated as of September 1, 1989
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50309
Attention: Investment Department,
Securities Division
Ladies and Gentlemen:
AMCAST INDUSTRIAL CORPORATION, an Ohio corporation (the "Company"), hereby
agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the Issuance
of $10,000,000 aggregate principal amount of its 9.0% Senior Notes (the
"Notes"), to mature September 15, 1999, to be dated the date of issuance, to
bear interest from the date thereof at the rate of 9.0% per annum prior to
maturity, such interest being payable quarterly on the fifteenth day of
September, December, March and June of each year, commencing with the first such
date after issue, to be substantially in the form attached hereto as Exhibit A
and to have the other terms and provisions hereinafter set forth. The term
"Notes" as used herein shall include each Note delivered pursuant to this Note
Agreement (the "Agreement") and each Note delivered in substitution or exchange
therefor and, where applicable, shall include the singular number as well as the
plural. Any reference to you in this Agreement shall in all instances be deemed
to include any nominee of yours or any separate account or other person on whose
behalf you are purchasing Notes. You are sometimes referred to herein as the
"Purchaser."
Section 1.2. Commitment; Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to you, and you agree to purchase
from the Company, Notes in the aggregate principal amount of $10,000,000 at a
price of 100% of the principal amount thereof.
Delivery of and payment for the Notes shall be made at the offices of
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, at 9:00
a.m., Chicago, Illinois time on September 15, 1989, or such other date as shall
be mutually agreed upon (the "Closing Date"). The Notes will be delivered to
you in the form of two
45
<PAGE> 6
Notes in fully registered form, issued in your name or in the name of your
nominee and in the principal amount specified in Schedule I. Delivery of the
Notes to you on the Closing Date shall be against payment of the purchase price
thereof in Federal Funds or other immediately available funds in U.S. dollars
transmitted to Bank One, Dayton, N.A. for deposit in the Company's General
Account No.905-668-880. If on the Closing Date the Company shall fail to tender
the Notes to you, you shall be relieved of all remaining obligations under this
Agreement. Nothing in the preceding sentence shall relieve the Company of any
liability occasioned by such failure to deliver the Notes.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. (a) In addition to payment of all
outstanding principal of the Notes at maturity and regardless of the amount of
Notes which may be outstanding from time to time, the Company will prepay, and
there shall become due and payable, on September 15 in each year, commencing
September 15, 1990 and ending September 15, 1998, both inclusive (herein called
"Fixed Payment Dates"), $1,500,000, in the case of the Fixed Payment Dates in
1990 and 1991, or $875,000, in the case of each Fixed Payment Date thereafter,
or such lesser amount, in any such case, as shall constitute payment in full of
the Notes. Each such prepayment shall be at a price of 100% of the principal
amount prepaid, together with interest accrued thereon to the date of prepayment
without premium.
(b) Any prepayment of the Notes pursuant to the provisions of Section
2.2 shall be credited against the obligations of the Company to make payment at
maturity and the prepayments required on the Notes in accordance with the terms
of this Section 2.1 in the inverse order of maturity. If and to the extent that
any prepayment of the Notes pursuant to the provisions of Section 2.3 does not
result in the prepayment of all Notes, the prepayments required to be made
pursuant to the provisions of this Section 2.1 shall be reduced by an amount
that bears the same relationship to the amount of the prepayment required by
this Section 2.1 immediately prior to such partial prepayment as the amount of
such partial prepayment pursuant to Section 2.3 bears to the principal amount of
Notes outstanding immediately preceding such partial prepayment.
Section 2.2. Optional Prepayments. (a) Upon notice as provided in
Section 2.4, the Company may prepay the Notes, in whole or in part, at any time
and from time to time, on any regular interest payment date from and after
September 15, 1990, in multiples of $100,000. Each such prepayment shall be at a
price of 100% of the principal amount prepaid, together with interest accrued
thereon to the date of prepayment, together with the Primary Make Whole Premium
Amount, if any.
(b) Except as provided in this Section 2.2 and Section 2.3 the Notes
shall not be prepayable in whole or in part at the option of the Company.
Section 2.3. Prepayment on Failure of Holders to Grant Certain Consents.
In the event the Company shall request the holders of the Notes to consent to a
merger, acquisition, investment, corporate reorganization, sale of assets,
recapitalization or other material transaction not otherwise permitted pursuant
to the provisions hereof (a "Prohibited Transaction") and the holder or holders
of less than
46
<PAGE> 7
66-2/3% in aggregate principal amount of the Notes shall, within 30 days from
the date of such request, have consented in writing to such Prohibited
Transaction, the Company may, within 150 days from the date of such request and
substantially concurrently with the consummation of such Prohibited Transaction,
prepay all (but not less than all) Notes held by each holder which has failed or
refused to consent to such transaction by prepayment of the principal amount
thereof and accrued interest thereon to the date of such prepayment together
with the Alternative Make Whole Premium Amount. Notice of prepayment having been
so given, the aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the Alternative Make Whole Premium
Amount, if any, shall become due and payable on the designated prepayment date.
Section 2.4. Notice of Optional Prepayment. The Company shall give
notice of any optional prepayment of the Notes under Sections 2.2 or 2.3 to each
holder of the Notes to be prepaid not less than 30 days nor more than 60 days
before the date fixed for such optional prepayment, specifying (i) such date,
(ii) the section of this Agreement under which prepayment is to be made, (iii)
the principal amount of such holder's Notes to be prepaid on such date and (iv)
accrued interest applicable to such prepayment. Notice of prepayment having been
so given, the aggregate principal amount of the Notes specified in such notice,
together with the premium, if any, and accrued interest thereon shall become due
and payable on the prepayment date. A computation of the amount, if any, of any
premium payable in connection with a prepayment shall be furnished to the
holders of the Notes to be prepaid as soon as practicable after determination of
such premium and, in all events, not less than three business days prior to the
date of such prepayment.
Section 2.5. Surrender of Notes on Prepayment or Exchange. Subject to
Section 2.6, upon any partial prepayment of a Note pursuant to this Section 2 or
partial exchange of a Note pursuant to Section 9.3, such Note may, at the option
of the holder thereof, (i) be surrendered to the Company pursuant to Section 9.3
hereof in exchange for a new Note equal to the principal amount remaining unpaid
on the surrendered Note, or (ii) be made available to the Company for notation
thereon of the portion of the principal so prepaid or exchanged. In case the
entire principal amount of any Note is prepaid or exchanged, such Note shall be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of such Note.
Section 2.6. Direct Payment. Notwithstanding anything to the contrary in
this Agreement or the Notes, in the case of any Note owned by the Purchaser or
its nominee or owned by any other Institutional Holder who has given written
notice to the Company requesting that the provisions of this Section shall
apply, the Company will promptly and punctually pay when due the principal
thereof and premium, if any, and interest thereon, without any presentment
thereof directly to the Purchaser or such subsequent holder at the address of
the Purchaser set forth in Schedule I or at such other address as the Purchaser
or such subsequent holder may from time to time designate in writing to the
Company or, if a bank account is designated for the Purchaser on Schedule I
hereto or in any written notice to the Company from the Purchaser or any such
subsequent holder, the Company will make such payments In Immediately available
funds to such bank account, marked for attention as indicated, or In such other
manner or to such other account of the Purchaser or such holder in any bank in
the United States as the Purchaser or any such subsequent holder may from
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<PAGE> 8
time to time direct in writing. The holder of any Notes agrees that in the event
it shall sell or transfer any such Notes (i) it will, prior to the delivery of
such Notes (unless it has already done so), make a notation thereon of all
principal, if any, prepaid on such Notes and will also note thereon the date to
which interest has been paid on such Notes, and (ii) it will promptly notify the
Company of the name and address of the transferee of any Notes so transferred.
With respect to Notes to which this Section applies, the Company shall be
entitled to presume conclusively that the original or such subsequent
institutional holder as shall have requested the provisions hereof to apply to
its Notes remains the holder of such Notes until (y) the Company shall have
received notice of the transfer of such Notes, and of the name and address of
the transferee, or (z) such Notes shall have been presented to the Company as
evidence of the transfer.
Section 2.7. Allocation of Payments. If there is more than one holder of
the Notes and if less than the entire principal amount of all the Notes
outstanding is to be prepaid pursuant to the provisions of Sections 2.1 or 2.2,
the Company will prorate the aggregate principal amount to be paid among the
outstanding Notes in proportion to the unpaid principal amounts thereof and, to
the extent that any such proportionate allocation shall not result in an even
multiple of $1,000, adjustment shall be made in the proportionate payments to
the nearest even multiple of $1,000. Partial prepayments pursuant to the
provisions of Section 2.3 shall be allocated as therein provided.
Section 2.8. Payments Due on Saturdays, Sundays and Holidays. In any
case where the date of any required payment or prepayment of the Notes or any
interest payment date on the Notes or the date fixed for any other payment of
any Note or exchange of any Note shall be on a Saturday, Sunday or a legal
holiday or a day on which banking institutions are authorized by law to close in
Des Moines, Iowa or New York, New York, then such payment, prepayment or
exchange need not be made on such date but may be made on the next succeeding
business day not a Saturday, Sunday or a legal holiday or a day upon which
banking institutions are authorized by law to close in Des Moines, Iowa or New
York, New York, with the same force and effect as if made on the due date.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. As an Inducement to, and as
part of the consideration for your purchase of the Notes pursuant to this
Agreement, the Company hereby represents and warrants to you as follows:
(a) Corporate Organization and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio, has full corporate power and authority to conduct the
business now being conducted by it, to enter into the Agreement and to issue and
sell the Notes as contemplated in the Agreement.
(b) Qualification to Do Business. The Company is duly licensed
or qualified and in good standing (or, as provided on Annex I hereto, is in the
process of becoming duly licensed or qualified and in good standing) as a
foreign corporation authorized to do business in each jurisdiction where the
failure to so qualify might have a material adverse effect on the business or
financial
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<PAGE> 9
condition of the Company or its ability to perform its obligations hereunder or
under the Notes. A list of those jurisdictions wherein the Company is qualified
to do business is attached hereto as Annex I.
(c) Subsidiaries. The Company has no Subsidiaries, as defined in Section
5.1, except those listed in Annex I hereto which correctly sets forth the
percentage of the outstanding capital stock or equivalent interest of each
Subsidiary which is owned, of record or beneficially, by the Company and/or one
or more Subsidiaries. Each Subsidiary has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization (or, as provided on Annex I hereto, is in the
process of becoming in good standing under said laws) and is duly licensed or
qualified in each other jurisdiction where the failure to so qualify might have
a material adverse effect on the business or financial condition of the Company
and its Subsidiaries, taken as a whole, or the ability of the Company to perform
its obligations hereunder or under the Notes. A list of those jurisdictions
wherein each Subsidiary is qualified to do business is attached hereto as Annex
I. Each Subsidiary has full corporate power and authority to own its properties
and to carry on its business as now conducted. The Company and/or one or more
Subsidiaries have good and marketable title to all of the shares it purports to
own of the capital stock of each Subsidiary, free and clear in each case of any
lien or encumbrance, and all such shares have been duly issued and are fully
paid and nonassessable.
(d) Financial Statements. The consolidated statements of financial
condition of the Company and its Subsidiaries as of August 31, 1984, 1985, 1986,
1987, and 1988, and the related consolidated statements of operations,
shareholders' equity and changes in financial position or cash flows, for the
fiscal years ended on said dates, reported on by the Company's independent
public accountants, copies of which have heretofore been delivered to you, were
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein) and present fairly the consolidated financial position and results of
operations of the Company and its Subsidiaries for and as of the end of each of
such fiscal years. The unaudited interim consolidated statements of financial
condition as of May 29, 1988 and May 28, 1989, and the unaudited consolidated
statements of operations and shareholders' equity of the Company and its
Subsidiaries for the periods then ended, copies of which have heretofore been
delivered to you, have been prepared in accordance with generally accepted
accounting principles and present fairly the consolidated financial condition of
the Company and its Subsidiaries as of said dates and the results of their
operations for the periods then ended, subject to year-end audit adjustments.
(e) No Contingent Liabilities or Adverse Changes. As of the date hereof,
neither the Company nor any of its Subsidiaries has any contingent liabilities
which are material to the Company and its Subsidiaries, taken as a whole, other
than as indicated in the financial statements (including the notes thereto)
described In the foregoing Paragraph (d), and since May 28, 1989, there have
been no material adverse changes in the condition, financial or otherwise, of
the Company and its Subsidiaries, taken as a whole, nor have there been any
material changes to the Company and its Subsidiaries, taken as a whole, except
49
<PAGE> 10
those occurring in the ordinary course of business (other than the disposition
of the assets of the Cast Products Group as described in Section 3.1(i) hereof).
(f) No Pending Litigation or Proceedings. There are no actions, suits or
proceedings pending or, to the best of the Company's knowledge after due
inquiry, threatened against or affecting the Company or any of its Subsidiaries,
at law or in equity or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which are reasonably likely to result, either individually
or collectively, in any material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Company and its
Subsidiaries, taken as a whole.
(g) Compliance With Law. (i) Neither the Company nor any of its
Subsidiaries is: (x) in default with respect to any order, writ, injunction or
decree of any court to which it is a named party or (y) in default under any
law, rule or regulation relating to its respective business, the sanctions and
penalties resulting from which defaults described in clauses (x) and (y) would
have a material adverse effect on the business, properties, operations, assets
or condition, financial or otherwise, of the Company and its Subsidiaries, taken
as a whole.
(ii) Neither the Company nor any Subsidiary is a "national" of a
"designated foreign country" (or a Person defined as a "designated foreign
country") within the definitions in the Foreign or Cuban Assets Control of the
United States Treasury Department, 31 C.F.R. Chapter V, as amended, or any
regulation or ruling issued thereunder. Neither the Company nor any Subsidiary
is a "national" of any foreign country subject to any restriction under
Presidential Executive Orders Nos. 8389 or 9193, as amended, or the regulations
issued thereunder, as amended.
(h) Pension Reform Act or 1974. Based upon your representations in
Section 3.2 of this Agreement, neither the purchase of the Notes by you nor the
consummation of any of the other transactions contemplated by this Agreement is
or will constitute a "prohibited transaction" within the meaning of Section 4975
of the Internal Revenue Code of 1986, as amended (the "Code"), or Section 406 of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
Internal Revenue Service has issued, or has been requested to issue on a timely
basis, a determination that each "pension benefit plan" as defined in Section 3
of ERISA, sponsored by the Company or any Subsidiary ("Plans") except for those
plans which are unfunded and maintained primarily for the purposes of providing
deferred compensation for a select group of management or highly compensated
employees, is qualified under Section 401(a) and related provisions of the Code,
as amended by ERISA, and that each related trust or custodial account is exempt
from taxation under Section 501(a) of the Code. All Plans of the Company or any
Subsidiary comply in all material respects with ERISA and other applicable laws.
There exist with respect to the Company or any Subsidiary no "multi-employer
plans," as defined in the Multi-employer Pension Plan Amendments Act of 1980,
for which a material withdrawal or termination liability may be incurred. There
exist with respect to
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<PAGE> 11
all Plans or trusts established or maintained by the Company or any Subsidiary
(i) no material accumulated funding deficiency within the meaning of ERISA, (ii)
no termination of any Plan or trust which would result in an acceleration of any
material liability to the Pension Benefit Guaranty Corporation ("PBGC") or any
"reportable event," as that term is defined in ERISA, which is likely to
constitute grounds for termination of any Plan or trust by the PBGC, and (iii)
no "prohibited transaction," as that term is defined in ERISA, which is likely
to subject any Plan, trust or party dealing with any such Plan or trust to any
material tax or penalty on prohibited transactions imposed by Section 4975 of
the Code.
(i) Title to Properties. Except as disclosed in the latest audited
consolidated financial statements (including the notes thereto) referred to in
Paragraph (d) above, the Company and its Subsidiaries each have (i) good title
to all the real property owned by it and (ii) good title to all the other
property reflected in the most recent balance sheet or subsequently acquired by
it (except as sold or otherwise disposed of in the ordinary course of business
and except for the sale by the Company to Advanced Cast Products, Inc. on
September 8, 1989 of the Company's plants located in Meadville, Pennsylvania,
Easton, Massachusetts and Ironton, Ohio (collectively, the "Cast Products
Group"), in each case free from all liens, charges, and encumbrances of any
kind, except (x) those securing Indebtedness of the Company or a Subsidiary,
which are listed in Annex II hereto or otherwise permitted by this Agreement and
(y) other liens, charges and encumbrances that, in the aggregate, do not
materially detract from the value of said properties or materially impair their
use in the operation of the business of the Company or any of its Subsidiaries.
(j) Leases. The Company and each Subsidiary enjoy peaceful and
undisturbed possession under all material leases under which the Company or such
Subsidiary is a lessee or is operating. None of such leases contains any unusual
or burdensome provision which might materially and adversely affect the
operation or use of the property so leased. All of such leases are valid and
subsisting and neither the Company nor any Subsidiary is in default under any of
such leases.
(k) Franchises, Patents, Trademarks and Other Rights. The Company and
each Subsidiary have all material franchises, permits, licenses and other
authority as are necessary to enable them to conduct their respective businesses
as now being conducted and as proposed to be conducted, and none of them is in
default under any of such franchises, permits, licenses or other authority which
are material to the business, properties, operations or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole. The Company
and each Subsidiary own or possess all patents, trademarks, service marks, trade
names, copyrights, licenses and rights with respect to the foregoing necessary
for the present conduct of their businesses, without any known conflict with the
rights of others which might result in any material adverse change in the
business, properties, operations or condition, financial or otherwise, of the
Company and its Subsidiaries, taken as a whole.
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<PAGE> 12
(l) Status of Notes and Sale of Notes. The Notes constitute the legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms, subject to usual equitable principles and except as limited by
bankruptcy, moratorium, insolvency or similar laws of general application
affecting the enforcement of creditors' rights. The sale of the Notes and
compliance by the Company with all of the provisions of this Agreement and of
the Notes (i) are within the corporate powers of the Company, (ii) have been
duly authorized by proper corporate action and (iii) are legal and will not
result in any breach of any of the provisions of, or constitute a default under,
or result in the creation of any lien or encumbrance upon any property of the
Company or any Subsidiary under the provisions of, any charter instrument,
by-law, loan agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them may be bound.
(m) No Defaults. No event has occurred and no condition exists which,
upon the issuance of the Notes, would constitute an Event of Default, or with
the lapse of time or the giving of notice or both would become an Event of
Default, under this Agreement. Neither the Company nor any Subsidiary is in
default under any charter instrument, by-law, or loan agreement to which it is a
party or by which it may be bound, or under any other agreement or instrument to
which it is a party or by which it may be bound which is material to the
business, properties, operations or condition, financial or otherwise, of the
Company and its Subsidiaries, taken as a whole.
(n) Governmental Consent. Neither the nature of the Company or any of
its Subsidiaries, their business or property, nor any relationship between the
Company or any of its Subsidiaries and any other person, nor any circumstances
in connection with the offer, issue, sale or delivery of the Notes is such as to
require a consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the Company in
connection with the execution and delivery of this Agreement or the offer,
issue, sale or delivery of the Notes. In making the representations contained in
this Section 3.1(n), the Company is relying, to the extent appropriate, upon the
representations of the Purchaser made in Section 3.2 hereof.
(o) Taxes. (i) Except with respect to the filing of certain returns and
the payment of certain amounts (not exceeding $2,000 in the aggregate) described
on Annex I hereto, all tax returns required to be filed by the Company or any
Subsidiary in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary, or upon any of their respective properties, income or franchises,
which are due and payable, have been paid or are being contested in good faith
by appropriate proceedings. Neither the Company nor any Subsidiary knows of any
proposed additional tax assessment against it nor of any basis for one which
would have a materially adverse effect on the Company and its Subsidiaries,
taken as a whole.
(ii) The respective Federal Income tax liabilities of the Company and
its Subsidiaries have been finally determined by the Internal Revenue Service
and satisfied for all taxable years to and including the taxable year ended
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August 31, 1981. The provisions for taxes on the books of the Company and each
Subsidiary are adequate for all open years and for the current fiscal period.
(p) Status under Certain Statutes. Neither the Company nor any
Subsidiary is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an "affiliate"
of such a "subsidiary company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined
in the Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
(q) Private Offering. Neither the Company, directly or indirectly, nor
Shea Paschall & Powell (the only Person authorized or employed by the Company as
agent, broker, dealer or otherwise in connection with the offering of the Notes
or any similar security of the Company) has offered any of the Notes or any
similar security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser, other than the Purchaser. The Company agrees that
neither the Company, directly or indirectly, nor anyone acting on its
authorization will offer the Notes or any part thereof or any similar securities
for issue or sale to, or solicit any offer to acquire any of the same from,
anyone so as to bring the issuance and sale of the Notes within the provisions
of Section 5 of the Securities Act of 1933, as amended.
(r) Burdensome Restrictions. Neither the Company nor any Subsidiary is
bound by any agreement or instrument or subject to any charter or other
corporate restriction which materially adversely affects the business,
properties, operations, or condition, financial or otherwise of the Company and
its Subsidiaries, taken as a whole.
(s) Use of Proceeds. The Company will apply the proceeds from the sale
of the Notes to forecasted capital expenditures for the Company's fiscal year
ending August 31, 1990, working capital purposes, and for other general
corporate purposes. None of the transactions contemplated in this Agreement
(including, without limitation thereof, the use of the proceeds from the sale of
the Notes) will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued pursuant thereto,
including, without limitation, Regulations G, T and X of the Board of Governors
of the Federal Reserve System (12 C.F.R., Chapter II). Neither the Company nor
any Subsidiary owns or intends to carry or purchase any "margin stock" within
the meaning of Regulation G, and none of the proceeds from the sale of the Notes
will be used to purchase or carry or refinance any borrowing the proceeds of
which were used to purchase or carry any "security" within the meaning of the
Securities Exchange Act of 1934, as amended.
(t) Condition of Property. With the exception of the Company's
facilities located In Columbia, Louisiana and Meridian, Mississippi, each of
which has been closed by the Company for at least two years, and which, on the
date
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hereof, the Company is in the process of selling or otherwise disposing of, all
of the facilities of the Company and each of its Subsidiaries are in sound
operating condition and repair except for facilities being repaired in the
ordinary course of business.
(u) Books and Records. The Company and each of its Subsidiaries maintain
books, records and accounts which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of their respective assets, and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary (x) to permit preparation of financial statements in accordance
with generally accepted accounting principles, and (y) to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) Full Disclosure. Neither the financial statements referred to in
Paragraph (d), nor this Agreement, nor the Company's 1988 Annual Report to
Shareholders furnished to you in connection with the placement of the Notes, nor
any other written statement or document furnished by the Company to you in
connection with the negotiation of the sale of the Notes, taken together,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading in
light of the circumstances under which they were made. There is no fact known,
or which, with reasonable diligence would be known, by the Company which the
Company has not disclosed to you in writing which has a material adverse effect
on or, so far as the Company can now foresee, will have a material adverse
effect on the business, property, operations or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole, or the ability
of the Company to perform its undertakings under and in respect of this
Agreement and the Notes.
(w) Compliance with Environmental Laws. The Company complies with all
applicable Federal, state, or local laws, statutes, rules, regulations or
ordinances relating to public health, safety or the environment, including,
without limitation, relating to releases, discharges, emissions or disposals to
air, water, land or ground water, to the withdrawal or use of ground water, to
the use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or
urea formaldehyde, to the treatment, storage, disposal or management of
hazardous substances (including, without limitation, petroleum, its derivatives,
by-products or other hydrocarbons), to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances the failure to comply with which
could have a material adverse effect on the Company, its Subsidiaries, their
businesses and properties, taken as a whole. Except as to the matters disclosed
in Annex III (the resolution of which matters is not anticipated by the Company
to have a material adverse effect on the business, property, operations or
condition, financial or otherwise, of the Company and its Subsidiaries, taken as
a whole), the Company does not know of any liability of the Company or any
Subsidiary under the Comprehensive Environmental Response, Compensation and
Liability
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<PAGE> 15
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act
of 1986 (42 U.S.C. Section 9601 et seq.).
Section 3.2. Representations of the Purchaser.
(a) Purchase for Investment. You represent to the Company that you are
purchasing the Notes to be purchased by you hereunder for investment, for your
own account or a separate account maintained by you, or both, in each case for
investment and with no present intention of distributing such Notes or any part
thereof, provided that the disposition of your property shall at all times be
and remain within your control.
(b) Source of Funds; ERISA. The Purchaser represents and warrants that:
(i) (A) it is an insurance company and a portion of the funds to be
used to make its investment hereunder constitutes plan assets allocated to
a separate account maintained by it; and
(B) the names of each employee benefit plan whose assets in such
account exceed five percent of the total assets or are expected to exceed
five percent of the total assets of such account as of the date of such
investment (for the purposes of this Section 3.2(b)(i)(B), all employee
benefit plans maintained by the same employer or employee organization are
deemed to be a single plan) are set forth in Schedule II hereto; and
(ii) the remaining portion of the funds used to purchase the Notes
does not constitute assets allocated to any separate account maintained by
it such that the application of such funds constitutes a "prohibited
transaction" under Section 406 of the Employee Retirement Income Security
Act of 1974, as amended.
(c) You acknowledge that the Notes have not been registered under the
Securities Act of 1933, as amended, and you understand that the Notes must be
held indefinitely unless they are subsequently registered under said Securities
Act or an exemption from such registration is available. You have been advised
that the Company does not contemplate registering, and is not legally required
to register, the Notes under said Securities Act.
SECTION 4. CLOSING CONDITIONS.
Your obligation to purchase the Notes as herein provided on the Closing
Date shall be subject to the performance by the Company of its agreements
hereunder, which by the terms hereof are to be performed at or prior to the time
of delivery of the Notes, and to the following conditions to be satisfied on or
before such Closing Date:
Section 4.1. Representations and Warranties. The representations and
Warranties of the Company contained in this Agreement or otherwise made in
writing in connection herewith shall be true and correct on or as of the Closing
Date and you shall receive from the Company a Closing Certificate dated such
Closing Date, and executed
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<PAGE> 16
by the Chairman of the Board, the President or any Vice President or Treasurer
of the Company to such effect.
Section 4.2. Legal Opinions. You shall receive from Chapman and Cutler, who
are acting as your special counsel in this transaction, and from Smith &
Schnacke, counsel for the Company, their respective opinions, dated such Closing
Date, in form and substance satisfactory to you and covering substantially the
matters set forth or provided in Exhibit B hereto.
Section 4.3. Events of Default. No event shall have occurred and be
continuing on the Closing Date which would constitute an Event of Default, as
defined in Section 7.1 hereof, or with notice or lapse of time or both would
become such an Event of Default, and the Company shall have delivered to you on
the Closing Date a certificate signed by the Chairman of the Board, the
President or any Vice President or Treasurer of the Company to such effect.
Section 4.4. Legality of Investment. Your acquisition of the Notes shall
constitute a legal investment as of the Closing Date under the laws and
regulations of each jurisdiction to which you may be subject (without resort to
any "basket" or "leeway" provision which permits the making of an investment
without restriction as to the character of the particular investment being
made), and such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation; and you shall
have received such certificates or other evidence as you may reasonably request
to establish compliance with this condition.
Section 4.5. Proceedings and Documents. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof shall be satisfactory in form and
substance to you and your special counsel, and you and your special counsel
shall have received copies (executed or certified as may be appropriate) of all
legal documents or proceedings which you and they may reasonably request in
connection with the consummation of said transactions.
Section 4.6. Waiver of Conditions. If on the Closing Date the Company fails
to tender to you the Notes to be Issued to you on such date or if the conditions
specified in Sections 4.1 through 4.5 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement. Without
limiting the foregoing, if the conditions specified in Sections 4.1 through 4.5
have not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine. Nothing
in this Section 4.8 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
SECTION 5. INTERPRETATION OF AGREEMENT.
Section 5.1 Certain Terms Defined. The terms hereinafter set forth when
used herein shall have the following meanings:
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<PAGE> 17
"Affiliate" shall mean any Person (other than a Subsidiary) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Alternative Make Whole Premium Amount" shall mean the Make Whole
Premium Amount computed with an Applicable Spread equal to 0.25%.
"Applicable Spread" is defined in the definitions of "Primary Make Whole
Premium Amount" and "Alternative Make Whole Premium Amount".
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a balance sheet of the lessee
in accordance with generally accepted accounting principles.
"Capitalized Rentals" shall mean as of the date of any determination the
amount at which the aggregate Rentals due and to become due under all
Capitalized Leases under which the Company or any Subsidiary is a lessee would
be reflected as a liability on a consolidated balance sheet of the Company and
its Subsidiaries.
"Cast Products Group" shall have the meaning ascribed thereto in Section
3.1(i) hereof.
"Consolidated Adjusted Assets" shall mean the amount by which (i) the
assets of the Company and its consolidated Subsidiaries exceed (ii) the amount
constituting goodwill, trade names, trademarks, patents, organization expense,
unamortized debt discount and expense and other similar intangibles acquired or
incurred after May 28, 1989, determined in accordance with generally accepted
accounting principles, subject to Section 5.2 hereof.
"Consolidated Adjusted Net Worth" shall mean the amount by which (i)
Consolidated Adjusted Assets exceeds (ii) the aggregate of all indebtedness,
liabilities and other items of the Company and its consolidated Subsidiaries
which, in accordance with generally accepted accounting principles, would be
included on the liability side of the consolidated balance sheet of the Company
and its Subsidiaries, except capital stock, capital surplus, retained earnings
and any other comparable capital accounts, subject to Section 5.2 hereof.
"Consolidated Current Assets" and "Consolidated Current Liabilities"
shall mean such assets and liabilities of the Company and its Subsidiaries on a
consolidated basis as shall be determined in accordance with generally accepted
accounting principles to constitute current assets and current liabilities,
respectively.
"Consolidated Net Earnings" shall mean the net income of the Company and
its Subsidiaries determined in accordance with generally accepted accounting
Principles, excluding (i) extraordinary items; and (ii) any equity interest of
the Company on the unremitted earnings or any corporation not a Subsidiary.
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"Consolidated Total Capitalization" shall mean the sum of Consolidated
Adjusted Net Worth plus Consolidated Funded Debt.
"Funded Debt" of any Person shall mean (i) all Indebtedness for borrowed
money or which has been incurred in connection with the acquisition of assets in
each case having a final maturity of one or more than one year from the date of
origin thereof (or which is renewable or extendible at the option of the obligor
for a period or periods more than one year from the date of origin), including
all payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or not included in
Consolidated Current Liabilities, (ii) all Capitalized Rentals, and (iii) all
Guaranties of Funded Debt of others. "Consolidated" when used as a prefix to any
Funded Debt shall mean the aggregate amount of all such Funded Debt of the
Company and its Subsidiaries on a consolidated basis eliminating intercompany
items.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation, of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all Maintenance Agreements (but only to the extent of the maximum
liability of the Company thereunder). For the purposes of all computations made
under this Agreement, a Guaranty in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend shall be deemed to
be Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with generally accepted accounting principles
shall be classified upon a balance sheet of such Person as liabilities of such
Person, and in any event shall include all (i) obligations of such Person for
borrowed money or which has been incurred in connection with the acquisition of
property or assets, (ii) obligations secured by any lien or other charge upon
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations, (iii) obligations created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, and (iv)
Capitalized Rentals under any Capitalized Lease, but excluding unfunded
obligations under the Company's pension plans. For the purpose of computing the
"Indebtedness" of any Person, there shall be excluded any particular
Indebtedness to the extent that, upon or prior to the maturity thereof, there
shall have been deposited with the proper depositary in trust the necessary
funds (or evidences of such Indebtedness, if permitted by the Instrument
creating such Indebtedness) for the payment, redemption or satisfaction of such
Indebtedness; and thereafter such funds and evidences of Indebtedness so
deposited shall not be included in any computation of the assets of such Person.
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The Company may exclude from Indebtedness not more than $550,000 in the
aggregate of obligations of the Company owing to The First National Bank of
Dayton and Star Bank, N.A., Cincinnati under a purchase agreement dated as of
December 30, 1986 between the Company and each of said banks, but only to the
extent that, (i) in the event that the Company shall be required to make a
payment with respect to such obligations, the Company shall be entitled to make
a drawing under a letter of credit issued by South Trust Bank of Alabama, N.A.,
and (ii) the right of the Company to receive amounts with respect to said letter
of credit shall not constitute an asset of the Company under generally accepted
accounting principles.
The Company may exclude from Indebtedness letters of credit as required
to satisfy workers' compensation bonding requirements.
"Investment" shall mean any investment made after the date of this
Agreement, including but not limited to investments in or advances to Persons
and investments in real estate (other than Permitted Investments, Joint Ventures
and investments in Subsidiaries or Persons which through such investments become
Subsidiaries).
"Institutional Holder" shall mean any bank, trust company, insurance
company, pension fund, mutual fund or other similar financial institution.
"Joint Venture" shall mean any association with one or more Persons to
undertake a commercial or business enterprise.
"Maintenance Agreement" shall mean any agreement, contingent or
otherwise, pursuant to which the Company, with respect to Indebtedness of any
Person other than a Subsidiary, obligates itself directly or indirectly (i) to
purchase such Indebtedness or any property constituting security therefor; (ii)
to advance or supply funds (x) for the purchase or payment of such Indebtedness,
or (y) to maintain working capital or any other balance sheet or income
statement condition, or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness; (iii) to lease property or to purchase
securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness of the ability of such Person to make payment of
the Indebtedness; or (iv) otherwise to assure (other than through a direct
guarantee of such Indebtedness) the owner of such Indebtedness against loss in
respect thereof.
"Make Whole Premium Amount" as at any date a payment thereof is due (the
"payment date") in connection with a prepayment under Section 2.2 or 2.3 hereof
of the Notes shall mean the excess of (i) the present value as at the payment
date of the Prepaid Cash Flows, discounted quarter-annually at an annual rate
which is equal to the Treasury Rate plus the Applicable Spread over (ii) the
aggregate principal amount of the Notes then to be paid or prepaid. To the
extent that the Treasury Rate plus the Applicable Spread at the time of
determination of the Make Whole Premium Amount is equal to or higher than 9%,
the Make Whole Premium Amount shall be zero. For purposes of any determination
of the Make Whole Premium Amount:
(a) "Prepaid Cash Flows" shall mean, for each date on which a payment
of principal or interest, or both, is scheduled to become due on the
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Notes, an amount determined by subtracting (i) the amount of such payment
scheduled to become due on such date after giving effect to any prepayment
on the date as to which the determination is being made and the application
of such prepayment in accordance with the provisions of Section 2.1 from
(ii) the amount of such payment which would have become due on such date
but for such prepayment.
(b) The applicable "Treasury Rate" means the mean of the yields to
maturity of United States Treasury obligations with a constant maturity (as
compiled by and published in the United States Federal Reserve Bulletin
H.15(519) or its successor publication for each of the two weeks
immediately preceding the payment date) most nearly equal to the remaining
Weighted Average Life to Maturity of the Prepaid Cash Flows as at the
payment date. If no maturity exactly corresponding to such remaining
Weighted Average Life to Maturity shall appear therein, yields for the two
most closely corresponding published maturities shall be calculated
pursuant to the foregoing sentence and the Treasury Rate shall be
interpolated from such yields on a straight-line basis (rounding to the
nearest month). If such rates shall not have been so published, the
Treasury Rate in respect of such determination date shall be calculated
pursuant to the next preceding sentence on the basis of the arithmetic mean
of the arithmetic means of the secondary market ask rates, as of
approximately 3:30 P.M., New York City time, on the last business days of
each of the two weeks preceding the payment date, for the actively traded
U.S. Treasury security or securities with a maturity or maturities most
closely corresponding to such Weighted Average Life to Maturity, as
reported by three primary United States Government securities dealers in
New York City of national standing selected in good faith by the Company.
(c) "Weighted Average Life to Maturity" with respect to the Prepaid
Cash Flows means, as at the payment date, the number of years obtained by
dividing the then Remaining Dollar-years of the Prepaid Cash Flows by the
principal amount of the prepayment. The term "Remaining Dollar-years" of
the Prepaid Cash Flows means the product obtained by (i) multiplying (A)
the principal portion of each Prepaid Cash Flow (including payment at final
maturity), by (B) the number of years (calculated to the nearest
one-twelfth) between the time of determination and the date of such Prepaid
Cash Flow, and (ii) totaling all the products obtained In the computations
described in clause (i).
"Permitted Investments" shall mean (i) direct or indirect obligations of,
or obligations unconditionally guaranteed by, the United States of America or an
agency thereof maturing within one year from the date of issuance, (ii)
commercial paper maturing within 270 days or less from the date of issuance
thereof and rated A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Service, Inc. (or if neither such organization shall rate obligations
of such nature at any time, an equivalent rating by any nationally recognized
rating organization in the United States), (iii) certificates of deposit or time
deposits issued by commercial banks located in the United States, and having
capital, surplus and undivided profits aggregating more than $100,000,000
maturing within one year from the date of issuance, (iv) bankers' acceptances
and repurchase agreements with commercial banks meeting the requirements set
forth in [clause (iii), above, (v) investments made in shares of any money
market mutual funds
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the investments of which are limited to investments described in clauses (i)
through (iv), above, (vi) investments in assets which are to be used by the
Company or any Subsidiary in the ordinary course of business and (vii)
investments of the proceeds of industrial revenue bonds in certificates of
deposit not falling within the provisions of clause (iii), above, which are
issued by institutions insured by the Federal Deposit Insurance Corporation or
the Federal Savings and Loan Insurance Corporation, provided that the proceeds
of any issue of industrial revenue bonds so invested and the amount of such
investments in any one institution may not exceed $250,000.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Primary Make Whole Premium Amount" shall mean the Make Whole Premium
Amount computed with an Applicable Spread equal to 0.50%.
"Rentals" shall mean and include all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the property) payable by the Company or a Subsidiary,
as lessee or sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called, "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation. The
term "Subsidiary" shall mean a subsidiary of the Company.
"Voting Stock" shall mean securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned Subsidiary" shall mean any Subsidiary of which all of the
shares of outstanding capital stock (except directors qualifying shares, if any)
are owned by the Company and/or one or more Wholly-owned Subsidiaries.
Terms which are defined in other Sections of this Agreement shall have
the meanings specified therein.
Section 5.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with generally
accepted accounting principles in force at the time this Agreement is executed
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement. If an additional minimum liability is recognized
on the consolidated
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balance sheet of the Company pursuant to paragraphs 36 and 37 of the Financial
Accounting Standards Board Statement of Financial Accounting Standards No.87
("SFAS 87"), dated December 1985, for any "defined benefit pension plan" (as
therein defined) of the Company or its Subsidiaries (including any such minimum
liability of a "defined benefit pension plan" of a newly acquired subsidiary),
the offsetting intangible asset shall not be included in intangibles for the
purposes of computing Consolidated Total Capitalization, Consolidated Adjusted
Assets or Consolidated Adjusted Net Worth if such liability would not have been
recognized if all "defined benefit pension plans" of the Company and its
Subsidiaries were taken together as a whole. The foregoing sentence relates
solely to such liability and offsetting intangible asset as may be recognized
upon initial adoption of any part of SFAS 87 by the Company, or, in the case of
a newly acquired Subsidiary, at the time of adoption of any part of SFAS 87 for
a "defined benefit pension plan" of such Subsidiary, and the amount of such
exclusion from intangibles shall be reduced or eliminated as the initial
liability and offsetting Intangible asset shall be reduced from time to time or
eliminated in the adjustments made at the end of each accounting period in
accordance with SFAS 87.
Section 5.3. Valuation Principles. Except when indicated expressly to
the contrary by the use of terms such as "fair value," "fair market value" or
"market value," each asset, each liability and each capital item of any person,
and any quantity derivable by a computation involving any of such assets,
liabilities or capital items, shall be taken at the net book value thereof for
all purposes of this Agreement. "Net book value" with respect to any asset,
liability or capital item of any Person shall mean the amount at which the same
is recorded or, in accordance with generally accepted accounting principles,
should have been recorded, in the books of account of such Person, as reduced by
any reserves which have been, or in accordance with generally accepted
accounting principles should have been, set aside with respect thereto, but in
every case (whether or not permitted in accordance with generally accepted
accounting principles) without giving effect to any write-up, write-down or
write-off (other than any write-down or write-off the entire amount of which was
charged to Consolidated Net Income or to a reserve which was a charge to
Consolidated Net Income) relating thereto which was made after the date of this
Agreement.
Section 5.4. Direct or Indirect Actions. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 6. COMPANY COVENANTS.
The Company agrees that, for so long as any amount remains unpaid on any
Note:
Section 6.1. Corporate Existence. The Company will maintain and
preserve, and will cause each Subsidiary to maintain and preserve, its corporate
existence and right to carry on its business and duly procure all necessary
renewals and extensions thereof and use, and cause each Subsidiary to use, its
best efforts to maintain, preserve and renew all of its rights, powers,
privileges and franchises which in the opinion of the Board of Directors or
senior management of the Company continue to
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be advantageous to the Company and its Subsidiaries; provided, however, that the
corporate existence of the Company or of any Subsidiary may be discontinued as a
result of a liquidation or sale of assets or merger in accordance with the
provisions of Sections 6.11 or 6.12 hereof.
Section 6.2. Insurance. The Company will insure and keep insured, and
will cause each Subsidiary to insure and keep insured, at all times all of its
properties which are of an insurable nature and of the character usually insured
by companies operating properties similar to the properties of the Company or
each such Subsidiary, against loss or damage by fire and from other causes
customarily insured against by similar companies in such amounts as are usually
insured against by such companies. The Company will also maintain, and will also
cause each Subsidiary to maintain, at all times adequate insurance against loss
or damage from such hazards and risks to the person and property of others as
are usually insured against by companies operating properties similar to the
properties of the Company or each such Subsidiary. All such insurance shall be
carried with insurers accorded a rating by A.M. Best Company, Inc. of A:XII or
better at the time of the issuance of any such policy; provided, however, that
if, during the term of any such insurance policy, the rating accorded the
insurer shall be less than A:XII, the Company will, on the date of renewal of
any such policy (or, if such change in rating shall occur within 90 days prior
to such renewal date, within 90 days of the date of such change in rating),
obtain such insurance policy from an insurer so rated. The Company shall furnish
you on or prior to the Closing Date a summary of insurance presently in force.
Notwithstanding the foregoing, (i) any insurance required to be carried under
this Section may be carried with Royal Indemnity Insurance Company so long as
said Royal Indemnity Insurance Company shall be included by A.M. Best Company,
Inc. in Financial Size Category XI; provided, however, that at all times during
which said Royal Indemnity Insurance Company shall be Included in said Financial
Size Category XI, it shall have an overall rating by said A.M. Best Company,
Inc. of A+; and (ii) the insurance policy or policies carried by the Company and
its Subsidiaries on the Closing Date with Admiral Insurance Company may continue
to be so carried until the expiration date thereof (without any extensions or
renewals thereof after the Closing Date) notwithstanding the fact that said
Admiral Insurance Company shall not have a rating by A.M. Best Company, Inc. of
A:XII; provided, in the case of this clause (ii), that either (a) no excess or
umbrella liability insurance policy carried by the Company or any Subsidiary
shall entitle the carrier thereunder to avoid payment of all or any portion of a
claim made thereunder by reason of the failure (for any reason) of said Admiral
Insurance Company to honor a claim made under any insurance policy issued by it,
or (b) the Company shall, on or prior to December 15, 1989, replace all
insurance policies maintained by it or any Subsidiary with said Admiral
Insurance Company with policies issued by insurers satisfying the requirements
of this Section.
Section 6.3. Taxes, Claims for Labor and Materials. The Company will pay
and discharge when due, and will cause each Subsidiary to pay and discharge when
due, all taxes, assessments and governmental charges or levies imposed upon it
or its property, assets or business, or upon properties leased by it (but only
to the extent required to do so by the applicable lease) prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a lien or charge upon its property or assets, provided that neither the
Company nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim, the payment of
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which is being contested in good faith and by proper proceedings that will stay
the forfeiture or sale of any property and with respect to which adequate
reserves are maintained in accordance with generally accepted accounting
principles.
Section 6.4. Maintenance of Properties. The Company will maintain, preserve
and keep, and will cause each Subsidiary to maintain, preserve and keep, its
material properties (whether owned in fee or a leasehold interest) in good
repair and working order, ordinary wear and tear excepted, and from time to time
will make all necessary repairs, replacements, renewals and additions so that at
all times the efficiency thereof required for the business of the Company and
each Subsidiary shall be maintained.
Section 6.5. Change in Business. The Company and its Subsidiaries will not,
directly or indirectly through any Subsidiary, enter into any business which is
substantially different from that presently conducted by them.
Section 6.6. Consolidated Adjusted Net Worth. The Company will maintain
Consolidated Adjusted Net Worth of not less than $68,000,000.
Section 6.7. Current Ratio. The Company at all times will maintain
Consolidated Current Assets of the Company and its Subsidiaries at not less than
175% of Consolidated Current Liabilities of the Company and its Subsidiaries.
Section 6.8. Limitations on Indebtedness. (a) The Company will not and will
not permit any Subsidiary to create, assume or incur or in any manner be or
become liable in respect of any Funded Debt, except:
(i) the Notes;
(ii) Funded Debt of the Company and its Subsidiaries outstanding as of
May 28, 1989 and reflected on the consolidated balance sheet of the Company
and its Subsidiaries as at said date; and
(iii) additional Funded Debt of the Company and its Subsidiaries,
provided that the aggregate amount of Funded Debt of the Company and its
Subsidiaries outstanding as of any date shall not exceed 60% of
Consolidated Total Capitalization as of such date.
(b) The Company (i) will not permit any Subsidiary to create, assume,
incur, guarantee, suffer to exist or otherwise become liable, directly or
indirectly, in respect of any Indebtedness described in clauses (i) through (iv)
of the definition of "Indebtedness" ("Specified Indebtedness") except (x)
Specified Indebtedness owed to the Company, (y) Specified Indebtedness secured
by mortgages, pledges, security interests, encumbrances, liens or charges of any
kind permitted in Section 6.9 hereof and (z) Unsecured Specified Indebtedness
incurred in connection with the issuance of industrial revenue bonds, (ii) will
not permit the aggregate Specified Indebtedness of its Subsidiaries, excluding
Specified Indebtedness owed to the Company, to exceed 20% of Consolidated
Adjusted Net Worth and (iii) will not permit the aggregate of all Specified
Indebtedness of Subsidiaries secured by mortgages, pledges, security interests,
encumbrances, liens or charges of any kind permitted in Section 6.9 hereof
(excluding
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secured Specified Indebtedness incurred in connection with the issuance of
industrial revenue bonds) to exceed 10% of Consolidated Adjusted Net Worth.
Section 6.9. Limitation on Liens. The Company will not, and will not permit
any Subsidiary to, create or incur, or suffer to be incurred or to exist, any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind on
its or their property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any property for the purpose
of subjecting the same to the payment of obligations in priority to the payment
of its or their general creditors, or acquire or agree to acquire, or permit any
Subsidiary to acquire, any property or assets upon conditional sales agreements
or other title retention devices, except:
(a) liens for property taxes and assessments or governmental charges
or levies and liens securing claims or demands of mechanics and materialmen
and the like, provided that payment thereof is not at the time required by
Section 6.3;
(b) liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review
shall have been secured;
(c) liens, charges, encumbrances and priority claims incidental to the
conduct of business or the ownership of properties and assets (including,
without limitation, warehousemen's and attorneys' liens and statutory
landlords' liens) and deposits, pledges or liens to secure the performance
of bids, tenders or trade contracts, security deposits on leases, or to
secure statutory obligations, surety or appeal bonds or other liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money, provided in each case, the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(d) survey exceptions or encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar purposes,
or zoning or other restrictions as to the use of real properties, which do
not in any event materially impair their use in the operation of the
business of the Company and its Subsidiaries or materially adversely affect
the value of the real property in question;
(e) mortgages, liens or security interests securing Indebtedness of a
Subsidiary to the Company or to another Subsidiary;
(f) mortgages, conditional sale contracts, security interests or other
arrangements for the retention of title (including Capitalized Leases)
existing as of May 28, 1989, securing Funded Debt of the Company or any
Subsidiary outstanding on such date; and
(g) mortgages, conditional sale contracts, security interests or other
arrangements for the retention of title (including Capitalized Leases)
incurred
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after the date hereof given to secure the payment of the purchase price
incurred in connection with the acquisition of fixed assets useful and
intended to be used in carrying on the business of the Company or a
Subsidiary, including liens existing on such fixed assets at the time of
acquisition thereof or at the time of acquisition by the Company or a
Subsidiary of any business entity then owning such fixed assets, whether or
not such existing liens were given to secure the payment of the purchase
price of the fixed assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of such acquisition,
provided that (i) except in connection with an industrial development bond
financing where applicable law shall otherwise require, the lien or charge
shall attach solely to the property acquired or purchased, (ii) at the time
of acquisition of such fixed assets, the aggregate amount remaining unpaid
on all Indebtedness secured by liens on such fixed assets whether or not
assumed by the Company or a Subsidiary shall not exceed an amount equal to
the lesser of the total purchase price or fair market value at the time of
acquisition of such fixed assets (as determined in good faith by the Board
of Directors, the Chairman of the Board, the President or the Chief
Financial Officer of the Company), (iii) such liens or charges shall arise
contemporaneously with, or within 90 days of, the acquisition or completion
of construction of such fixed assets, and (iv) all such Indebtedness shall
have been incurred within the applicable limitations provided in Section
6.8.
Section 6.10. Restricted Payments. The Company will not, directly or
indirectly, and will not permit any Subsidiary to:
(a) Declare or pay any dividends, either in cash or property, on any
class of the capital stock of the Company (except dividends or stock splits
payable solely in common stock of the Company); or
(b) Purchase, redeem or retire any of the capital stock of the Company
or any warrants, rights or options to purchase or acquire any shares of
such capital stock; or
(c) Make any other distribution of assets or property In respect of
the capital stock of the Company; or
(d) Make any Investment; or
(e) Make any optional prepayment of any subordinated debt (as defined
below) of the Company or any Subsidiary; or
(f) Make an excess contribution to a Joint Venture (the term "excess
contribution" for purposes hereof being deemed to be the amount by which
(i) any capital or other contribution, loan or advance other than by way of
a guarantee or pursuant to a Maintenance Agreement to a Joint Venture
created or entered into after March 3, 1986 plus (ii) the then outstanding
capital or other contributions, loans and advances of the Company and its
Subsidiaries to all Joint Ventures created or entered into after March 3,
1986, exceeds 10% of Consolidated Total Capitalization at the time of
making such contribution);
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(the foregoing being hereinafter collectively referred to as "Restricted
Payments") if, after giving effect thereto, the aggregate amount of all
Restricted Payments made during the period from and after March 3, 1986, to
and including the date of the making of the Restricted Payment in question,
would exceed the sum of:
(i) $5,000,000, plus
(ii) 100% of the Consolidated Net Earnings for such period
(computed on a cumulative basis for the entire period from March
3, 1986), plus
(iii) The aggregate net cash consideration received by the
Company from the sale after March 3, 1986 of any shares of its capital
stock or warrants to acquire shares of its capital stock or any
Indebtedness that is converted into shares of its capital stock or the
value of capital stock issued in conjunction with the Company's
acquisition of other businesses, not to exceed the cost basis of the
tangible assets acquired, plus
(iv) The net cash proceeds from the sale, repayment or
liquidation of any Investment made after March 3, 1986 but only to the
extent such proceeds represent a return of capital invested in such
Investment.
For purposes of this Section, (x) the amount of any Restricted Payment which is
payable or distributable in property other than cash or shares of capital stock
of the Company shall be deemed to be the greater of the book value or fair
market value (as determined in good faith by the Board of Directors, the
Chairman of the Board, the President or the Chief Financial Officer of the
Company) of such property as of the date of the declaration or payment of such
Restricted Payment, (y) "subordinated debt" means any Indebtedness which by its
terms, or by operation of law, is subordinate, with respect to any security
therefor and with respect to right of payment, to the Notes, and (z) stock
repurchases totaling up to $12,000,000 which are made on or prior to August 31,
1990 out of the proceeds of the sale of the Company's Cast Products Group
described in Section 3.1(i) hereof shall not be included in "Restricted
Payments".
Section 6.11. Sale of Assets. The Company will not, and will not permit
any Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively a
"Disposition") any asset, other than in the ordinary course of business, to any
Person, other than the Company or any Wholly-owned Subsidiary, if the book value
of such assets (i) when added to the book value of all other assets sold,
leased, transferred or otherwise disposed of (other than in the ordinary course
of business or to the Company or any Wholly-owned Subsidiary) by the Company and
its Subsidiaries during the same fiscal year, exceeds 10% of Consolidated
Adjusted Assets, determined as of the end of the immediately preceding fiscal
year or (ii) when added to the book value of all other assets sold, leased,
transferred or otherwise disposed of (other than in the ordinary course of
business or to the Company or any Wholly-owned Subsidiary) by the Company and
its Subsidiaries from August 31, 1989 through the date of such sale, lease or
other disposition, exceeds 25% of Consolidated Adjusted Assets, determined as of
the end of the immediately preceding fiscal year. Notwithstanding the foregoing,
(a) the book value of the assets sold, leased, transferred or otherwise disposed
of in connection with any Disposition shall not be required to be included in
the foregoing computations to the extent that the Company shall, within one year
after such Disposition, invest, or cause
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a subsidiary to invest, the net proceeds thereof in other property useful and to
be used in the business of the Company and its Subsidiaries (whether new,
additional or replacement property but excluding property purchased as part of
regular upkeep and maintenance), (b) the Company or any such Subsidiary may make
a Disposition if such Disposition is effected under or pursuant to (x) any law
or governmental regulations, decree or order of any applicable court, government
or governmental body having power of eminent domain requiring such Disposition,
(y) a threat of expropriation, condemnation, involuntary sale, or divestiture of
such asset by any applicable government or governmental body having power of
eminent domain, or (z) any agreement with a government or a political
subdivision, agency or instrumentality thereof, provided, however, that the book
value of assets permitted to be disposed of pursuant to this clause (b) shall be
included in all future computations in respect of the fiscal year of such
Disposition under this Section 6.11 unless the proceeds of such Disposition
shall be invested within one year after such Disposition in the manner described
in clause (a), above, and (c) the book value of the assets sold, leased,
transferred or otherwise disposed of in connection with (x) the Disposition of
the Cast Products Group (which Disposition is more fully described in Section
3.1(i) hereof and (y) the Dispositions of the Company's facilities located on
the Closing Date in Columbia, Louisiana and Meridian, Mississippi, which
Dispositions are more fully described in Section 3.1(t) hereof, shall not be
required to be included in the foregoing computation; provided, however, that
provisions of this clause (c) shall apply to the Dispositions described in
clause (y) hereof only to the extent that such Dispositions shall be consummated
on or prior to December 31, 1989.
The Company shall promptly notify each holder of Notes when either (i)
the aggregate book value of assets sold, leased, transferred or otherwise
disposed of by the Company and its Subsidiaries (other than in the ordinary
course of business or to the Company or any Wholly-owned Subsidiary) in any
fiscal year exceeds 10% of Consolidated Adjusted Assets, determined as of the
end of the immediately preceding fiscal year or (ii) the aggregate book value of
assets sold, leased, transferred or otherwise disposed of by the Company and its
Subsidiaries (other than in the ordinary course of business or to the Company or
any Wholly-owned Subsidiary) from August 31, 1989 through the date of such sale,
lease or other disposition exceeds 25% of Consolidated Adjusted Assets,
determined as of the end of the immediately preceding fiscal year.
Notwithstanding the foregoing, if any Disposition involves shares or
Indebtedness of a Subsidiary, the Company will not, and will not permit any
Subsidiary to, make such Disposition unless such Disposition would be permitted
by Section 6.13.
Section 6.12. Merger. The Company will not, and will not permit any
Subsidiary to, merge or consolidate with any other Person, except that:
(a) The Company may merge into any Person, or permit any other Person
to merge into it, provided that immediately after giving effect thereto,
the Company shall be the successor corporation and shall be in compliance
with all Provisions of this Agreement; and
(b) any Subsidiary may (i) merge Into the Company or a Wholly-owned
Subsidiary or (ii) consolidate or merge with any Person other than the
Company
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or a Subsidiary, provided that (x) such Subsidiary is the successor
corporation or (y) if such Subsidiary is not the successor corporation,
either (A) the Company's entire equity interest in such Subsidiary is
disposed of and no Indebtedness shall be owed by the Company to such
Subsidiary or its successor or (B) the successor corporation becomes a
Subsidiary as a result of such consolidation or merger, provided that in
any of such events the Company immediately thereafter shall be in
compliance with all of the provisions of this Agreement.
Section 6.13. Disposition of Stock of Subsidiaries. The Company will not,
and will not permit any Subsidiary to, issue, sell or transfer the capital stock
of a Subsidiary if such issuance, sale or transfer would cause it to cease to be
a Subsidiary unless all shares of such capital stock of such Subsidiary and all
Indebtedness of such Subsidiary owned by the Company and by every other
Subsidiary shall simultaneously be sold, transferred or otherwise disposed of
and such sale would not be prohibited under Section 6.11 and provided further
that such Subsidiary does not own any shares of stock or Indebtedness of another
Subsidiary.
Section 6.14. Maintenance of Records. The Company will keep, and will cause
each Subsidiary to keep, at all times proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to the business and affairs of the Company or
such Subsidiary, in accordance with generally accepted accounting principles
consistently applied throughout the period involved (except for such changes as
are disclosed in such financial statements or in the notes thereto and concurred
in by the independent certified public accountants), and the Company will, and
will cause each Subsidiary to, provide reasonable protection against loss or
damage to such books of record and account.
Section 6.15. Financial Information and Reports. The Company will furnish
to you and to any other Institutional Holder (in duplicate if you or such other
holder so request), the following:
(a) As soon as available and in any event within 45 days after the end
of each of the first three quarterly accounting periods of each fiscal year
of the Company:
(1) consolidated balance sheets of the Company and its
Subsidiaries as of the close of such quarter setting forth in
comparative form the amount for the corresponding period of the
preceding fiscal year,
(2) consolidated statements of income and retained earnings of
the Company and its Subsidiaries for such quarterly period, setting
forth in comparative form the amount for the corresponding period of
the preceding fiscal year, and
(3) consolidated statements of cash flows of the Company and its
Subsidiaries for the portion of the fiscal year ending with such
quarter, setting forth in comparative form the amount for the
corresponding period of the preceding fiscal year,
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all in reasonable detail prepared in accordance with generally accepted
accounting principles consistently applied throughout the period involved
(except for such changes as are disclosed in such financial statements or
in the notes thereto and concurred in by the independent certified public
accountants) and certified by the chief financial officer of the Company
(i) outlining the basis of presentation, and (ii) stating that the
information presented in such statements fairly presents the financial
condition of the Company and its Subsidiaries and the results of operations
for the period, subject to year-end audit adjustments;
(b) As soon as available and in any event within 90 days after the
last day of each fiscal year of the Company:
(1) consolidated balance sheets of the Company and its
Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings and
cash flows of the Company and its Subsidiaries for such fiscal year,
all in reasonable detail, prepared in accordance with generally accepted
accounting principles consistently applied throughout the period involved
(except for changes as are disclosed in such financial statements or in the
notes thereto and concurred in by the independent certified public
accountants) and accompanied by a report of a firm of independent public
accountants of recognized national standing selected by the Company;
(c) Together with the financial reports delivered pursuant to
Paragraphs (a) and (b) of this Section 6.15, a certificate of the chief
financial officer, (i) to the effect that the signer thereof has
re-examined the terms and provisions of this Agreement and that, to the
best of his knowledge, at the date of said certificate, during the periods
covered by such financial reports and as of the end of such periods, no
Event of Default, or event which, with the lapse of time or the giving of
notice, or both, would become an Event of Default hereunder, occurred as
of the date of such statement or during such periods, or if the signer is
aware of any such event or Event of Default, he shall disclose in such
statement the nature thereof, its period of existence and what action, If
any, the Company has taken or proposes to take with respect thereto, and
(ii) stating whether the Company is in compliance with Sections 6.6, 6.7,
6.8, 6.9 and 6.10 and setting forth, in sufficient detail, the information
and computations required to establish whether or not the Company was in
compliance with the requirements of Sections 6.6, 6.7, 6.8, 6.10 and 6.11
during the periods covered by the financial reports then being furnished
and as of the end of such fiscal period;
(d) Together with the financial reports delivered pursuant to
Paragraph (b) of this Section 6.15, a certificate of the independent public
accountants stating that in making the examination necessary for expressing
an opinion on such financial statements, nothing came to their attention
that caused them to believe that there is in existence or has occurred any
Event of Default hereunder, or any event (the occurrence of which is
ascertainable by accountants in the course of normal audit procedures)
which, with the lapse of time or the
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giving of notice, or both, would become an Event of Default hereunder or,
if such accountants shall have obtained knowledge of any such event or
Event of Default, they shall disclose in such certificate the nature
thereof and the length of time it has existed;
(e) Within 5 days after the Company obtains knowledge thereof, notice
of any litigation or governmental proceeding pending against the Company or
any Subsidiary which might materially adversely affect the business,
operations or condition, financial or otherwise, of the Company or any of
its Subsidiaries;
(f) As soon as available, copies of such financial statements,
notices, reports and proxy statements as the Company shall furnish to its
shareholders; copies of all registration statements and periodic reports
which the Company may file with the Securities and Exchange Commission, and
any other similar or successor agency of the Federal government
administering the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as
amended (other than any registration statements filed on Form S-8 and
relating solely to employee benefit plans operated by the Company or any
Subsidiary); and copies of all reports relating to the Company or its
securities which the Company may file with any securities exchange on which
any of the Company's securities may be registered;
(g) As soon as available, a copy of each other report submitted to the
Company or any Subsidiary by independent accountants retained by the
Company or any Subsidiary in connection with any interim or special audit
made by them of the books of the Company or any Subsidiary; and
(h) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Company and its
Subsidiaries.
Section 6.16. Inspection of Properties and Records. The Company will allow,
and will cause each Subsidiary to allow, any representative of you or any other
Institutional Holder, so long as you or such other Institutional Holder shall
hold any Note, to visit and inspect any of its properties, to examine its books
of record and account and to discuss its affairs, finances and accounts with its
officers and its public accountants (and by this provision the Company and each
Subsidiary hereby authorize such accountants to discuss with you or such
Institutional Holder its affairs, finances and accounts), all at such reasonable
times and as often as you or such Institutional Holder may reasonably request.
With respect to the financial statements or other information delivered
pursuant to Section 6.15 hereof or this Section 6.16 and any other information
heretofore obtained by you or obtained by you or any other Institutional Holder
with respect to the Company or any of its Subsidiaries as a result of any
examination or discussion contemplated under this Section 6.16 hereof, you and
any such other Institutional Holder agree that, to the extent that such
Information therein contained has not theretofore otherwise been disclosed by or
as authorized by the Company in such a manner as to render such information no
longer confidential or to the extent that such information has otherwise become
publicly available, you and such other
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Institutional Holder will use your best efforts to reasonably maintain the
confidential nature of the information therein contained in accordance with
standards generally adhered to in the private placement industry; provided, that
anything herein contained to the contrary notwithstanding, you or such other
Institutional Holder may disclose or disseminate such information to: (a) your
employees, agents, attorneys, consultants and accountants in the course of the
performance of their duties, (b) such third parties as you may, in your
discretion (which you agree shall be exercised in a manner consistent with
standards generally adhered to in the private placement industry), deem
reasonably necessary or desirable in connection with or in response to (i)
compliance with any law, ordinance or governmental order, regulation, rule,
policy, subpoena, investigation, or regulatory authority request, or (ii) any
order, decree, judgment, subpoena, notice of discovery or similar ruling or
pleading issued, filed, served or purported on its face to be issued, filed or
served (x) by or under authority of any court, tribunal, arbitration board of
any governmental or industry agency, commission, authority, board or similar
entity or (y) in connection with any proceeding, case or matter pending (or on
its face purported to be pending) before any court, tribunal, arbitration board
or any governmental agency, commission, authority, board or similar entity; (c)
any prospective purchaser, securities broker or dealer or investment banker in
connection with the resale or proposed resale by you or such other Institutional
Holder of any portion of the Notes and who shall agree to accept such
information subject to the provisions of this Section 6.16; (d) any Person
holding your debt or equity Securities who for good cause and a proper purpose
shall have requested to inspect such information in its capacity as a holder of
such Securities who shall agree to accept such information subject to the
provisions of this Section 6.16; (e) the National Association of Insurance
Commissioners; (f) any entity utilizing such information to rate or classify
your debt or equity Securities; and (g) any Person owning a limited partnership
interest in you or the members of any board acting in an advisory capacity to
you and who shall agree to accept such information subject to the provisions of
this Section 6.16; and, provided further, that you shall not be liable to the
Company or any other Person for damages for any failure by you to comply with
the provisions of this Section 6.16;
Section 6.17. Dealings with Affiliates. The Company will not, and will
not permit any Subsidiary to, enter into any transaction (including the
furnishing of goods or services) with an Affiliate except in the ordinary course
of business as presently conducted and on terms and conditions no less favorable
to the Company or such Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
Section 6.18. ERISA. (a) The Company agrees that the actuarial valuation
of employee benefits, both vested and unvested, under any Plan of the Company or
any Subsidiary, will be based on assumptions and methods represented in writing
on an annual basis by execution of a Schedule B to the Form 5500 Series annual
financial report as being reasonable by the "enrolled actuary" (as defined in
Title I of ERISA) for each such Plan and that each such Plan will comply in all
material respects with ERISA and other applicable laws or will be brought into
compliance within applicable remedial amendment periods.
(b) The Company will not at any time permit any Plan maintained by it or
by any Subsidiary or "affiliate" (as defined in Section 407(d)(7) of ERISA) to:
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(i) engage in any "prohibited transaction" as such term is defined in
Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to result in
the imposition of a lien on the property of the Company or any Subsidiary
pursuant to Section 4068 of ERISA, if and to the extent such termination is
within the control of the Company;
if the event or condition described in (i), (ii) or (iii) above is likely to
subject the Company or any Subsidiary or "affiliate" to a liability which, in
the aggregate, is material in relation to the business, operations, property or
condition, financial or otherwise, of the Company and its Subsidiaries, taken as
a whole.
(c) Upon the request of you or any other Institutional Holder, the Company
will furnish a copy of the annual report of each Plan (Form 5500) required to be
filed with the Internal Revenue Service. Copies of annual reports shall be
delivered no later than 30 days after the later of the date such report has been
filed with the Internal Revenue Service or the date the copy is requested.
Section 6.19. Compliance with Laws. The Company will comply, and will cause
each of its Subsidiaries to comply, with all laws, rules and regulations
relating to their respective businesses, other than laws, rules and regulations
the failure to comply with which and the sanctions and penalties resulting
therefrom, when taken together with the failure to comply with all other laws,
rules and regulations and the sanctions and penalties resulting therefrom, would
not have a material adverse effect on the operations, business, property, assets
or condition, financial or otherwise, of the Company and its Subsidiaries, taken
as a whole, or would not result in the creation of a lien which, if incurred in
the ordinary course of business, would not be permitted by Section 6.9(a) on any
of the property of the Company or any Subsidiary; provided, however, that the
Company and its Subsidiaries shall not be required to comply with laws, rules
and regulations the validity or applicability of which are being contested in
good faith and by appropriate proceedings.
Section 6.20. Consolidated Tax Returns. The Company will not file, or
consent to the filing of, any consolidated Federal income tax return with any
Person other than a Subsidiary, except to the extent that the Company is
required under the Internal Revenue Code to do otherwise.
Section 6.21. Acquisition of Notes. The Company will forthwith cancel any
Notes in any manner or at any time acquired by the Company or any Subsidiary or
Affiliate and such Notes shall not be deemed to be outstanding for any of the
purposes of this Agreement or the Notes.
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SECTION 7. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 7.1. Nature of Events. An "Event of Default" shall exist in case
any one or more of the following occurs and is continuing:
(a) Default in the payment of interest when the same shall have become
due on any of the Notes and such default shall continue five days;
(b) Default in the making of any required prepayment on any of the
Notes as required or contemplated in Section 2.1;
(c) Default in the payment of the principal of any of the Notes or the
premium thereon, if any, at maturity, upon acceleration of maturity or at
any date fixed in any notice for prepayment;
(d) Default shall occur (i) in the payment of the principal of or
interest on any other indebtedness, as and when the same shall become due
and payable, of the Company or any Subsidiary for borrowed money, provided
the principal amount of such indebtedness at the time of such default
exceeds $3,000,000, (ii) under any mortgage, agreement or other instrument
under or pursuant to which such indebtedness for borrowed money (the
principal amount of which at the time of default exceeds $3,000,000) is
issued, or (iii) under any Capitalized Lease, or any operating lease the
remaining rentals of which at the time of default exceed $3,000,000,
regardless of whether such default would be an Event of Default hereunder,
and such default under (i), (ii) or (iii) above shall continue, unless
waived, beyond the period of grace, if any, allowed with respect thereto;
(e) Default shall occur in the observance or performance of any of the
covenants or conditions contained in Section 6.18, Section 6.20 or Sections
6.5 through 6.13 which is not remedied within 10 days;
(f) Default shall occur under any other covenant or provision of this
Agreement which is not remedied within 30 days after written notice thereof
to the Company by the holder of any of the Notes;
(g) Any representation or warranty made by the Company herein, or made
by the Company in any written statement or certificate furnished by the
Company in connection with the issuance and sale of the Notes or furnished
by the Company pursuant hereto, proves incorrect in any material respect as
of the date of the issuance or making thereof;
(h) Any judgment, writ or warrant of attachment on or any similar
process in an aggregate amount in excess of $5,000,000 shall be entered or
filed against the Company or any Subsidiary or against any property or
assets of either and remain unpaid, unvacated, unbonded or unstayed
(through appeal or otherwise) for a period of 45 days after the Company
receives notice thereof;
(i) The Company shall incur a "Distress Termination" (as defined in
Title IV of ERISA) of any Plan or any trust created thereunder which
results in material liability to the PBGC, the PBGC shall institute
proceedings to
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terminate any Plan or any trust created thereunder, or a trustee shall be
appointed by a United States District Court pursuant to Section 4042(b) of
ERISA to administer any Plan or any trust created thereunder;
(j) The Company or any Subsidiary shall be in financial difficulties
as evidenced
(i) by its generally not paying its debts as they become due or
its admitting in writing its inability to pay its debts generally as
they become due;
(ii) by its filing a petition in bankruptcy or for reorganization
or for the adoption of an arrangement under the Federal Bankruptcy
Act, or any similar applicable bankruptcy or insolvency law, as now or
in the future amended (herein collectively called "Bankruptcy Laws"),
or an answer or other pleading admitting or failing to deny the
material allegations of such a petition or seeking, consenting to or
acquiescing in relief provided for under the Bankruptcy Laws;
(iii) by making an assignment of all or a substantial part of its
property for the benefit of its creditors;
(iv) by seeking or consenting to or acquiescing in the
appointment of a receiver, liquidator, custodian or trustee of it or
for all or a substantial part of its property;
(v) by being finally adjudicated a bankrupt or insolvent;
(vi) by the entry of a court order, which shall not be vacated,
set aside or stayed within 60 days from the date of entry, appointing
a receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property, or approving a petition filed
against it for, or effecting an arrangement in, bankruptcy or for a
reorganization pursuant to the Bankruptcy Laws or for any other
judicial modification or alteration of the rights of creditors; or
(vii) by the assumption of custody or sequestration by a court of
competent jurisdiction of all or a substantial part of its property,
which custody or sequestration shall not be suspended or terminated
within 60 days from its inception.
Section 7.2. Remedies on Default. When (i) any Event of Default described
in Section 7.1 hereof, except Paragraphs (a), (b) and (c) thereof, has happened
and is continuing, the holder or holders of at least 25% in principal amount of
the Notes then outstanding may, and when (ii) any Event of Default described in
Paragraphs (a), (b) and (c) of Section 7.1 hereof has happened and is
continuing, any holder may (in addition to any other right, power or remedy
permitted to such holder or holders by law) declare the entire principal and all
interest accrued on all the Notes then outstanding to be, and such Notes shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby
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expressly waived. The Company will forthwith pay to the holder or holders of all
the Notes then outstanding the entire principal of and interest accrued on such
Notes.
The Company agrees to pay to each holder of the Notes then outstanding
all reasonable costs and expenses incurred by it in the collection or
enforcement of any such Notes, including reasonable compensation to such
holder's attorneys for all services rendered in connection therewith to the
extent permitted by law.
Section 7.3. Annulment of Acceleration of Notes. The provisions of the
foregoing Section 7.2 are subject to the condition that if the principal of and
accrued interest on the Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default, the holder or holders of
66-2/3% in aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such declaration
and the consequences thereof, provided that (i) at the time such declaration is
annulled and rescinded no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement, (ii) all arrears of
interest upon all the Notes and all other sums payable under the Notes and under
this Agreement (except any principal, interest or premium on the Notes which has
become due and payable solely by reason of such declaration under Section 7.2)
shall have been duly paid and (iii) each and every other Event of Default shall
have been cured or waived, and provided further, that no such rescission and
annulment shall extend to or affect any subsequent default or Event of Default
or impair any right consequent thereto.
Section 7.4. Other Remedies. If any Event of Default shall be
continuing, any holder of Notes may enforce its rights by suit in equity, by
action at law, or by any other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or agreement
contained in this Agreement or in the Notes or in aid of the exercise of any
power granted in this Agreement, and may enforce the payment of any Note held by
such holder and any of its other legal or equitable rights.
Section 7.5. Conduct No Waiver. No course of dealing on the part of any
holder of Notes, nor any delay or failure on the part of any holder of Notes to
exercise any of its rights, shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies.
Section 7.6. Remedies Cumulative. No right or remedy conferred upon or
reserved to any holder of Notes under this Agreement is intended to be exclusive
of any other right or remedy, and every right and remedy shall be cumulative and
in addition to every other right or remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy given by this
Agreement or by applicable law to any holder of Notes may be exercised from time
to time and as often as may be deemed expedient by such holder, as the case may
be.
Section 7.7. Notice of Default. With respect to Events of Default or
claimed defaults, the Company will give the following notices:
(a) The Company promptly, but in any event within 5 days, will furnish
to each holder of Notes notice in writing by registered mail, return
receipt
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requested, of the occurrence of an Event of Default or an event which, with
the lapse of time or the giving of notice, or both, would become an Event
of Default. Such notice shall specify the nature of such default, the
period of existence thereof and what action the Company has taken or is
taking or proposes to take with respect thereto.
(b) If the holder of any Note or of any other evidence of indebtedness
of the Company or any Subsidiary gives any notice or takes any other action
with respect to a claimed default, the Company will forthwith give written
notice thereof to each holder of the then outstanding Notes, describing the
notice or action and the nature of the claimed default.
SECTION 8. AMENDMENTS, WAIVERS AND CONSENTS.
Section 8.1. Matters Subject to Modification. Any term, covenant,
agreement or condition of this Agreement may, with the consent of the Company,
be amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the Company
shall have obtained the consent in writing of the holder or holders of at least
66-2/3% in aggregate principal amount of outstanding Notes; provided, however,
that without the written consent of the holder or holders of all of the Notes
then outstanding, no such waiver, modification, alteration or amendment shall be
effective which will (a) extend the time or decrease the amount of payment
(including any required prepayment) of the principal of or the interest on any
Note, (b) reduce the principal amount thereof or the premium, if any, or reduce
the rate of interest thereon, (c) change any provision of any instrument
affecting the preferences between holders of the Notes or between holders of the
Notes and other creditors of the Company, or (d) change any of the provisions of
Section 7.1, Section 7.2, Section 7.3 or this Section 8.
For the purpose of determining whether holders of the requisite
principal amount of Notes have made or concurred in any waiver, consent,
approval, notice or other communication under this Agreement, Notes held in the
name of, or owned beneficially by, the Company, any Subsidiary or any Affiliate
of any thereof, shall not be deemed outstanding.
Section 8.2. Solicitation of Holders of Notes. The Company will not
solicit, request or negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of this Agreement or the Notes unless each
holder of the Notes (irrespective of the amount of Notes then owned by it) shall
concurrently be informed thereof by the Company and shall be afforded the
opportunity of considering the same and shall be supplied by the Company with
sufficient Information to enable it to make an informed decision with respect
thereto. Executed or true and correct copies of any waiver or consent effected
pursuant to the provisions of this Section 8 shall be delivered by the Company
to each holder of outstanding Notes forthwith following the date on which the
same shall have been executed and delivered by the holder or holders of the
requisite percentage of outstanding Notes. The Company will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of the
Notes as consideration for or as an inducement to the entering into by any
holder of the Notes of any waiver or
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amendment of any of the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms, ratably to each holder of
the then outstanding Notes.
Section 8.3. Binding Effect. Any such amendment or waiver shall apply
equally to all the holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Company whether or not such Note
shall have been marked to indicate such amendment or waiver. No such amendment
or waiver shall extend to or affect any obligation not expressly amended or
waived or impair any right related thereto.
SECTION 9. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT.
Section 9.1. Form of Notes. The Notes initially delivered under this
Agreement will be in the form of fully registered Notes in the form attached
hereto as Exhibit A. The Notes are issuable only in fully registered form and in
denominations of $500,000 and any whole multiples of $100,000 greater than
$500,000 (or the remaining outstanding balance thereof, if less than $500,000).
Section 9.2. Note Register. The Company shall cause to be kept at its
principal office a register (the "Note Register") for the registration and
transfer of the Notes. The names and addresses of the holders of Notes, the
transfer thereof and the names and addresses of the transferees of the Notes
shall be registered in the Note Register. The Company may deem and treat the
person in whose name a Note is so registered as the holder and owner thereof for
all purposes and shall not be affected by any notice to the contrary, until due
presentment of such Note for registration of transfer as provided in this
Section 9.
Section 9.3. Issuance of New Notes upon Exchange or Transfer. Upon
surrender for exchange or registration of transfer of any Note at the office of
the Company designated for notices in accordance with Section 10.2, the Company
shall execute and deliver, at its expense, one or more new Notes of any
authorized denominations requested by the holder of the surrendered Note, each
dated the date to which interest has been paid on the Notes so surrendered (or,
if no interest has been paid, the date of such surrendered Note), but in the
same aggregate unpaid principal amount as such surrendered Note, and registered
in the name of such person or persons as shall be designated in writing by such
holder. Every Note surrendered for registration of transfer shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or by his attorney duly authorized in writing. The
Company may condition its issuance of any new Note or Notes in connection with a
transfer by any Person on compliance with Section 3.2 by any transferee of the
Notes, by Institutional Holders on compliance with Section 2.5 and on the
payment to it of a sum sufficient to cover any stamp tax or other governmental
charge imposed in respect of such transfer.
Section 9.4. Replacement of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of
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<PAGE> 39
indemnity in such form and amount as shall be reasonably satisfactory to the
Company or in the event of such mutilation upon surrender and cancellation of
the Note, the Company, without charge to the holder thereof, will make and
deliver a new Note, of like tenor in lieu of such lost, stolen, destroyed or
mutilated Note. If any such lost, stolen or destroyed Note is owned by you or
any other Institutional Holder (whose credit is satisfactory to the Company),
then the affidavit of an authorized officer of such owner setting forth the fact
of loss, theft or destruction and of its ownership of the Note at the time of
such loss, theft or destruction shall be accepted as satisfactory evidence
thereof, and no further indemnity shall be required as a condition to the
execution and delivery of a new Note, other than a written agreement of such
owner (in form reasonably satisfactory to the Company) to indemnify the Company.
SECTION 10. MISCELLANEOUS.
Section 10.1. Expenses. Whether or not the purchase of Notes herein
contemplated shall be consummated, the Company agrees to pay directly all
reasonable expenses in connection with the preparation, execution and delivery
of this Agreement and the transactions contemplated hereby, including, but not
limited to, reasonable out-of-pocket expenses, the charges and disbursements of
special counsel, which shall be payable on the Closing Date, photocopying and
printing costs and charges for shipping the Notes, adequately insured, to you at
your home office or at such other address as you may designate, and all similar
expenses relating to any amendment, waivers or consents in connection with this
Agreement or the Notes. The Company also agrees that it will pay and save you
harmless against any and all liability with respect to stamp and other
documentary taxes, if any, which may be payable, or which may be determined to
be payable in connection with the execution and delivery of this Agreement or
the Notes (but not in connection with a transfer of any Notes), whether or not
any Notes are then outstanding. The obligations of the Company under this
Section 10.1 shall survive the retirement of the Notes.
Section 10.2. Notices. Except as otherwise expressly provided herein all
communications provided for hereunder shall be in writing and delivered or sent
by registered or certified mail, return receipt requested, or by overnight
courier (i) if to you, addressed as this Agreement is addressed or to such other
address as you may in writing designate, (ii) if to any other holder of the
Notes, to such address as the holder may designate in writing to the Company,
and (iii) if to the Company, Amcast Industrial Corporation, 3931 S. Dixie
Avenue, P.O. Box 98, Dayton, Ohio 45401, Attention: Treasurer, or to such other
address as the Company may in writing designate.
Section 10.3. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by you
at the closing of the purchase of the Notes (except the Notes themselves), and
(c) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process, and you may destroy any original document so reproduced. The Company
agrees and stipulates that any such reproduction which is legible shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and
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<PAGE> 40
whether or not such reproduction was made by you in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence; provided that nothing
herein contained shall preclude the Company from objecting to the admission of
any reproduction on the basis that such reproduction is not accurate, has been
altered, is otherwise incomplete or is otherwise inadmissible.
Section 10.4. Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
Section 10.5. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio. No provision of this
Agreement may be waived, changed or modified, or the discharge thereof
acknowledged, orally, except only by an agreement in writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge is
sought.
Section 10.6. Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
Section 10.7. Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart or reproduction thereof permitted by Section
10.3.
Section 10.8. Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with a
closing, (i) shall be deemed to have been relied upon by you, notwithstanding
any investigation heretofore or hereafter made by you or on your behalf and (ii)
shall survive the delivery of this Agreement and the Notes.
Section 10.9. Integration and Severability. This Agreement embodies the
entire agreement and understanding between you and the Company, and supersedes
all prior agreements and understandings relating to the subject matter hereof.
In case any one or more of the provisions contained in this Agreement or in any
Note, or application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein, and any other application thereof, shall not in
any way be affected or impaired thereby.
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<PAGE> 41
IN WITNESS WHEREOF, the Company and the Purchaser have caused this
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.
AMCAST INDUSTRIAL CORPORATION
By /s/ Michael R. Higgins
------------------------------------
Title Treasurer
[SEAL]
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By /s/ Fredrick A. Bell
------------------------------------
Title Assistant Director
Securities Investment
By /s/ Warren Shank
------------------------------------
Title COUNSEL
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<PAGE> 1
Exhibit 4.9
FIRST AMENDMENT TO CREDIT AND INTERCREDITOR AGREEMENT
-----------------------------------------------------
THIS FIRST AMENDMENT TO CREDIT AND INTERCREDITOR AGREEMENT, dated
January 5, 1996 (this "Amendment"), among CASTING TECHNOLOGY COMPANY, an Indiana
general partnership (the "Company"), NBD BANK, a Michigan banking corporation
("NBD"), and THE ASAHI BANK, LTD., a Japanese banking corporation acting through
its Chicago Branch ("Asahi") (NBD and Asahi, collectively, the "Banks" and
individually, a "Bank"), and NBD BANK (in such capacity, the "Agent").
RECITALS
--------
A. The parties hereto have entered into a Credit and Intercreditor
Agreement dated July 28, 1995 (as amended, the "Credit Agreement"), which is in
full force and effect.
B. The Company desires to amend the Credit Agreement as herein
provided, and the Banks and the Agent are willing to so amend the Credit
Agreement on the terms set forth herein.
AGREEMENT
---------
Based upon these recitals, the parties agree as follows:
A. AMENDMENT. Exhibits B and C of the Credit Agreement shall be
replaced by Exhibits B and C attached hereto.
2. REFERENCES TO CREDIT AGREEMENT. From and after the effective date
of this Amendment, references to the Credit Agreement in the Credit Agreement
and all other documents issued under or with respect thereto (as each of the
foregoing is amended hereby or pursuant hereto) shall be deemed to be references
to the Credit Agreement as amended hereby.
3. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Banks and the Agent that:
(a) (i) The execution, delivery and performance of this Amendment and
all agreements and documents delivered pursuant hereto by the Company have been
duly authorized by all necessary action and do not and will not violate any
provision of
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<PAGE> 2
any law, rule, regulation, order, judgment, injunction, or award presently in
effect applying to it, or of its charter, or result in a breach of or constitute
a default under any material agreement, lease or instrument to which the Company
is a party or by which it or its properties may be bound or affected; (ii) no
authorization, consent, approval, license, exemption or filing of a registration
with any court or governmental department, agency or instrumentality is or will
be necessary to the valid execution, delivery or performance by the Company of
this Amendment and all agreements and documents delivered pursuant hereto; and
(iii) this Amendment and all agreements and documents delivered pursuant hereto
by the Company are the legal, valid and binding obligations of the Company,
enforceable against it in accordance with the terms thereof.
(b) After giving effect to the amendments contained herein, the
representations and warranties contained in Article IV (other than Section 4.6)
of the Credit Agreement are true and correct on and as of the effective date
hereof with the same force and effect as if made on and as of such effective
date.
(c) No Event of Default has occurred and is continuing or will exist
under the Credit Agreement as of the effective date hereof.
4. MISCELLANEOUS. The terms used but not defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement. Except as
expressly amended hereby, the Credit Agreement and all other documents issued
under or with respect thereto are hereby ratified and confirmed by the Banks,
the Agent, and the Company and shall remain in full force and effect, and the
Company hereby acknowledges that it has no defense, offset or counterclaim with
respect thereto.
5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart.
6. EXPENSES. The Company agrees to pay and save the Agent and the
Banks harmless from liability for all costs and expenses of the Agent arising in
respect of this Amendment, including the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & Freeman, counsel to the Agent, in
connection with preparing and reviewing this Amendment and any related
agreements and documents.
7. GOVERNING LAW. This Amendment is a contract made under, and shall
be governed by and construed in accordance with, the laws of the State of
Michigan applicable to contracts made and to be performed entirely within such
state and without giving effect to the choice law principles of such state.
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<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the date first written above.
CASTING TECHNOLOGY COMPANY NBD BANK, individually and as Agent
By: AMCAST CASTING
TECHNOLOGIES, INC.,
its General Partner
By: /S/ D. D. WATTS By: /S/ EDWARD C. HATHAWAY
------------------------- ----------------------------
Its: VICE PRESIDENT Its: First Vice President
--------------------- ------------------------
And By: IZUMI, INC., its THE ASAHI BANK, LTD., acting
General Partner through its Chicago branch
By: /S/ SADAO TAURA By: /S/ MASAHIRO KATAGIRI
------------------------- ----------------------------
Its: PRESIDENT Its: Manager
--------------------- ------------------------
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<PAGE> 1
Exhibit 4.10
SECOND AMENDMENT TO CREDIT AND INTERCREDITOR AGREEMENT
------------------------------------------------------
THIS SECOND AMENDMENT TO CREDIT AND INTERCREDITOR AGREEMENT, dated as
of May 31, 1996 (this "Amendment"), among CASTING TECHNOLOGY COMPANY, an Indiana
general partnership (the "Company"), NBD BANK, a Michigan banking corporation
("NBD"), and THE ASAHI BANK, LTD., a Japanese banking corporation acting through
its Chicago Branch ("Asahi") (NBD and Asahi, collectively, the "Banks" and
individually, a "Bank"), and NBD BANK, a Michigan banking corporation, as agent
for the Banks (in such capacity, the "Agent").
RECITALS
--------
A. The parties hereto have entered into a Credit and Intercreditor
Agreement dated July 28, 1995 (as amended, the "Credit Agreement"), which is in
full force and effect.
B. The Company desires to amend the Credit Agreement as herein
provided, and the Banks and the Agent are willing to so amend the Credit
Agreement on the terms set forth herein.
AGREEMENT
---------
Based upon these recitals, the parties agree as follows:
1. AMENDMENT. Upon the Company satisfying the conditions set forth in
Section 4 hereof, the Credit Agreement shall be amended as follows:
(a) The definitions of "Maturity Date" and "Termination Date" in
Section 1.1 shall be amended to read as follows:
"MATURITY DATE" means the maturity date of the Term Loans
issued under Section 2.1(b), which will be August 3, 2002.
"TERMINATION DATE" (of the revolver period) means the earlier
to occur of (a) August 3, 1998, and (b) the date on which the
Commitment shall be terminated pursuant to Section 6.2.
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<PAGE> 2
(b) Section 2.3(c) shall be amended to amend the agency fee by
replacing the number "$4,000" with the number "$5,000" in the second line
thereof.
(c) Section 3.1(a) shall be amended to read as follows:
(a) Unless earlier payment is required under this Agreement, (i)
the Company shall pay to the Banks on the Termination Date the
entire outstanding principal amount of the Revolving Credit Loans,
and (ii) the Company shall pay to the Banks the outstanding
principal amount of the Term Loans in eight equal semi-annual
installments, payable on the third day of each February and
August, commencing on February 3, 1999, to and including the
Maturity Date, when the entire outstanding principal amount of the
Term Loans shall be due and payable.
(d) The notice address for the Company set forth in Section 8.2
shall be amended to read as follows: 1450 Musicland Drive, Franklin, Indiana
46131, Attention: Chief Financial Officer, Facsimile No. (317)-___-____.
(e) The Commitment Amount set forth next to the name of NBD Bank
on the signature page of the Credit Agreement shall be increased by Six Million
Dollars ($6,000,000) to Twenty-One Million Dollars ($21,000,000).
(f) The Commitment Amount set forth next to the name of The Asahi
Bank, Ltd. on the signature page of the Credit Agreement shall be increased by
Four Million Dollars ($4,000,000) to Fourteen Million Dollars ($14,000,000).
(g) The Address for Notices set forth next to the name of NBD
Bank on the signature page of the Credit Agreement shall be amended and restated
in its entirety to read as follows:
One Indiana Square
Suite 308
Indianapolis, Indiana 46266
Attention: Edward C. Hathaway
Facsimile: (317) 266-6042
(h) Exhibit A-1 and Exhibit A-2 to the Credit Agreement shall be
amended and restated in their entirety, to read as set forth on Exhibit A-1 and
Exhibit A-2, respectively, attached to this Amendment.
2. REFERENCES TO CREDIT AGREEMENT. From and after the effective date
of this Amendment, references to the Credit Agreement in the Credit Agreement
and all other
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<PAGE> 3
documents issued under or with respect thereto (as each of the foregoing is
amended hereby or pursuant hereto) shall be deemed to be references to the
Credit Agreement as amended hereby.
3. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to the Banks and the Agent that:
(a) (i) The execution and delivery by the Partners on behalf of
the Company and the performance by the Company of this Amendment and all
agreements, instruments, and documents delivered pursuant hereto by the Company
have been duly authorized by all necessary action and do not and will not
violate any provision of any law, rule, regulation, order, judgment, injunction,
or award presently in effect applying to the Company, or of the Company's
charter, or result in a breach of or constitute a default under any material
agreement, lease or instrument to which the Company is a party or by which it or
its properties may be bound or affected; (ii) no authorization, consent,
approval, license, exemption or filing of a registration with any court or
governmental department, agency or instrumentality is or will be necessary to
the valid execution, delivery or performance by the Company of this Amendment
and all agreements and documents delivered pursuant hereto; and (iii) this
Amendment and all agreements and documents delivered pursuant hereto by the
Company are the legal, valid and binding obligations of the Company, enforceable
against it in accordance with the terms thereof.
(b) After giving effect to the amendments contained herein, the
representations and warranties contained in Article IV (other than Section 4.6)
of the Credit Agreement are true and correct on and as of the effective date
hereof with the same force and effect as if made on and as of such effective
date.
(c) No Default or Event of Default has occurred and is continuing
or will exist under the Credit Agreement as of the effective date hereof.
4. CONDITIONS TO EFFECTIVENESS. This Amendment shall not become
effective until the Agent and each Bank has received the following documents and
the following conditions have been satisfied, each in form and substance
satisfactory to the Agent and each Bank:
(a) Updated Closing Certificates and copies of such organizational
documents of the Company, each of the Partners and each of the Guarantors,
including partnership agreements, articles of incorporation, bylaws (or
certifying as to the continued accuracy of the partnership agreements, articles
of incorporation and bylaws previously delivered to the Banks), good standing
certificates and incumbency certificates, and such documents evidencing
necessary corporate action by each of the Partners and each of the Guarantors
with respect to this Amendment and all other agreements or documents delivered
pursuant hereto;
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<PAGE> 4
(b) Restated Revolving Credit Notes duly executed on behalf of the
Company in favor of each Bank, substantially in the form attached as Exhibit
A-1;
(c) Confirmation of Security Agreement duly executed on behalf of
the Company in favor of the Agent;
(d) Amendment and Confirmation of Guaranty - NBD duly executed on
behalf of the Guarantor in favor of NBD;
(e) First Acknowledgement and Confirmation of Guaranty Agreement -
Asahi duly executed on behalf of the Guarantor in favor of Asahi;
(f) Delivery of an opinion of legal counsel for the Company, each
of the Partners and each of the Guarantors, in form and substance satisfactory
to the Banks;
(g) Payment by the Company to the Banks of a Closing Fee in the
amount of Six Thousand Two Hundred Fifty Dollars ($6,250), to be shared pro rata
between the Banks based on their respective Commitments; and
(h) Such additional agreements and documents, fully executed by
the Company, reasonably requested by the Agent.
5. MISCELLANEOUS. The terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement. Except as
expressly amended hereby, the Credit Agreement and all other documents issued
under or with respect thereto are hereby ratified and confirmed by the Banks,
the Agent, and the Company and shall remain in full force and effect, and the
Company hereby acknowledges that it has no defense, offset or counterclaim with
respect thereto.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this
Amendment by signing any such counterpart.
7. EXPENSES. The Company agrees to pay and save the Agent and the
Banks harmless from liability for all costs and expenses of the Agent and the
Banks arising in respect of this Amendment, including the reasonable fees and
expenses of the respective counsel to the Agent and the Banks in connection with
preparing and reviewing this Amendment and any related agreements and documents.
8. GOVERNING LAW. This Amendment is a contract made under, and shall be
governed by and construed in accordance with, the laws of the State of Michigan
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<PAGE> 5
applicable to contracts made and to be performed entirely within such state and
without giving effect to the choice law principles of such state.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.
CASTING TECHNOLOGY COMPANY
By: AMCAST CASTING TECHNOLOGIES,
INC.,
its General Partner
By: /S/ DOUGLAS D. WATTS
-------------------------
Its: VICE PRESIDENT
--------------------
And By: IZUMI, INC.,
its General Partner
By: /S/ SADAO TAURA
-------------------------
Its: PRESIDENT
--------------------
NBD BANK, individually and as Agent
By: /S/ EDWARD C. HATHAWAY
-------------------------
Its: First Vice President
THE ASAHI BANK, LTD., acting
through its Chicago branch
By: /S/ MASAHIRO KATAGIRI
-------------------------
Its: Manager
89
<PAGE> 6
AMENDMENT AND CONFIRMATION OF GUARANTY AGREEMENT - NBD
------------------------------------------------------
THIS AMENDMENT AND CONFIRMATION OF GUARANTY AGREEMENT - NBD, dated as
of May 31, 1996 (this "Confirmation"), made by Amcast Industrial Corporation, an
Ohio corporation (the "Guarantor"), in favor of NBD Bank, a Michigan banking
corporation ("NBD").
RECITALS
--------
A. Casting Technology Company, an Indiana general partnership (the
"Company"), has entered into a Credit and Intercreditor Agreement dated July 28,
1995 (as amended, the "Credit Agreement") with NBD and The Asahi Bank, Ltd., a
Japanese banking corporation acting through its Chicago Branch ("Asahi")
(collectively, the "Banks" and individually, a "Bank"), and NBD, as agent for
the Banks (in such capacity, the "Agent").
B. The Guarantor has entered into a Guaranty Agreement - NBD, dated as
of July 28, 1995 (the "Guaranty"), in favor of NBD pursuant to which it
guaranteed, among other things, the payment of the Company's obligations to NBD
under the Credit Agreement.
C. The Company, the Banks and the Agent have entered into a Second
Amendment to Credit and Intercreditor Agreement of even date herewith (the
"Second Amendment"), pursuant to which, among other things, the Banks have
agreed to increase the credit facilities of the Company to an aggregate
principal amount not to exceed Thirty-Five Million Dollars ($35,000,000), of
which NBD has committed to provide an aggregate principal amount not to exceed
Twenty-One Million Dollars ($21,000,000).
D. The Guarantor wishes to confirm to NBD its obligations under the
Guaranty and desires to amend the Guaranty to further guaranty the obligations
of the Company to NBD under the Credit Agreement as amended by the Second
Amendment.
AGREEMENT
---------
Based upon these recitals, the parties agree as follows:
1. CONFIRMATION. The Guarantor confirms to NBD the continuing effect
of the Guaranty as a guaranty of the Guaranteed Obligations (as defined in the
Guaranty).
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<PAGE> 7
2. AMENDMENTS.
(a) Section (1)(a) of the Guaranty shall be amended by replacing
the number "$15,000,000" with the number "$21,000,000".
(b) The notice address for NBD set forth in Section 10 of the
Guaranty shall be amended to read as follows: One Indiana Square, Suite 308,
Indianapolis, Indiana 46266, Attention: Edward C. Hathaway.
3. REFERENCES TO THE GUARANTY. From and after the date of this
Confirmation, references in the Credit Agreement, the Guaranty and all other
documents executed pursuant to the Credit Agreement to the Guaranty shall be
deemed to be references to the Guaranty as amended hereby.
4. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants that the representations and warranties set forth in Section 5 of the
Guaranty are true and correct as of the date hereof with the same effect as if
made on that date. Except as expressly amended, the Guaranty shall remain in
full force and effect.
5. COUNTERPARTS. This Confirmation may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this
Confirmation by signing any such counterpart.
6. GOVERNING LAW. This Confirmation is made under, and the rights and
obligations of the parties hereunder, shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts to
be made and to be performed entirely within such State.
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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Confirmation to
be duly executed and delivered as of the date first written above.
AMCAST INDUSTRIAL CORPORATION
By: /S/ DOUGLAS D. WATTS
------------------------------
Its: VICE PRESIDENT
-----------------------
NBD BANK
By: /S/ EDWARD C. HATHAWAY
------------------------------
Its: FIRST VICE PRESIDENT
-----------------------
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<PAGE> 1
Exhibit 10.1
[logo]
SHARE BUILDER
93
<PAGE> 2
TABLE OF CONTENTS
INTRODUCTION ..................................1
ELIGIBILITY AND PARTICIPATION .................2
EMPLOYEE CONTRIBUTIONS ........................3
COMPANY CONTRIBUTIONS .........................3
BROKER COMMISSIONS ............................3
YOUR INDIVIDUAL ACCOUNT .......................3
WHAT HAPPENS TO THE STOCK? ....................4
HOW DOES OWNING STOCK AFFECT YOUR INCOME TAX? .4
BROKER FOR THE PLAN ...........................5
QUESTIONS AND ANSWERS .........................5
PARTICIPATION FORMS ...........................8
94
<PAGE> 3
INTRODUCTION
AN OPPORTUNITY TO PURCHASE AMCAST COMMON STOCK
THROUGH PAYROLL DEDUCTIONS
Amcast has agreed to make its payroll deduction facilities available to its
eligible employees to enable them to purchase Amcast common stock at market
prices current at the time of purchase, through individual monthly ShareBuilder
Plan accounts opened by such employees with Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Broker").
The formal name of the plan is Amcast Industrial Corporation Employee
ShareBuilder Plan. This plan gives you an opportunity to become a stockholder,
and it provides you with a convenient and consistent way to supplement your own
personal savings plan.
This booklet summarizes the provisions of the plan. It explains in detail how
you become eligible, what you must do to participate and what the plan does for
you.
Please read the booklet carefully. You might want to share it with your family
as well. In that way, all of you will know how the plan works-both for today and
for the future.
* * * * *
Participation in the plan is entirely voluntary and Amcast is making no
recommendations to its employees. You should know that there is no guarantee
under the plan against loss due to changes in stock-market prices. In seeking
the benefits of stock ownership, you must also accept the risks.
Amcast has reserved the right to discontinue use of its payroll deduction
facilities for this plan at any time it deems such action to be advisable in its
judgment.
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<PAGE> 4
ELIGIBILITY AND
PARTICIPATION
When you become You become eligible to participate in the plan if you:
eligible for o have reached the age of majority in the state in which
participation you reside,
o are a full-time employee,
o have completed one year of continuous full-time
employment with Amcast or a subsidiary,
o are not declared ineligible by Amcast.
...all you need Once you are eligible to participate, all you need to do is
to do is fill out fill out the appropriate forms (see page 8) to become a
appropriate forms. participant. As mentioned earlier, participation is
voluntary. If you elect to participate, these are the steps
you must take:
o complete the Payroll Deduction Authorization form
and the Purchase Order form (and the Joint Account
with Right of Survivorship form, if you wish),
o decide how much money you want to contribute for
the purchase of Amcast stock. How much you can
contribute is discussed in the next section.
Your plan participation begins as soon as the required
forms are received and processed by your local
personnel office.
You remain a participant until the earliest of:
o your termination of employment with Amcast or a sub-
sidiary,
o your written election to terminate your plan participa-
tion, or
o the date of your death.
If you withdraw You may withdraw from plan participation at any time by
from the plan, submitting a written request to your local personnel
you must wait to office. You must wait at least six months from the
participate again. effective date of your withdrawal to start participating
again. Assuming that you are still eligible, all you need
to do is fill out the same forms you did before and wait
for them to be processed again.
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<PAGE> 5
EMPLOYEE CONTRIBUTIONS
You can contribute Employee contributions to the ShareBuilder Plan are
up to $46 weekly, subject to your pay period designation as outlined below.
$92 biweekly, $100 Pay Period Contribution Limits
semimonthly, or Designation Minimum Maximum
$200 monthly. Weekly $ 5 $ 46
Biweekly $ 9 $ 92
Semimonthly $10 $100
Monthly $20 $200
Employee contributions will be deducted from all pay
periods except vacation periods.
All deductions must be in WHOLE DOLLAR amounts. You may
increase or decrease your payroll deduction by sending a
written request to your human resources representative.
However, you may not make this kind of change more than
twice in a 12-month period.
COMPANY CONTRIBUTIONS
Amcast will Amcast will also match $.15 for each $1.00 you contribute
contribute $.15 to the ShareBuilder plan immediately. These matching con-
for each $1.00 tributions will be used to purchase additional shares of
you contribute. Amcast stock and will be automatically credited to your
account.
BROKER COMMISSIONS
Amcast Amcast will pay the broker for commissions on purchases
will pay made through the company and for dividend reinvestments
commissions. on those shares.
The broker's commission and other charges in connection
with sales, or in connection with purchases not made by
payroll deductions, will be payable by the employee who
orders the transactions for his account (see page 7).
YOUR INDIVIDUAL ACCOUNT
Broker opens Once you start contributing to the plan, the broker opens
account in your an account in your name. The relationship between you
name. and the broker (see page 5) is the normal relationship
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<PAGE> 6
between any broker and its client. You may use your
account for purchasing shares of common stock outside the
plan, as discussed in the questions and answers section.
Broker buys shares The contributions you make to the plan are forwarded to
of Amcast the broker on a monthly basis. The broker then purchases
stock. . . shares of Amcast stock for you at the prevailing market
price. . .full shares, or a fractional interest in full
shares, as the total monthly contribution to your account
allows. (Fractional share interests are allocated to the
nearest ten-thousandth of a share).
WHAT HAPPENS TO THE STOCK?
. . . which are At the time of purchase, you immediately own all full and
always owned fractional shares of stock which have been purchased in
by you. your name. This stock stays in your account and earns
dividends which are automatically reinvested in more full
and/or fractional shares of Amcast stock for you.
Instead of leaving your shares on deposit with the
broker, you are free to keep them yourself, or you may
instruct the broker to sell all or any portion of the
shares, with all proceeds going to you.
Even if you sell all of the Amcast stock in your account,
you can still remain a plan participant. See page 2 for
details about when participation stops
HOW DOES OWNING STOCK AFFECT
YOUR INCOME TAX?
Dividends and Since this ShareBuilder Plan is not a "qualified" plan (in
company contributions other words, it is not tax-exempt under federal
are taxable standards), all dividends and company contributions are
to you. taxable to you as ordinary income for federal tax
reporting purposes (perhaps for state and local taxes,
too, if applicable).
Also, if you intend to sell any stock, you might want to
seek tax counsel, since any profit from the sale is also
taxable.
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<PAGE> 7
You will receive quarterly statements of your account
which you should keep as part of your permanent records.
They serve as evidence of stock ownership and as a basis
for tax records.
BROKER FOR THE PLAN
Broker is Amcast has designated the Dayton, Ohio office of Merrill
Merrill Lynch. Lynch, Pierce, Fenner & Smith Inc., as broker. The address
is: Courthouse Plaza, 10 West Second St., P.O. Box 1013,
Dayton, Ohio 45402. Mark any correspondence with this
office to the attention of TOM BLALOCK. Should you have
any questions concerning your account his telephone
number is:
Dayton, Ohio 225-2677
Ohio 1-800-762-9124
Outside Ohio 1-800-543-9168
QUESTIONS AND ANSWERS
Here are answers to questions most frequently asked about
the ShareBuilder Plan:
WHAT DOES STOCK COST?
Stock prices vary. Stock prices vary from day to day and even hour to hour,
depending on how much owners of a stock are willing to
sell it for and how much buyers are willing to pay for it.
Prices are not fixed or regulated by anyone. They depend
on the basic law of supply and demand.
WHAT DO I GET TO SHOW THAT I OWN STOCK?
You will receive As a participant in the plan, you will receive quarterly,
regular account cumulative statements showing the total shares in your
statements. account which were purchased with your payroll
deductions. The statement will also describe the price
that was paid on the date of purchase, plus a
confirmation of your dividend reinvestments.
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<PAGE> 8
Your stock is held for you without payment of a custody
charge. No actual stock certificate for the shares you own
is issued in your name unless you request it. There is a
charge for the issuance of a stock certificate. No
certificate can be issued for a fractional interest in a
share.
WILL I RECEIVE INFORMATION PROVIDED TO STOCKHOLDERS?
You will receive As soon as you own one full share of stock, you will
stockholder receive any material received by Merrill Lynch and issued
information. by Amcast for the benefit and information of its
stockholders such as the annual report, interim reports,
and proxy forms.
WHEN I AM A STOCKHOLDER, WHO DECIDES HOW I SHOULD VOTE MY
STOCK?
You exercise You do. When Amcast distributes proxies, your full shares
voting rights. will be voted for you in accordance with your written
instructions as delivered to Merrill Lynch.
WHAT HAPPENS IF I STOP MY PAYROLL DEDUCTIONS?
Your account will If for any reason you notify Amcast to discontinue your
continue unless payroll deductions, Merrill Lynch will continue your
you elect to account unless you elect to close it. To close your
close it. account, you may request that Merrill Lynch send you a
stock certificate for the number of full shares you own
plus a check for the net proceeds from the sale of any
fractional interest of a share credited to you. Or, if you
don't want to keep your shares and want the cash instead,
Merrill Lynch will, on instructions from you, sell your
stock and send you a check for the net proceeds, less
commissions and charges.
WHAT HAPPENS IF I LEAVE AMCAST?
It is not necessary that your accumulated shares be sold
if you leave Amcast. You will still have an account
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<PAGE> 9
with Merrill Lynch and can go right on buying stock by
direct payments either monthly or quarterly. If you
request, your account will be closed as explained above.
MAY I MAKE OTHER INVESTMENTS DIRECTLY WITH MERRILL LYNCH?
You may purchase Yes. Since your account is with Merrill Lynch, you may
shares of common directly purchase any stock listed on the New York and
stock outside the American Stock Exchanges, plus more than 1,000 major
plan. over-the-counter stocks. You may buy any dollar amount you
wish, beginning at $25. All you need do is send your order,
along with a check, to the Merrill Lynch office listed
above. Your order will be executed at the opening price on
the next business day following receipt of your
instructions. A reduced brokerage commission is
automatically deducted from the total amount
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<PAGE> 10
TERMS AND CONDITIONS
I understand that the following terms and conditions shall govern all
transactions in my account with Merrill Lynch, Pierce, Fenner & Smith Inc.,
and the voting and handling of securities in such account.
1. All provisions of any constitution, rules and regulations of the exchange or
marketplace and its clearing house, if any, where transactions are executed
shall apply. I warrant that I have attained the age of majority in the state in
which I reside.
2. Single payments in my account, made in addition to my payroll deductions, may
be made by forwarding a check or money order with a designation of Amcast as the
security to be purchased. Each acceptable payment, less standard charges, will
be applied to the purchase of full shares and/or a fractional interest in
shares. The execution of single payment purchases or sales will be at the
opening or as soon as practicable thereafter on the first business day following
the day the order is received.
3. Payments for either a payroll deduction plan or a dividend reinvestment plan
will periodically be made either through payroll deductions by my employer or by
the Amcast dividend paying agent. Each such payment may be commingled with other
participants' funds and additional funds, if any, forwarded by my employer or
the dividend paying agent, to purchase shares and fractional interests in
shares. Shares for either plan may be purchased over a period of time, and the
average price of shares purchased shall be the price per share allocable to me.
4. Commissions, fees or other charges on all transactions in my account will be
in accordance with the rates from time to time in effect under the rules of the
New York Stock Exchange where applicable or at such other rates as posted by
Merrill Lynch, Pierce, Fenner & Smith Inc., and in effect at the time of the
transaction.
5. Cash dividends on shares held in my account on the record date for dividends
will be credited to my account on payment date and reinvested, unless I instruct
you to the contrary. My pro-rata share of stock dividends and split-ups of
shares are to be credited to my account. Other distributions of securities and
rights to subscribe will be sold and the net proceeds handled as a cash
dividend. On exchanges or tender offers where timely instructions are not
received by you from me, I hereby give you the right to make such exchange or to
tender my shares whenever, in your opinion, it is in my best interest to do so.
6. Upon request, and subject to a transfer charge, a certificate in my name for
the full shares of a security held in my account will be mailed to me. Proceeds
of sales will be held for my account unless you are instructed otherwise.
7. On receipt by you of advice of my legal incapacity or death, securities and
cash in my account shall be held pending receipt of proper authorization and
instructions.
8. Any controversy between us arising out of transaction in this account or this
agreement shall be settled by arbitration before the National Association of
Securities Dealers or the New York Stock Exchange or the American Stock Exchange
only.
9. Executions and other services shall be limited to those described in these
terms and conditions or which Merrill Lynch may from time to time announce.
Customers who wish to avail themselves of services not offered in these accounts
may at any time apply for a regular cash or margin account.
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<PAGE> 1
Exhibit 10.2
------------
AMCAST INDUSTRIAL CORPORATION
ANNUAL INCENTIVE PLAN
ADMINISTRATIVE MANUAL
CONFIDENTIAL
08/04/82
Revised: 06/09/86
103
<PAGE> 2
PURPOSE OF MANUAL
This manual sets forth policy guidelines and administrative procedures with
respect to the Amcast Industrial Corporation Annual Incentive Plan (AIP). It
will serve as a guide for those administering the plan to ensure that actions
taken are consistent over time and in line with the plan's terms and objectives.
This manual is not intended to be a communication device for participants. and
is not a legal plan text. As a result, it is not intended for general
distribution.
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<PAGE> 3
I. OBJECTIVES OF THE PLAN
The objective of the Annual Incentive Plan is to motivate the key
contributors to annual profitability toward the attainment of specific
financial and operating objectives. In addition, senior management
believes that the plan will serve to make the compensation of
participants competitive with opportunities in other companies.
II. DURATION OF THE PLAN
The AIP was established by the Board of Directors and became effective
on September 1, 1982. The plan, subject to the following provisions and
such other terms and conditions as the Compensation Committee of the
Board of Directors may prescribe, will continue in effect until
terminated by the board.
III. ADMINISTRATION OF THE PLAN
A. Board of Directors
------------------
The Board of Directors has the final authority to administer the
plan. The duties of the board include:
- Approving Compensation Committee proceedings regarding changes
to the plan, participation, awards, and administration of the
plan; and
- Amending, suspending, or terminating the plan.
B. Compensation Committee of the Board of Directors
------------------------------------------------
The Compensation Committee administers the plan. As delegated by the
Board of Directors, the committee:
- Approves financial objectives upon which awards under the plan
are earned,
- Reviews eligibility criteria for participation in the plan,
- Approves participants in the plan*,
- Approves target incentive awards*,
- Determines the effect of changes in accounting principles or
practices and of acquisitions or divestitures on the calculation
of awards under the plan,
- Reviews final award computations and authorizes final award
amounts*, and
- Constructs rules and other procedures for use in carrying out
provisions of the plan in the best interest of Amcast Industrial
Corporation and its shareholders.
*As pertains to Group A participants (i.e., staff officers,
group executives, unit managers, and group sales managers).
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<PAGE> 4
C. Chief Executive Officer
-----------------------
The responsibilities of the CEO include recommending to the
Compensation Committee:
- Return on capital employed (ROCE) financial objectives for each
operating unit under which awards will be earned under the plan,
- Participants (Group A)*,
- Target incentive awards (Group A)*. and
- Final award calculations (Group A)*.
The CEO has the authority to approve the following for all other
participants in the plan.
- Participants (Group B)*,
- Target incentive awards (Group B)*,
- Personal performance objectives (Group A and B)*, and
- Final award calculations (Group B)*,
*The CEO will present to the Compensation Committee an annual
summary of incentive payments made under the plan. This will include
both Group A and B participants.
Group A - staff officers, group executives, unit managers, group
sales managers.
Group B - subordinates to Group A participants, i.e., unit staff and
selected corporate staff.
D. Group Executives
----------------
The group executives have the responsibility for recommending to the
CEO the following under the plan:
- ROCE financial objectives for their respective operating units,
- Group and unit participants in the plan,
- Target incentive awards, and
- Personal performance objectives.
These individuals will also distribute awards under the plan, if
any, and communicate regarding the plan with participants from their
respective groups and units.
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<PAGE> 5
E. Vice President, Finance
-----------------------
The vice president of finance coordinates and documents accounting
activities under the plan. As such, he is responsible for:
- Recording financial objectives under the plan,
- Maintaining records on the extent of achievements of financial
objectives under the plan,
- Assisting in calculating awards under the plan,
- Arranging for the proper allocation of costs under the plan and
assuring adequate and timely expense accruals, and
- Recommending interpretations of accounting terms under the plan.
IV. PARTICIPATION
A. Definition of Eligibility
-------------------------
Participation in the plan is limited to officers of the corporation,
principal managers of groups and units, and to other individuals
who, by virtue of their positions, can substantially affect the
annual performance of the organization to which they are assigned.
Sales personnel are excluded, except for designated managers, and
will be covered under a separate plan.
B. Selection of Participants
-------------------------
Participants in the plan will be selected prior to the beginning of
the fiscal year, based on the recommendation of the chief executive
officer.
C. Eligibility for Award
---------------------
An individual who is selected as meeting the definition of
eligibility, and who joins Amcast during the fiscal year or is
promoted to a participating position during the fiscal year, may
become eligible to participate immediately. Such individuals will be
considered for awards from the plan in proportion to the part of the
fiscal year in which they are a participant.
When a change of target incentive award levels is made under the
plan during the fiscal year because of promotion or other
justifiable reasons, the participant will be eligible to receive an
award proportionate to the time he was at each award level.
When a participant changes organizational units during the fiscal
year, awards from the plan will be proportioned to the time spent in
each organization.
If, during the fiscal year, a participant dies, retires, or is
transferred to a position which does not qualify for inclusion in
the AIP, the participant or his designated beneficiary will be
eligible to receive an award proportionate to the time he was a
participant.
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<PAGE> 6
If a participant should leave the corporation during the fiscal year
for reasons other than retirement, he will not be eligible to
receive an award unless otherwise determined by the Compensation
Committee of the board.
V. AWARD PERIOD
Awards from the AIP will based on the achievements of participants
during the period of September 1 through August 31 (the plan year). A
new plan year will begin each September 1.
VI. TARGET INCENTIVE AWARDS
Each participant will have a target incentive award between 15 percent
and 50 percent of the annual base salary in effect at the beginning of
the plan year. The amount of the target will be commensurate with the
responsibility of the position and the relative ability to influence
profitability. The total of target awards, in dollars, will equal the
target incentive fund. A participant's target incentive award will
remain fixed throughout the plan year unless the participant is promoted
or transferred to a position which warrants a higher or lower target
incentive award. The maximum award under the plan will not exceed 60
percent of the annual base salary of a participant. Normal salary
increases during the plan year will not be recognized for incentive
purposes.
UNASSIGNED SUPPLEMENTAL FUND. In addition to the target incentive funds,
an amount not to exceed $50,000 shall be available for incentive
compensation which may be used, at the discretion of the Compensation
Committee, to supplement the formula funds in the event special
circumstances warrant awards for special situations outside the defined
participants.
VII. TARGET INCENTIVE AWARD ALLOCATION
Incentive awards will be determined through the assessment of corporate,
group or unit, and individual participant's performance as follows:
<TABLE>
<CAPTION>
% of Award Based on Results of
-----------------------------------------
Participant Corporate Group Unit Individual
----------- --------- ----- ---- ----------
<S> <C> <C> <C> <C>
Corporate Staff 70-100 0 0 0-30
Group VP's 25- 50 45- 75 0 0-30
Group Staff 0 70-100 0 0-30
Unit Managers 25- 50 0 45- 75 0-30
Unit Staff 0 0 70-100 0-30
</TABLE>
The components of the incentive award are separate and distinct. By
achieving the maximum ROCE objective for the corporate, group, or unit
component, it is possible to earn up to 150 percent of the target
incentive award. Only 100 percent of the target award is possible in the
personal performance category.
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<PAGE> 7
For participants, the following award combinations can occur under the
AIP:
<TABLE>
<CAPTION>
Incentive Award Paid for Performance of
---------------------------------------
Potential Group
Award AIC or
Combination Overall Unit Individual
----------- ------- ---- ----------
<S> <C> <C> <C>
1 yes yes yes
2 yes yes no
3 yes no yes
4 yes no no
5 no yes yes
6 no yes no
7 no no yes
8 no no no
</TABLE>
A participant may receive an award based on group or unit or personal
performance in a year that Amcast's overall financial performance does
not generate a corporate incentive award. The group or unit and personal
performance components likewise are not linked. If group or unit
performance is below threshold*, an award based on achievement of
personal objectives could be paid. Amcast must, however, generate an
after-tax profit for corporate officers to be eligible to receive any
award (corporate, group, unit, or personal performance) from the plan.
*Threshold is the minimum acceptable ROCE necessary to generate an
incentive award based upon corporate, group, or unit financial results
(refer to VIII and IX).
VIII. CORPORATE COMPONENT
Threshold, objective, and maximum return on capital employed objectives
are set annually for the overall Amcast organization. ROCE is defined as
earnings before taxes and interest on long-term debt as a percent of the
average of twelve months actual shareholders' equity plus long-term
debt. Certain material nonoperating income and expense items may be
excluded from the calculations at the discretion of the Compensation
Committee.
109
<PAGE> 8
A percentage of the target incentive award allocated to the corporate
component is earned at threshold, objective, and maximum ROCE.
- For example, consider the following performance schedule:
<TABLE>
<CAPTION>
ROCE Target Incentive
Objective Earned
--------- ----------------
<S> <C> <C>
Threshold A% 50%
Objective B% 100%
Maximum C% 150%
</TABLE>
- The target incentive award earned between threshold and objective,
and objective and maximum will be prorated.
The following formula is utilized in determining awards based upon
corporate ROCE results.
Corporate Target Corporate
Target X Incentive = Earned
Award Earned Award
Allocated Percent
IX. GROUP OR UNIT COMPONENT
A percentage of the group or unit target incentive award is earned at
threshold, objective, and maximum ROCE performance. (See VIII for ROCE
definition.)
- For example, consider the following ROCE performance schedule:
<TABLE>
<CAPTION>
Group or
Unit
ROCE Target Incentive
Objective Earned
--------- ----------------
<S> <C> <C>
Threshold D% 50%
Objective E% 100%
Maximum F% 150%
</TABLE>
Note: Group and unit thresholds, objectives, and maximums will be linked
with the financial objectives for the overall Amcast organization.
- The following formula is utilized in determining awards based on
group or unit ROCE results:
Group/Unit Target Group/Unit
Target X Incentive = Earned
Award Earned Award
Allocated Percent
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<PAGE> 9
X. PERSONAL PERFORMANCE COMPONENT
A participant's performance against a maximum of seven significant
objectives will determine the amount of the target incentive award
earned under the personal performance component.
The objectives have different degrees of importance to the individual
and organization. One hundred incentive points are allocated among the
objectives to establish each objective's importance. Performance on each
objective will be rated as either yes or no. For example:
<TABLE>
<CAPTION>
Incentive Incentive
Points Performance Points
Objective Allocated Rating Earned
--------- --------- ------ ------
<S> <C> <C> <C>
Annual operating results
A 40 yes 40
B 20 no 0
Key opportunities to be exploited or improvements to be made
C 20 yes 20
Progress to be achieved in longer-range programs
D 10 no 0
E 10 yes 10
-- --
100 70
</TABLE>
(This individual's performance rating is 70 percent.)
The following formula determines an individual's incentive award under
the personal performance component.
Individual Individual Earned
Performance X Performance = Personal
Target Rating Performance
Award Award
For the personal performance component, the maximum award is 100 percent
of the target award.
XI. TOTAL AWARD CALCULATION
The sum of award components (corporate, group or unit, and personal
performance) is the individual's total incentive award from the plan.
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<PAGE> 10
XII. INDIVIDUAL OBJECTIVE SETTING
The information generated in the business planning process can be
utilized in the personal performance component of the plan.
Generally, such objectives should be:
- Pertinent to the responsibility of the individual,
- Aimed at what the company wants accomplished, and
- Written in crisp language and quantified so it is easily determined
if the objectives were achieved.
A maximum of seven significant performance objectives is established for
each individual. Objectives should be set in one or more of three
categories:
- Annual operating results,
- Key opportunities to be exploited or improvements to be made, and
- Progress to be achieved with respect to longer-range programs.
Objectives have different degrees of importance to the individual and
Amcast. To recognize the differences in importance, incentive points are
allocated to each objective. A total of 100 incentive points is
allocated over the three objective categories. Consider the following
example:
<TABLE>
<CAPTION>
Percentage of Incentive
Incentive Category Points Allocated
------------------ -----------------------
<S> <C>
Annual operating results 60%
Key opportunities to be exploited 20%
or improvements to be made
Progress to be achieved with 20%
respect to longer-range programs
</TABLE>
An action plan is developed for each objective in order to provide a
check on the reasonableness of the objective and an additional basis for
evaluating performance:
- Action plans concern the acquisition, use, and disposition of
resources.
- Action plans will be integrated across functional lines, recognize
basic operating unit purposes, and outline what decisions must be
made to achieve the objective.
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<PAGE> 11
Exhibit B will be used to document individual objectives. The form
includes the "record of agreement" between the levels of management on
the significant objectives. The form ensures all parties have the same
understanding of:
- What is expected
- How performance on each objective will be appraised, and
- What relative importance each objective has.
Informal interim reviews of progress toward objectives is an integral
part of the plan. On a periodic basis, management will formally review:
- The continued validity of objectives,
- Changes in action plans resulting from changes in assumptions or
uncontrollable influences, and
- Relative achievement to date and its impact on incentive accruals.
After the plan year, the CEO, group executives, and unit managers will
evaluate individual objective achievement:
- Actual results would be recorded on the objective setting record and
evaluation worksheet (Exhibit B).
- The basis for rating each objective will be agreed upon and
recorded.
Exhibit B is also utilized for reviewing individual objectives and for
final personal performance incentive award calculations.
Exhibit C is a summary sheet for communicating plan details to
participants at the beginning of the incentive plan year.
XIII. AWARD ADJUSTMENTS
The Compensation Committee and the Board of Directors, upon
recommendation of the chief executive officer, may make any adjustments
to the AIP required to ensure a successful program of management
motivation and reward that they deem to be in the best interest of the
shareholders.
XIV. PAYMENT METHODS
Awards from the AIP will be paid in cash. A participant in the AIP may
voluntarily elect to defer the receipt of cash awards under this plan by
filing an irrevocable election to do so with the corporation according
to the provisions of the Amcast Deferred Compensation Plan.
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<PAGE> 12
XV. WITHHOLDING FOR INCOME TAXES
All award amounts are subject to withholding for federal income tax
purposes. Arrangements will also be made to withhold any amounts
required by state and local authorities.
XVI. MISCELLANEOUS
A. NO RIGHT TO ELIGIBILITY. Participation in the AIP in any one plan
year is not be be construed as a right to continuing eligibility.
B. NO RIGHT TO CONTINUED EMPLOYMENT. The selection of any person for
participation in the AIP shall not give a participant any right to
be retained in the employ of the corporation or any subsidiary and
the right and power to dismiss or discharge any participant is
specifically reserved by the corporation.
* * * * *
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<PAGE> 1
Exhibit 10.3
DEFERRED COMPENSATION AGREEMENT FOR DIRECTORS
As of ______________________________________
AMCAST INDUSTRIAL CORPORATION
(an Ohio corporation - the "company" herein)
and
______________________________________________________
(a director of the company - the "director" herein)
Agree as follows:
I. DUTIES AND TERM OF SERVICE
The director will serve as a member of the company's Board of Directors,
and perform faithfully the duties of a member of the Board of Directors,
including service on committees of the board and service in an advisory and
consultive capacity to the chairman and officers of the company at such times as
may be reasonably requested. This agreement will terminate upon the occurrence
of any one of the following events:
A. The director ceases to hold office as a member of the company's Board
of Directors,
B. The end of the company's fiscal half year in which the director
attains the age of 70 years,
C. The death of the director,
D. Written notice that the director desires to terminate the agreement
II. COMPENSATION
The director will be paid for his services in accordance with the following
schedule:
A. Reimbursement for all travel and incidental expenses incurred for the
benefit of the company, whether in connection with attendance at the meetings of
the company's Board of Directors or otherwise.
B. Fees for serving as a member of the Board of Directors, for
attendance at special meetings of the Board of Directors and meetings of
committees of the Board of Directors, and where applicable, for serving as
chairman of a committee of the Board of Directors, all as established from time
to time by the Board of Directors.
III. PAYMENT OF COMPENSATION
Amounts described in paragraph II-A will be paid to the director on a
current basis as expenses are incurred.
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<PAGE> 2
DEFERRED COMPENSATION AGREEMENT FOR DIRECTORS
Page 2 of 5
IV. DEFERMENT OF COMPENSATION
The compensation described in paragraph II-B will not be paid or
distributed until the termination of this agreement as provided in Section I,
and then only in accordance with Section VII hereof. The director may elect to
defer a certain portion of his total compensation.
V. DEFERRED COMPENSATION ACCOUNT
The company shall establish a "deferred compensation account" (the
"account") for the director. As of the last day of the company's fiscal half
hear during which this agreement is executed, and as of the last day of each
applicable succeeding fiscal half year, the company shall credit to the account
the amount, in cash or stock equivalents, as hereinafter described, of the
director's compensation described in paragraph II-B hereof or the pro rata
portion thereof applicable on account of the director's services during such
fiscal half year, provided that during the first such fiscal half year only the
portion of such compensation applicable to the period during which this
agreement is in effect shall be so credited.
VI. CASH OR STOCK ELECTION
A. The entire amount credited to the account for each fiscal half year
shall be credited either as a cash allotment or as a stock allotment in
accordance with the director's election. The initial election shall be in
writing and delivered to the secretary of the company on or before the date of
this agreement and any subsequent change in election shall be made in writing
and delivered to the secretary of the company not later than 15 days preceding
the first fiscal half year to which such election is applicable. If the director
shall fail to make an initial election, he shall be deemed to have elected to
have such amounts credited as stock allotments.
B. If a cash allotment is elected, the account shall be credited with
the dollar amount of the allotment, and the account shall be credited, at the
end of each fiscal half year, with interest at published prevailing rate for
6-month U.S. Treasury Bills times the amount in the account as of the beginning
of such fiscal half year.
C. If a stock allotment is elected, the account shall be credited with:
1. a stock equivalent which shall be equal to the number of lull
shares of the company's Common Stock (the "Common Stock") that could be
purchased with the dollar amount of the allotment at the average of the
closing prices of such stock over the counter during the final month of
the applicable fiscal half year of the company, plus
2. the dollar amount of any part of such allotment that was not
equivalent to the purchase price of a full share.
D. The stock equivalents in the account shall be credited, on the last
day of each fiscal half year, with a dividend equivalent which shall be an
amount determined by multiplying the dividends paid, either in cash or property
(other than Common Stock), upon a share of Common Stock to a stockholder of
record during such fiscal half year, by the number of shares in the account at
the beginning of such fiscal half year (with appropriate adjustment to reflect
any increase or decrease during the period in the number of shares in the
account as a result of the application of paragraph E of this Section VI). In
the case of dividends payable in property, the dividend equivalent shall be
based on the fair market value of the property at the time of
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<PAGE> 3
DEFERRED COMPENSATION AGREEMENT FOR DIRECTORS
Page 3 of 5
distribution of the dividend, as determined by the company. If on the last day
of any fiscal half year the dollar amounts in the account of a director who has
elected stock allotments equal or exceed the price of one share of Common Stock
(determined as in the preceding paragraph VI-C), such amount shall be treated as
if it were a stock allotment credited to the account on such date.
E. In the event of any change in the Common Stock upon which the stock
equivalency hereunder is based, by reason of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split-up, combination or
exchange of shares, or other change in the corporate structure, the number of
shares credited to the director shall be appropriately adjusted.
VII. DISTRIBUTION
A. Distribution of the aggregate cash and/or stock equivalents in the
account shall be made as provided in this Section VII in five approximately
equal annual installments commencing on or about January 1 following the end of
the fiscal half year in which this agreement terminates. Interest or dividend
equivalents credited on the undistributed cash or stock equivalents in the
account after the fiscal half year in which this agreement terminates shall be
distributed on the first day of the third month following the fiscal half year
in which credited or as soon thereafter as practicable.
B. Any cash or stock equivalents in the account, or interest or dividend
equivalents on undistributed cash or stock equivalents in the account, which
become distributable after the death of the director, shall be distributed as
provided in paragraph VII-A, to such person or persons or the survivors thereof,
including corporations, unincorporated associations or trusts, as the director
may have a designated in writing and delivered to the secretary of the company.
The director may from time to time revoke or change any such designation by
written notice delivered to the secretary of the company. If there is no
unrevoked designation on file with the company at the time of the director's
death, or if the person or persons designated therein shall have all predeceased
the director or otherwise ceased to exist, such distributions shall be made to
the director's estate.
C. Distribution of the cash in the account shall be made in cash.
Distribution of stock equivalents in the account may be made by delivery of an
equal number of shares of Common Stock (using only treasury shares). The company
may, however, distribute wholly or partly in lieu of any installment of Common
Stock, cash in an amount equal to the closing price of said Common Stock on the
nearest trading day preceding the date on which such Common Stock is
distributable. The company shall promptly notify the director of the type of
distribution to be made, and the amount of payment or number of shares
forthcoming. The company may, with the consent of the person or persons then
entitled to receive distribution of the next payable cash or stock equivalents,
make other changes in the time or medium of distribution of all or part of the
undistributed cash or stock equivalents.
D. The company shall deduct from the amount of all distributions
hereunder any taxes required to be withheld by the federal or any state or local
government. In case distributions are made in shares of Common Stock, the
company shall have the right to retain the number of shares having a then market
price equivalent to the amount of the said tax required to be withheld in
respect to such distributions. In lieu thereof, however, the company may permit
a recipient
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<PAGE> 4
DEFERRED COMPENSATION AGREEMENT FOR DIRECTORS
Page 4 of 5
receiving a distribution in Common Stock to reimburse the company for any such
taxes required to be withheld by the company, upon such terms and conditions as
the company may prescribe.
VIII. MISCELLANEOUS
A. Neither the director nor any other person shall have any interest in
any fund or in any specific asset or assets of the company by reason of any cash
or stock equivalents or interest or dividend equivalents credited to the account
of a director hereunder, nor the right to exercise any of the rights or
privileges of a stockholder with respect to any stock equivalents credited to
his account, nor any right to receive any distribution under this agreement
except as and to the extent expressly provided in this agreement. Any allotment
or credit to the account shall be reflected as general assets on the books of
the company, subject to the claims and obligations of creditors and others and
any liability created hereunder to the director shall be in the nature of a
general claim without any priority or right being created in the director. The
director shall not have the right to assign, pledge or otherwise dispose of
(except as provided in Section VII hereof) any cash or stock equivalents in the
account, nor shall his interest therein be subject to garnishment, attachment,
transfer by operation of law, or any legal process. If director should attempt
to assign, pledge or otherwise dispose of (except as provided in Section VII
thereof) any cash and/or stock equivalents in the account or if any attempt
shall be made to garnish, attach, transfer by operation of law or by any legal
process his interests in the account, all cash and stock equivalents in the
account, and all interests of the director therein shall at the discretion of
the company, cease and determine, and in such event the company may hold or
apply same or any part thereof for the benefit of the director, the director's
spouse, children or other dependents, or any of them, in such manner in such
proportion as the company may deem proper.
B. Anything in Sections V through VIII hereof to the contrary
notwithstanding, compensation payable to the director pursuant to the provisions
of paragraph II-B hereof for services following the end of the fiscal half year
in which the director has attained the age of 70, shall be paid currently in
cash, in quarterly installments, commencing with the last day of the quarter
following the end of such period.
C. This agreement shall not be assignable by the company without the
written consent of the director, except that, if the company shall merge or
consolidate with or into, or transfer substantially all of its assets, including
good will, to another corporation or other form of business organization, this
agreement shall bind and run to the benefit of the successor of the company
resulting from such merger, consolidation or transfer.
D. This agreement comprises the entire agreement between the parties
hereto and as of the date first above written supersedes, cancels, and annuls
any and all prior agreements between the parties hereto with respect to payments
to the director for services to the company. This agreement may not be modified
orally.
E. This agreement and all questions arising in connection therewith
shall be governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have hereunto and to a duplicate hereof,
set their signatures as of the day and year first above written.
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<PAGE> 5
DEFERRED COMPENSATION AGREEMENT FOR DIRECTORS
Page 5 of 5
AMCAST INDUSTRIAL CORPORATION
BY:
------------------------------
TITLE:
------------------------------
DATE:
------------------------------
(Corporate Seal)
BY:
------------------------------
TITLE: DIRECTOR
------------------------------
DATE:
------------------------------
119
<PAGE> 1
Exhibit 10.5
------------
INDEMNIFICATION AGREEMENT
-------------------------
AGREEMENT between AMCAST INDUSTRIAL CORPORATION, an Ohio corporation
(the "Company"), and __________________ (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors the most capable persons available;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors of public companies
in today's environment;
WHEREAS, basic protection against undue risk of personal liability of
directors heretofore has been provided through insurance coverage providing
reasonable protection at reasonable cost, and Indemnitee has relied on the
availability of such coverage; but as a result of substantial changes in the
marketplace for such insurance it has become increasingly more difficult to
obtain such insurance on terms providing reasonable protection at reasonable
cost;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the company in an effective manner, the Company wishes to provide in this
Agreement for the indemnification of Indemnitee to the full extent permitted by
law;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. CERTAIN DEFINITIONS.
(a) CHANGE IN CONTROL: means and shall be deemed to have occurred on
(i) the date of approval by shareholders of the Company of a definitive
agreement providing either for the merger or consolidation of the Company
into or with another corporation, if the Company will not be surviving
corporation or will become a subsidiary of another corporation, or for the
sale of all or substantially all of the assets of the Company; (ii) the
date upon which the Company is provided a copy of a Schedule 13D (filed
pursuant to Section 13(d) of the Securities Exchange Act of 1934)
indicating that a group or person has become the beneficial owner of 20%
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<PAGE> 2
or more of the outstanding voting shares of the Company or if no such
Schedule 13D is filed, the date the Company first learns that a group or
person has become the beneficial owner of 20% or more of such shares; or
(iii) the date of a change in the composition of the Board of Directors of
the Company such that individuals who were members of the Board of
Directors on the date two years prior to such change (or who were
subsequently elected to fill a vacancy in the Board, or were subsequently
nominated for election by the Company's shareholders, by the affirmative
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such two year period) no longer constitute a
majority of the Board of Directors of the Company.
(b) CLAIM: any threatened, pending or completed action, suit or
proceeding, or any investigation, whether conducted by the Company or any
other party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil,
criminal, administrative, investigative or other.
(c) EXPENSES: include attorneys' fees and all other costs, expenses
and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal) or
preparing to defend, being a witness in or participant in any Claim
relating to any Indemnifiable Event (including all interest, assessments
and other charges paid or payable in connection with or in respect of any
of the foregoing).
(d) JUDGMENTS: include judgments, fines, penalties and amounts paid in
settlement that are paid or payable in connection with any Claim relating
to any Indemnifiable Event.
(e) INDEMNIFIABLE EVENT: any event or occurrence related to the fact
that Indemnitee is or was a director of the Company, or is or was serving
at the request of the Company as a director, trustee, officer, employee,
agent or representative of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or by reason of anything
done or not done by Indemnitee in any such capacity.
(f) REVIEWING PARTY: any appropriate person or body consisting of a
member or members of the Company's Board of Directors or any other person
or body appointed
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<PAGE> 3
by the Board (including the special, independent counsel referred to in
Section 4) who is not a party to the particular Claim for which Indemnitee
is seeking indemnification.
2. SCOPE OF INDEMNIFICATION.
(a) BASIC INDEMNIFICATION ARRANGEMENT. In the event Indemnitee was, is
or becomes a party to or witness or other participant in, or is threatened
to be made a party to or witness or other participant in, a Claim by reason
of (or arising in part out of) an Indemnifiable Event, the Company shall
indemnify Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than thirty days after written demand
is presented to the Company against any and all Judgments arising from or
relating to such Claim.
(b) EXPENSES. Any and all Expenses and any and all expenses referred
to in Section 2(c) shall be paid by the Company promptly as they are
incurred by Indemnitee (any such payment of expenses by the Company is
hereinafter referred to as an "Expense Advance"). Indemnitee hereby agrees
to repay the amount of Expenses so paid if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his action or
failure to act involved an act or omission undertaken with deliberate
intent to cause injury to the Company or undertaken with reckless disregard
for the best interests of the Company. Indemnitee hereby further agrees to
reasonably cooperate with the Company concerning any Claim.
(c) INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) which are incurred by Indemnitee in connection with any claim
asserted against or action brought by Indemnitee for (i) indemnification of
Expenses or Judgments or advance payment of Expenses by the Company under
this Agreement or under any other agreement, the Company's Regulations,
statute or rule of law now or hereafter in effect relating to claims for
Indemnifiable Events and/or (ii) recovery under any directors and officers
liability insurance policy or policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the
case may be.
122
<PAGE> 4
(d) PARTIAL INDEMNITY. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion
of the Judgments arising from or relating to a Claim but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.
(e) INDEMNIFICATION OF SUCCESSFUL DEFENSE EXPENSES. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any or all Claims
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.
3. REVIEWING PARTY DETERMINATIONS.
(a) GENERAL RULES. Notwithstanding the provisions of Section 2, the
obligations of the Company under Section 2(a) shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the special, independent counsel referred to
in Section 4 hereof is involved) that Indemnitee would not be permitted to
be indemnified under applicable law; provided, however, that if Indemnitee
has commenced legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed) and any such determination by the Reviewing Party
shall be modified, to the extent necessary, to conform to such final
judicial determination.
(b) ELECTION OF REVIEWING PARTY. If there has not been a Change in
Control, the Reviewing Party shall be selected by the Board of Directors.
If there has been such a Change in Control; the Reviewing Party shall be
the special, independent counsel referred to in Section 4 hereof.
(c) JUDICIAL REVIEW. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not
123
<PAGE> 5
be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the
State of Ohio having subject matter jurisdiction thereof and in which venue
is proper seeking an initial determination by the court or challenging any
such determination by the Reviewing Party or any aspect thereof, and the
Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
(d) BURDEN OF PROOF. In connection with any determination by the
Reviewing Party pursuant to Section 3(a), or by a court of competent
jurisdiction pursuant to Section 3(c) or otherwise, as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish by clear and convincing evidence that
Indemnitee is not so entitled.
4. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control that has been approved by
a majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control) then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments under this
Agreement or under any other agreement, the Company's Regulations, statute or
rule of law now or hereafter in effect relating to Claims for Indemnifiable
Events, the Company shall seek legal advice only from special, independent
counsel selected by Indemnitee and approved by the Company (which approval shall
not be unreasonably withheld), and who has not otherwise performed services for
the Company within the last five years (other than in connection with such
matters) or Indemnitee. The Company agrees to pay the reasonable fees of the
special, independent counsel referred to above and to indemnify fully such
counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
5. NO PRESUMPTION. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding, by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.
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<PAGE> 6
6. NON-EXCLUSIVITY. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may now or hereafter have to
indemnification by the Company.
7. LIABILITY INSURANCE. The rights of the Indemnitee hereunder shall
also be in addition to any other rights Indemnitee may now or hereafter have
under policies of insurance maintained by the Company or otherwise. To the
extent the Company maintains an insurance policy or policies providing directors
or officers liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director.
8. LIABILITY STANDARDS. This Agreement shall be construed on the basis
of the duties owed by Indemnitee as a director of the Company, and the standards
for determining liability in damages for a breach thereof, which apply to each
particular Claim. The parties acknowledge that changes in such duties or such
liability standards may result in an expansion or contraction of the Company's
indemnification exposure hereunder.
9. AMENDMENTS, ETC. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
10. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
11. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Company's Regulations or otherwise) of the
amounts otherwise indemnifiable hereunder.
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<PAGE> 7
12. BINDING EFFECT, ETC. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director of the Company or as a director,
trustee, officer, agent or representative of any other enterprise at the
Company's request.
13. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
14. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Ohio applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
15. SHAREHOLDER APPROVAL. This Agreement will automatically terminate
on December 31, 1987 unless prior thereto it has been approved by the
affirmative vote of the holders of a majority of the outstanding Common Shares
of the Company.
Executed and effective as of this ____ day of _________ , 1987.
AMCAST INDUSTRIAL CORPORATION
By__________________________________
Leo W. Ladehoff
Chairman of the Board and
Chief Executive Officer
____________________________________
126
<PAGE> 1
Exhibit 10.6
------------
AMCAST INDUSTRIAL CORPORATION
FIRST MASTER BENEFIT TRUST AGREEMENT
March 11, 1988
127
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I Name of Trust ........................................2
1.1 Name .................................................2
1.2 Purpose ..............................................2
ARTICLE II Definitions ..........................................2
ARTICLE III The Plans ............................................4
ARTICLE IV Payment Schedules under Plans ........................4
4.1 Payment Schedules ....................................4
4.2 Modified Payment Schedules ...........................5
4.3 Withholdings .........................................5
4.4 Further Assurances ...................................5
4.5 Distributions in the Event
of Taxability ........................................5
ARTICLE V The Trust Fund and Funding ...........................6
5.1 Receipt and Holding of
the Trust Fund .......................................6
5.2 Initial Funding of Trust .............................6
5.3 Additional Funding; Excess Assets ....................7
5.4 Release of Trust Funds Unless
a Change of Control Occurs ...........................7
5.5 Transfer to Another Trustee ..........................8
ARTICLE VI Status of Trust ......................................8
6.1 Grantor Trust ........................................8
6.2 Subject to Claims of Creditors
of the Company .......................................8
6.3 Notification of Bankruptcy
or Insolvency ........................................9
ARTICLE VII The Trustee's Accounting ............................10
7.1 Books and Records ...................................10
7.2 Trustee's Report ....................................10
7.3 Additional Reports ..................................10
ARTICLE VIII Administration of the Trust Fund ....................11
8.1 Ownership and Investment
of the Trust Fund ...................................11
8.2 Powers of the Trustee ...............................11
8.3 Situs of Assets .....................................12
8.4 Entire Agreement ....................................12
128
<PAGE> 3
ARTICLE IX Relating to the Trustee ..............................12
9.1 Liability of the Trustee .............................12
9.2 Obligations under Law ................................13
9.3 Bond .................................................13
9.4 Compensation .........................................13
9.5 Indemnification ......................................13
ARTICLE X Missing Persons, Incapacitated Executives,
Death and Directions .................................14
10.1 Missing Persons ......................................14
10.2 Incapacitated Executives .............................14
10.3 Death of Executive ...................................14
10.4 Form .................................................14
10.5 Proof of any Matter ..................................15
10.6 Absence of Directions ................................15
ARTICLE XI Resignation or Removal of Trustee ....................15
11.1 Successor Trustee ....................................15
11.2 Final Account ........................................15
11.3 Transfer and Discharge ...............................15
11.4 Effective Date of Appointment
of Successor Trustee .................................16
11.5 Merger or Consolidation ..............................16
ARTICLE XII Protection for Third Persons .........................16
12.1 Protection for Third Persons .........................16
ARTICLE XIII Termination; Amendment; and Waiver ...................16
13.1 Termination ..........................................16
13.2 Amendment and Waiver .................................16
13.3 Schedule A to the Trust ..............................17
ARTICLE XIV General Provisions ...................................17
14.1 Ohio Trust ...........................................17
14.2 severability .........................................17
14.3 Arbitration ..........................................18
14.4 Notices ..............................................18
14.5 Trust Beneficiaries ..................................18
14.6 Headings .............................................18
14.7 Counterparts .........................................19
129
<PAGE> 4
AMCAST INDUSTRIAL CORPORATION
-----------------------------
FIRST MASTER BENEFIT TRUST AGREEMENT
------------------------------------
THIS FIRST MASTER BENEFIT TRUST AGREEMENT (the "Trust") is established this
11th day of March 1988 by AMCAST INDUSTRIAL CORPORATION, an Ohio corporation, as
grantor (the "Company"), and BANK ONE, DAYTON, NATIONAL ASSOCIATION, as trustee
(the "Trustee"), under the following circumstances:
(A) The Company from time to time establishes incentive and other
compensation plans and arrangements under which the Company becomes
obligated to make deferred payments to present and former directors and
executives of the Company;
(B) The aforesaid compensation arrangements are not funded or
otherwise secured, and the Company by this Trust desires to provide further
assurance to Leo W. Ladehoff in connection with certain deferred payments
provided for in the Executive Employment Agreement between Mr. Ladehoff and
the Company dated October 29, 1986 and to other such persons that in the
event of a Change of Control of the Company (as defined at Article II) such
deferred payments will be timely made when due by depositing with the
Trustee upon the occurrence of a Potential Change of Control of the
Company, subject only to the claims of the Company's existing or future
general creditors in the event of the Company's insolvency or bankruptcy as
defined at Section 6.3, assets for use in making such deferred payments;
(C) The Company desires to establish this Trust as a master trust
arrangement and intends from time to time (i) to designate on Schedule A to
this Trust, in addition to the aforesaid Executive Employment Agreement,
such other plans and arrangements giving rise to deferred payment
obligations of the Company that the Trustee is authorized to pay on behalf
of the Company from Trust assets in the event of a Change of Control and
(ii) to set forth on Schedule A to this Trust, in addition to Mr. Ladehoff,
other persons for whose benefit this Trust is established and the Company's
payment obligations to each such person; and
(D) The Company desires for record keeping purposes only that the
Trustee maintain a separate account for each such person and for investment
purposes that the Trustee commingle the Trust assets;
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good and valuable considerations, the parties hereto agree as
follows:
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<PAGE> 5
ARTICLE I
---------
NAME OF TRUST
-------------
1.1 NAME. This Trust may be referred to as the "First Master Benefit Trust
for Amcast Industrial Corporation."
1.2 PURPOSE. This Trust is established for the purposes set forth in
Preambles A through D to this Trust.
ARTICLE II
----------
DEFINITIONS
-----------
The following terms used in this Trust shall have the following meanings:
A. "Board" means the Board of Directors of the Company.
B. "Change of Control" means and shall be deemed to have occurred on (i)
the date upon which the Company is provided a copy of a Schedule 13D, filed
pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the "1934
Act"), indicating that a group or person, as defined in Rule 13d-3 under the
1934 Act, has become the beneficial owner of 20% or more of the outstanding
Voting Shares of the Company or the date upon which the Company first learns
that a person or group has become the beneficial owner of 20% or more of the
outstanding Voting Shares of the Company if a Schedule 13D is not filed; (ii)
the date of a change in the composition of the Board of Directors of the Company
such that individuals who were members of the Board of Directors on the date two
years prior to such change (or who were subsequently elected to fill a vacancy
in the Board, or were subsequently nominated for election by the Company's
shareholders, by the affirmative vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such two year
period) no longer constitute a majority of the Board of Directors of the
Company; (iii) the date the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Shares of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Shares of the surviving entity) at
least 80% of the total voting power represented by the voting shares of the
Company or such surviving entity outstanding immediately after such merger or
consolidation; or (iv) the date shareholders of the
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<PAGE> 6
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all the
Company's assets.
C. "Company" means Amcast Industrial Corporation, an Ohio corporation, and
any successor to such entity.
D. "Executive" means and includes Leo W. Ladehoff and any other person who
in accordance with the terms of a Plan is or was a participant in a Plan and who
is listed on Schedule A to this Trust as a person to whom the Trustee by the
terms of this Trust is directed to make payments on behalf of the Company.
E. "Executive Employment Agreement" means the Executive Employment
Agreement between the Company and Leo W. Ladehoff dated October 29, 1986.
F. "Fiscal Year" means the fiscal year of the Company.
G. "Payment Schedule" shall have the meaning ascribed to it at Section 4.1.
H. "Plans" means the Executive Employment Agreement and those other
compensation arrangements, plans or agreements listed on Schedule A to this
Trust under which the Company is obligated to make payments to individual
Executives and the Trustee under this Trust is directed to make such payments on
behalf of the Company.
I. "Potential Change of Control" means and shall be deemed to have occurred
if (i) Voting Shares of the Company have been acquired other than directly from
the Company in exchange for cash or property by any person who thereby becomes
the owner of more than 15% of the Company's outstanding Voting Shares; (ii) any
person (other than the Company) has made a tender offer for, or a request for
invitations for tenders of, Voting Shares; (iii) any person forwards or causes
to be forwarded to shareholders of the Company proxy statement(s) in any period
of twenty-four (24) consecutive months, soliciting proxies to elect to the Board
of Directors of the Company two or more candidates who were not nominated as
candidates in proxy statements forwarded to shareholders during such period by
the Board of Directors of the Company; or (iv) the Board adopts a resolution to
the effect that, for purposes of this Agreement, a Potential Change of Control
of the Company has occurred.
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J. "Trust" means the trust created by this Agreement.
K. "Trust Fund" shall have the meaning ascribed to it at Section 5.1.
L. "Trustee" means any trustee from time to time serving as the trustee of
the Trust.
M. "Voting Shares" means any securities of the Company which vote generally
in the election of directors.
ARTICLE III
-----------
THE PLANS
---------
The Trustee shall, on behalf of the Company and out of the Trust Fund,
make payments to the Executives in accordance with the Payment Schedules
delivered to the Trustee pursuant to Article IV. The Company shall continue to
be liable to make all payments to Executives required under the terms of the
Plans to the extent such payments have not been made pursuant to this Trust.
Payments made from the Trust Fund to Executives in respect of the Plans pursuant
to Article IV shall, to the extent of such payments, satisfy the Company's
obligation to pay benefits to such Executives under the Plans.
ARTICLE IV
----------
PAYMENT SCHEDULES UNDER PLANS
-----------------------------
4.1 PAYMENT SCHEDULES. Upon or before the occurrence of a Potential
Change of Control, the Company shall provide the Trustee with a schedule of the
individual Executives who are participants in the Plans listed on Schedule A and
to whom payments are to be made from the Trust on behalf of the Company. Upon
the occurrence of a Potential Change of Control, the Company shall also deliver
to the Trustee payment schedules, included as Part II to Schedule A, showing as
to each Executive the dates payments are to be made to each individual Executive
and the amount of each such payment or setting forth a formula or instructions
acceptable to the Trustee for determining the amounts so payable and the payment
dates ("Payment Schedules"). The Payment Schedules shall include instructions as
to the amount of interest accruing under the Plan. The Payment Schedules, as
they pertain to each Executive, shall also be delivered by the Company to such
Executive.
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4.2 MODIFIED PAYMENT SCHEDULES. Modified Payment Schedules shall be
delivered by the Company to the Trustee and to each Executive (as it pertains to
such Executive) each time that additional amounts are required to be paid by the
Company to the Trustee under Section 5.3 and upon the occurrence of any event,
such as early retirement of an Executive, requiring a modification of the
Payment Schedule. The Trustee shall make payments from the Trust assets to an
Executive in accordance with the provisions of the Payment Schedule applicable
to such Executive. In the event that an Executive reasonably believes that the
Payment Schedule, as modified, does not properly reflect the amount payable to
such Executive or the time or form of payment from the Trust assets in respect
of any Plan, such Executive shall be entitled to deliver to the Trustee written
notice (the "Executive's Notice") setting forth payment instructions for the
amount the Executive believes is payable under the relevant terms of such Plan.
The Executive shall also deliver a copy of the Executive's Notice to the Company
within three (3) business days of the delivery to the Trustee. Unless the
Trustee receives written objection from the Company within thirty (30) business
days after receipt by the Trustee of such notice, the Trustee shall make the
payment in accordance with the payment instructions set forth in the Executive's
Notice. In the event the Company delivers to the Trustee a written objection in
accordance with the preceding sentence, then, if the Company and the Executive
are unable to resolve their differences within the 45-day period following the
Company's delivery of objections to the Trustee, the parties shall submit the
matter to arbitration in accordance with Section 14.3.
4.3 WITHHOLDINGS. The Trustee shall be permitted to withhold from any
payment due to an Executive hereunder the amount required by law to be so
withheld under Federal, state and local wage withholdings requirements or
otherwise, and shall pay over to the appropriate government authority the
amounts so withheld. The Trustee may rely on instructions from the Company as to
any required withholding and shall be fully protected under Section 9.5 in
relying on such instructions.
4.4 FURTHER ASSURANCES. The Trustee shall, at any time and from time to
time, administer this Trust as may be necessary or proper to effectuate the
purposes of this Trust. If the Trust receives an unqualified opinion of tax
counsel selected by the Trustee, which opinion states that the Executives are
subject to Federal income tax on amounts held in Trust prior to the distribution
to the Executives of such amounts, the Trustee shall, to the extent practicable,
take such action and administer the Trust Fund in such a manner so as to prevent
the Trust Fund from being immediately taxable income to the Executives before
making
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any distributions pursuant to Section 4.5, provided that the Trustee shall not
return any portion of the Trust Fund to the Company.
4.5 DISTRIBUTIONS IN THE EVENT OF TAXABILITY. In the event of any final
determination by the Internal Revenue Service or a court of competent
jurisdiction, which determination is not appealable or the time for appeal or
protest of which has expired, or the receipt by the Trustee of a substantially
unqualified opinion of tax counsel selected by the Trustee, which determination
determines, or which opinion opines, that the Executives or any particular
Executive, is subject to Federal income taxation on amounts held in the Trust
prior to the distribution to the Executives or Executive of such amounts and no
curative action is available under Section 4.4, the Trustee shall, on receipt by
the Trustee of such opinion or notice of such determination, pay to each
Executive the portion of the Trust Fund includible in such Executive's Federal
gross income, provided as a condition of receiving such payment, the Executive
delivers to the Trustee a written agreement stating that the payment being made
is in satisfaction of the obligations of the Company due to him in respect of
which the payment is made, after taking into consideration that such payment is
being made prior to the required distribution date, and the Company concurs in
such agreement which concurrence shall not be unreasonably withheld.
ARTICLE V
---------
THE TRUST FUND AND FUNDING
--------------------------
5.1 RECEIPT AND HOLDING OF THE TRUST FUND. The Trustee will accept and
hold all contributions and all insurance contracts, insurance policies and other
property transferred and delivered to the Trustee by the Company or at the
Company's direction. All contributions and property received by the Trustee,
plus income and appreciation, constitute the trust fund (the "Trust Fund").
5.2 INITIAL FUNDING OF TRUST. Concurrently with the execution of this
Trust, the Company is delivering to the Trustee the sum of One Thousand Dollars
to be held in trust hereunder. Upon the occurrence of a Potential Change of
Control, the Company shall contribute to the Trust, in cash or other property,
the amount determined under accepted actuarial principles to be necessary to
fund the amounts payable to the Executives under the Plans in accordance with
the Payment Schedules for the Executives delivered to the Trustee pursuant to
Section 4.1.
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5.3 ADDITIONAL FUNDING; EXCESS ASSETS. Unless the Trust Funds
contributed to the Trustee pursuant to the last sentence of Section 5.2 have
been released to the Company pursuant to Section 5.4, the Company shall, as soon
as practicable after the end of each Fiscal Year, recalculate the amount
determined under accepted actuarial principles to be necessary to fund the
amounts payable to the Executives under all Plans and in accordance with the
Payment Schedules for the Executives delivered to the Trustee pursuant to
Section 4.1 and 4.2 through the end of the most recently completed Fiscal Year
(herein referred to as the "Aggregate Payment Obligation"). If the Aggregate
Payment Obligation exceeds the fair market value of the assets in the Trust at
the end of the most recently completed Fiscal Year, then there exists a funding
deficiency to the extent of such excess; and the Company shall by no later than
90 days after the end of such Fiscal Year contribute to the Trustee additional
cash or property having a fair market value equal to the amount of the funding
deficiency. If the fair market value of assets in the Trust at the end of the
most recently completed Fiscal Year is more than 125% of the Aggregate Payment
Obligation, then there is an overfunding to the extent of such excess; and the
Trustee shall as soon as practicable after the determination that an overfunding
exists distribute cash or other property to the Company having a fair market
value equal to the amount by which the fair market value of Trust assets exceeds
125% of the Aggregate Payment Obligation.
5.4 RELEASE OF TRUST FUNDS UNLESS CHANGE OF CONTROL OCCURS. Any funds
delivered to the Trustee pursuant to Section 5.2 because of the occurrence of a
Potential change of Control, together with any assets in the Trust Fund in
excess of $1,000, shall be returned to the Company one year after the date of
such delivery, unless a Change of Control shall have occurred. If any subsequent
Potential Change of Control occurs during such initial one-year period, such
initial one-year period shall be extended to a date one year after the
occurrence of the subsequent Potential Change of Control. The Company shall
notify the Trustee of the occurrence of a Change of Control or Potential Change
of Control, and Executives holding 25% or more beneficial interest in Trust
Funds may notify the Trustee that a Change of Control or Potential Change of
Control has occurred (provided in the case of any such notice from Executives,
it is accompanied by an opinion of counsel stating that in the opinion of such
counsel a Change of Control or Potential Change of Control has occurred). The
Trustee may rely on any such notice or on any other actual notice satisfactory
to the Trustee of such a change or potential change which the Trustee may
receive. Notwithstanding the foregoing, the Trustee shall have no
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<PAGE> 11
duty or obligation to make any independent determination that such a change or
potential change has occurred. In the event Trust Funds are released to the
Company pursuant to this Section 5.4, all payment schedules delivered to the
Trustee pursuant to Section 4.1 shall be returned to the Company and be of no
further force and effect.
5.5 TRANSFER TO ANOTHER TRUSTEE. The Company may direct the Trustee to
transfer the Trust Fund to a successor trustee as set forth in Section 11.1. The
Trustee immediately will comply with that direction. When that transfer is
completed, the Trustee will be relieved from all further obligations in
connection with the Trust Fund.
ARTICLE VI
----------
STATUS OF TRUST
---------------
6.1 GRANTOR TRUST. The Trust is part of the Company's program
established for the purpose of providing deferred compensation to its present
and former directors and key employees and is intended to be exempt from the
participation, vesting, funding and fiduciary requirements of the Employee
Retirement Income Security Act of 1974, as amended. The Company intends the
Trust to be treated as a grantor trust within the meaning of Section 671 of the
Internal Revenue Code and all income attributable to the Trust Fund shall be
reported by the Company. The Trust Fund shall at all times be subject to the
claims of the creditors of the Company as set forth in Section 6.2.
6.2 SUBJECT TO CLAIMS CREDITORS OF THE COMPANY. It is the intent of the
parties hereto that the Trust Fund is and shall remain at all times subject to
the claims of the creditors of the Company in the event of the Company's
insolvency or bankruptcy as set forth in this Article VI, including, without
limitation, its general creditors. Accordingly, the Company shall not create a
security interest in the Trust Fund in favor of the Executives or any creditor.
If the Trustee receives the notice provided for in Section 6.3, or otherwise
receives actual notice that the Company is insolvent or bankrupt as defined in
Section 6.3, the Trustee will make no further distributions of the Trust Fund to
any of the Executives but shall deliver the entire amount of the Trust Fund only
as a court of competent jurisdiction, or duly appointed receiver or other person
authorized to act by such a court, may direct, in order to make the Trust Fund
available to satisfy the claims of the Company's creditors, including, without
limitation, its general creditors. The Trustee shall resume distribution of
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the Trust Fund to the Executives under the terms hereof, upon no less than
thirty (30) days advance notice to the Company, if it determines that the
Company was not, or is no longer, bankrupt or insolvent. Unless the Trustee has
actual notice of the Company's bankruptcy or insolvency, the Trustee shall have
no duty to inquire whether the Company is bankrupt or insolvent.
6.3 NOTIFICATION OF BANKRUPTCY OR INSOLVENCY. The Company, through its
Board of Directors and Chief Executive Officer, shall advise the Trustee
promptly in writing of the Company's bankruptcy or insolvency. The Company shall
be deemed to be bankrupt or insolvent, for purposes of this Agreement only, upon
the occurrence of any of the following:
(i) The Company shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, petition or apply to any
tribunal for the appointment of a custodian, receiver, liquidator,
sequestrator, or any trustee for it or a substantial part of its
assets, or shall commence any case under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction (federal or state),
whether now or hereafter in effect; or if there shall have been filed
any such petition or application, or any such case shall have been
commenced against it, in which an order for relief is entered or which
remains undismissed; or the Company by any act or omission shall
indicate its consent to, approval of or acquiescence in any such
petition, application or case or order for relief or to the
appointment of a custodian, receiver or any trustee for it or any
substantial part of any of its property, or shall suffer any such
custodianship, receivership, or trusteeship to continue undischarged;
or
(ii) The Company shall be unable to pay its obligations as they
become due in the usual course of its affairs; or
(iii) The sum of the Company's debts is greater than all its
property at a fair valuation; or
(iv) The present saleable value of the Company's assets is less
than the amount that would be required to pay the probable liability
on its existing debts as they become absolute and matured.
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ARTICLE VII
-----------
THE TRUSTEE'S ACCOUNTING
------------------------
7.1 BOOKS AND RECORDS. The Trustee will keep accurate and detailed accounts
of all investments, receipts, disbursements and other transactions in respect of
the Trust Fund. Those accounts and related records may be inspected by any
person designated by the Company. The Trustee will retain those records and
supporting data for the period required by law. All Trust assets may be
commingled for purposes of investment. For recordkeeping purposes only, an
account will be maintained for each Executive. Each account will be credited
with all contributions relating to the Executive for whom it was established and
will be debited with all payments to such Executive.
7.2 TRUSTEE'S REPORT. Within 60 days after the end of each Fiscal Year, the
Trustee shall file a written report with the Company containing:
(a) A description of investments, receipts, disbursements and other
transactions effected by the Trustee during the most recently completed
Fiscal Year;
(b) An exact description of any asset transferred to the Trustee or
transferred by the Trustee to any other person during such Fiscal Year;
(c) An exact description of assets sold or purchased by the Trustee
during such Fiscal Year, the cost of each item purchased and the net
proceeds of each item sold;
(d) An exact description of all assets held by the Trustee as of the
close of business on the last day of such Fiscal Year, and the cost and
fair market value of each item (other than insurance contracts) determined
as of the same date; and
(e) Any other information required by law to be filed on behalf of the
Trust.
The information described in subsections (a), (b) and (c), above, may be
given in the form of monthly or quarterly reports, if those reports, taken
together, contain the required information.
7.3 ADDITIONAL REPORTS. In addition to the report required under Section
7.2 above, the Trustee shall make any interim reports reasonably requested by
the Company.
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ARTICLE VIII
------------
ADMINISTRATION OF THE TRUST FUND
--------------------------------
8.1 OWNERSHIP AND INVESTMENT OF THE TRUST FUND. The Trustee is the legal
owner of all Trust Fund assets and, subject to this Article, shall invest and
reinvest the Trust Fund. Any amounts reasonably necessary to meet contemplated
payments or to be transferred from the Trust Fund may be deposited temporarily
in the commercial department of any bank or trust company. The Trustee will not
be liable for any interest on those deposits except for interest actually paid
by the bank or trust company or, if the deposit is with the Trustee's own
commercial department, interest at the legally permitted rate agreed to by the
Trustee and the Company. Alternatively, the Trustee may make temporary deposits
in governmental obligations, certificates of deposit, commercial paper,
commercial paper master notes or a common trust fund maintained by the Trustee
for temporary cash investments.
8.2 POWERS OF THE TRUSTEE. Subject to this Article, Article 5 and Sections
9.1 and 9.2 and in addition to the powers generally given to trustees by law,
the Trustee may:
(a) Invest and reinvest the Trust Fund in (i) obligations issued or
guaranteed by the United States or by any person controlled or supervised
by and acting as an instrumentality of the United States pursuant to
authority granted by Congress, (ii) obligations issued or guaranteed by any
state or political subdivision thereof having a rating equal to or higher
than the current A rating classification of Moody's Investors Service, Inc.
or the current A rating classification of Standard & Poor's Corporation,
both of New York, New York, or their successors; (iii) commercial or
finance paper of any corporation having a net worth of $10,000,000 and
having a rating classification equal to or higher than the current P-1
rating classification of Moody's Investors Service, Inc. or the current A-1
rating classification of Standard & Poor's Corporation, both of New York,
New York, or their successors; (iv) bankers' acceptances drawn on and
accepted by banks or trust companies organized under the laws of the United
States of America or any state thereof, having a reported capital and
surplus of at least $10,000,000 in dollars of the United States of America
or bankers' acceptances drawn on and accepted by the Trustee; (v)
certificates of deposit maturing within twelve months of
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<PAGE> 15
the Trustee or of banks or trust companies, organized under the laws of the
United States of America or any state thereof, having a reported capital
and surplus of at least $10,000,000 in dollars of the United States of
America and which has a rating at least equal to the rating required in
(iii) above; and (vi) repurchase agreements collateralized with obligations
described in (i) above; and (vii) money market funds the assets of which
are of the types specified above; provided that any such investment or
deposit is not prohibited by law.
(b) Abandon, adjust, arbitrate, compromise, or otherwise settle any
obligation or liability due to or from it as Trustee, including any tax
claim, and/or enforce or contest any claim in legal or administrative
proceedings. The Trustee will not be required to contest any claim unless
it has been indemnified against the costs and expenses of that action or
unless available Trust Fund assets are sufficient to pay those expenses.
(c) Compensate from the Trust Fund, agents, accountants, brokers and
counsel (who may be counsel for the Company) and other assistants and
advisors which it believes are necessary or desirable for the proper
administration of the Trust Fund.
(d) Temporarily deposit uninvested funds in a commingled temporary
deposit medium maintained by the Trustee, which is composed of certificates
of deposit or other obligations issued by the Trustee.
(e) Do all other acts not specifically mentioned above which are
necessary to administer the Trust Fund and to carry out the purposes of the
Trust.
8.3 SITUS OF ASSETS. Except as permitted by law, the Trustee may not
maintain in the Trust Fund any assets located outside the jurisdiction of the
district courts of the United States.
8.4 ENTIRE AGREEMENT. The Trustee will have only those powers, duties, or
responsibilities set forth in this Agreement.
ARTICLE IX
----------
RELATING TO THE TRUSTEE
-----------------------
9.1 LIABILITY OF THE TRUSTEE. The Trustee will exercise its powers and
perform its duties with the care, skill, prudence, and diligence under the
circumstances then prevailing
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<PAGE> 16
that a prudent man acting in a like capacity and familiar with those matters
would use in the conduct of an enterprise of a like character and with like aim.
The Trustee also will diversify Trust Fund investments to minimize the risk of
large loss unless under the circumstances the Trustee believes it clearly would
be prudent not to diversify. Wherever this Trust Agreement provides that the
Trustee must follow directions of the Company or that the Trustee has no duty or
power concerning a matter, the Trustee will not be liable for any harm caused by
a direction or lack of a direction or by any exercise or non-exercise of power
by another unless:
(a) the Trustee knowingly participates in or knowingly undertakes to
conceal an act or omission of another fiduciary with respect to a Plan or
the Trust; or
(b) by the Trustee's failure to act in accordance with this Section,
the Trustee has enabled another fiduciary to breach a fiduciary duty; or
(c) the Trustee has knowledge of a breach of fiduciary duty which
resulted in harm or injury and does not make reasonable efforts under the
circumstances to remedy the breach.
9.2 OBLIGATIONS UNDER LAW. Regardless of any general or specific power or
authority granted to it, the Trustee may not engage in any transaction, exercise
any power or perform any duty under this Trust in violation of the Internal
Revenue Code, Employee Retirement Income Security Act, as amended, or any
regulations or rulings issued under those laws.
9.3 BOND. Unless required by law, the Trustee is not required to furnish
bond for the faithful performance of its duties.
9.4 COMPENSATION. The Trustee will be compensated reasonably as agreed to
by the Company and the Trustee. That compensation and all reasonable expenses of
administration will be paid by the Company directly and not out of Trust Funds.
9.5 INDEMNIFICATION. The Company agrees to indemnify and hold harmless the
Trustee from and against any and all damages, losses, claims or expenses as
incurred, including expenses of investigation and fees and disbursements of
counsel to the Trustee and any taxes imposed on the Trust Fund or income of the
Trust (the "Indemnified Amounts"), arising out of or in connection with the
performance by the Trustee of its duties hereunder provided the Indemnified
Amounts do not arise out of,
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<PAGE> 17
or are connected with, a harm as to which the Trustee may be liable under
subparagraphs (a), (b) or (c) of Section 9.1. Any amount payable to the Trustee
under this Section 9.5 and not previously paid by the Company shall be paid by
the Company promptly upon demand therefor by the Trustee.
ARTICLE X
---------
MISSING PERSONS, INCAPACITATED EXECUTIVES, DEATH AND DIRECTIONS
---------------------------------------------------------------
10.1 MISSING PERSONS. If any payment to be made by the Trustee to an
Executive is not claimed or accepted by the Executive, the Trustee shall notify
the Company. The Trustee shall not have any obligation to search for or
ascertain the whereabouts of any Executive.
10.2 INCAPACITATED EXECUTIVES. While a Executive who is entitled to a
payment or distribution hereunder is under a legal disability or, in the
Trustee's opinion, in any way is incapacitated so as to be unable to manage his
financial affairs, the Trustee may make any required distribution to an
Executive by making it (i) directly to the Executive, (ii) a legal guardian of
the Executive, or (iii) in such other manner as the Trustee deems in the best
interest of the Executive.
10.3 DEATH OF EXECUTIVE. If any Plan designated on Schedule A provides for
the continuance of payments upon the death of Executive, the Trustee shall use
Trust Funds to make such payments. In the event an Executive dies before
receiving all payments required to be paid to him pursuant to the Payment
Schedules, the Company shall, within 30 days of Executive's death, provide the
Trustee with a new Payment Schedule relating to Executive directing the Trustee
as to whether future payments are to be made to a designated beneficiary of
Executive or Executive's estate or whether payments terminate upon death. In the
event a Plan provides that a designated beneficiary or the estate of Executive
shall receive payments after the death of Executive, then the Payment Schedule
furnished to the Trustee in connection with the Executive's death shall be
furnished to the designated beneficiary or the estate, as the case may be, and
the provisions of Section 4.2 shall apply in the event that any disagreement as
to a modified Payment Schedule arises.
10.4 FORM. All directions, notices, certifications and amendments to the
Trust to be given by the Company will be in writing; if given by the Company,
they will be signed on behalf of the Company.
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<PAGE> 18
10.5 PROOF OF ANY MATTER. If required by the Trustee, any matter may be
proved conclusively by certification by the Company. The Trustee also may accept
or require any other or further evidence it believes to be sufficient or
necessary.
10.6 ABSENCE OF DIRECTIONS. If the Trustee believes that it must take
action under this Trust, it may act in its sole discretion unless direction is
provided under this Trust.
ARTICLE XI
----------
RESIGNATION OR REMOVAL OF TRUSTEE
---------------------------------
11.1 SUCCESSOR TRUSTEE. The Trustee may resign and be discharged from
its duties hereunder at any time by giving notice in writing of such resignation
to the company and each Executive specifying a date (not less than thirty (30)
days after the giving of such notice) when such resignation shall take effect.
Promptly after such notice, the Company shall appoint a successor trustee, such
trustee to become Trustee hereunder upon the resignation date specified in such
notice. The Trustee shall continue to serve until its successor accepts the
trust and receives delivery of the Trust Fund. The Company may at any time
substitute a new trustee by giving thirty (30) days notice thereof to the
Trustee then acting. The Trustee and any successor thereto appointed hereunder
shall be a commercial bank which is not an affiliate of the Company, but which
is a national banking association or established under the laws of one of the
states of the United States, and which has equity in excess of $10,000,000.
11.2 FINAL ACCOUNT. If the Trustee dies, resigns or is removed, and
unless the Company accepts without exception the Trustee's final account, the
Trustee (or his representative) may settle its account either (a) by beginning
an action to procure a judicial settlement or (b) by agreeing on a settlement
with the Company.
11.3 TRANSFER AND DISCHARGE. If a successor trustee is appointed, the
Trustee will transfer the Trust Fund to the successor along with true copies of
all relevant records reasonably requested by the successor. The Trustee also
will execute all documents necessary to the transfer of the Trust Fund. When it
has completed those actions, the Trustee will not be further accountable for any
matters covered in its accounting.
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11.4 EFFECTIVE DATE OF APPOINTMENT OF SUCCESSOR TRUSTEE. Appointment of
a successor trustee will be effective when it delivers to the Company and to the
former trustee written acceptance of the appointment. When delivered, this Trust
will be interpreted as if the successor trustee had been originally named
Trustee. However, the successor trustee will not be liable or responsible for
anything done or omitted in the administration of the Trust before its
appointment.
11.5 MERGER OR CONSOLIDATION. If the Trustee engages in a corporate
reorganization, the resulting corporation automatically will be the Trustee's
successor.
ARTICLE XII
-----------
PROTECTION FOR THIRD PERSONS
----------------------------
12.1 PROTECTION FOR THIRD PERSONS. In dealing with the Trustee, no one
other than the Company is required to inquire into the Trustee's authority to
take any action authorized by this Trust. Those persons may assume that the
Trustee is authorized to take any action which it undertakes and will not be
liable for any act done under written direction of the Trustee. Also, those
persons may assume that the Trustee is authorized to receive any money or
property paid to the Trustee, or paid under the Trustee's written direction.
Written certification by the Company of the Trustee's name will be conclusive
evidence that the Trustee is qualified to act as Trustee at the date of that
certification.
ARTICLE XIII
------------
TERMINATION; AMENDMENT; AND WAIVER
----------------------------------
13.1 TERMINATION. This Trust shall be terminated upon the earliest of
any of the following events: (i) the exhaustion of the Trust Fund; or (ii) the
final payment of all amounts payable to all of the Executives pursuant to all
the Plans. Promptly upon termination of this Trust, any remaining portion of the
Trust Fund shall be paid to the Company.
13.2 AMENDMENT AND WAIVER. This Trust is irrevocable and may not be
amended except by an instrument in writing signed on behalf of the parties
hereto together with the written consent of Executives having at least
sixty-five percent (65%) of all amounts then held in the Trust credited to their
accounts, except that in the event a proposed amendment relates only to
Executives participating
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in one Plan, then the written consent of Executives required to adopt such an
amendment shall be determined on the basis of the assets held in Trust in
respect of that Plan and the interest of such Executives in such assets. The
parties hereto, together with the consent of Executives having at least
sixty-five percent (65%) of all amounts then held in the Trust credited to their
accounts, may at any time waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto or an
Executive to any such waiver shall be valid if set forth in an instrument in
writing signed by or on behalf of such party or Executive. Notwithstanding the
foregoing, any such amendment or waiver may be made by written agreement of the
parties hereto without obtaining the consent of the Executives if such amendment
or waiver does not, in the opinion of counsel acceptable to the Trustee,
adversely affect the rights of the Executives hereunder. No amendment or waiver
relating to this Trust may be made which only affects a particular Executive
unless such Executive has agreed in writing to such amendment or waiver.
13.3 SCHEDULE A TO THE TRUST. Schedule A lists those Plans which the
Company, pursuant to Section 4.1, has designated as a Plan with respect to which
the Trustee is authorized to make payments to Executives from the Trust Fund as
set forth in this Trust. The Company may from time to time, as set forth in
Section 4.1, amend Schedule A to include an additional Plan or Plans or to list
additional Executives. The Company shall not, however, amend Schedule A to
delete a Plan or Plans from Schedule A unless any such deletion has been
approved in the same manner and by the same consent of Executives as an
amendment is required to be approved under Section 13.2.
ARTICLE XIV
-----------
GENERAL PROVISIONS
------------------
14.1 OHIO TRUST. The Trust will be construed and enforced according to
the laws of the State of Ohio and the United States.
14.2 SEVERABILITY. In the event that any provision of this Trust or the
application thereof to any person or circumstances shall be determined by a
court of proper jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Trust, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each provision of this Trust shall be valid
and enforced to the fullest extent permitted by law.
146
<PAGE> 21
14.3 ARBITRATION. Any dispute between the Executives and the Company or
the Trustee as to the interpretation or application of the provisions of this
Trust and amounts payable hereunder shall be determined exclusively by binding
arbitration in Dayton, Ohio, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court of competent jurisdiction.
14.4 NOTICES. Any notice, report, demand or waiver required or permitted
hereunder shall be in writing and shall be given personally or by prepaid
registered or certified mail, return receipt requested, addressed as follows:
If to the Company: Amcast Industrial Corporation
3931 South Dixie Avenue
Kettering, Ohio 45439
Attn: Treasurer
If to the Trustee: Bank One, Dayton, National Association
Kettering Tower
7th Floor
Dayton, Ohio 45401
Attn: Trust Department
If to an Executive, to the address of such Executive as listed next to his name
on Schedule A hereto.
A notice shall be deemed received upon the date of delivery if given
personally or, if given by mail, upon the receipt thereof.
14.5 TRUST BENEFICIARIES. Each Executive is an intended beneficiary
under this Trust, and shall be entitled to enforce all terms and provisions
hereof with the same force and effect as if such person had been a party hereto.
14.6 HEADINGS. The headings and subheadings in this Agreement are
inserted for convenience of reference only and are not to be considered in the
construction of its provisions.
147
<PAGE> 22
14.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which is an original; all counterparts constitute the same
instrument, sufficiently evidenced by any one counterpart.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
instrument to be executed this 11th day of March 1988.
AMCAST INDUSTRIAL CORPORATION
Attest: By
-------------------------- --------------------------------
Assistant Secretary Title
-----------------------------
"Company"
BANK ONE, DAYTON, NATIONAL
ASSOCIATION
By
--------------------------------
"Trustee"
148
<PAGE> 23
SCHEDULE A
AMCAST INDUSTRIAL CORPORATION
FIRST MASTER BENEFIT TRUST AGREEMENT
MARCH 11, 1988
--------------
PLANS AS TO WHICH THE TRUSTEE HAS BEEN DESIGNATED TO MAKE
PAYMENTS ON BEHALF OF THE COMPANY.
- ---------------------------------------------------------
PLAN I: Executive Employment Agreement between Leo W.
Ladehoff and the Company dated October 29, 1986 (the "Employment
Agreement").
l. Action of the Board of Directors of the Company.
The Board of Directors of Amcast Industrial Corporation (the
"Company") by resolutions adopted on December 16, 1987 directed that
the Trustee be authorized to make the payments required to be made to
Leo W. Ladehoff pursuant to Section 3 of the Executive Employment
Agreement from the Trust Fund in the event a Change of Control occurs
and the Trust is funded as provided in Article V.
2. Executive to whom payments are to be made.
Address for
Name Notices and Payments Social Security No.
- ---- -------------------- -------------------
Leo W. Ladehoff 4501 Troon Trail ###-##-####
Kettering, Ohio 45439
3. PAYMENT OBLIGATION OF THE COMPANY TO EXECUTIVE
UNDER THE EMPLOYMENT AGREEMENT.
Name Payment Obligation
- ---- ------------------
Leo W. Ladehoff Seven Thousand Dollars ($7,000) on the first day of each
month for a period of 120 consecutive months, commencing on
the later of (i) March 1, 1991 and (ii) the first day of the
month following the month in which Mr. Ladehoff ceases being
employed by the Company.
149
<PAGE> 1
Exhibit 10.8
AS Amended through August 19, 1992
AMCAST INDUSTRIAL CORPORATION
-----------------------------
1989 DIRECTOR STOCK OPTION PLAN
-------------------------------
PLAN DOCUMENT
-------------
150
<PAGE> 2
1989 DIRECTOR STOCK OPTION PLAN
-------------------------------
l. Purpose
-------
The purpose of this 1989 Director Stock Option Plan (the "Plan") is to
encourage increased stock ownership of Amcast Industrial Corporation (the
"Company") by members of the Board of Directors of the Company who are not
employees of the Company or any of its Subsidiaries and whose continued services
as directors are considered important to the Company's continued progress. The
Plan's additional purpose is to benefit the Company by providing such directors
with a further incentive to continue as directors of the Company and increase
shareholder value.
2. Definitions
-----------
(a) "Board" means the Board of Directors of the Company.
(b) "Company" means Amcast Industrial Corporation, an Ohio corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Fair Market Value means the mean of the high and low sales prices of
a Share on the date when the value of a Share is to be determined, as reported
on the New York Stock Exchange Composite Transaction Tape; or, if no sale is
reported for such date, then on the next preceding date on which a sale is
reported; or, if the Shares are no longer listed on such exchange, the
determination of such value shall be made by the Board in accordance with
applicable provisions of the Code and related regulations promulgated under the
Code.
(e) "Option" means a nonqualified stock option that is not entitled to
special tax treatment under Section 422A of the Code.
(f) "Outside Director" means a director of the Company who is not employed
by the Company or a Subsidiary of the Company.
(g) "Shares" means the Common Shares of the Company.
(h) "Subsidiary" means any company more than 50% of the voting stock of
which is owned or controlled, directly or indirectly, by the Company.
3. Shares Subject to the Plan
--------------------------
(a) MAXIMUM NUMBER. The maximum number of Shares that may be subject to
Options granted pursuant to the Plan shall be one hundred twenty thousand
(120,000), subject to adjustment in accordance with Subsection 3(b). The Shares
which may be issued
151
<PAGE> 3
pursuant to Options may be authorized and unissued Shares or Shares held in the
Company's treasury. In the event of an expiration, termination, or cancellation
of any Option granted under the Plan without the issuance of Shares, the Shares
subject to such Option shall no longer be charged against the 120,000 Share
maximum and may again be used for new Options.
(b) RECAPITALIZATION ADJUSTMENT. In the event of any change affecting the
Shares by reason of any share dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
change, or any distributions to a holder of Shares other than cash dividends,
the Committee shall make such adjustment, if any, as it may deem appropriate to
avoid dilution in the number and kind of shares authorized for issuance under
the Plan, in the number and kind of shares covered by Options and in the option
price of outstanding Options.
4. Administration
--------------
The Plan shall be administered by the Board. The Board shall have all the
powers vested in it by the terms of the Plan, such powers to include authority
(within the limitations described herein) to prescribe the form of the agreement
embodying awards of Options made under the Plan. Grants of Options under the
Plan shall be automatic as provided in Section 6(a). The Board shall, subject to
the provisions of the Plan, have the power to construe the Plan, to determine
all questions arising thereunder, and to adopt and amend such rules and
regulations for the administration of the Plan as it may deem desirable. Any
decision of the Board in the administration of the Plan, as described herein,
shall be final and conclusive. No member of the Board shall be liable for any
action taken or decision made in good faith relating to the Plan or any Option.
5. Eligibility
-----------
Each Outside Director of the Company shall be eligible to participate in
the Plan.
6. Terms and Conditions of Options
-------------------------------
Each Option granted under the Plan shall be evidenced by a signed written
agreement in such form as the Board shall prescribe from time to time in
accordance with the Plan, and shall comply with the following terms and
conditions:
(a) AUTOMATIC GRANT OF OPTIONS. On the first business day of January of
each year, each Outside Director who is a director of the Company on such date
shall automatically be granted an Option for one thousand five hundred (1,500)
Shares. All Options granted under the Plan shall be nonqualified stock
152
<PAGE> 4
options. The purchase price of a Share under each Option shall be the Fair
Market Value of a Share on the date of grant.
(b) EXERCISABILITY AND PERIOD OF OPTION. Each Option shall become first
exercisable one year after the date upon which it was granted, provided,
however, that any Option granted pursuant to the Plan shall, if not then
exercisable, become exercisable in full upon the retirement of the Outside
Director because of age ("Retirement") or total and permanent disability (as
determined in the sole discretion of the Board), or upon the death of the
Outside Director. No Option shall be exercisable after the expiration of five
(5) years from the date upon which such Option is granted. Each Option shall be
subject to termination before its date of expiration as provided in Section 7.
(c) NOTICE OF EXERCISE AND PAYMENT. An Option granted under the Plan may be
exercised by the optionee giving written notice of exercise to the Secretary of
the Company. The Option price for Shares purchased shall be paid in full at the
time such notice is given. An Option shall be deemed exercised on the date the
Secretary receives written notice of exercise, together with full payment for
the Shares purchased. The Option price shall be paid to the Company either in
cash, by delivery to the Company of Shares already-owned by the optionee or in
any combination of cash and such Shares. In the event already-owned Shares are
used to pay all or a portion of the Option price, the amount credited to payment
of the Option price shall be the Fair Market Value of the already-owned Shares
on the date the Option is exercised.
(d) FRACTIONAL SHARES. No fractional Shares shall be issued pursuant to the
exercise of an Option, nor shall any cash payment be made in lieu of fractional
Shares.
(e) OPTIONS NON-TRANSFERABLE. Each Option granted under the Plan shall, by
its terms, be nontransferable otherwise than by will or the laws of descent and
distribution, and an Option may be exercised, during the lifetime of the Outside
Director, only by such Outside Director or, if permissible under applicable law,
by the Outside Director's guardian or legal representative. No Option or
interest therein may be transferred, assigned, pledged or hypothecated by the
optionee during his lifetime whether by operation of law or otherwise, or be
made subject to execution, attachment, or similar process.
7. Termination of Service
----------------------
(a) TERMINATION OF SERVICE OTHER THAN DUE TO RETIREMENT OR DEATH. In the
event that an Outside Director shall cease to be a director, other than by
reason of Retirement or death, then the Outside Director may exercise the Option
during the nine (9)-month period following such termination, but, in no event,
after the expiration of the Option. In the event that the Option is not
exercised during the nine (9)-month period
153
<PAGE> 5
following termination, it shall expire at the end of such nine (9)-month period.
In the event that an Outside Director ceases to be a director other than by
reason of Retirement or death, and then dies during the nine (9)-month period
following such termination of service as a director, then the Option may be
exercised by a legatee or legatees of the Outside Director under his last will,
or by his personal representatives or distributees, at any time within a period
of one year after the Outside Director's death, but, in no event, after
expiration of the Option. In the event that the Option is not exercised during
the one year period after the Outside Director's death, then it shall expire at
the end of such one year period.
(b) RETIREMENT. In the event that an Outside Director shall cease to be
a director because of Retirement, then the Outside Director may exercise the
Option at any time during the remaining term of the Option. In the event that an
Outside Director dies following Retirement, then the Option theretofore granted
to the Outside Director may be exercised by a legatee or legatees of the Outside
Director under his last will, or by his personal representatives or
distributees, at any time during the remaining term of the Option.
(c) DEATH. In the event that an Outside Director shall cease to be a
director because of death, then the Option theretofore granted to the Outside
Director may be exercised by a legatee or legatees of the Outside Director under
his last will, or by his personal representatives or distributees, at any time
during the remaining term of the Option.
8. Limitation of Rights
--------------------
Neither the Plan, nor the granting of an Option nor any other action
taken pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Company will retain an Outside
Director for any period of time, or at any particular rate of compensation.
9. Compliance With Laws and Exchange Requirements
----------------------------------------------
No Option shall be granted and no Shares shall be issued in connection
with any Option unless the Option and the issuance and delivery of Shares upon
exercise of the Option shall comply with all relevant provisions of state and
federal law, including, without limitation, the Securities Act of 1933, the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed.
10. Amendment and Termination of Plan
---------------------------------
154
<PAGE> 6
(a) AMENDMENT. The Board may from time to time amend the Plan, or any
provision thereof, in such respects as the Board may deem advisable except that
it may not amend the Plan more than once every six months, other than to comport
with changes in the Code, and except that it may not amend the Plan without
shareholder approval so as to:
(1) increase the maximum number of Shares that may be issued under the
Plan except in accordance with Section 3(b);
(2) materially increase the benefits accruing to participants under
the Plan; or
(3) materially modify the requirements as to eligibility for
participation in the Plan.
(b) TERMINATION. The Board may at any time terminate the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any amendment or the termination of
the Plan shall not adversely affect any Option previously granted and such
Option shall remain in full force and effect as if the Plan had not been amended
or terminated.
11. Notices
-------
Each notice relating to the Plan shall be in writing and delivered in
person or by certified or registered mail to the proper address. Each notice to
the Board shall be addressed as follows: Amcast Industrial Corporation, 3931
South Dixie Avenue, Kettering, Ohio 45439, Attention: President. Each notice to
a participant shall be addressed to the participant at the address of the
participant maintained by the Company on its books and records. Anyone to whom a
notice may be given under this Plan may designate a new address by written
notice to the other party to that effect.
12. Benefits of Plan
----------------
This Plan shall inure to the benefit of and be binding upon each successor
of the Company. All rights and obligations imposed upon a participant and all
rights granted to the Company under this Plan shall be binding upon the
participant's heirs, legal representatives and successors.
13. Pronouns and Plurals
--------------------
155
<PAGE> 7
All pronouns shall be deemed to refer to the masculine, feminine, singular
or plural, as the identity of the person or persons may require.
14. Shareholder Approval and Term of Plan
-------------------------------------
The Plan shall become effective upon its approval by the affirmative vote
of the holders of a majority of the outstanding Shares. Unless sooner terminated
under Section 10, the Plan shall be in effect for a period of ten years and
automatically terminate on the tenth anniversary of its approval by shareholders
of the Company.
* * * * * *
- ---------------------
(1) The Plan was approved by the Board on October 19, 1988 and Shareholders of
the Company on December 14, 1988.
(2) An amendment to Section 10(a) of the Plan was adopted by the Board on
August 19, 1992.
156
<PAGE> 8
Appendix A
----------
[logo]
AMCAST
INDUSTRIAL CORPORATION
1989 DIRECTOR STOCK OPTION PLAN
157
<PAGE> 9
[logo]
AMCAST
INDUSTRIAL CORPORATION
1989 DIRECTOR STOCK OPTION PLAN
-------------------------------
l. Purpose
-------
The purpose of this 1989 Director Stock Option Plan (the "Plan") is to
encourage increased stock ownership of Amcast Industrial Corporation (the
"Company") by members of the Board of directors of the Company who are not
employees of the Company or any of its Subsidiaries and whose continued services
as directors are considered important to the Company's continued progress. The
Plan's additional purpose is to benefit the Company by providing such directors
with a further incentive to continue as directors of the Company and increase
shareholder value.
2. Definitions
-----------
(a) "Board" means the Board of Directors of the Company.
(b) "Company" means Amcast Industrial Corporation, an Ohio corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Fair Market Value" means the mean of the high and low sales prices of
a Share on the date when the value of a Share is to be determined, as reported
on the New York Stock Exchange Composite Transaction Tape; or, if no sale is
reported for such date, then on the next preceding date on which a sale is
reported; or, if the Shares are no longer listed on such exchange, the
determination of such value shall be made by the Board in accordance with
applicable provisions of the Code and related regulations promulgated under the
Code.
(e) "Option"means a nonqualified stock option that is not entitled to
special tax treatment under Section 422A of the Code.
(f) "Outside Director" means a director of the Company who is not employed
by the Company or a Subsidiary of the Company.
(g) "Shares" means the Common Shares of the Company.
(h) "Subsidiary" means any company more than 50 percent of the voting stock
of which is owned or controlled, directly or indirectly, by the Company.
158
<PAGE> 10
3. Shares Subject to the Plan
--------------------------
(a) MAXIMUM NUMBER. The maximum number of Shares that may be subject to
Options granted pursuant to the Plan shall be one hundred twenty thousand
(120,000); subject to adjustment in accordance with Subsection 3(b). The Shares
which may be issued pursuant to Options may be authorized and unissued Shares or
Shares held in the Company's treasury. In the event of an expiration,
termination, or cancellation of any Option granted under the Plan without the
issuance of Shares, the Shares subject to such Option shall no longer be charged
against the 120,000 Share maximum and may again be used for new Options.
(b) RECAPITALIZATION ADJUSTMENT. In the event of any change affecting the
Shares by reason of any share dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
change, or any distributions to a holder of Shares other than cash dividends,
the Committee shall make such adjustment, if any, as it may deem appropriate to
avoid dilution in the number and kind of shares authorized for issuance under
the Plan, in the number and kind of shares covered by Options, and in the option
price of outstanding Options.
4. Administration
--------------
The Plan shall be administered by the Board. The Board shall have all the
powers vested in it by the terms of the Plan, such powers to include authority
(within the limitations described herein) to prescribe the form of the agreement
embodying awards of Options made under the Plan. Grants of Options under the
Plan shall be automatic as provided in Section 6(a). The Board shall, subject to
the provisions of the Plan, have the power to construe the Plan, to determine
all questions arising thereunder, and to adopt and amend such rules and
regulations for the administration of the Plan as it may deem desirable. Any
decision of the Board in the administration of the Plan, as described herein,
shall be final and conclusive. No member of the Board shall be liable for any
action taken or decision made in good faith relating to the Plan or any Option.
5. Eligibility
-----------
Each Outside Director of the Company shall be eligible to participate in
the Plan.
6. Terms and Conditions of Options
-------------------------------
Each option granted under the Plan shall be evidenced by a signed written
agreement in such form as the Board shall prescribe from time to time in
accordance with the Plan, and shall comply with the following terms and
conditions:
159
<PAGE> 11
(a) AUTOMATIC GRANT OF OPTIONS. On the first business day of January of
each year, each Outside Director who is a director of the Company on such date
shall automatically be granted an Option for one thousand five hundred (1,500)
Shares. All Options granted under the Plan shall be nonqualified stock options.
The purchase price of a Share under each Option shall be the Fair Market Value
of a Share on the date of grant.
(b) EXERCISABILITY AND PERIOD OF OPTION. Each Option shall become first
exercisable one year after the date upon which it was granted, provided,
however, that any Option granted pursuant to the Plan shall, if not then
exercisable, become exercisable in full upon the retirement of the Outside
Director because of age ("Retirement") or total and permanent disability (as
determined in the sole discretion of the Board), or upon the death of the
Outside Director. No Option shall be exercisable after the expiration of five
(5) years from the date upon which such Option is granted. Each Option shall be
subject to termination before its date of expiration as provided in Section 7.
(c) NOTICE OF EXERCISE AND PAYMENT. An Option granted under the Plan may be
exercised by the optionee giving written notice of exercise to the Secretary of
the Company. The Option price for Shares purchased shall be paid in full at the
time such notice is given. An Option shall be deemed exercised on the date the
Secretary receives written notice of exercise, together with full payment for
the Shares purchased. The Option price shall be paid to the Company either in
cash, by delivery to the Company of Shares already owned by the optionee or in
any combination of cash and such Shares. In the event already-owned Shares are
used to pay all or a portion of the Option price, the amount credited to payment
of the Option price shall be the Fair Market Value of the already-owned Shares
on the date the Option is exercised.
(d) FRACTIONAL SHARES. No fractional Shares shall be issued pursuant to the
exercise of an Option, nor shall any cash payment be made in lieu of fractional
Shares.
(e) OPTIONS NONTRANSFERABLE. Each Option granted under the Plan shall, by
its terms, be nontransferable otherwise than by will or the laws of descent and
distribution, and an Option may be exercised, during the lifetime of the Outside
Director, only by such Outside Director or, if permissible under applicable law,
by the Outside Director's guardian or legal representative. No Option or
interest therein may be transferred, assigned, pledged, or hypothecated by the
optionee during his lifetime whether by operation of law or otherwise, or be
made subject to execution, attachment, or similar process.
7. Termination of Service
----------------------
(a) TERMINATION OF SERVICE OTHER THAN DUE TO RETIREMENT OR DEATH. In the
event that an Outside Director shall cease to be a director, other than by
reason of Retirement or death, then the Outside Director may exercise the Option
during the nine (9)-month period following such termination, but, in no event,
after the expiration of the Option. In the event that the Option is
160
<PAGE> 12
not exercised during the nine (9)-month period following termination, it shall
expire at the end of such nine (9)-month period. In the event that an Outside
Director ceases to be a director other than by reason of Retirement or death,
and then dies during the nine (9)-month period following such termination of
service as a director, then the Option may be exercised by a legatee or legatees
of the Outside Director under his last will, or by his personal representatives
or distributees, at any time within a period of one year after the Outside
Director's death, but, in no event, after expiration of the Option. In the-event
that the Option is not exercised during the one-year period after the Outside
Director's death, then it shall expire at the end of such one-year period.
(b) RETIREMENT. In the event that an Outside Director shall cease to be a
director because of Retirement, then the Outside Director may exercise the
Option at any time during the remaining term of the Option. In the event that an
Outside Director dies following Retirement, then the Option theretofore granted
to the Outside Director may be exercised by a legatee or legatees of the Outside
Director under his last will, or by his personal representatives or
distributees, at any time during the remaining term of the Option.
(c) DEATH. In the event that an Outside Director shall cease to be a
director because of death, then the Option theretofore granted to the Outside
Director may be exercised by a legatee or legatees of the Outside Director under
his last will, or by his personal representatives or distributees, at any time
during the remaining term of the Option.
8. Limitation of Rights
--------------------
Neither the Plan, nor the granting of an Option nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Company will retain an Outside
Director for any period of time, or at any particular rate of compensation.
9. Compliance with Laws and Exchange Requirements
----------------------------------------------
No Option shall be granted and no Shares shall be issued in connection with
any Option unless the Option and the issuance and delivery of Shares upon
exercise of the Option shall comply with all relevant provisions of state and
federal law, including, without limitation, the Securities Act of 1933, the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed.
161
<PAGE> 13
10. Amendment and Termination of Plan
---------------------------------
(a) AMENDMENT. The Board may from time to time amend the Plan, or any
provision thereof, in such respects as the Board may deem advisable except that
it may not amend the Plan without shareholder approval so as to:
(1) increase the maximum number of Shares that may be issued under the
Plan except in accordance with Section 3(b);
(2) materially increase the benefits accruing to participants under
the Plan; or
(3) materially modify the requirements as to eligibility for
participation in the Plan.
(b) TERMINATION. The Board may at any time terminate the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any amendment or the termination of
the Plan shall not adversely affect any Option previously granted and such
Option shall remain in full force and effect as if the Plan had not been amended
or terminated.
11. Notices
-------
Each notice relating to the Plan shall be in writing and delivered in
person or by certified or registered mail to the proper address. Each notice to
the Board shall be addressed as follows: Amcast Industrial Corporation, 3931
South Dixie Avenue, Kettering, Ohio 45439, Attention: Secretary. Each notice to
a participant shall be addressed to the participant at the address of the
participant maintained by the Company on its books and records. Anyone to whom a
notice may be given under this Plan may designate a new address by written
notice to the other party to that effect.
12. Benefits of Plan
----------------
This Plan shall inure to the benefit of and be binding upon each successor
of the Company. All rights and obligations imposed upon a participant and all
rights granted to the Company under this Plan shall be binding upon the
participant's heirs, legal representatives, and successors.
13. Pronouns and Plurals
--------------------
All pronouns shall be deemed to refer to the masculine, feminine, singular
or plural, as the identity of the person or persons may require.
162
<PAGE> 14
14. Shareholder Approval and Term of Plan
-------------------------------------
The plan shall become effective upon its approval by the affirmative
vote of the holders of a majority of the outstanding Shares. Unless sooner
terminated under Section 10, the Plan shall be in effect for a period of ten
years and automatically terminate on the tenth anniversary of its approval by
shareholders of the Company.
163
<PAGE> 1
EXHIBIT 10.9
------------
The Company executed 1 year, 1 1/2 year, and 2 year Change of Control Agreements
as of September 1, 1996 with the following individuals:
1 YEAR AGREEMENTS
- -----------------
Joseph A. Angi - General Manager, Amcast Automotive - Brake & Chassis Division
Myron E. Frye - Vice President of Purchasing
John W. Garratt - President, Casting Technology Company
Dean Meridew - General Manager, Amcast Automotive - Wheel Division
1 1/2 YEAR AGREEMENTS
- ---------------------
William L. Bown - Vice President and Controller
J. Randall Caraway - President, Amcast Precision
2 YEAR AGREEMENTS
- -----------------
Dennis A. Bertram - Senior Vice President of Operations, Amcast Automotive
Denis G. Daly - Vice President, General Counsel and Secretary
Terry R. Garner - Vice President and General Manager, Elkhart Industrial
Division
Michael R. Higgins - Treasurer
Michael N. Powell - President, Amcast Flow Control
Thomas K. Walker - President, Amcast Automotive
Douglas D. Watts - Vice President, Finance
All executed Change of Control Agreements are identical to the example attached
except for the percentage which appears in Item 5(B)(i)(b). The percentage
equals 100%, 150%, and 200% for a 1 Year Agreement, 1 1/2 Year Agreement, and 2
Year Agreement, respectively.
164
<PAGE> 2
September 1, 1996
Mr. Dennis A. Bertram
5482 Parkside Drive
Brighton, MI 48116
Dear Mr. Bertram:
Amcast Industrial Corporation, an Ohio corporation (the "Company"), considers
the establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that, as is the case
with many publicly held corporations, the mere possibility of a change in
control may raise distracting and disrupting uncertainties and questions among
management personnel, may interfere with their whole-hearted attention and
devotion to the performance of their duties, and may even lead to their
departure, all to the detriment of the best interests of the Company and its
shareholders. Accordingly, the Board of Directors of the Company (the "Board")
has determined that the best interests of the Company and its shareholders would
be served by assuring to certain executives of the Company, including yourself,
the protection provided by an agreement which defines the respective rights and
obligations of the Company and the executive in the event of termination of
employment subsequent to a change in control of the Company.
In order to induce you to remain in the employ of the Company, this letter
agreement sets forth the severance benefits which the Company agrees will be
provided to you in the event your employment with the Company [or, in the case
of a transaction described in clause (iv) of paragraph 2, with the successor to
the Company (a "Successor")] is terminated subsequent to a "change in control of
the Company" under the circumstances described below.
Except where the context otherwise indicates, the term "Company" hereinafter
includes the Company and any Successor.
1. OPERATION AND TERM OF AGREEMENT. This agreement, although effective
immediately, shall not become operative unless and until there has been a
change in control of the Company. None of the provisions of this agreement
shall be applicable
165
<PAGE> 3
September 1, 1996
page 2
to any termination of your employment, however occurring, which is effective
prior to a change in control of the Company. This agreement shall continue
until the later of December 31, 2000 or two years after the occurrence of a
change in control of the Company, provided such change in control occurs on
or before December 31, 2000, subject to extension beyond that date by mutual
written consent. The Company will review this agreement with you between
January 1, 2000 and July 31, 2000, for the purpose of determining whether or
not an extension beyond December 31, 2000 is mutually agreeable and, if so,
on what basis and for how long.
2. CHANGE IN CONTROL. No benefits shall be payable hereunder unless there shall
have been a change in control of the Company, as set forth below, and your
employment with the Company shall thereafter have been terminated in
accordance with paragraph 3 below. For purposes of this agreement, a "change
in control of the Company" shall mean and be deemed to have occurred on (i)
the date upon which the Company is provided a copy of a Schedule 13D, filed
pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the "1934
Act"), indicating that a group or person, as defined in Rule 13d-3 under the
1934 Act, has become the beneficial owner of 20% or more of the outstanding
Voting Shares of the Company or the date upon which the Company first learns
that a person or group has become the beneficial owner of 20% or more of the
outstanding Voting Shares of the Company if a Schedule 13D is not filed; (ii)
the date of a change in the composition of the Board of Directors of the
Company such that individuals who were members of the Board of Directors on
the date two years prior to such change (or who were subsequently elected to
fill a vacancy in the Board, or were subsequently nominated for election by
the Company's shareholders, by the affirmative vote of at least two-thirds of
the directors then still in office who were directors at the beginning of
such two year period) no longer constitute a majority of the Board of
Directors of the Company; (iii) the date the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the holders of the
Voting Shares of the Company outstanding immediately prior to the merger or
consolidation continuing to own immediately after the merger or consolidation
80% or more of the Voting Shares of the Company or the surviving entity, if
the Company is not the surviving entity in the merger or consolidation; or
(iv) the date shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets. "Voting Shares"
means any securities of the Company which vote generally in the election of
directors.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
(A) If any of the events described in paragraph 2 constituting a change in
control of the Company shall have occurred, then upon any subsequent
termination of your
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<PAGE> 4
September 1, 1996
page 3
employment at any time within two years following the occurrence of such
event, you shall be entitled to the benefits provided by this agreement,
as set forth in paragraph 5, unless such termination is (i) by the
Company for Cause or because of your Disability, or (ii) because of your
Retirement, or (iii) by you other than for Good Reason, or (iv) because
of your death.
(B) As used in this agreement, the terms "Cause", "Retirement", "Good
Reason", and "Disability" shall have the meanings set forth below:
(i) CAUSE. "Cause" shall mean (a) the willful and continued failure by
you to substantially perform your duties with the Company (other
than any such failure resulting from your physical or mental
illness or other physical or mental incapacity), after a demand
for substantial performance is delivered to you by the Board which
specifically identifies the manner in which the Board believes
that you have not substantially performed your duties, or (b) the
willful engaging by you in gross misconduct which is materially
and demonstrably injurious to the Company resulting or intended to
result, directly or indirectly, in substantial personal gain or
substantial personal enrichment at the expense of the Company. For
purposes of this subparagraph, no act, or failure to act, on your
part shall be considered "willful" unless done, or omitted to be
done, by you not in good faith and without reasonable belief that
your action or omission was in the best interests of the Company.
Notwithstanding the foregoing, Cause shall not be deemed to exist
unless and until there shall have been delivered to you a copy of
a resolution duly adopted by the affirmative vote of not less than
three-fourths of the number of directors then in office at a
meeting of the Board called and held for that purpose (after
reasonable notice to you and an opportunity for you, together with
your counsel, to be heard before the Board), finding that in the
good faith opinion of the Board you were guilty of conduct set
forth above in clauses (a) or (b) of the first sentence of this
subparagraph and specifying the particulars thereof in detail.
(ii) RETIREMENT. "Retirement" shall mean cessation of your employment
in accordance with the Company's retirement policy (including
early retirement) generally applicable to salaried employees, or
in accordance with any retirement arrangement with respect to you
established with your consent.
(iii) GOOD REASON. "Good Reason" shall mean:
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<PAGE> 5
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page 4
(a) The assignment to you of any duties inconsistent with your
position, duties, responsibilities and status with the Company
immediately prior to a change in control of the Company, or a
change in your responsibilities, as in effect immediately prior to
a change in control of the Company, which materially diminishes
your responsibilities with the Company when considered as a whole,
or any removal of you from or any failure to re-elect you to any
of such positions or offices; provided, however, that the
foregoing shall not constitute Good Reason if done in connection
with termination of your employment because of your Retirement, or
by the Company for Cause or because of your Disability, or by you
other than for Good Reason.
(b) A reduction by the Company of your then current annual base salary
or, if higher, your annual base salary as in effect at the time of
the change in control of the Company.
(c) Failure by the Company to continue in effect any benefit,
incentive compensation, pension, employee stock ownership, stock
option, life insurance, medical, health and accident, or
disability plan in which you are participating at the time of a
change in control of the Company or plans providing you with
substantially similar benefits, or the taking of any action by the
Company which would adversely affect your participation in or
materially reduce your benefits under any of such plans or deprive
you of any material fringe benefit enjoyed by you at the time of
the change in control of the Company, or the failure by the
Company to provide you with the number of paid vacation days to
which you would then be entitled in accordance with the Company's
vacation policy in effect at the time of the change in control of
the Company.
(d) The relocation of the Company's principal executive offices to a
location outside Montgomery County, Ohio, if at the time of a
change in control of the Company you are based at the Company's
principal executive offices.
(e) The Company's requiring you to be based anywhere other than the
location where you are based at the time of a change in control of
the Company, if the same requires you to relocate your principal
residence; or, in the event you consent to being based anywhere
other than such location, the failure by the Company to pay (or
reimburse you for) all reasonable moving expenses incurred by you
relating to a change of your principal residence in connection
with such relocation
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<PAGE> 6
September 1, 1996
page 5
and to indemnify you against any loss [defined as the difference
between the higher of (1) your aggregate investment in such
residence or (2) the fair market value of such residence, as
determined by a real estate appraiser designated by you and
reasonably satisfactory to the Company, and the actual sale price
of such residence after the deduction of all real estate brokerage
charges and related selling expenses] realized upon the sale of
such residence in connection with any such change of residence.
(f) The Company's requiring you to perform duties or services which
necessitate absence overnight from your place of residence,
because of travel involving the business or affairs of the
Company, to a degree not substantially consistent with the extent
of such absence necessitated by such travel during the period of
twelve months immediately preceding a change in control of the
Company, except to the extent that such travel or absence is in
connection with the finalization of the transaction resulting in
the change of control, and does not continue for more than 90 days
after the final closing of the transaction.
(g) The failure of the Company to obtain the assumption of this
agreement by any Successor as provided in paragraph 7 hereof.
(h) The Company's termination of your employment without satisfying
any applicable requirements of paragraph 4 and subparagraph B (i)
above.
(iv) DISABILITY. "Disability" shall mean your inability to perform the
duties required of you on a full-time basis for a period of six
consecutive months because of physical or mental illness or other
physical or mental disability or incapacity, followed by the Company
giving you thirty days' written notice of its intention to terminate
your employment by reason thereof, and your failure because of physical
or mental illness or other physical or mental disability or incapacity
to resume the full-time performance of your duties within such period
of thirty days and thereafter perform the same for a period of two
consecutive months.
(C) During any period of time subsequent to a change in control of the
Company, if you fail to perform your duties as a result of physical or
mental illness or other physical or mental disability or incapacity, you
shall continue to receive your full salary at your annual base salary
rate then in effect, together with incentive compensation (as defined in
paragraph 5A accrued but not paid prior to your Date of Termination) as
defined in paragraph 4 until you return to work or your
169
<PAGE> 7
September 1, 1996
page 6
employment with the Company is terminated; provided, however, that any
amount otherwise payable for any period of time pursuant to this
subparagraph (C) shall be reduced by any payment or payments you receive
for such period of time under any employee salary continuation plan or
employee disability insurance plan maintained by the Company no part of
the cost of which was paid or is payable by you.
(D) If subsequent to a change in control of the Company your employment is
terminated by the Company for Cause, the Company shall pay you your full
salary through the Date of Termination at your annual base salary rate in
effect at the time Notice of Termination is given, and you shall also
receive all accrued or vested benefits of any kind to which you are, or
would otherwise have been, entitled through the Date of Termination (as
defined in paragraph 4), and the Company shall thereupon have no further
obligation to you under this agreement.
4. NOTICE AND DATE OF TERMINATION.
(A) Any termination of your employment subsequent to a change in control of
the Company shall be consummated by written Notice of Termination given
to the other party. For purposes of this agreement, "Notice of
Termination" shall mean a notice which indicates the specific termination
provision or provisions in this agreement relied upon, if any, and sets
forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of your employment.
(B) "Date of Termination" shall mean (i) if your employment is terminated by
the Company for Cause, the date specified in the Notice of Termination or
the date on which the meeting of the Board referred to in subparagraph
3(B)(i) is concluded, whichever date is the later; or (ii) if your
employment is terminated for any other reason, the date on which Notice
of Termination is given or the effective date specified in the Notice,
whichever is later. For purposes of this agreement, termination of your
employment shall be deemed to have occurred within two years following
the occurrence of a change in control of the Company if the Date of
Termination is within such two year period.
5. COMPENSATION AND BENEFITS UPON TERMINATION.
(A) "Incentive Compensation" shall mean the annual cash payment awarded under
the Annual Incentive Program (AIP) or other plan which replaces the AIP
but not including any awards under any stock option, stock grant, stock
rights, or
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<PAGE> 8
September 1, 1996
page 7
similar plan or any award under any company sponsored profit sharing,
pension, 401k, or similar savings plan.
(B) The compensation and benefits to be provided to you pursuant to paragraph
3 of this agreement upon termination of your employment with the Company
under specified circumstances within two years following a change in
control of the Company include the following:
(i) Subject to the provisions of paragraph 8 hereof, the Company
shall pay to you as severance pay in a lump sum in cash on
the Date of Termination, the following amounts:
(a) Your full salary through the Date of Termination at your
annual base salary rate in effect at the time Notice of
Termination is given; and also the amount of Incentive
Compensation to any completed period or periods which has
been earned by or awarded to you but which has not yet
been paid to you.
(b) In lieu of any further salary payments to you for periods
subsequent to the Date of Termination, an amount (the
"Additional Compensation Payment") equal to two hundred
percent (200%) of the sum of your annual base salary at
the rate in effect as of the Date of Termination (or, if
higher, at the rate in effect at the time of the change in
control) plus an amount equal to two hundred percent
(200%) of the average annual amount awarded to you as
Incentive Compensation for the two years immediately
preceding the year during which the Date of Termination
occurs (whether or not fully paid).
(c) An amount in cash equal to the aggregate spread between
the exercise prices of all options granted to you under
the Company's existing stock option plans or any stock
option plan adopted by the Company subsequent to the date
hereof ("Options") which are then outstanding, whether or
not then fully exercisable, and the higher of (a) the Fair
Market Value of Common Share of the Company ("Company
Shares") on the Date of Termination or (b) the average
price per Company Share actually paid by the acquiring
party in connection with any change in control of the
Company. As used in this subparagraph, "Fair Market Value"
shall mean (1) in the event the Company Shares are listed
on any exchange or in the NASD National Market System, the
last sale price on such exchange or System on the Date of
Termination (or last trading date prior thereto) or, if
there are no sales on such date, the mean between the
representative bid and asked prices for Company
171
<PAGE> 9
September 1, 1996
page 8
Shares on such exchange or System at the close of business on
such date or (2) in the event that there is then no public
market for the Company Shares or that trading in the
Company Shares is sporadic and the mean between any bid
and asked prices is not representative of fair market
value, the fair market value of the Company Shares
determined in accordance with ss.2031-2(f) of the Treasury
Regulations or any successor provision thereto. Any Option
for which payment is made as prescribed in this
subparagraph (c) shall be canceled effective upon the
making of such payment.
(d) All legal fees and expenses reasonably incurred by you in
good faith as a result of such termination (including all
such fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or
enforce any right or benefit provided by this agreement).
(e) Interest at the rate of 10 percent per annum, compounded
daily from the due date of any payment required to be made
by the company under any provision of the agreement
through the date such payment is actually made.
(ii)The Company shall, at its expense, maintain in full force
and effect for your continued benefit all life insurance,
medical, health, and accident plans, programs and
arrangements in which you were entitled to participate at
the time of the change in control, provided that your
continued participation is possible under the terms of such
plans, programs and arrangements. In the event that the
terms of any such plan, program, or arrangement do not
permit your continued participation or that any such plan,
program or arrangement has been or is discontinued or the
benefits thereunder have been or are materially reduced, the
Company shall arrange to provide, at its expense, benefits
to you which are substantially similar to those which you
were entitled to receive under such plan, program or
arrangement at the time of the change in control. The
Company's obligation under this subparagraph (ii) shall
terminate on the earliest of the following dates: (a) the
second anniversary date of the Date of Termination, (b) the
date an essentially equivalent and no less favorable benefit
is made available to you by a subsequent employer or (c) the
date that would have been your normal retirement date under
the Company's defined benefit pension plan for salaried
employees had your remained employed by the Company.
(iii) In the event that because of their relationship to you,
members of your family or other individuals are covered by
any plan, program, or
172
<PAGE> 10
September 1, 1996
page 9
arrangement described in subparagraph (ii) above immediately prior
to the Date of Termination, the provisions set forth in
subparagraph (ii) shall apply equally to require the continued
coverage of such persons; provided, however, that if under the
terms of any such plan, program or arrangement any such person
would have ceased to be eligible for coverage during the period in
which the Company is obligated to continue coverage for you,
nothing set forth herein shall obligate the Company to continue to
provide coverage for such person beyond the date such coverage
would have ceased even if you had remained an employee of the
Company.
(iv)The Company shall enable you to purchase the automobile, if
any, which the Company was providing for your use at the
time Notice of Termination was given at the wholesale value
as set out in the latest Black Book published by National
Auto Research Division of Hearst Business Media Corporation,
of such automobile at such time.
(B) If an event constituting Good Reason shall occur, you shall be entitled
to the compensation and benefits described in (A) above only if you give
a Notice of Termination with respect thereto within 90 days after the
occurrence of such event, regardless of whether there has been an
intervening termination of your employment by the Company or otherwise.
(C) You shall not be required to mitigate the amount of any payment provided
for in this agreement by seeking other employment or otherwise; provided,
however, that in the event that you shall obtain other employment at any
time within two years immediately following your Date of Termination, 20%
of all earnings obtained by reason of such other employment during the
two year period immediately following your Date of Termination shall be
payable to the Company in full satisfaction of any obligation you have to
mitigate payment made to you by the Company. Upon obtaining any such
other employment, you, within thirty (30) days thereof, shall notify the
Company in writing of such other employment and the aggregate
compensation (including Incentive Compensation, bonuses and all other
forms of cash and contingent remuneration) to which you will be entitled.
During each of the two years immediately following your Date of
Termination, you shall provide the Company, on or before April 15 of each
year following such year, a photostatic copy of your federal income tax
return (including all schedules and exhibits thereto), as filed with the
Internal Revenue Service for the preceding calendar year.
6. RIGHTS AS FORMER EMPLOYEE. Nothing contained in this agreement shall be
construed as preventing you, and shall not prevent you, following any
termination of
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September 1, 1996
page 10
your employment whether pursuant to this agreement or otherwise, from
thereafter participating in any benefit or insurance plans, programs or
arrangements (including without limitation, any retirement plans or
programs) in the same manner and to the same extent that you would have
been entitled to participate as a former employee of the Company had this
agreement not have been executed, except, however, you shall not be
entitled to any severance payments under any severance pay programs of the
Company (other than this agreement) if you are paid the benefits provided
for under this agreement.
7. SUCCESSORS. The Company shall require any Successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to you, to expressly assume
and agree to perform this agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of such succession shall be a breach of this
agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled hereunder if you
terminated your employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
This agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any
amounts would still be payable to you hereunder if you had continued to
live, all such amounts, unless otherwise provided herein, shall be paid to
such beneficiary or beneficiaries as you shall have designated by written
notice delivered to the Company prior to your death or, failing such
written notice, to your estate.
8. UNAUTHORIZED DISCLOSURE; INVENTIONS.
(A) During the period of your employment hereunder, and for a period of
five (5) years following the termination of such employment, you hereby
agree that you will not, without the written consent of the Board or a
person authorized thereby, disclose to any person, other than an
employee of the Company, a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by you of
your duties as an executive of the Company or pursuant to any order or
process of any court or regulatory agency, any material confidential
information obtained by you while in the employ of the Company with
respect to any of the Company's products, improvements, formulae,
designs or styles, processes, customers, methods of distribution or
methods of
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September 1, 1996
page 11
manufacture; provided, however, that confidential information shall not
include any information known generally to the public (other than as a
result of unauthorized disclosure by you) or any information of a type
not otherwise considered confidential by persons engaged in the same
business or a business similar to that conducted by the Company.
(B) INVENTIONS. Any and all inventions made, developed or created by you
(whether at the request or suggestion of the Company or otherwise,
whether alone or in conjunction with others, and whether during regular
hours of work or otherwise) during the period of your employment by the
Company, which may be directly or indirectly useful in, or relate to,
the business of or tests being carried out by the Company or any of its
subsidiaries or affiliates, will be promptly and fully disclosed by you
to an appropriate executive officer of the Company and shall be the
Company's exclusive property as against you, and you will promptly
deliver to an appropriate executive officer of the Company all papers,
drawings, models, data and other material relating to any invention
made, developed or created by you as aforesaid.
You will, upon the Company's request and without any payment
therefor, execute any documents necessary or advisable in the
opinion of the Company's counsel to direct issuance of patents to
the Company with respect to such inventions as are to be the
Company's exclusive property as against you under this subsection
(b) or to vest in the Company title to such inventions as against
the Executive, the expense of securing any patent, however, to be
borne by the Company.
(C) The foregoing provision of this Section 8 shall be binding upon the
Executive's heirs, successors and legal representatives.
9. SAVINGS CLAUSE.
(A) The Deficit Reduction Act of 1984 added Section 280G to the Internal
Revenue Code of 1954, as amended (the "Code"). Section 280G imposes a
20% excise tax on excessive compensation received by, and denies a
deduction to the corporation for the amount of excess compensation paid
to, employees who are officers, shareholders, or highly compensated
individuals as a result of a change in the ownership or effective
control of the corporation or in the ownership of a substantial portion
of the assets of the corporation. In general, payments to an individual
that are contingent on a change in control will not be treated as
excessive if such payments do not exceed three times the average annual
compensation received by such individual over the five calendar years
preceding the year in which the change in control occurred. The
provisions in
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<PAGE> 13
September 1, 1996
page 12
subparagraph (B) of this paragraph 8 are designed to maximize the
amounts payable to you pursuant to this agreement or otherwise which
are contingent upon a change of control of the Company.
(B) In the event that it is determined that any payment by the Company to
or for your benefit (whether paid or payable pursuant to the terms of
this agreement or otherwise) would be subject to the 20% tax pursuant
to Section 4999 of the Code, then the aggregate present value of
amounts payable to or for your benefit pursuant to this agreement (such
payments pursuant to this agreement are hereinafter referred to as
"Agreement Payments") shall be reduced to the Reduce Amount. For
purposes of this subparagraph, the "Reduced Amount" shall be defined as
an amount expressed in present value which maximizes the aggregate
present value of Agreement Payments without causing any payments to be
subject to the 20% tax pursuant to Section 4999 of the Code.
10. NOTICES. All notices required or permitted to be given under this
agreement shall be in writing and shall be mailed (postage prepaid by
either registered or certified mail) or delivered, if to the Company,
addressed to:
Amcast Industrial Corporation
7887 Washington Village Drive
Dayton, Ohio 45459
Attention: Chief Executive Officer
and if to you, addressed to:
Dennis A. Bertram
5482 Parkside Drive
Brighton, MI 48116
Either party may change the address to which notices to such party are to
be directed by giving written notice of such change to the other party in
the manner specified in this paragraph. All notices, including without
limitation, any Notice of Termination, shall be deemed to have been given
upon the date of actual receipt of the recipient party.
11. ARBITRATION. Any dispute or controversy arising out of or relating to this
agreement shall be settled by arbitration in Dayton, Ohio, in accordance
with the rules then obtaining of the American Arbitration Association, and
judgment may be entered on the arbitrator's award in any court having
jurisdiction.
12. MISCELLANEOUS. No provision of this agreement may be modified, waived, or
discharged unless such waiver, modification or discharge is agreed to in
writing,
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September 1, 1996
page 13
signed by you and such officer of the Company as may be specifically
designated by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of, or of compliance by such other
party with, any condition or provision of this agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which
are not set forth expressly in this agreement.
13. GOVERNING LAW. The validity, interpretation, construction and performance
of this agreement shall be governed by the laws of the State of Ohio,
without giving effect to the principles of conflicts of law thereof.
14. VALIDITY. The invalidity or unenforceability of any provision of this
agreement shall no affect the validity or enforceability of any other
provision, which shall remain in full force and effect.
If this letter correctly sets forth our agreement on the subject matter hereof,
please so confirm by signing and returning the enclosed copy.
Very truly yours,
AMCAST INDUSTRIAL CORPORATION
By /s/ John H. Shuey
-----------------------------------
John H. Shuey
President and Chief Executive Officer
Confirmed to and agreed:
/s/ Dennis A. Bertram
- -------------------------------
Dennis A. Bertram
September 21, 1996
- -------------------------------
Date
177
<PAGE> 1
EXHIBIT 13.1
------------
SELECTED DATA
($ in thousands except per common share and statistical data)
<TABLE>
<CAPTION>
FINANCIAL DATA 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net sales ............................ $343,934 $328,231 $271,856 $222,643 $236,805
Gross profit ......................... 70,696 68,111 59,258 50,425 52,247
Gross profit percent ................. 20.6% 20.8% 21.8% 22.6% 22.1%
Income before taxes .................. 24,731 26,098 22,067 18,831 18,740
Net income ........................... 15,926 17,171 14,454 12,052 11,994
Working capital ...................... 57,774 47,845 48,590 36,097 32,525
Total assets ......................... 269,217 229,367 194,161 176,537 173,774
Long-term debt ....................... 58,783 29,687 13,910 17,929 22,276
PER COMMON SHARE DATA
Net income ........................... $ 1.85 $ 2.02 $ 1.72 $ 1.44 $ 1.66
Weighted average number of common
shares outstanding (in thousands) .. 8,606 8,517 8,425 8,347 7,223
Dividends declared ................... $ .56 $ .53 $ .49 $ .48 $ .48
Book value ........................... 15.80 14.52 13.02 11.81 11.37
STATISTICAL DATA
Current ratio ........................ 2.1 1.9 2.0 1.9 1.8
Long-term debt as a percent of capital 30.2% 19.3% 11.2% 15.3% 19.1%
Number of employees .................. 2,600 2,400 2,300 1,900 1,900
</TABLE>
Note: Net income for 1993 and 1992 is Income before Cumulative Effect of a
Change in Accounting Principle and Income from Continuing Operations,
respectively.
178
<PAGE> 2
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
Shareholders and Board of Directors
Amcast Industrial Corporation
Dayton, Ohio
We have audited the accompanying consolidated statements of financial condition
of Amcast Industrial Corporation and subsidiaries as of August 31, 1996 and
1995, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the three years in the period ended August 31, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amcast
Industrial Corporation and subsidiaries at August 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended August 31, 1996, in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Dayton, Ohio
October 8, 1996
/s/Ernst & Young LLP
--------------------
179
<PAGE> 3
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands except per share amounts)
<TABLE>
<CAPTION>
Year Ended August 31
1996 1995 1994
<S> <C> <C> <C>
Net sales ................................................................ $ 343,934 $328,231 $271,856
Cost of sales ............................................................ 273,238 260,120 212,598
--------- -------- --------
GROSS PROFIT 70,696 68,111 59,258
Selling, general and administrative expenses ............................. 43,368 41,139 36,038
--------- -------- --------
OPERATING INCOME 27,328 26,972 23,220
Other income (expense), net .............................................. (249) 513 441
Interest expense ......................................................... 2,348 1,387 1,594
--------- -------- --------
INCOME BEFORE INCOME TAXES 24,731 26,098 22,067
Income taxes ............................................................. 8,805 8,927 7,613
--------- -------- --------
NET INCOME $ 15,926 $ 17,171 $ 14,454
========= ======== ========
Net income per share ..................................................... $ 1.85 $ 2.02 $ 1.72
========= ======== ========
</TABLE>
See notes to consolidated financial statements
180
<PAGE> 4
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
($ in thousands)
<TABLE>
<CAPTION>
August 31
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents .................................................................... $ 5,413 $ 1,286
Accounts receivable .......................................................................... 50,407 44,643
Inventories .................................................................................. 45,021 49,146
Prepaid expenses ............................................................................. 8,380 7,786
-------- --------
TOTAL CURRENT ASSETS 109,221 102,861
PROPERTY, PLANT, AND EQUIPMENT
Land ......................................................................................... 2,385 1,978
Buildings .................................................................................... 33,382 27,653
Machinery and equipment ...................................................................... 166,286 135,163
Construction in progress ..................................................................... 42,948 35,530
-------- --------
245,001 200,324
Less allowances for depreciation ............................................................. 106,395 94,701
-------- --------
138,606 105,623
OTHER ASSETS .................................................................................... 21,390 20,883
-------- --------
$269,217 $229,367
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................................................................. $ 30,750 $ 33,647
Compensation and related items ............................................................... 10,174 9,719
Accrued expenses ............................................................................. 8,211 5,930
Current portion of long-term debt ............................................................ 1,105 4,522
Other current liabilities .................................................................... 1,207 1,198
-------- --------
TOTAL CURRENT LIABILITIES 51,447 55,016
LONG-TERM DEBT--less current portion ............................................................ 58,783 29,687
DEFERRED INCOME TAXES ........................................................................... 12,126 6,952
DEFERRED LIABILITIES ............................................................................ 10,697 13,507
SHAREHOLDERS' EQUITY
Preferred shares, without par value:
Authorized--1,000,000 shares
Issued--None
Common shares, at stated value:
Authorized--15,000,000 shares
Issued--8,618,491 shares, 8,555,875 shares in 1995 ......................................... 8,618 8,556
Capital in excess of stated value ............................................................ 65,003 64,175
Retained earnings ............................................................................ 62,543 51,474
-------- --------
136,164 124,205
-------- --------
$269,217 $229,367
======== ========
</TABLE>
See notes to consolidated financial statements
181
<PAGE> 5
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($ in thousands)
<TABLE>
<CAPTION>
Capital in Common
Common Excess of Retained Shares in
Shares Stated Value Earnings Treasury Total
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 1, 1993 ................ $8,383 $62,047 $28,577 $ (87) $ 98,920
Net income ............................. 14,454 14,454
Cash dividends declared, $.49 per share (4,134) (4,134)
Stock options exercised ................ 75 698 87 860
Tax benefit from stock options exercised 167 167
Other .................................. (104) (104)
------ ------- ------- ------- --------
BALANCE AT AUGUST 31, 1994 .................. 8,458 62,912 38,793 110,163
Net income ............................. 17,171 17,171
Cash dividends declared, $.53 per share (4,523) (4,523)
Stock options exercised ................ 98 1,029 1,127
Tax benefit from stock options exercised 234 234
Other .................................. 33 33
------ ------- ------- ------- --------
BALANCE AT AUGUST 31, 1995 .................. 8,556 64,175 51,474 124,205
NET INCOME ............................. 15,926 15,926
CASH DIVIDENDS DECLARED, $.56 PER SHARE (4,824) (4,824)
STOCK OPTIONS EXERCISED ................ 62 780 842
TAX BENEFIT FROM STOCK OPTIONS EXERCISED 48 48
OTHER .................................. (33) (33)
------ ------- ------- ------- --------
BALANCE AT AUGUST 31, 1996 .................. $8,618 $65,003 $62,543 $ -- $136,164
====== ======= ======= ======= ========
</TABLE>
See notes to consolidated financial statements
182
<PAGE> 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands )
<TABLE>
<CAPTION>
Year Ended August 31
1996 1995 1994
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income ...................................................................... $ 15,926 $ 17,171 $ 14,454
Depreciation .................................................................... 17,428 14,392 12,812
Deferred liabilities ............................................................ 2,364 (793) 380
Changes in assets and liabilities:
Accounts receivable ........................................................... (5,764) (6,243) (4,636)
Inventories ................................................................... 4,125 (10,677) (3,897)
Prepaid expenses .............................................................. (594) (2,643) (887)
Other assets .................................................................. 305 (1,420) 995
Accounts payable .............................................................. (2,897) 6,478 9,119
Accrued liabilities ........................................................... 2,745 (801) 1,238
-------- -------- --------
NET CASH PROVIDED BY OPERATIONS 33,638 15,464 29,578
INVESTING ACTIVITIES:
Additions to property, plant, and equipment ..................................... (48,640) (41,724) (15,596)
Contributions to joint venture .................................................. (2,774) (6,660) (1,014)
Assets held for sale and other assets ........................................... 191 5,641 7,762
-------- -------- --------
NET CASH USED BY INVESTING ACTIVITIES (51,223) (42,743) (8,848)
FINANCING ACTIVITIES:
Additions to long-term debt ..................................................... 50,000 20,300
Proceeds from exercise of stock options ......................................... 890 1,361 1,027
Reduction in long-term debt ..................................................... (20,904) (4,523) (4,019)
Short-term borrowings and current portion of long-term debt ..................... (3,417) 503 (337)
Dividends ....................................................................... (4,824) (4,523) (4,134)
Other ........................................................................... (33) 33 (104)
-------- -------- --------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 21,712 13,151 (7,567)
-------- -------- --------
Net change in cash and cash equivalents ............................................ 4,127 (14,128) 13,163
Cash and cash equivalents at beginning of year ..................................... 1,286 15,414 2,251
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 5,413 $ 1,286 $ 15,414
======== ======== ========
</TABLE>
See notes to consolidated financial statements
183
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands except per share data)
ACCOUNTING POLICIES
THE CONSOLIDATED FINANCIAL STATEMENTS include the accounts of Amcast Industrial
Corporation and its subsidiaries (the Company). Intercompany transactions have
been eliminated. Certain prior year amounts have been reclassified to conform to
the current year presentation.
CASH AND CASH EQUIVALENTS include amounts on deposit with financial institutions
and investments maturing within 90 days.
ACCOUNTS RECEIVABLE are stated net of allowances for doubtful accounts of $233
at August 31, 1996, and $222 at August 31, 1995.
INVENTORIES are valued at the lower of cost or market using the last-in,
first-out (LIFO) and the first-in, first-out (FIFO) methods.
PROPERTY, PLANT, AND EQUIPMENT are carried at cost. Expenditures for significant
renewals and improvements are capitalized. Repairs and maintenance are charged
to expense as incurred.
DEPRECIATION AND AMORTIZATION is computed on the straight-line method. The
amortization periods represent the estimated useful lives of the assets.
DEFERRED INCOME TAXES are provided for temporary differences between financial
and tax reporting in accordance with the liability method under the provisions
of Statement of Financial Accounting Standard No. 109, "Accounting for Income
Taxes".
NET INCOME PER SHARE is computed on the weighted average number of common shares
outstanding during each year. The exercise of outstanding options, which are
common stock equivalents, would cause no material dilution.
USE OF ESTIMATES and assumptions are made by management in the preparation of
the financial statements in conformity with generally accepted accounting
principles that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
184
<PAGE> 8
INVENTORIES
The major components of inventories as of August 31 are:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Finished products ..................................... $24,121 $31,881
Work in process ....................................... 14,519 15,450
Raw materials and supplies ............................ 12,115 11,961
------- -------
50,755 59,292
Less amount to reduce certain inventories to LIFO value 5,734 10,146
------- -------
$45,021 $49,146
======= =======
</TABLE>
Inventories reported on the FIFO method were $13,811 and $12,901 at August 31,
1996 and 1995, respectively. The estimated replacement cost of inventories is
the amount reported before the LIFO reserve.
185
<PAGE> 9
OTHER ASSETS
The major components of other assets as of August 31 are:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Assets held for sale ......................... $ 3,425 $ 3,522
Investment in joint venture .................. 9,639 7,278
Other ........................................ 8,326 10,083
------- -------
$21,390 $20,883
======= =======
</TABLE>
Assets held for sale reflect the estimated realizable values of the fixed
assets of closed facilities. The investment in joint venture represents the
Company's share of Casting Technology Company's net equity.
186
<PAGE> 10
LONG-TERM DEBT AND CREDIT ARRANGEMENTS
The following table summarizes the Company's borrowings at August 31:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Senior notes ....................... $53,500 $ 7,232
Revolving credit notes ............. 13,000
Lines of credit .................... 7,300
Industrial revenue bonds ........... 6,388 6,677
------- -------
59,888 34,209
Less current portion ............... 1,105 4,522
------- -------
Long-Term Debt $58,783 $29,687
======= =======
</TABLE>
Senior notes consist of two agreements with interest rates of 7.09% and
9.0%. The notes call for periodic principal payments and mature November 7,
2005, and September 15, 1999, respectively.
The Company has a $60,000 credit agreement extending through March 31,
2000. There were no outstanding borrowings under this credit agreement at August
31, 1996. The interest rate on borrowings under this agreement is based on, at
the Company's option, the prime rate, the certificate of deposit rate plus a
premium, or the Euro-dollar rate plus a premium. Premiums are subject to Company
performance measured on a quarterly basis and range from 0.375% to 0.75%. A
commitment fee of 0.15% is payable on the unused portion of the credit line.
The Company has lines of credit totaling $25,000. These lines were unused
at August 31, 1996 and require no compensating balances or commitment fees.
Industrial revenue bonds consist of various issues at fixed and variable
interest rates, ranging from 3.2% to 5%. These bonds call for principal payments
at various dates through 2004.
Debt covenants require the Company to maintain certain current and
debt-to-equity ratios. Other provisions limit the aggregate amount of certain
defined payments including purchase of Company stock and cash dividends. At
August 31, 1996, all retained earnings were available for the payment of
dividends.
The obligations in connection with industrial revenue bonds are
collateralized by property, plant, and equipment with a net book value of $2,386
at August 31, 1996. The Company has guaranteed debt of $16,380 at August 31,
1996, of Casting Technology Company, a joint venture.
The carrying amounts of the Company's debt instruments approximate fair
value as defined under SFAS No. 107. Fair value is estimated based on discounted
cash flows, as well as other valuation techniques.
Long-term debt maturities for each of the next five years are $1,105 in
1997, $1,108 in 1998, $1,050 in 1999, $1,050 in 2000, and $175 in 2001.
Capitalized interest was $2,038 and $390 in 1996 and 1995, respectively.
Interest paid was $4,272, $1,830, and $1,705 in 1996, 1995, and 1994,
respectively.
187
<PAGE> 11
STOCK OPTIONS
The 1981 Stock Option Plan provided for the granting of options to purchase
common shares to key employees of the Company and its subsidiaries. Granting of
options under this plan expired on October 13, 1991.
The 1989 Stock Incentive Plan provides for the granting of a maximum of
1,200,000 stock options, stock appreciation rights, performance awards, and
restricted stock awards to key employees of the Company and its subsidiaries.
The option price per share may not be less than the fair market value of a share
on the date the option is granted, and the maximum term of an option may not
exceed ten years.
The 1989 Director Stock Option Plan provides for the granting of a maximum
of 120,000 nonqualified stock options. The option price per share is equal to
the fair market value of a Company share on the date of grant. The term of each
option is five years, and an option first becomes exercisable one year after the
date of grant. Under the plan each person serving as a director of the Company
on the first business day of January of each year, who is not employed by the
Company, will automatically be granted 1,500 options.
Statement of Financial Accounting Standards No. 123, "Accounting for Stock
Based Compensation", was issued in October 1995 and is effective in the
Company's fiscal year ending August 31, 1997. The statement establishes
financial accounting and reporting standards for stock-based compensation plans.
Companies may elect to account for such plans under the fair value method or to
continue previous accounting and disclose proforma net income and net income per
share as if the fair value method was applied. The Company has not reached any
conclusion on the adoption of this statement.
Information regarding the Company's stock option plans is summarized below:
<TABLE>
<CAPTION>
1981 1989 1989
Stock Stock Director Stock
Option Plan Incentive Plan Option Plan
<S> <C> <C> <C>
Shares under option:
Outstanding at August 31, 1993.......................... 7,000 319,533 46,500
Granted............................................. 97,932 10,500
Exercised........................................... (7,000) (65,009) (15,000)
Canceled............................................ (11,129)
------- ------- ------
Outstanding At August 31, 1994.......................... 341,327 42,000
Granted............................................. 129,137 10,500
Exercised........................................... (91,144) (6,000)
Canceled............................................ (11,000)
------- ------
Outstanding At August 31, 1995.......................... 368,320 46,500
Granted............................................. 112,202 12,000
Exercised........................................... (56,275) (4,500)
Canceled............................................ (22,425)
------- ------
Outstanding At August 31, 1996.......................... 401,822 54,000
======= ======
Options available to grant at August 31, 1996................ 432,026 27,000
======= ======
Average option price per share:
At August 31, 1994...................................... $14.95 $16.69
At August 31, 1995...................................... 17.33 18.39
At August 31, 1996...................................... 17.99 19.35
Options exercisable:
At August 31, 1994...................................... 243,395 31,500
At August 31, 1995...................................... 244,183 36,000
At August 31, 1996...................................... 296,055 42,000
Average price of options exercised:
Year Ended August 31, 1994.............................. $12.75 $11.78 $12.66
Year Ended August 31, 1995.............................. 11.47 11.00
Year Ended August 31, 1996.............................. 13.81 6.88
</TABLE>
188
<PAGE> 12
LEASES
The Company has a number of operating lease agreements primarily involving
machinery, physical distribution, and computer equipment. Certain of these
leases contain renewal or purchase options which vary by lease. These leases are
noncancelable and expire on dates through 2003.
Rent expense was $4,960, $5,206, and $5,234 for the years ended August 31,
1996, 1995, and 1994, respectively.
The following is a schedule by year of future minimum rental payments
required under the operating leases that have initial or remaining noncancelable
lease terms in excess of one year as of August 31, 1996:
<TABLE>
<S> <C>
1997 .............................. $ 4,330
1998 .............................. 5,696
1999 .............................. 1,147
2000 .............................. 913
2001 .............................. 829
-------
TOTAL MINIMUM LEASE PAYMENTS $12,915
=======
</TABLE>
189
<PAGE> 13
PREFERRED SHARE PURCHASE RIGHTS
The Company has a Shareholder Rights Plan pursuant to which holders of the
Company's common shares receive a dividend of one preferred share purchase right
(collectively, the "Rights") for each common share held. The Rights contain
features which, under defined circumstances, allow holders to buy shares at a
bargain price. The Rights will expire on February 28, 1998. The Rights are not
presently exercisable and trade in tandem with the common shares. The Rights
become exercisable following the close of business on the tenth day after a
public announcement that a person or group has acquired 20% or more of the
common shares of the Company or a public announcement or commencement of a
tender or exchange offer which would result in ownership of 30% or more of the
common shares of Amcast. It is expected that the Rights will begin to trade
independently of the Company's common shares at that time.
The Company may redeem the Rights for one cent per Right any time prior to
the close of business on the tenth day following the day that a 20% position is
acquired and under certain circumstances thereafter, including certain
transactions not involving a 20% shareholder of the Company.
190
<PAGE> 14
COMMITMENTS AND CONTINGENCIES
At August 31, 1996, the Company has committed to capital expenditures of
$9,624 in 1997, primarily for the Engineered Components segment.
The Company, as is normal for the industry in which it operates, is
involved in certain legal proceedings and subject to certain claims and site
investigations which arise under the environmental laws and which have not been
finally adjudicated.
The Company has been identified as a potentially responsible party by
various state agencies and by the United States Environmental Protection Agency
(U.S. EPA) under the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, for costs associated with nine U.S. EPA led
multi-party sites and six state environmental agency-led remediation sites. Each
of these claims involves third-party owned disposal sites for which compensation
is sought from the Company as an alleged waste generator for recovery of past
governmental costs or for future investigation or remedial actions. The
designation as a potentially responsible party and the assertion of such claims
against the Company are made without taking into consideration the extent of the
Company's involvement with the particular site. In each instance, claims have
been asserted against a number of other entities for the same recovery or other
relief as was asserted against the Company. These claims are in various stages
of administrative or judicial proceeding. The Company has no reason to believe
that it will have to pay a significantly disproportionate share of clean-up
costs associated with any site.
To the extent possible, with the information available at the time, the
Company has evaluated its responsibility for costs and related liability with
respect to the above sites. In making such evaluation, the Company did not take
into consideration any possible cost reimbursement claims against its insurance
carriers. The Company is of the opinion that its liability with respect to those
sites should not have a material adverse effect on its financial position or
results of operations. In arriving at this conclusion, the principal factors
considered by the Company were ongoing settlement discussions with respect to
certain of the sites, the volume and relative toxicity of waste alleged to have
been disposed of by the Company at certain sites, which factors are often used
to allocate investigative and remedial costs among potentially responsible
parties, the probable costs to be paid by other potentially responsible parties,
total projected remedial costs for a site, if known, and the Company's existing
reserve to cover costs associated with unresolved environmental proceedings. At
August 31, 1996, the Company's accrued undiscounted reserve for such
contingencies was $2.3 million.
Allied-Signal Inc. has brought an action against the Company seeking a
contribution from the Company equal to 50% of Allied-Signal's estimated $30
million remediation cost in connection with a site in southern Ohio. The Company
believes its responsibility with respect to this site is very limited due to the
nature of the foundry sand waste it disposed of at the site. A trial in this
case was completed in February of 1995, but no judgment has been rendered. The
Company believes that if it has any liability at all in regard to this matter,
that liability would not be material to its financial position or results of
operations.
191
<PAGE> 15
MAJOR CUSTOMERS AND CREDIT CONCENTRATION
The Company sells products to customers primarily in the United States. The
Company performs ongoing credit evaluations of customers, and generally does not
require collateral. Allowances are maintained for potential credit losses and
such losses have been within management's expectations.
On August 31, 1996, trade receivables from the domestic automotive industry
were $21,082 and $22,858 was due from the construction industry.
Sales to Engineered Components' largest customer, General Motors
Corporation, were $114,473, $120,100, and $89,300 for the years ended August 31,
1996, 1995, and 1994, respectively. Trade receivables from General Motors
Corporation on August 31, 1996 and 1995, were $14,551 and $13,192 and were
current. No other single customer accounted for a material portion of trade
receivables.
192
<PAGE> 16
PENSION PLANS
The Company has a noncontributory defined benefit pension plan covering certain
employees. The plan covers salaried employees and provides pension benefits that
are based on years of credited service, employee compensation during years
preceding retirement, and the primary social security benefit. The plan also
covers hourly employees and provides pension benefits of stated amounts for each
year of credited service. The Company's policy is to fund the annual amount
required by the Employee Retirement Income Security Act of 1974. Plan assets
consist of U.S. Treasury bonds and notes, U.S. governmental agency issues,
corporate bonds, and common stocks. The plan held 350,000 common shares of the
Company at August 31, 1996 (6.8% of plan assets) and 1995 (7.8% of plan assets).
The Company also sponsors a deferred compensation profit sharing plan for
the benefit of substantially all salaried employees. The Company provides a 15%
match on employee contributions up to 6% of eligible compensation and a
supplemental savings match from 1% to 35% based on the Company achieving a
minimum return on shareholders' equity and subject to IRS limitations.
The Company participates in a multiemployer plan which provides defined
benefits to certain bargaining unit employees.
The following table sets forth the funded status and the amounts recognized
in the consolidated statements of financial condition for the Company's defined
benefit plan at August 31:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation ................................................... $(82,720) $(81,636)
======== ========
Accumulated benefit obligation .............................................. $(85,626) $(82,573)
======== ========
Projected benefit obligation ................................................... $(90,299) $(87,233)
Plan assets at fair value ...................................................... 90,834 85,559
-------- --------
Overfunded (underfunded) projected benefit obligation .......................... 535 (1,674)
Unrecognized net (gain) loss ................................................... (360) 3,026
Unrecognized prior service cost ................................................ 1,653 1,897
Unrecognized transition (asset) being recognized over a minimum of 15 years .... (3,067) (3,625)
-------- --------
Net pension liability recognized in the consolidated
statement of financial condition .......................................... $ (1,239) $ (376)
======== ========
</TABLE>
A summary of the components of net periodic pension cost for the defined
plan in 1996, 1995, and 1994, and the total amounts charged to expense for the
defined contribution and multiemployer plans follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Defined benefit plan:
Service cost of current period ................................................ $ 1,603 $ 1,133 $ 1,315
Interest cost on projected benefit obligation ................................. 6,268 6,412 6,289
Actual return on plan assets .................................................. (12,630) (10,021) (1,798)
Net amortization and deferral ................................................. 5,410 2,868 (5,320)
-------- -------- -------
Net pension cost .............................................................. 651 392 486
Defined contribution plan ........................................................ 416 510 410
Multiemployer pension plan ....................................................... 232 214 197
-------- -------- -------
Total Cost $ 1,299 $ 1,116 $ 1,093
======== ======== =======
Assumed rates of return:
Weighted average discount rate ................................................ 7.5% 7.5% 8.0%
Rate of future compensation increase .......................................... 4.7% 4.7% 4.7%
Long-term return on assets:
Dedicated ................................................................... 7.0% 8.0% 7.5%
Nondedicated ................................................................ 10.5% 10.5% 10.0%
</TABLE>
193
<PAGE> 17
POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
The Company provides health care and life insurance benefits to designated
salary and hourly employees who participate in a defined benefit pension plan
and who retired prior to January 1, 1992. The plan coordinates with Medicare and
requires employee contributions. The Company also provides similar benefits to
certain employees, represented by bargaining units, who retire before attaining
age 65 and meet certain minimum service requirements. Benefits for the
bargaining unit employees terminate when the retiree attains age 65. The Company
funds the postretirement benefits on a cash basis.
Accumulated postretirement benefit obligation recognized in 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Retirees ......................................... $ 4,264 $4,390
Fully eligible active plan participants .......... 101 346
Other active employees ........................... 447 427
------- ------
4,812 5,163
Deferred (loss) gain ............................. (472) 241
------- ------
$ 4,340 $5,404
======= ======
</TABLE>
In prior years, health care and life insurance benefits for retired
employees of closed facilities were provided for at the time the related
facility was closed. The accrued postretirement benefit obligation for these
retirees at August 31, 1996 and 1995 was $1,800 and $2,400, respectively.
Net periodic postretirement benefit expense for 1996, 1995 and 1994 is as
follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Service cost .................. $ 28 $ 25 $ 28
Interest cost ................. 340 415 460
---- ---- ----
$368 $440 $488
==== ==== ====
</TABLE>
The actuarial assumptions used to determine costs and benefit obligation
includes a discount rate of 7.5% for both 1996 and 1995. The assumed rates of
future increases in per capita cost of health care benefits (health care trend
rates) are 8% in 1996 and 7% in 1997, decreasing gradually to 5.5% by the year
1999. Increasing the health care trend rate by one percentage point would
increase the accumulated postretirement benefit obligation $249 and would
increase the 1996 postretirement benefit cost $20.
194
<PAGE> 18
INCOME TAXES
The provisions for income taxes are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Currently payable
State and local ............................. $ 171 $ 561 $ 466
Foreign ..................................... 507 542 460
Federal ..................................... 2,702 4,896 3,962
Deferred
State and local ............................. 364 88 (100)
Federal ..................................... 5,061 2,840 2,825
------ ------ -------
$8,805 $8,927 $ 7,613
====== ====== =======
</TABLE>
Reconciliations of income taxes computed by applying the statutory federal
income tax rate to the provisions for income taxes are as follows:
<TABLE>
<S> <C> <C> <C>
Federal income tax at statutory rate ........... $8,657 $9,134 $ 7,723
Federal tax credits ............................ (400)
State income taxes ............................. 348 422 238
Other .......................................... (200) (229) (348)
------ ------ -------
$8,805 $8,927 $ 7,613
====== ====== =======
</TABLE>
Deferred taxes resulting from temporary differences between financial and tax
reporting are as follows:
<TABLE>
<S> <C> <C> <C>
Depreciation ................................... $2,406 $ 846 $ 628
Restructuring .................................. 785 847 518
Discontinued operation ......................... 645 2,493
Start-up costs ................................. 1,979 1,359 (137)
Other .......................................... 255 (769) (317)
------ ------ -------
$5,425 $2,928 $ 3,185
====== ====== =======
</TABLE>
The Company has income tax credits of $192 expiring in 2010 and an alternative
minimum tax credit of $521 available to offset future tax payments. Income taxes
paid totaled $1,905, $6,603, and $3,347 in 1996, 1995, and 1994, respectively.
Significant components of deferred tax assets and liabilities are as follows :
<TABLE>
<CAPTION>
Deferred tax assets related to : 1996 1995
<S> <C> <C>
Accrued compensation and related items .......... $ 5,163 $ 5,284
Tax credit carryforwards ........................ 713 1,492
Other ........................................... 3,187 3,311
------- -------
9,063 10,087
Deferred tax liabilities related to :
Depreciation .................................... 11,770 10,408
Other ........................................... 8,240 5,201
------- -------
20,010 15,609
------- -------
Net deferred tax liabilities ....................... $10,947 $ 5,522
======= =======
</TABLE>
195
<PAGE> 19
BUSINESS SEGMENTS
($ in thousands)
The Company has two business segments, Flow Control Products and Engineered
Components.
Through the Flow Control Products and Engineered Components segments, the
Company serves the construction, automotive, industrial, and aerospace sectors
of the economy. See Corporate Profile on the inside front cover and pages 4
through 13 for a review of the major products produced.
Flow Control Products sales of copper plumbing fittings amounted to
$113,409, $112,492, and $92,532 in 1996, 1995, and 1994, respectively. Sales of
aluminum products to the automotive industry by Engineered Components amounted
to $151,237, $150,215, and $111,104 in 1996, 1995, and 1994, respectively.
Export sales and sales by geographic area were not material.
<TABLE>
<CAPTION>
NET SALES INCOME BEFORE INCOME TAXES
1996 1995 1994 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Flow Control Products ..... $159,323 $146,692 $124,090 $ 25,236 $ 25,387 $ 19,849
Engineered Components ..... 184,611 181,539 147,766 9,323 8,862 10,034
Corporate ................. (7,480) (6,764) (6,222)
Interest Expense .......... (2,348) (1,387) (1,594)
-------- -------- -------- -------- -------- --------
$343,934 $328,231 $271,856 $ 24,731 $ 26,098 $ 22,067
======== ======== ======== ======== ======== ========
IDENTIFIABLE ASSETS DEPRECIATION
Flow Control Products ..... $ 94,604 $ 92,373 $ 65,564 $ 5,370 $ 4,294 $ 3,913
Engineered Components ..... 166,383 133,437 97,798 11,892 9,954 8,707
Corporate ................. 8,230 3,557 18,410 166 144 192
-------- -------- --------
269,217 229,367 181,772
Discontinued Operation .... 12,389
-------- -------- -------- -------- -------- --------
$269,217 $229,367 $194,161 $ 17,428 $ 14,392 $ 12,812
======== ======== ======== ======== ======== ========
CAPITAL EXPENDITURES
Flow Control Products ..... $ 9,809 $ 12,236 $ 4,893
Engineered Components ..... 38,767 29,371 10,592
Corporate ................. 64 117 111
-------- -------- --------
$ 48,640 $ 41,724 $ 15,596
======== ======== ========
</TABLE>
196
<PAGE> 20
QUARTERLY FINANCIAL DATA (UNAUDITED)
($ in thousands except per share data)
<TABLE>
<CAPTION>
FISCAL QUARTER FOR THE YEAR
---------------------------------------------------
1996 1st 2nd 3rd 4th
<S> <C> <C> <C> <C> <C>
Net sales .................... $86,465 $81,796 $87,566 $88,107 $343,934
Gross profit ................. 17,419 16,590 16,255 20,432 70,696
Net income ................... 4,055 3,917 2,932 5,022 15,926
Net income per share ......... $ .47 $ .46 $ .34 $ .58 $ 1.85
Average number of
shares outstanding ........ 8,577 8,614 8,616 8,617 8,606
<CAPTION>
Fiscal Quarter For the Year
---------------------------------------------------
1995 1st 2nd 3rd 4th
<S> <C> <C> <C> <C> <C>
Net sales .................... $76,998 $81,755 $86,397 $83,081 $328,231
Gross profit ................. 15,657 17,055 17,893 17,506 68,111
Net income ................... 3,623 4,278 4,674 4,596 17,171
Net income per share ......... $ .43 $ .50 $ .55 $ .54 $ 2.02
Average number of
shares outstanding ........ 8,475 8,513 8,524 8,553 8,517
</TABLE>
197
<PAGE> 1
EXHIBIT 23.1
------------
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Amcast Industrial Corporation and subsidiaries of our report dated October 8,
1996, included in the 1996 Annual Report to Shareholders of Amcast Industrial
Corporation.
Our audits also included the financial statement schedule of Amcast Industrial
Corporation listed in 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
We also consent to the incorporation by reference in Post-Effective Amendment
No. 1 to Registration Statement Number 33-2876 on Form S-8 dated November 27,
1987, in Registration Statement Number 33-18690 dated December 21, 1987, in
Registration Statement Number 33-28080 on Form S-8 dated April 11, 1989, in
Registration Statement Number 33-28084 on Form S-8 dated April 11, 1989, in
Registration Statement Number 33-38176 on Form S-8 dated December 20, 1990, in
Registration Statement Number 33-28075 on Form S-3 dated April 11, 1989, in
Registration Statement Number 33-61290 on Form S-8 dated April 19, 1993 and in
Registration Statement Number 333-00133 on Form S-8 dated January 10, 1996, of
our report dated October 8, 1996, with respect to the consolidated financial
statements incorporated herein by reference, and our report included in the
preceding paragraph with respect to the financial statement schedule included in
this Annual Report (Form 10-K) of Amcast Industrial Corporation and
subsidiaries.
/s/ Ernst & Young LLP
---------------------
November 22, 1996
Dayton, Ohio
198
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ James K. Baker
-------------------
James K. Baker
199
<PAGE> 2
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ Walter E. Blankley
-----------------------
Walter E. Blankley
200
<PAGE> 3
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ Peter H. Forster
---------------------
Peter H. Forster
201
<PAGE> 4
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ Ivan W. Gorr
-----------------
Ivan W. Gorr
202
<PAGE> 5
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ Leo W. Ladehoff
--------------------
Leo W. Ladehoff
203
<PAGE> 6
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ Earl T. O'Loughlin
-----------------------
Earl T. O'Loughlin
204
<PAGE> 7
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ William G. Roth
--------------------
William G. Roth
205
<PAGE> 8
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1996;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown and
each of them, his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, to execute in his name, place, and stead,
the Company's Annual Report on Form 10-K for the year ended August 31, 1996,
(including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in the
aforesaid capacity, every act whatsoever necessary or desirable to be done, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
5th day of November, 1996.
/s/ R. William Van Sant
------------------------
R. William Van Sant
206
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
<CASH> 5,413
<SECURITIES> 0
<RECEIVABLES> 50,640
<ALLOWANCES> 233
<INVENTORY> 45,021
<CURRENT-ASSETS> 109,221
<PP&E> 245,001
<DEPRECIATION> 106,395
<TOTAL-ASSETS> 269,217
<CURRENT-LIABILITIES> 51,447
<BONDS> 59,888
<COMMON> 8,618
0
0
<OTHER-SE> 127,546
<TOTAL-LIABILITY-AND-EQUITY> 269,217
<SALES> 343,934
<TOTAL-REVENUES> 343,934
<CGS> 273,238
<TOTAL-COSTS> 316,606
<OTHER-EXPENSES> 249
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,348
<INCOME-PRETAX> 24,731
<INCOME-TAX> 8,805
<INCOME-CONTINUING> 15,926
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,926
<EPS-PRIMARY> 1.85
<EPS-DILUTED> 1.85
</TABLE>
