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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 1999 or
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________.
Commission file number 1-10582
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Alliant Techsystems Inc.
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(Exact name of registrant as specified in its charter)
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Delaware 41-1672694
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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600 Second Street N.E., Hopkins, Minnesota 55343-8384
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 931-6000
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, par value $.01 New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
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 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of May 31, 1999, 10,227,721 shares of the registrant's voting common stock
were outstanding (excluding 3,635,892 treasury shares). The aggregate market
value of such stock held by non-affiliates of the registrant on such date was
approximately $848.3 million.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Annual Report to stockholders for the fiscal year ended March
31, 1999 are incorporated by reference into Parts I, II and IV. Portions of the
definitive Proxy Statement for the 1999 Annual Meeting of stockholders are
incorporated by reference into Part III.
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PART I
ITEM 1. BUSINESS
(a) General Development of Business
Alliant Techsystems Inc., which is sometimes called the Company or the
Registrant in this report, was incorporated as a Delaware corporation and a
wholly owned subsidiary of Honeywell Inc. on May 2, 1990. The Company was formed
by Honeywell in connection with Honeywell's plan to spin off to its stockholders
the following Honeywell business operations: Defense and Marine Systems
Business, Test Instruments Division, and Signal Analysis Center. The spin-off
became effective on September 28, 1990, when Honeywell transferred to the
Company substantially all of the assets and liabilities of these businesses.
Honeywell also distributed to its stockholders one share of the Company's Common
Stock for every four shares of Honeywell Common Stock they held on October 9,
1990, which was the record date for the spin-off. As a result of the spin-off,
100% of the Company's Common Stock was distributed to Honeywell's stockholders
on a pro rata basis.
In January 1991, the Company changed its fiscal year end from December 31
to March 31, starting with the fiscal year that began April 1, 1991 and ended
March 31, 1992.
In December 1992, the Company sold the Test Instruments Division (which had
been renamed Metrum Information Storage).
In October 1993, the Company acquired Accudyne Corporation and Kilgore
Corporation, and in November 1993, the Company acquired Ferrulmatic, Inc. Each
of these acquisitions was accounted for as a purchase, and the financial
statements included in this report include the acquired companies' assets and
liabilities and their results of operations since the date they were acquired.
On March 31, 1994, Accudyne, Kilgore and Ferrulmatic were merged into the
Company.
In March 1995, the Company acquired certain assets and operations of the
Hercules Aerospace Company division of Hercules Incorporated. The acquisition of
Hercules Aerospace Company was accounted for as a purchase, and the financial
statements included in this report include the acquired operations' assets and
liabilities and their results of operations since the date they were acquired.
In March 1996, Company management, after evaluating its strategic plans for
the future, elected to discontinue its role as an owner of foreign
demilitarization businesses located in the former Soviet republics of Ukraine
and Belarus. The Company subsequently completed its withdrawal from its Belarus
joint venture. The Company has been unsuccessful in its attempts to sell its
interest in the Ukraine joint venture. As a result, the Company has begun the
process of removing and salvaging assets.
In February 1997 the Company sold its Marine Systems Group. The financial
statements included in this report account for this former business as a
discontinued operation.
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The Company's principal executive offices are located at 600 Second Street
N.E., Hopkins, Minnesota 55343-8384 (telephone number: (612) 931-6000).
Some of the information that must be included in this report is
incorporated by reference from the Company's most recent annual report to
stockholders, which is called the Annual Report. The Annual Report is for the
fiscal year ended March 31, 1999, which is called fiscal year 1999 or fiscal
1999.
(b) Financial Information About Industry Segments
The Company's business is conducted in three industry segments: Aerospace,
Conventional Munitions and Defense Systems. Incorporated by reference are the
following portions of the Annual Report:
Page Number(s)
Portion of Annual Report in Annual Report
Note 18 of Notes to Financial Statements............... 48-49
(c) Narrative Description of Business
General
During fiscal year 1999, the Company conducted its business through three
business groups: Conventional Munitions, Defense Systems, and Space and
Strategic Systems. The Company has since realigned its business operations into
a number of separate legal entities that are listed on Exhibit 21 to this
report. These legal entities are grouped under holding companies corresponding
to the Company's three business operating segments: Aerospace, Conventional
Munitions, and Defense Systems. The Company realigned its business operations in
this manner in order to enhance operational, financial and strategic
effectiveness, to encourage ownership and an entrepreneurial spirit among
employees, and to create a stronger market identity for each of the businesses.
The following description of the Company's business reflects this new realigned
business structure.
Many of the Company's products and programs are customarily referred to by
customers or in the marketplace by acronyms. Many of these acronyms are included
in this report (in parenthesis following the product or program name) for the
convenience of subsequent reference, and for the benefit of readers who may be
more familiar with the acronyms than with the actual product or program names.
Aerospace
Aerospace designs and produces solid rocket propulsion systems for space
launch vehicles and strategic missile systems, and composite structures for
space launch vehicles, reusable launch vehicles, aircraft, spacecraft, missiles
and other applications. Operations are conducted through Alliant Aerospace
Company and Alliant Southern Composites Company, which operate in four business
areas: space propulsion, strategic propulsion, composites structures and space
structures.
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Space Propulsion. The space propulsion business represents the largest
portion of the Aerospace sales base and includes a broad product portfolio
encompassing all vehicle payload classes (small to heavy lift). The Company is
presently producing solid propulsion systems for Titan IVB, Delta II, Delta III,
Delta IV, Pegasus(R), and Taurus(R) launch vehicles.
The Company produces the Titan Solid Rocket Motor Upgrade (SRMU) space
booster for Lockheed Martin Corporation. The SRMU serves as the strap-on
propulsion system (two per vehicle) for the U.S. Air Force upgraded Titan IVB
heavy-lift launch vehicle. The Company also has a contract for Titan launch
operations support which extends into 2002.
The Company produces all of the solid strap-on boosters for The Boeing
Company's Delta launch vehicle family. Delta II is a medium-lift expendable
launch vehicle developed for both government and commercial applications. The
Delta II launch vehicle family employs GEM-40's (graphite epoxy motor - 40 inch
diameter) in multiple configurations using three, four or nine motors. The
Company is now also producing, under contract to Boeing, a larger strap-on GEM-
46 booster for the new, enhanced medium-lift Delta III expendable launch
vehicle. Each Delta III launch vehicle employs nine solid strap-on boosters.
During fiscal year 1999, Boeing awarded the Company additional production
quantities for both GEM-40 and GEM-46. During fiscal year 1999, Boeing also
awarded the Company a contract to develop and produce a new, even larger GEM-60
booster to be used with versions of the new Delta IV expendable launch vehicle.
Delta IV M+ vehicle configurations will employ two or four of these GEM-60 solid
strap-on boosters.
During fiscal year 1999, the Company was awarded a contract to develop and
produce a vectorable version of the Delta II GEM-40 booster for use as the first
stage of the National Missile Defense (NMD) ground-based interceptor. The
Company is under contract to Boeing, the lead system integrator, for the current
developmental program phase. No decision has yet been made regarding future
deployment and production.
The Pegasus(R) air launched vehicle is used to deploy small U.S.
Government, foreign government and commercial payloads. Each vehicle contains
three solid propulsion stages, all of which are produced by the Company for
Orbital Sciences Corporation. The Pegasus(R) motors are also used as upper
stages on Orbital Sciences' Taurus(R) ground launched vehicle. This vehicle
is also used to deploy small U.S. Government and commercial payloads. The
Company is under contract to Orbital Sciences for quantities of Pegasus(R) and
Taurus(R) motors that will extend production into 2000.
Strategic Propulsion. The strategic propulsion business, which now
consists of one large production program and various operational service
contracts, has been involved with substantially all of the land and sea based
strategic propulsion systems since their inception. Currently, the principal
strategic propulsion production program is Trident II (D5), a submarine-launched
intercontinental ballistic missile composed of three solid propulsion stages.
The Company, through a joint venture with the Thiokol Propulsion unit of Cordant
Technologies Inc., developed and produced the first and second propulsion stages
of the Trident II (D5) missile under a contract with Lockheed Martin
Corporation. In 1997, the joint venture completed the qualification process to
also produce the third stage of the missile. In addition to the Trident II
production contract, the Company has contracts with Lockheed Martin to support
both the U.S.
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Navy's existing fleet of Trident I (C4) missiles and the operational D5 units.
The Company developed and produced the Peacekeeper third stage motor for the
U.S. Air Force, and provides some continuing aging and surveillance services
support to the missile system. The Company also continues to provide
surveillance services to the U. S. Air Force for Minuteman II third stage motors
it previously produced.
Composite Structures. The composite structures business designs and
fabricates a broad range of structures from carbon/carbon, graphite, aramid, and
glass fiber reinforced composite materials. Target markets include both
government and commercial users, with a wide variety of applications and
structure sizes. Key programs are concentrated primarily in the commercial and
government aircraft structures, space launch vehicle structures and liquid
propulsion tank segments. The Company is under contract to Lockheed Martin to
develop composite cryogenic liquid hydrogen fuel tanks for the NASA X-33 Phase
II reusable launch vehicle.
In fiscal year 1999, the Company received a contract from Boeing to produce
composite structures for its new Delta IV family of expendable launch vehicles.
The structures include the EELV/Delta IV common booster core nose cones,
interstages and other large vehicle structures.
In fiscal year 1999 the Company received a contract to develop and produce
fuselage skins for the BA609 commercial tilt-rotor aircraft. The Company is
also under contract to produce a counterbalance mechanism for the C-17 transport
aircraft and the composite door springs for Boeing's 767 aircraft. Other
programs and opportunities include additional aircraft and engine structures,
other components and assemblies for missiles, military land vehicles, and
various structures for reusable and expendable launch vehicles.
Space Structures. The space structures business designs and fabricates
composite structures components and assemblies for commercial, civil and
military satellites. Products include instrument benches and dimensionally
stable assemblies, antennae and reflector assemblies, spacecraft bus structures,
and other component parts.
During fiscal year 1999, the Company opened a new large composite
structures manufacturing facility in Iuka, Mississippi. Other Aerospace
operations are conducted in Magna and Clearfield, Utah.
Conventional Munitions
Conventional Munitions designs, develops and supplies medium caliber
ammunition, tank ammunition, munition propellants, commercial gun powders, solid
rocket propulsion systems, flares, warheads, and composite structures for the
U.S. and allied governments as well as for commercial applications. Operations
are conducted through Alliant Conventional Munitions, Alliant Ammunition and
Powder Company, Alliant Missile Products Company and Alliant Kilgore Flares
Company.
Alliant Conventional Munitions. Alliant Conventional Munitions designs,
develops and supplies medium caliber ammunition and tank ammunition.
The Company is a leading supplier of medium caliber ammunition and fuzes.
Production programs include 25mm Bushmaster rounds for the U.S. Army's Bradley
Fighting Vehicle, the
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Marine Corps' Light Armored Vehicle, the U.S. Navy's shipboard defense systems,
and platforms of U.S. allies; the PGU-32 25mm round for the AV-8B aircraft; the
PGU-38 25mm enhanced combat rounds for the U.S. Air Force's AC-130 gunship;
Lightweight 30mm ammunition for the Apache helicopter; and the GAU-8/A 30mm
family of armor-piercing, high-explosive incendiary, and target practice rounds
currently used by the U.S. Air Force's A-10 aircraft and planned for use on the
Marine Corps' new Advanced Amphibious Assault Vehicle. Development efforts
include improving the performance of medium caliber ammunition for the advanced
threats of the future. The Company is also the sole source producer of the
M758/M759 fuze for medium caliber ammunition.
In the tank ammunition area, the Company produces and develops tactical and
training tank rounds which are used for the M1A1/M1A2 Abrams tanks of the U.S.
Army, Army Reserve, National Guard, Marine Corps, and U.S. allies. Such rounds
include the M830A1 multi-purpose round and the M831A1 and M865 training rounds.
The Company is the sole producer of the M830A1 multi-purpose round. The Company
is one of two suppliers to the U.S. Government for the M831A1 and M865 training
rounds. The Company is currently under contract to the U.S. Army to develop the
M829E3 advanced kinetic-energy rounds for future threats.
Alliant Conventional Munitions operations are conducted in Hopkins, Elk
River and New Brighton, Minnesota, Totowa, New Jersey, and Wilmington, Illinois.
Alliant Ammunition and Powder Company. Alliant Ammunition and Powder
Company designs, develops and manufactures solid extruded propellant for
ammunition and rockets for the U.S. and foreign military services. It also
performs load, assemble and pack of medium caliber ammunition. Through New River
Energetics, Inc., a wholly owned subsidiary, it also manufactures and
commercially markets gun powders for both reloaders and manufacturers of
sporting ammunition.
Primary propellant production programs include propellants for multiple
training and war reserve 120mm tank rounds, artillery propelling charges, and
25mm and 30mm ammunition. The Company is also the sole source supplier of Mk90
propellant grains for use in the HYDRA 70 rocket and launch motors for the TOW
II missile.
In addition to the military programs, the Company produces a wide range of
commercial gun powders and has activated stand-by military capacity for
commercial chemical commodity sales.
Propellant development opportunities being pursued include improved
smokeless gun powder, and modular charges for advanced artillery systems.
Alliant Ammunition and Powder Company operations are conducted at the
Radford Army Ammunition Plant in Radford, Virginia, which is also the U. S.
Army's Group Technology Center for propellant development and production. The
Company has also been actively involved in relocating Company operations and
several unrelated commercial businesses onto the Radford facility under the
Armament Retooling and Manufacturing Support Act (ARMS) initiative. The Company
also manages the Sunflower Army Ammunition Plant in DeSoto, Kansas, where it
seeks commercial tenants for the property and provides general plant management
services, including maintenance or demolition of inactive facilities, security
and fire protection.
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Alliant Missile Products Company. Alliant Missile Products Company develops
and supplies solid propulsion systems and advanced warheads for various U.S.
Department of Defense tactical weapons. Principal products include solid rocket
motors, gas generators and tactical missile warheads for the U.S. Army, Navy and
Air Force. It also develops and supplies high-strength, low-weight structures
made of metals and composites for use in products such as missile launch tubes
and critical parts for ammunition and military aircraft.
Current production programs include propulsion systems for AMRAAM,
Sidewinder, AGM-130, Sparrow, Sensor Fuzed Weapon (SFW), Hellfire II/Longbow,
Maverick and TOW II. AMRAAM and SFW are its largest production programs. AGM-130
is an air-to-ground stand-off attack missile used by the U.S. Air Force. Boeing
North American is the sole prime contractor for AGM-130 and the Company is the
sole source propulsion supplier. The SFW system is presently in Full Rate
Production and has become one of its largest programs. The Company is the sole
source supplier on the SFW submunition propulsion deployment system. The Company
has been the U.S. Army's primary supplier of flight motors for TOW II since the
program's inception in 1981. Production programs in related areas include
warheads for the Maverick, Hellfire, Longbow and AMRAAM missile systems, metal
cases for the U.S. Army's Tactical Missile System (ATACMS) surface-to-surface
missile, gas generators for the Trident II (D5) and Tomahawk Cruise missiles,
composite launch tubes for the Army's Javelin anti-tank missile, and composite
overwrapped pressure vessels for use on satellites.
Major development programs include the propulsion systems for the Evolved
Sea Sparrow Missile (ESSM), the AIM-9X Evolved Sidewinder, the AMRAAM Propulsion
Enhancement Program (PEP), the Predator anti-tank system (Predator), and the
advanced smart 120mm kinetic energy tank round (TERM-KE). The Company is co-
developing the propulsion system for the ESSM program, which is a NATO program
involving 13 nations. Raytheon Systems Company is the prime contractor. The
prime contractor on Predator is Lockheed Martin Corporation, and the prime
contractor on TERM-KE is Alliant Defense Electronics Systems, Inc., a Defense
Systems operating company. The Company is the sole propulsion source on both
Predator and TERM-KE. The Company is developing and producing composite
structures for the F-22 fighter being developed by Lockheed Martin Corporation
and the M829E3 advanced tank ammunition being developed by Alliant Ammunition
and Powder Company. Other new business opportunities being pursued include the
Standard Missile Second Stage and the Beyond Visual Range Air-to-Air Missile.
In advanced warhead systems, the Company currently has contracts for the
production of warheads for the Hellfire/Longbow and AMRAAM missiles, and a
contract for the development of the Brimstone warhead.
In January, 1999, the Company signed a product and strategic alliance
agreement with Raytheon Company under which the Company will act as a preferred
strategic supplier to Raytheon.
Alliant Missile Products Company operations are conducted in Rocket Center,
West Virginia.
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Alliant Kilgore Flares Company. The Alliant Kilgore Flares Company develops
and produces infrared countermeasure flares, and a wide spectrum of pyrotechnic
devices for the U.S. and foreign governments. It also makes pyrotechnics for
various commercial activities.
Kilgore is the world's leading supplier of infrared countermeasure
products. Production programs include the MJU-7A/B, M206, MJU-10/B, MJU-32/B and
MJU-38/B U.S. countermeasures. In addition, Kilgore-designed flare products,
such as the 55mm KC-004/A flares, are routinely provided for export. Kilgore is
currently manufacturing an Israeli flare design under a Foreign Military Funding
contract. Kilgore has manufactured over six million infrared flares over the
last decade. Kilgore was the original designer of the MJU-10/B and first
sequenced version of the MJU-7 and 1x1 inch flares. Kilgore has patented a
variety of advanced countermeasure designs. On-going development efforts include
sole source supplier to Lockheed Martin Corporation for the infrared flares for
the F-22 aircraft and performing development efforts for advanced flares for the
U.S. Navy. Kilgore is also the only current producer of the MK 186 TORCH
shipboard countermeasure.
Over 100 different pyrotechnic products have been produced by Kilgore. The
pyrotechnic product lines include impulse cartridges, marine location markers,
explosive squibs, colored smoke and signaling devices, screening devices, and
commercial day/night signals. Current programs include efforts for NATO and non-
NATO countries for improved signaling and screening devices as well as standard
pyrotechnic products.
Kilgore also supports a variety of intra-company production programs such
as primers and tracers for tank ammunition, flashtubes for the GAU-8/A, and
critical components for the TERM-KE program.
The Alliant Kilgore Flares Company operations are conducted in Toone,
Tennessee.
Alliant Defense Systems
Defense Systems designs, develops and supplies munitions, weapon systems,
secure electronics, threat warning devices, unmanned aerial vehicles, fuzes and
batteries for the U.S. and allied governments. Operations are conducted through
Alliant Integrated Defense Company, Alliant Defense Electronics Systems, Inc.,
Alliant Precision Fuze Company and Alliant Power Sources Company.
Alliant Integrated Defense Company. Alliant Integrated Defense Company
develops and produces barrier and demolition munitions, weapons systems, SADARM
and secure electronics.
Barrier Systems. The Company is producing and developing advanced barrier
systems for delivery from trucks, tracked vehicles and helicopters. Primary
production programs are the Volcano system, a modular barrier system delivered
from ground and air platforms, and Shielder, a Vehicle-Launched Smart Anti-tank
Munition System, for which the Company is the system prime contractor to the
U.K.'s Ministry of Defence. The Company is pursuing several other international
opportunities in this area. In 1998 the Company won a competitive contract from
the U. S. Army to develop the next generation barrier system. The objective of
this Anti-Personnel Landmine Alternative (APL-A) program is to design and
demonstrate an integrated
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barrier system with positive command and control capabilities as an alternative
to current potentially indiscriminate land mines and mine fields. This will
provide an increased measure of operational effectiveness and elimination of
risks to friendly troops and civilians. The Company is producing the Selectable
Lightweight Attack Munition (SLAM), a hand-emplaced anti-materiel munition with
multiple activation modes for the U.S. Special Forces and the U.S. Army. The
Company has developed the Penetration Augmentation Munition (PAM) for
applications such as concrete bridge abutments, and the Fighting Position
Excavator (Badger) for U.S. and international applications. The Badger allows
the soldier to significantly reduce foxhole digging time while increasing safety
and effectiveness.
Weapon Systems. The Company is developing the Objective Individual Combat
Weapon (OICW). OICW is a lightweight, shoulder-fired weapon designed to
selectively replace the M16 rifle/M203 grenade launcher. The system consists of
a combinatorial weapon, ballistic fire control system and thermal sight, and
both a 20mm high explosive (HE) bursting munition with a remote autonomous fuze
and a 5.56mm kinetic energy round. The Company is responsible for systems
integration and development of the HE ammunition, and won the downselect phase
of the contract in March 1998. In 1998 the Company won a contract for the
production of NDI non-lethal ordnance for use in situations such as civil
disturbances.
SADARM. The Company, together with the prime contractor, Aerojet (a
business segment of GenCorp., Inc.), is the developer and producer of the Sense
and Destroy Armor (SADARM) munition. SADARM has entered low rate initial
production, and is presently the only tube artillery smart munition in
production. The SADARM munition is used on 155mm Howitzers and combines
millimeter wave and infrared sensor and signal processing technologies. In
addition, SADARM is currently being evaluated for potential application to air
and rocket delivery systems.
Secure Electronics. The Company is the only US Government certified
producer of Selective Availability Anti-Spoofing Modules (SAASM). SAASM is key
to providing secure communications between global positioning system (GPS)
satellites and air or ground based military GPS receivers which are critical to
highly accurate navigation systems. In early 1999 the Company won two key SAASM
contracts. The Combat Survivor Evader Locator (CSEL) program positions the
Company in the handheld receiver market, and the Guided Multiple Launch Rocket
System (GMLRS) contract positions the Company in the tactical missile guidance
market for secure electronics. U.S. Department of Defense policy currently
directs that all GPS based systems will be equipped with SAASM.
New business opportunities being pursued include Scatterable Anti-Tank
Systems, Advanced Weapon Systems and Secure Electronics.
Alliant Integrated Defense Company operations are conducted in Hopkins and
Elk River, Minnesota.
Alliant Defense Electronics Systems, Inc. Alliant Defense Electronics
Systems products include AAR-47, Defense Information, TERM and the Outrider UAV.
AAR-47. The Company is producing the AAR-47 Missile Warning System, a
passive electro-optic threat warning device used to protect low, slow flying
helicopters and fixed wing aircraft against attack from ground-to-air-missiles.
The Company completed a production
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contract for the system and is currently engaged in a Central Processor Unit
(CPU) upgrade (both hardware and software) for improved probabilities of
detection, longer warning times, and lower false alarm rates. Production of the
upgraded CPU began in fiscal year 1999. The Company also won a competitive bid
for an upgraded, higher performance sensor to include a laser warning capability
in fiscal year 1999.
Defense Information. Defense information programs include the Common
Munitions BIT/Reprogramming Equipment (CMBRE) which is a portable field tester
with a common interface to support the growing US inventory of smart weapons.
Production of CMBRE began in fiscal year 1998 and is expected to continue for
eight years. Other programs include Demonstration of Advanced Solid State Laser
Radar (DASSL) which is a next generation seeker technology for smart weapons,
and the Analog-to-Digital Adaptable Recorder Input-Output (ADARIO) which is a
multi-channel data formatter for highspeed digital recorders.
TERM. The Company is currently developing the XM-1007 for application to a
Tank Extended Range Munition (TERM) requirement that includes beyond line of
sight missions using scout vehicles for target location and designation. The
Company is the sole development prime contractor for the XM-1007. Production is
anticipated to begin in 2006. The Company is also bidding a derivative XM-1007
design in a competitive procurement for the U.S. Army-sponsored TERM advanced
technology application program.
UAV. The Company is the developer and producer of the Outrider Tactical
Unmanned Aerial Vehicle (UAV) system. The Outrider system consists of four air
vehicles, two ground control stations, one air vehicle trailer, one auxiliary
trailer, and one remote video terminal. Outrider is designed to be readily
deployed from land or ship deck. Outrider provides real-time reconnaissance,
surveillance, and target acquisition information for the armed forces using the
system. The Military Utility Assessment (MUA) for Outrider was completed in 1998
and the U.S. Government has released a competitive request for proposal for the
low rate initial production (LRIP) phase.
New business opportunities being pursued include sensors and seekers for
smart munitions and guided projectile systems, and potential international UAV
programs.
Alliant Defense Electronics Systems, Inc. operations are conducted in
Clearwater, Florida, Hopkins, Minnesota, and Hondo, Texas.
Alliant Precision Fuze Company. Alliant Precision Fuze Company develops
and manufacturers fuzes for the U.S. Army, Navy and Air Force.
During fiscal year 1998 the Company acquired part of Motorola's military
fuze business, which developed and manufactured high-quality electronic fuzes
for projectiles, air-delivered weapons and penetrating weapons. Since the
acquisition, the Company has successfully integrated these programs. During the
first twelve months following the acquisition, the Company won six of seven
competitions based on the acquired product line.
Gun Hardened Fuzes. Sole source fuze production programs include the M734
fuze for mortar rounds and the M732A2 proximity fuze for artillery. The Company
is also developing the
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Army's XM773 Multi-Option Fuze Artillery and the Navy's Mk 419 Multi Function
Fuze (MFF) which provide point detonation, delay, variable time, and proximity
functions.
Sensor and Electronic Fuzing. The Company is entering LRIP for the
Brilliant AntiTank (BAT) submunition Electronic Safe and Arm Device (ESAD) and
is also under contract to develop a P3I design for this device. The Company is
under contract to produce the DSU-33 B/B proximity sensor for air delivered
systems. In addition, the Company has two contracts with allied nations for the
production of the FMU-139 bomb fuze.
Embedded Fuzes. The Company has a U.S. Air Force development contract for
the Hard Target Smart Fuze (HTSF). In addition, the Company is under contract
to the Air Force to develop the next generation hard target fuze, the Multiple
Event Hard Target Fuze (MEHTF).
Alliant Precision Fuze Company operations are conducted in Janesville,
Wisconsin and Hopkins, Minnesota.
Alliant Power Sources Company. Alliant Power Sources Company develops and
manufactures specialized lithium and lithium-ion polymer batteries for U.S. and
foreign military and aerospace customers, and for use in the Company's own
products.
Lithium Batteries. The Company's principal lithium battery products are
reserve batteries, which are used in such applications as anti-tank mines, fuzes
and artillery systems that require long-term storage capacity. The Company is
developing a new miniature battery production line capable of producing six
million batteries per year for artillery fuzes. The Company also produces
specialty batteries, such as space-qualified battery modules for space probes
such as Galileo and Huygens.
Lithium-Ion Polymer Batteries. The Company's lithium-ion polymer
rechargeable batteries offer very high energy density and packaging flexibility
for use where weight and space may be limited or where unique operational
configurations are required. The lithium-ion polymer batteries are produced and
marketed by Alliant/Valence LLC, which is a 50/50 joint venture between the
Alliant Power Sources Company and Valence Technology, Inc., a commercial battery
company based in Henderson, Nevada.
Alliant Power Sources Company operations are conducted in Horsham,
Pennsylvania.
Raw Materials
Key raw materials used in the Company's operations include aluminum, steel,
steel alloys, copper, depleted uranium, graphite fiber and prepreg, hydroxy
terminated polybutadiene, epoxy resins and adhesives, EPDM rubbers,
nitrocellulose, diethylether, x-ray film, plasticizers and nitrate esters, and
ammonium perchlorate. The Company also purchases chemicals, electronic,
electro-mechanical and mechanical components, subassemblies, and subsystems
which are integrated with the Company's own manufactured parts for final
assembly into finished products and systems.
The Company closely monitors its sources of supply in order to assure an
adequate supply of raw materials and other supplies needed in its manufacturing
processes. U.S. Government
10
<PAGE>
contractors like the Company are frequently limited to procuring materials and
components from sources of supply approved by the U.S. Department of Defense. In
addition, as business conditions change and defense budgets contract, suppliers
of specialty chemicals and materials sometimes consider dropping low volume
items from their product lines, which may require (and in the past has required)
qualification of new suppliers for raw materials on key programs.
The supply of ammonium perchlorate, a principal raw material used in the
Company's operations, has been limited to a single source which supplies the
entire domestic solid propellant industry. This single source, however,
maintains two separate manufacturing lines a reasonable distance apart which
mitigates the likelihood of a processing problem impacting all production. Any
disruption in the Company's supply of ammonium perchlorate could have a material
adverse effect on the Company's results of operations or financial condition.
The Company also presently relies on one primary supplier for its graphite
fiber, which is used in the production of composite materials. Although other
sources of fiber exist, the addition of a new supplier would require the Company
to qualify the new sources for use on the Company's programs. Any prolonged
disruption in the supply of this material or any delay as a result of the
qualification of a new source could have a material adverse effect on the
Company's results of operations or financial condition.
Current suppliers of some insulation materials used in rocket motors have
announced plans to close manufacturing plants and discontinue product lines. As
a result, the Company will need to find replacement materials or new sources of
supply for these materials, which are polymers and neoprene used in EPDM rubber
insulation, and aerospace rayon used in nozzles. The Company has sufficient
inventory to cover production through 2002, and has identified replacement
materials that have passed initial testing toward qualification. Difficulty
completing qualification and implementing use of replacement materials or new
sources of supply could have a material adverse effect on the Company's results
of operations or financial condition.
Manufacturing and Handling of Explosive Materials
Some of the Company's products, including those relating to propulsion
systems, propellants, ammunition and artillery systems, involve the manufacture
and/or handling of a variety of explosive materials. From time to time in the
past, this activity has resulted in explosive incidents which have temporarily
shut down or otherwise disrupted some of the Company's manufacturing processes,
thereby causing production delays. There can be no assurance that the Company
will not experience similar incidents in the future or that any similar
incidents will not result in production delays or otherwise have a material
adverse effect on the Company's results of operations or financial condition.
Major Customers
The Company's sales are predominantly derived from contracts with agencies
of the U.S. Government and its prime contractors. The various U.S. Government
customers, which include the U.S. Army, Navy and Air Force, exercise independent
purchasing decisions. As a result, sales to the U.S. Government generally are
not regarded as constituting sales to one customer. Instead, each contracting
customer entity is considered to be a separate customer.
11
<PAGE>
The Company's U.S. Government sales, including sales to U.S. Government
prime contractors, during the last three fiscal years are summarized in the
following table.
Fiscal year U.S. Government Sales
----------- ---------------------
1999 $828.8 million
1998 $879.1 million
1997 $884.7 million
During fiscal year 1999, approximately 76 percent of the Company's sales
were derived from contracts with the U.S. Government or U.S. Government prime
contractors. The following table summarizes the approximate percentage
breakdown of the Company's fiscal year 1999 sales (a) as a prime contractor and
a subcontractor, and (b) to various categories of customers.
Fiscal Year 1999 Sales
----------------------
Sales as a prime contractor 50%
Sales as a subcontractor 50%
---
TOTAL.................... 100%
Sales to:
U.S. Army 38%
U.S. Air Force 22%
U.S. Navy 10%
Other government, commercial
or international customers 30%
---
TOTAL.................... 100%
The Company's top ten contracts accounted for approximately 54% of fiscal
year 1999 net sales. During fiscal year 1999, sales to each of Lockheed Martin
Corporation and The Boeing Company and their respective affiliates accounted for
more than 10% of the Company's sales. These sales related to multiple contracts
and, in the case of Boeing, included commercial contracts.
This significant reliance upon contracts related to U.S. Government
programs entails inherent risks, including risks particular to the defense
industry, which are summarized below.
Reductions or Changes in Military Expenditures. The overall U.S. defense
budget declined in real terms from the mid-1980's through the early 1990's.
Although U.S. defense budgets have recently stabilized, future levels of defense
spending cannot be predicted with certainty. Any future declines in U.S.
military expenditures could materially adversely affect the Company's results of
operations and financial condition. The impact of possible future declines in
the level of defense procurement on the Company's results of operations and
financial condition will depend upon the timing and size of the changes and the
Company's ability to offset their impact with new business, business
consolidations or cost reductions. The loss or significant curtailment of a
material program in which the Company participates could materially adversely
affect the Company's future results of operations and financial condition.
Contract Termination. The terms of U.S. Government contracts permit the
U.S. Government to terminate the contracts, either for its convenience or in the
event of a default by
12
<PAGE>
the contractor. Upon termination of a cost-plus contract, the contractor is
entitled to reimbursement of its allowable costs. If the termination is for
convenience, the contractor is also entitled to receive payment of a total fee
proportionate to the percentage of the work completed under the contract. Upon
termination of fixed-price contracts, the contractor is entitled to receive
payment for items delivered to and accepted by the U.S. Government. If the
termination is for convenience, the contractor is also entitled to receive
payment of fair compensation for work performed plus the costs of settling and
paying claims by terminated subcontractors, other settlement expenses, and a
reasonable profit on the costs incurred or committed. If a contract termination
is for default:
. the contractor is paid an amount agreed upon for completed and partially
completed products and services accepted by the U.S. Government,
. the U.S. Government is not liable for the contractor's costs for unaccepted
items, and is entitled to repayment of any advance payments and progress
payments related to the terminated portions of the contract, and
. the contractor may be liable for excess costs incurred by the U.S.
Government in procuring undelivered items from another source.
If a contract is terminated for convenience, the contractor is entitled to
recover only costs incurred or committed, settlement expenses and profit on work
completed prior to termination. If a contract is terminated for default, the
contractor may be liable for excess costs incurred by the U.S. Government in
procuring undelivered items from another source.
Loss of Appropriations. U.S. Government contracts are also conditioned
upon the continuing availability of Congressional appropriations. Congress
usually appropriates funds for a given program on a fiscal year basis even
though contract performance may take more than one year. Consequently, at the
outset of a major program, the contract is usually partially funded, and
additional monies are normally committed to the contract by the procuring agency
only as appropriations are made by Congress for future fiscal years. In
addition, most U.S. Government contracts are subject to modification in the
event of changes in funding. Any failure by Congress to appropriate additional
funds to any program in which the Company participates, or any contract
modification as a result of funding changes, could materially delay or terminate
the program. This could have a material adverse effect on the Company's results
of operations or financial condition.
Procurement and Other Related Laws and Regulations. The Company is subject
to extensive and complex U.S. Government procurement laws and regulations.
These laws and regulations provide for ongoing U.S. Government audits and
reviews of contract procurement, performance and administration. If the Company
were to:
. fail to comply, even inadvertently, with these laws and regulations or with
laws governing the export of munitions and other controlled products and
commodities, or
. commit a significant violation of any other federal law, it could suffer
adverse consequences. These consequences potentially include:
. contract termination,
. civil and criminal penalties, and
. under certain circumstances, suspension and debarment of the Company, or the
business involved, from future U.S. Government contracts for a specified
period of time.
Any such action could have a material adverse effect on the Company's results of
operations or financial condition.
13
<PAGE>
The Company, as a government contractor, is subject to audit and review by
the U.S. Government of its contract performance and of its accounting and
general practices relating to contracts. The costs and prices under these
contracts may be subject to adjustment based upon the results of the audit. To
date, these audits have not had a material effect on the Company's results of
operations or financial condition. However, no assurance can be given that
future audits will not have a material adverse effect on the Company's results
of operations or financial condition.
In addition, licenses are required from U.S. Government agencies for export
from the United States of many of the Company's products. The Company is
currently not permitted to export some of its products.
Competitive Bidding. The Company obtains military contracts through either
competitive bidding or sole-sourced procurement. A significant portion of the
Company's sales are from contracts that were awarded after a competitive bidding
process that often involved many bidders. A similar competitive bidding process
is likely to apply to the Company's efforts to win future contract awards.
There can be no assurance that the Company will continue to be successful in
having its bids accepted, or that contracts awarded to the Company in the future
will be profitable. There is always the risk in both competitive bidding and
sole-sourced procurements that if a bid is submitted and a contract is
subsequently awarded, actual performance costs may exceed the projected costs
upon which the submitted bid or contract price was based. If actual costs
exceed the projected costs on which bids or contract prices were based, the
Company's profitability could be materially adversely affected.
Types of Contracts. The Company's U.S. Government business is performed
under both cost-plus contracts and fixed-price contracts.
Cost-plus Contracts. Cost-plus contracts are either cost-plus-fixed-fee,
cost-plus-incentive-fee, or cost-plus-award fee contracts. Cost-plus-fixed-fee
contracts provide for reimbursement of costs, to the extent that the costs are
allowable, and the payment of a fixed fee. Cost-plus-incentive-fee contracts
and cost-plus-award-fee contracts provide for increases or decreases in the
contract fee, within specified limits, based upon actual results as compared to
contractual targets for factors such as cost, quality, schedule and performance.
Fixed Price Contracts. Fixed price contracts are either firm fixed-price,
fixed-price incentive, or fixed-price-level-of-effort contracts. Under firm
fixed-price contracts, the Company agrees to perform certain work for a fixed
price and realizes all the benefit or detriment resulting from decreases or
increases in the costs of performing the contract. Fixed-price incentive
contracts are fixed-price contracts providing for adjustment of profit and
establishment of final contract prices by a formula based on the relationship
which final total costs bear to total target cost. The final contract price
under a fixed-price incentive contract is a function of cost, which may be
affected by schedule and performance. Fixed-price-level-of-effort contracts are
generally structured with a fixed price per labor hour, subject to the
customers' labor hour needs up to a contract cap. All fixed-price contracts
present the inherent risk of unreimbursed cost overruns which could have a
material adverse effect on the Company's results of operations or financial
condition. In addition, certain costs, including certain financing costs,
portions of research and development costs, and certain marketing expenses
related to the preparation of competitive bids
14
<PAGE>
and proposals and international sales, are not reimbursable under U.S.
Government contracts. The U.S. Government also regulates the methods under which
costs are allocated to U.S. Government contracts.
The following table summarizes how much each of these types of contracts
contributed to the Company's U.S. Government business in fiscal year 1999.
<TABLE>
<CAPTION>
Fiscal Year 1999
----------------
U.S. Government Business By Contract Type
-----------------------------------------
Cost-plus contracts:
<S> <C> <C> <C>
Cost-plus-fixed-fee 15%
Cost-plus-incentive-fee/cost-plus-award-fee 8% 23%
Fixed-price contracts:
Firm fixed-price 68%
Fixed-price incentive/fixed-price-level-of-effort 9% 77%
---
TOTAL................................................. 100%
</TABLE>
Other. In addition, the Company, like all defense contractors, is subject
to risks associated with uncertain cost factors related to:
. scarce technological skills and components,
. the frequent need to bid on programs in advance of design completion (which
may result in unforeseen technological difficulties and/or cost overruns),
. the substantial time and effort required for relatively unproductive design
and development,
. design complexity,
. rapid obsolescence, and
. the potential need for design improvement.
Competition
The Company encounters intense competition for its contracts from numerous
other companies. Some of these companies, particularly those competitors
outside the Company's core business areas, have financial, technical, marketing,
manufacturing, distribution and other resources substantially greater than those
of the Company. The Company's ability to compete for these contracts depends to
a large extent upon:
. the effectiveness and innovativeness of its research and development
programs,
. its ability to offer better program performance than its competitors at a
lower cost, and
. its readiness in facilities, equipment and personnel to undertake the
programs for which it competes.
In some instances, programs are sole-sourced or work-directed by the U.S.
Government to a single supplier. In these cases, there may be other suppliers
who have the capability to compete for the programs involved, but they can only
enter or reenter the market if the U.S. Government should choose to reopen the
particular program to competition. The Company's principal sole source
contracts are for the following programs: Trident (D5) missile (through the
joint venture with the Thiokol Propulsion unit of Cordant Technologies Inc.),
Titan IV SRMU space boosters, AGM-130 and SFW propulsion systems, M830A1 multi-
purpose tank ammunition round, Volcano anti-tank scatterable mine, M758 fuze for
medium caliber
15
<PAGE>
ammunition, the M732A2 proximity fuze, and the M734/M735 mortar fuzes, SADARM
(with Aerojet, the prime contractor), and the OICW weapon system.
The Company generally faces competition from a number of competitors in
each business area. However, Primex Technologies, Inc. is the principal Alliant
Conventional Munitions competitor for medium caliber ammunition and tank
ammunition, and the sole Alliant Conventional Munitions domestic competitor for
commercial gun powders. The Company shares the production of tank ammunition
training rounds with Primex, and Primex is currently the sole source for the
M829A2 Kinetic Energy round, while the Company is the sole source for the M830A1
multi-purpose round. The Company also shares the 25mm and 30mm medium-caliber
ammunition market with Primex, its sole domestic competitor.
The downsizing of the munitions industrial base has resulted in a reduction
in the number of competitors, through consolidations and departures from the
industry. This has reduced the number of competitors for some programs, but has
strengthened the capabilities of some of the remaining competitors. In
addition, it is possible that there will be increasing competition from the
remaining competitors in business areas where they do not currently compete,
particularly in those business areas dealing with electronics.
Novation of U.S. Government Contracts
When U.S. Government contracts are transferred from one contractor to
another contractor, such as in connection with the sale of a business, the
Government requires that the parties enter into a novation agreement. A
novation agreement generally provides that:
. the transferring contractor guarantees or otherwise assumes liability for the
performance of the acquiring contractor's obligations under the contract,
. the acquiring contractor assumes all obligations under the contract, and
. the U.S. Government recognizes the transfer of the contract and related
assets.
The Company entered into novation agreements covering the contracts
transferred to the Company in connection with the spin-off. Honeywell has the
obligations of a transferring contractor, and the Company has the obligations of
an acquiring contractor. The contracts covered by these novation agreements are
scheduled to be performed over a period of time, and it is not expected that
they will be fully and finally discharged for a number of years. The Company
has agreed to perform all of its obligations under each contract and to
indemnify Honeywell against any liability Honeywell may incur under the novation
agreement by reason of any failure by the Company to perform its obligations.
The Company has entered into similar novation agreements in connection with
the sale of Metrum Information Storage and the former Marine Systems Group. In
these cases, however, the Company, as the seller, has guaranteed performance of
the buyer's obligations under the contracts transferred to the buyer, and the
buyers, rather than the Company, have the performance and indemnification
obligations described in the last sentence of the preceding paragraph.
The Company and Hercules Incorporated have agreed to use all reasonable
efforts to enter into novation agreements covering contracts acquired by the
Company in the Hercules Aerospace Company acquisition. These novation
agreements are expected to provide that the Company assumes all obligations
under the acquired contracts and that the U.S. Government recognizes the
16
<PAGE>
transfer to the Company of the acquired contracts and related assets. The
acquired contracts are scheduled to be performed over time, and it is not
expected that they will be fully and finally discharged for several years.
Hercules has agreed to indemnify the Company against any liability which the
Company may incur under the novation agreements by reason of any prior failure
by Hercules to perform its obligations under the novated contracts. The Company
has agreed to indemnify Hercules against any liability which Hercules may incur
under the novation agreements by reason of any failure by the Company to perform
its obligations under the novated contracts.
Research and Development
The following table summarizes the expenses incurred during the last three
fiscal years on (a) Company-sponsored research and development activities
related to new products or services and the improvement of existing products or
services, and (b) research and development activities that were customer-
sponsored (primarily funded by the U.S. government).
<TABLE>
<CAPTION>
Company-sponsored Customer-sponsored
Fiscal year Research and Development Research and Development
----------- ------------------------ ------------------------
<S> <C> <C>
1999 $ 8.9 million $208.5 million
1998 $12.4 million $241.6 million
1997 $16.2 million $231.3 million
</TABLE>
Backlog
The total amount of contracted backlog orders was $2,457.3 million on April
1, 1999, and $1,700.7 million on April 1, 1998. It is expected that
approximately 83 percent of sales during the fiscal year ending March 31, 2000,
will fill orders that were in backlog at April 1, 1999. The backlog represents
the value of contracts for which goods and services are yet to be provided. The
backlog consists of firm contracts, and although they can be and sometimes are
modified or terminated, the amount of modifications and terminations
historically has been limited compared to total contract volume.
Seasonality
The Company's business is not seasonal in nature. However, since the
Company's sales on certain production contracts are not recorded until product
is delivered to the customer, extra effort is expended to complete and deliver
product prior to fiscal year end, which has typically resulted in higher sales
in the fourth fiscal quarter.
Export Sales
The Company's export sales from the United States to unaffiliated customers
during the last three fiscal years are summarized in the following table.
Fiscal year Export Sales
----------- ------------
1999 $61.8 million
1998 $33.2 million
1997 $58.0 million
17
<PAGE>
Employees
As of March 31, 1999, the Company employed approximately 6,110 active
employees. Approximately 1,920 employees were covered by collective bargaining
agreements. The following table summarizes the number of these agreements, and
the number of covered employees, and the expiration dates of the agreements.
<TABLE>
<CAPTION>
Number of Expiration Number of Employees
Location Contracts Date Represented
-------- --------- ---------- -----------
<S> <C> <C> <C>
Rocket Center, WV......... 2 08/14/00 215
11/14/00 10
Magna, UT................. 1 02/15/03 259
Janesville, WI............ 1 03/31/01 273
Minneapolis, MN area...... 1 09/30/99 272
Radford, VA............... 2 10/06/01 91
10/06/02 761
DeSoto, KS................ 1 11/18/01 37
</TABLE>
Relations between the Company and its unionized and non-unionized employees
and their various representatives are generally considered satisfactory.
However, there can be no assurance that new labor contracts can be agreed to
without work stoppages.
Patents
As of March 31, 1999, the Company owned approximately 247 U.S. patents,
approximately 182 foreign patents, and had approximately 52 U.S. patent
applications and 51 foreign patent applications pending. Although the conduct
of the Company's business involves the manufacture of various products that are
covered by patents, the Company's management does not believe that any one
single existing patent or license or group of patents is material to the success
of its business as a whole. Management believes that unpatented research,
development and engineering skills also make an important contribution to the
Company's business. The U.S. Government typically receives royalty-free
licenses to inventions made under U.S. Government contracts, with the Company
retaining all other rights, including all commercial rights, to such inventions.
In addition, the Company's proprietary information is protected through the
requirement that employees sign confidentiality agreements as a condition of
employment, and the Company's policy of protecting proprietary information from
unauthorized disclosure.
Environmental Matters
The Company's operations and ownership or use of real property are subject
to a number of federal, state and local environmental laws and regulations. For
example, under the federal Clean Water Act, the Company's facilities may be
required to obtain permits and to construct pollution control equipment to
reduce the levels of pollutants being discharged into surface waters. Under the
federal Clean Air Act, the Company's facilities may be required to obtain
permits and install pollution control equipment to limit the emission of various
kinds of air pollutants. The Company may also be required to comply with the
provisions of the federal Resource Conservation and Recovery Act which regulates
the generation, storage, handling,
18
<PAGE>
transportation, treatment and disposal of hazardous and solid wastes. In
addition, the Company could be subject to the federal Comprehensive
Environmental Response, Compensation and Liability Act, which is referred to as
CERCLA and imposes liability for the cleanup of releases of hazardous
substances. This liability may involve, for example, releases at off-site
locations as well as at presently and formerly owned or leased facilities.
Environmental laws and regulations change frequently, and it is difficult to
predict what impact these environmental laws and regulations may have on the
Company in the future. When the Company becomes aware of environmental concerns
for which it is potentially liable, the Company works with the various
governmental agencies in investigating the situation, proposing remedial and/or
corrective action and performing the agreed-upon action without unreasonable
delay.
To date, these environmental laws and regulations have not had a material
adverse effect on the Company's results of operations or financial condition.
It is difficult to predict whether and to what extent these environmental laws
and regulations may impact the Company's results of operations or financial
condition in the future. Due to the nature of the Company's operations, the
Company is involved from time to time in legal proceedings involving remediation
of environmental contamination from past or present operations or use or
ownership of real property, as well as compliance with environmental
requirements applicable to ongoing operations. The Company may also be subject
to fines and penalties, toxic tort suits or other third party lawsuits due to
its or its predecessors' present or past use of hazardous substances or the
alleged contamination of the environment through past or present operations.
There can be no assurance that material costs or liabilities will not be
incurred in connection with any such proceedings or claims.
At the time of the spin-off, the Company entered into an environmental
matters agreement with Honeywell Inc. This agreement addresses the liability of
the parties for the disposal of material at environmental treatment, recycling,
storage, disposal, or similar sites that occurred prior to the spin-off. Under
this agreement, the Company assumed the liability and agreed to indemnify
Honeywell for the Company's proportional share of the costs of remedial and/or
corrective action allocated to Honeywell as a "potentially responsible party."
The Company's proportional share is the percentage that the volume of the
material generated by the Company's initial businesses bears to the total volume
of material generated by Honeywell at each site. The Company does not believe
that its ultimate contribution or liability relating to these matters,
individually or in the aggregate, would be reasonably likely to have a material
adverse effect on the business of the Company taken as a whole.
As part of the Hercules Aerospace Company acquisition, the Company has
generally assumed responsibility for environmental compliance at the aerospace
facilities used by the operations acquired in the acquisition. There may also
be significant environmental remediation costs associated with these aerospace
facilities that will, in some cases, be funded in the first instance by the
Company, subject to reimbursement or indemnification as described below.
Management believes that much of the compliance and remediation cost associated
with these aerospace facilities will be reimbursable under U.S. Government
contracts, and that those environmental remediation costs not reimbursable under
these contracts will be covered by Hercules under environmental agreements
entered into in connection with the Hercules Aerospace Company acquisition.
Under these environmental agreements, Hercules has agreed to indemnify the
Company for:
19
<PAGE>
. environmental conditions relating to releases or hazardous waste activities
occurring prior to the closing of the Hercules Aerospace Company
acquisition,
. fines relating to pre-closing environmental compliance,
. environmental claims arising out of breaches of Hercules' representations
and warranties, and
. certain compliance requirements at the Kenvil, New Jersey facility.
The indemnity obligation of Hercules is subject to a total deductible of
$1.0 million for all claims (including non-environmental claims) that the
Company may assert under the Hercules Aerospace Company acquisition purchase
agreement. In addition, Hercules is not required to indemnify the Company for
any individual claims below $50,000. Hercules is obligated to indemnify the
Company for the lowest cost response of remediation required at the facility.
The limitations of Hercules' indemnification obligations do not apply to amounts
incurred by Hercules in connection with the performance of remedial actions
relating to preacquisition conditions at the Clearwater, Florida facility or in
connection with its obligation to comply with certain environmental regulations
at the Kenvil, New Jersey facility. Hercules will be responsible for conducting
any remedial activities and seeking reimbursement from the U.S. Government with
respect to the Kenvil, New Jersey facility and the Clearwater, Florida facility.
There can be no assurance that the U.S. Government or Hercules will
reimburse the Company for any particular environmental costs or reimburse the
Company in a timely manner. U.S. Government reimbursements for non-CERCLA
cleanups are financed out of a particular agency's operating budget. The ability
of a particular governmental agency to make timely reimbursements for cleanup
costs will be subject to national budgetary constraints. When the Company is
required to first conduct the remediation and then seek reimbursement from the
U.S. Government or Hercules, the Company's working capital may be materially
adversely affected until the Company receives reimbursement.
Year 2000 Compliance
Background
The Company utilizes a significant amount of information technology ("IT"), such
as computer hardware and software, and operating systems ("IT systems"), and
non-IT systems, such as applications used in manufacturing, product development,
financial business systems and various administrative functions ("non-IT
systems"). To the extent that these IT systems and non-IT systems contain source
code that is unable to distinguish the upcoming calendar year 2000 from the
calendar year 1900 (the "Year 2000 Issue"), some level of modification or
replacement of such systems will be necessary. The Company has established a
Year 2000 Project Management Plan ("Year 2000 Plan") to identify and address
systems requiring such modification or replacement. The Year 2000 Plan also
involves assessing the extent to which the Company's suppliers and customers are
addressing the Year 2000 Issue. Company management has identified certain
business systems, suppliers, and customers as critical to its ongoing business
needs ("business critical"). Failure of these business critical systems,
suppliers, or customers to become Year 2000 compliant in a timely manner could
have a material adverse impact to the Company.
State of Readiness
20
<PAGE>
The Year 2000 Plan, which encompasses both IT and non-IT systems, involves the
following five-phase approach to the Year 2000 Issue, with the indicated
timetable for completion of business critical items:
<TABLE>
<CAPTION>
Timetable
Phase Activity for Completion Status
- ----- -------- -------------- ------
<S> <C> <C> <C>
1 Ensure Company-wide awareness of the Year 2000
Issue.................................................. September 30, 1997 Completed
2 Assess the impact of the Year 2000 Issue on the
Company, and conduct inventories, analyze systems,
prioritize modification or replacement, and develop
contingency plans...................................... January 31, 1998 Completed
3 Begin modification, replacement or elimination of
selected platforms, applications, databases and
utilities, and modify interfaces, as appropriate........ August 31, 1998 Completed
4 Complete work begun in Phase 3, and test, verify and
validate all systems.................................... September 30, 1999 Substantially
Completed
5 Implement modified or replaced platforms, applications,
databases and utilities................................. September 30, 1999 Substantially
Completed
</TABLE>
The Company is not aware of any problems reasonably likely to occur as a result
of third party failures to address the Year 2000 Issue. Extensive work has been
done to identify supplier Year 2000 Issues. Suppliers were requested to provide
a Year 2000 Issue status on their products, operating systems, suppliers and
facilities, and visits have been made to numerous key suppliers. Suppliers are
being contacted periodically to secure additional information on specific Year
2000 Issues and to identify new issues that may arise as the year progresses.
Phase 4 and 5 activities for business critical items are substantially complete,
except for specific items where validating actions have been rescheduled into
mid-1999 to accommodate business requirements. Critical actions and completion
dates have been identified to ensure that no business critical system will pass
its respective time-horizon-to-failure date. All internal Year 2000 actions,
other than manual actions required to be taken on January 1, 2000, are scheduled
to be complete by September 30, 1999.
The Company has utilized the services of several independent industry
consultants to assist it in assessing the reliability of its risk and cost
estimates.
Costs
The Company currently estimates that costs associated with modifying or
replacing systems affected by the Year 2000 Issue, including the amounts
expended in connection with the Company's ongoing, normal course-of-business
efforts to upgrade or replace business critical systems and software
applications as necessary, will be approximately $13 million, compared to the
Company's normal, annual IT operating budget of approximately $30 million.
These costs are being funded through cash flows from operations. Costs
associated with incremental personnel costs, consulting, and hardware and
software modification are being expensed as incurred. The costs of newly
purchased hardware and software are being capitalized in accordance with normal
21
<PAGE>
policy. The majority of cost was incurred during fiscal year 1999, and
approximately $10 million had been expended through March 31, 1999.
Approximately 37% of the total amount ultimately expended is expected to be for
systems modification, and the balance for systems replacement. There are no IT
projects which the Company has had to delay due to the Year 2000 Issues that
would have a material impact on the Company's results of operations or financial
position. The Company continues to review its contractual obligations relative
to the Year 2000 Issue, and currently believes that there are no such
obligations that would have a material impact to the Company's results of
operations or its financial position.
Risks
The failure to resolve a material Year 2000 Issue could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial position. Due to the general
uncertainty inherent in the Year 2000 Issue, resulting in part from the
uncertainty of the Year 2000 Issue readiness of third-party suppliers and
customers, the Company is unable to determine at this time whether the
consequences of failures resulting from the Year 2000 Issue will have a material
impact on the Company's results of operations, liquidity or financial position.
The Year 2000 Plan is expected to significantly reduce the Company's level of
uncertainty about the Year 2000 Issue and, in particular, about the Year 2000
Issue compliance and readiness of its business critical systems, suppliers, and
customers.
The most significant risk to the Company is the potential impact of
circumstances beyond its control, such as the failure of its business critical
suppliers and/or customers (particularly the U.S. Government) to resolve their
Year 2000 Issues, with a resulting inability of such suppliers to supply
critical goods and services to the Company, or of such customers to pay for
their purchases from the Company. A related significant risk to the Company is
that an inability of its business critical suppliers to resolve their Year 2000
Issues could result in the Company not being able to meet its contractual
obligations. Another significant risk to the Company could be the significant
loss of critical personnel on its Year 2000 Plan team.
The Company currently believes that there is minimal risk that its Year 2000
Plan will not be successfully implemented in a timely manner. In the event that
the Company is ultimately unable to implement its Year 2000 Plan in a timely
manner, the Company believes that its contingency plans, described below,
adequately accommodate its business critical systems in a way that would not
result in a material adverse impact to the Company's results of operations, its
liquidity, or its financial position. However, there can be no assurance that
the Company and/or relevant third parties will successfully resolve all of their
Year 2000 Issues or that the Company's contingency plans will be entirely
successful in mitigating those issues. Any such failure could have a material
adverse effect on the Company's operations, liquidity, or its financial
position.
Contingency Plans
The Company has been informed that the U.S. Government had resolved the Year
2000 Issues affecting its payment system by March 1999, which allows about nine
months for testing of the payment system. The Company is working with the
Government payment office on a contingency plan that will accommodate a manual
billing and payment process in the event the Year 2000 Issues affecting the
Government payment system are not successfully resolved in a timely manner.
22
<PAGE>
A contingency plan has been established for all business critical Company
systems identified as Year 2000 Issues as of August 31, 1998, and contingency
plans have also been developed for certain critical suppliers, including
identification of back-up supply sources, and consideration of the need to
purchase additional critical supplies. Additionally, the Company has started to
develop plans addressing the operation of its facilities during and immediately
after the beginning of calendar 2000, to prepare for the possibility of
infrastructure failure (i.e., power system failure). All contingency plans will
be reviewed during the second quarter of fiscal year 2000.
Cautionary Statement
The costs of the Year 2000 Plan and the timing in which the Company believes it
will implement the Year 2000 Plan are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no assurance that these estimates will be achieved, and actual
results could differ materially from those anticipated. Specific factors that
might cause such material differences include, but are not limited to, the
success of the Company in identifying systems and programs having Year 2000
Issues, the nature and amount of programming required to upgrade or replace the
affected programs, the availability and cost of personnel trained in this area,
and the extent to which the Company might be adversely impacted by the failure
of third parties (i.e., suppliers, customers, etc.) to remediate their own Year
2000 issues. Failure by the Company and/or its suppliers and customers (in
particular, the U.S. Government, on which the Company is materially dependent)
to complete Year 2000 Issue compliance work in a timely manner could have a
material adverse effect on the Company's operations, its liquidity, and/or its
financial position.
23
<PAGE>
Additional Information
Incorporated by reference are the following portions of the Annual Report:
<TABLE>
<CAPTION>
Page Number(s)
Portion of Annual Report in Annual Report
<S> <C>
ATK at a Glance............................................................ 8-9
Conventional Munitions..................................................... 11-13
Aerospace.................................................................. 15-17
Defense Systems............................................................ 19-21
Selected Financial Data.................................................... 22
Research and Development................................................... 24
Discontinued Operations.................................................... 25-26
Contingencies--Environmental Matters....................................... 28
Year 2000.................................................................. 30-31
Market Risk................................................................ 31-32
Risk Factors............................................................... 32
Long-Term Contracts........................................................ 38
Environmental Remediation and Compliance................................... 38
Note 6 of Notes to Financial Statements.................................... 40
Note 14 of Notes to Financial Statements................................... 45-46
Note 15 of Notes to Financial Statements................................... 46-47
Note 16 of Notes to Financial Statements................................... 47-48
</TABLE>
ITEM 2. PROPERTIES
At March 31, 1999, the Company occupied manufacturing, assembly, warehouse,
test, research, development and office properties having a total floor space of
approximately 12 million square feet. These properties are either owned, leased
or occupied under facilities use contracts with the U.S. Government. The
following table provides summary information about the location and size of
these properties, and indicates which of the Company's business segments is the
principal user of the property--Aerospace ("AC"), Conventional Munitions ("CM"),
or Defense Systems ("DS"). In some cases, property is used by more than one
business segment.
24
<PAGE>
<TABLE>
<CAPTION>
Government
Owned Leased Owned /(2)/ Total
----------------------------------------------------------------
Principal Properties/(1)/ (thousands of square feet)
-------------------------
<S> <C> <C> <C> <C>
Florida
Clearwater (DS)........................ -- 112 -- 112
Illinois
Wilmington (CM)........................ -- -- 440 440
Iowa
Burlington (CM)........................ -- 40 -- 40
Kansas
DeSoto (CM)............................ -- -- 730 730
Minnesota
Elk River (CM/DS)...................... 145 -- -- 145
Hopkins (CM/DS)/(3)/................... 536 -- -- 536
New Brighton (CM)...................... -- -- 1,522 1,522
Mississippi
Iuka (AC).............................. -- 110 -- 110
New Jersey
Totowa (CM)............................ 93 11 -- 104
Pennsylvania
Horsham (DS)........................... -- 53 -- 53
Tennessee
Toone (CM)............................. 224 -- -- 224
Texas
Hondo (DS)............................. -- 27 -- 27
Utah
Clearfield (AC)........................ -- 606 -- 606
Magna (AC)............................. 1,810 -- 518 2,328
Tekoi (AC)............................. -- 25 -- 25
Virginia
Radford (CM)........................... -- -- 3,809 3,809
West Virginia
Rocket Center (CM) 96 -- 915 1,011
Wisconsin
Janesville (DS)........................ 212 -- -- 212
----- ----- ----- ------
Subtotal................... 3,116 984 7,934 12,034/(4)/
Other Properties/(5)/
---------------------
AC/CM/DS.................................. -- 27 -- 27
----- ----- ----- ------
Subtotal................... -- 27 -- 27
----- ----- ----- ------
TOTAL.................................. 3,116 1,011 7,934 12,061
===== ===== ===== ======
(26%) (8%) (66%) (100%)
</TABLE>
_____________________________
(1) Excludes properties in the following states aggregating 276,100 square feet
of space that is owned or leased, but is no longer occupied by the Company:
Colorado (265,000 owned square feet, 170,100 square feet of which is
leased); and Virginia (11,100 leased square feet, which is subleased).
25
<PAGE>
(2) These properties are occupied rent-free under five-year facilities
contracts that require the Company to pay for all utilities, services, and
maintenance costs.
(3) This facility also serves as the Company's corporate headquarters.
(4) Business segment usage of these properties is as follows (in thousands of
square feet): Aerospace, 3,069; Conventional Munitions, 7,880; Defense
Systems, 404; and Conventional Munitions and Defense Systems jointly, 681.
(5) Principally sales and other offices, each of which has less than 10,000
square feet of floor space.
The Company also owns 1,200 acres of undeveloped land in Hot Springs,
South Dakota. The following table provides summary information about the
location, size and use of other owned or leased land, and indicates which of the
Company's business segments is the principal user of the land.
<TABLE>
<CAPTION>
Owned Leased Use
-----------------------------------------------------------------
Location (acres)
<S> <C> <C> <C>
Minnesota
Elk River (DS)........................... 3,169 -- Assembly, test and evaluation
New Mexico
Socorro (CM)............................. -- 1,400 Assembly, test and evaluation
Texas
Hondo (DS)............................... -- 27 Flight testing airstrip
</TABLE>
Since the spin-off, the Company has implemented a significant program of
consolidating its operations and facilities, due in part to an underutilization
of facilities. The Company continues to explore opportunities for further
facility consolidations. The Company considers its properties to be in generally
good condition and adequate for the needs of its business.
Incorporated by reference are the following portions of the Annual Report:
Page Number(s)
Portion of Annual Report in Annual Report
Property and Depreciation................................. 38
Note 4 of Notes to Financial Statements................... 39
Note 11 of Notes to Financial Statements.................. 43
Note 12 of Notes to Financial Statements.................. 43
Facilities and Offices.................................... 53
ITEM 3. LEGAL PROCEEDINGS
In March 1997 the Company received a partially unsealed complaint, filed on
an unknown date, in a lawsuit alleging violations of the False Claims Act (known
as a qui tam action) by four former employees ("Relators"). The action has since
been identified as United States of America ex rel. P. Robert Pratt and P.
Robert Pratt, individually vs. Alliant Techsystems Inc. and Hercules
Incorporated, which was filed in the United States District Court, Central
District of California. The action alleges labor mischarging to the Intermediate
Nuclear Force ("INF")
26
<PAGE>
contract and other contracts at the Company's Bacchus Works facility in Magna,
Utah, which was acquired as part of its acquisition of Hercules Aerospace
Company from Hercules. Damages are not specified. The Company and Hercules have
agreed to share equally the external attorney's fees and investigative fees and
related costs and expenses of this action until such time as a determination is
made as to the applicability of the indemnification provisions of the Hercules
Aerospace Company Purchase Agreement. In March 1998, the Company and Hercules
settled with the Department of Justice on the portion of the complaint alleging
labor mischarging to the INF contract and agreed to pay $2.25 million each,
together with Relators' attorney's fees of $150,000 each, which amounts were
paid in April 1998. The Department of Justice has declined to intervene in the
remaining portion of the complaint. On October 16, 1998, the Company and
Hercules settled with the Relators and agreed to pay $500,000 each, together
with Relators' attorney's fees of $75,000 each, subject to Court approval. On
January 21, 1999, the court approved the settlement and entered judgment
dismissing the case, subject to the right of the Department of Justice to appeal
such approval and dismissal. On March 22, 1999, the Department of Justice filed
notice of an intent to appeal.
The Company is a defendant in a patent infringement captioned Thiokol
Corporation (now known as Cordant Technologies Inc.) vs. Alliant Techsystems
Inc. and Hercules Incorporated, which was filed in the U.S. District Court for
the District of Delaware on November 15, 1995, and which the Company believes is
without merit. The plaintiff alleges that the rocket motor insulation used by
the Company in certain rocket motors infringes a patent owned by the plaintiff.
The complaint seeks trebling of any damages that may be awarded based upon an
allegation of deliberate and willful infringement. The complaint does not
quantify the amount of damages sought. Through an analysis of an October 27,
1997 court filing, the Company believes that, based upon an economist's expert
testimony, the plaintiff may seek lost profits, interest and costs of
approximately $240 million. Even if the Company is found liable, it believes
that damages should be based upon a reasonable royalty of less than $5 million.
The Company's motion for summary judgment in the case was denied by the court,
which bifurcated the trial, with the liability issue being tried first and, if
liability is found, the damages issue being tried second. The liability issue
was tried in January 1998, after which the court requested, and the parties
submitted, post-trial briefs. On March 25, 1999, the Court held invalid the
patent that is the subject of the action. The plaintiff filed a notice of appeal
on April 23, 1999, with respect to the Court's holding that the patent is
invalid. The Company filed a notice of cross-appeal on April 30, 1999, with
respect to the Court's finding that, if the patent had not been held invalid,
the Company would have been held to have infringed the patent. On April 13,
1999, the plaintiff and the Company entered into a "standstill agreement" under
which the parties have agreed to file a joint motion to the U.S. Court of
Appeals for the Federal Circuit for a stay of all proceedings for up to 150
days, during which the parties have agreed to negotiate in good faith to settle
the litigation.
The Company has also been served with a complaint in a civil action
captioned United States v. Alliant Techsystems Inc. and filed in the U.S.
District Court for the District of Minnesota, alleging violations of the False
Claims Act, the Truth in Negotiations Act, and common law and equitable theories
of recovery. The complaint was filed March 10, 1997, and relates to a contract
for the AT4 shoulder-fired weapon. The complaint alleges that the contract in
question was defectively priced. Based upon documents provided to the Company in
connection with the action, the Company believes that the U.S. Government may
seek damages and penalties of approximately $5 million.
27
<PAGE>
Under the provisions of the False Claims Act, a civil penalty of between
$5,000 and $10,000 can be assessed for each claim, plus three times the amount
of any damages sustained by the U.S. Government. In addition to damages, a
judgment against the Company in such a suit or a finding of liability in a
separate criminal action could carry penalties of suspension or debarment which
would make some or all of the Company's operations ineligible to be awarded any
U.S. Government contracts for a period of up to three years. The amount of
damages, if any, involved in the above actions filed under the False Claims Act
cannot be determined at this time.
The Company is also a defendant in other suits and claims, some of which
are covered by insurance, and in other investigations of varying natures. While
the results of litigation and other proceedings cannot be predicted with
certainty, in the opinion of management, the actions seeking to recover damages
against the Company either are without merit, are covered by insurance and
reserves, do not support any grounds for cancellation of any contract, or are
not likely to materially affect the financial condition or results of operations
of the Company, although the resolution of any of such matters during a specific
period could have a material effect on the quarterly or annual operating results
for that period.
Incorporated by reference are the following portions of the Annual Report:
Page Number(s)
Portion of Annual Report in Annual Report
Contingencies--Environmental Matters..................... 28
Contingencies--Litigation................................ 29-30
Environmental Remediation and Compliance................. 38
Note 6 of Notes to Financial Statements.................. 40
Note 14 of Notes to Financial Statements................. 45-46
Note 16 of Notes to Financial Statements................. 47-48
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth
quarter of fiscal year 1999.
28
<PAGE>
SUPPLEMENTARY ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists the Company's executive officers, their ages and
positions as of June 1, 1999, and the date they first became executive officers.
<TABLE>
<CAPTION>
Name (Age) Position (Date Became Executive Officer)
<S> <C>
Paul David Miller (57)............. Chairman of the Board and Chief Executive Officer (January 1, 1999)
Peter A. Bukowick (55)............. President and Chief Operating Officer (March 15, 1995)
Charles H. Gauck (60).............. Vice President and Secretary (September 28, 1990)
Robert E. Gustafson (50)........... Vice President--Human Resources (July 22, 1996)
Richard N. Jowett (54)............. Vice President--Investor Relations and Public Affairs and Assistant Treasurer (May
11, 1998)
John L. Lotzer (43)................ Vice President--Tax and Investments (October 27, 1998)
William R. Martin (58)............. Vice President--Washington, D.C. Operations (January 8, 1996)
Mark L. Mele (42).................. Vice President--Strategic Planning (May 11, 1998)
Scott S. Meyers (45)............... Vice President, Treasurer and Chief Financial Officer (March 1, 1996)
Paula J. Patineau (45)............. Vice President and Controller (January 29, 1997)
Paul A. Ross (62).................. Senior Group Vice President--Aerospace (April 1, 1997)
Don L. Sticinski (47).............. Group Vice President--Defense Systems (March 1, 1998)
Nicholas G. Vlahakis (51).......... Group Vice President--Conventional Munitions (December 1, 1997)
Daryl L. Zimmer (56)............... Vice President and General Counsel (September 28, 1990)
</TABLE>
Each of the above individuals serves at the pleasure of the Company's Board
of Directors, and is subject to reelection annually on the date of the Company's
Annual Meeting of stockholders. No family relationship exists between any of the
executive officers or between any of them and any director of the Company.
Information regarding the five-year employment history (in each case with the
Company unless otherwise indicated) of each of the executive officers is set
forth below.
Admiral Miller, USN (Ret.) has held his present position since January
1999. Prior to that he was with Litton Industries, where he served as a Vice
President since September 1997, and President of Sperry Marine Inc., which he
joined in November 1994, following a 30-year career in the U.S. Navy. Prior to
his retirement from the U.S. Navy, he was Commander-in-Chief, U.S. Atlantic
Command, one of five U.S. theater commands, and served concurrently as NATO
Supreme Allied Commander-Atlantic.
Mr. Bukowick has been President since May 1998, and Chief Operating Officer
since September 1997. From September 1998 until January 1999, he also served as
acting Chief Executive Officer. From April 1997 until May 1998 he served as
Executive Vice President, and from March 1995 until April 1997, he was Group
Vice President - Aerospace Systems. Prior to that, he was President pro tempore
of Hercules Aerospace Company from January 1995 until
29
<PAGE>
March 1995, and Vice President, Technology of Hercules Aerospace Company from
1992 until December 1994.
Mr. Gauck has been Vice President since January 1999, and Secretary since
the spin-off.
Mr. Gustafson has held his present position since July 1996. From the spin-
off until July 1996 he served as Director of Compensation and Benefits.
Mr. Jowett has been Vice President - Investor Relations and Public Affairs
since May 1998, and Assistant Treasurer since October 1998. From April 1993
until May 1998, he served as Director of Investor Relations.
Mr. Lotzer has held his present position since October 1998. From December
1993 until October 1998, he served as Director of Taxation.
Mr. Martin has held his present position since January 1996. From March
1995 until January 1996, he served as Vice President - Business Development of
the Company's Aerospace Systems Group. From July 1991 until March 1995 he served
as Vice President - Business Development and Washington Office Operations of
Hercules Aerospace Company.
Mr. Mele has held his present position since May 1998. Prior to that he was
Director, Business Planning since March 1995. From February 1993 until March
1995, he served as Manager, New Product Development of Hercules Aerospace
Company.
Mr. Meyers has been Vice President and Chief Financial Officer since March
1996, and Treasurer since August 1998. From January 1990 until March 1996, he
served as Executive Vice President and Chief Financial Officer of Magnavox
Electronic Systems Company.
Ms. Patineau has held her present position since January 1997. From June
1996 until January 1997, she served as acting Controller. From April 1992 until
July 1996, she served as Director of Financial Reporting/Accounting Services.
Mr. Ross has held his present position since April 1999. From November 1998
until April 1999 he served as Senior Vice President - Space and Strategic
Systems. From April 1997 until November 1998, he served as Group Vice President-
Space and Strategic Systems. From April 1995 until April 1997, he served as Vice
President and General Manager, Space and Strategic Division, Aerospace Systems
Group. From August 1994 until March 1995, he was Vice President of Operations of
Hercules Aerospace Company. Prior to joining Hercules Aerospace Company, he was
employed by Rockwell International, most recently as Vice President of
Production Operations, Rocketdyne Division, from June 1991 until August 1994.
Mr. Sticinski has held his present position since March 1998. From April
1997 until March 1998, he served as Vice President - Operations of the Company's
Space and Strategic Systems Group. From March 1995 until April 1997, he served
as Vice President - Operations, Space and Strategic Division, of the Company's
Aerospace Systems Group. Prior to that, he was Vice President - Titan Projects
of Hercules Aerospace Company from April 1993 until March 1995.
30
<PAGE>
Mr. Vlahakis has held his present position since December 1997. From April
1997 until December 1997, he served as Vice President and General Manager -
Ordnance of the Company's Conventional Munitions Group. From March 1995 until
April 1997, he served as Vice President and General Manager - Ordnance of the
Company's Aerospace Systems Group. From 1993 until March 1995, he was Vice
President and General Manager of Hercules Aerospace Company's tactical
propulsion facility. From 1991 until 1993, he was Vice President of Hercules
Aerospace Company's Expendable Launch Vehicle Group.
Mr. Zimmer has held his present position since the spin-off.
31
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Company Common Stock is listed and traded on the New York Stock Exchange
under the symbol ATK. The following table sets forth the high and low sales
prices of the Common Stock for each full quarterly period within the two most
recent fiscal years, as reported on the New York Stock Exchange Composite Tape:
<TABLE>
<CAPTION>
Period High Low
Fiscal year ended March 31, 1999:
<S> <C> <C>
Quarter ended June 28, 1998............................................. $65.5625 $ 57.875
Quarter ended September 27, 1998........................................ 68.875 61.375
Quarter ended December 27, 1998......................................... 83.0625 65.00
Quarter ended March 31, 1999............................................ 88.00 72.625
Fiscal year ended March 31, 1998:
Quarter ended June 29, 1997............................................. $ 52.875 $ 40.50
Quarter ended September 28, 1997........................................ 69.00 51.4375
Quarter ended December 28, 1997......................................... 65.6875 53.75
Quarter ended March 31, 1998............................................ 65.00 54.50
</TABLE>
The number of holders of record of Company Common Stock as of May 31, 1999,
was 11,339.
The Company has never paid cash dividends. The Company's dividend policy
will be reviewed by the Board of Directors of the Company at such future times
as may be appropriate in light of relevant factors existing at such times,
including the extent to which the payment of cash dividends may be limited by
covenants contained in its bank credit agreements dated November 23, 1998. These
credit agreements currently limit the aggregate sum of dividends plus certain
other restricted payments incurred after November 23, 1998 to $50 million. These
credit agreements also prohibit dividend payments if loan defaults exist or
certain financial covenant ratios are not maintained.
32
<PAGE>
Incorporated by reference are the following portions of the Annual Report:
<TABLE>
<CAPTION>
Page Number(s)
Portion of Annual Report in Annual Report
<S> <C>
Consolidated Income Statements -- Basic earnings per common share
and diluted earnings per common share.............................. 34
Earnings Per Share Data............................................. 39
Note 7 of Notes to Financial Statements............................. 40-41
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference is the following portion of the Annual Report:
<TABLE>
<CAPTION>
Page Number(s)
Portion of Annual Report in Annual Report
<S> <C>
Selected Financial Data............................................. 22
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference is the following portion of the Annual Report:
<TABLE>
<CAPTION>
Page Number(s)
Portion of Annual Report in Annual Report
<S> <C>
Management's Discussion and Analysis................................ 23-32
</TABLE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference are the following portions of the Annual Report:
<TABLE>
<CAPTION>
Page Number(s)
Portion of Annual Report in Annual Report
<S> <C>
Financial Highlights................................................ 1
Report of Independent Auditors...................................... 33
Report of Management................................................ 33
Consolidated Income Statements...................................... 34
Consolidated Balance Sheets......................................... 35
Consolidated Statements of Cash Flows............................... 36
Consolidated Statement of Stockholders' Equity...................... 37
Notes to the Consolidated Financial Statements...................... 38-50
</TABLE>
33
<PAGE>
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
Information regarding the executive officers of the Company is set forth
following Item 4 in Part I of this report. The other information required by
this Item will be included in the definitive proxy statement for the Company's
1999 annual meeting of stockholders, and is incorporated by reference. This
proxy statement, which is called the 1999 Proxy Statement, will be filed within
120 days after the end of fiscal year 1999.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will be included in the 1999 Proxy
Statement and is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item will be included in the 1999 Proxy
Statement and is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item will be included in the 1999 Proxy
Statement and is incorporated by reference.
34
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report
<TABLE>
<CAPTION>
Annual Report
Page Form 10-K
Number(s) Page Number
<S> <C> <C>
1. Financial Statements (incorporated by reference from
the Annual Report):
Financial Highlights.................................. 1
Report of Independent Auditors........................ 33
Consolidated Income Statements........................ 34
Consolidated Balance Sheets........................... 35
Consolidated Statements of Cash Flows................. 36
Consolidated Statement of Stockholders' Equity........ 37
Notes to the Consolidated Financial Statements........ 38-50
2. Financial Statement Schedules (included in this
report):
Independent Auditors' Report..................................................... 42
Schedules:
II - Valuation Reserves...................................................... 43
</TABLE>
All schedules, other than indicated above, are omitted because of the absence
of the conditions under which they are required or because the information
required is shown in the financial statements or notes thereto.
3. Exhibits. (The following exhibits are filed with this report unless the
exhibit number is followed by an asterisk (*), in which case the exhibit is
incorporated by reference from the document listed. The applicable
Securities and Exchange Commission File Number is 1-10582 unless otherwise
indicated. Exhibit numbers followed by a pound sign (#) identify exhibits
that are either a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K. Excluded from this
list of exhibits, pursuant to Paragraph (b) (4) (iii) (A) of Item 601 of
Regulation S-K, may be one or more instruments defining the rights of holders
of long-term debt of the Registrant. The Registrant hereby agrees that it
will, upon request of the Securities and Exchange Commission, furnish to the
Commission a copy of any such instrument.)
35
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
3(i).1* Restated Certificate of Incorporation, effective July 20, 1990 (Exhibit 3.1 to Amendment No. 1 to Form 10
Registration Statement filed with the Securities and Exchange Commission on July 20, 1990 (the "Form 10")).
3(i).2* Certificate of Correction, effective September 21, 1990 (Exhibit 3.1 to Registration Statement on Form S-4, File No.
33-91138, filed with the Securities and Exchange Commission on April 13, 1995 (the "Form S-4")).
3(i).3* Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock of the
Registrant, effective September 28, 1990 (Exhibit 3.3 to the Form S-4).
3(ii)* By-Laws, as amended through May 10, 1999 (Exhibit 3(ii) to Form 8-K dated May 10, 1999).
4.1* Form of Certificate for common stock, par value $.01 per share (Exhibit 4.1 to Amendment No. 1 to the Form 10).
4.2* Rights Agreement, dated as of September 24, 1990, between the Registrant and Manufacturers Hanover Trust Company
(Exhibit 4.2 to Post-Effective Amendment No. 1 to the Form 10).
4.2.1* First Amendment to Rights Agreement, dated as of August 4, 1992, between the Registrant and Chemical Bank (successor
to Manufacturers Hanover Trust Company) (Exhibit 4.2.1 to Form 10-K for the fiscal year ended March 31, 1993).
4.2.2* Rescission Agreement, dated as of May 26, 1993, between the Registrant and Chemical Bank (Exhibit 4.2.2 to Form 10-K
for the fiscal year ended March 31, 1993).
4.2.3* Second Amendment to Rights Agreement, dated as of October 28, 1994, between the Registrant and Chemical Bank (Exhibit
4 to Form 8-K dated October 28, 1994).
4.2.4* Third Amendment to Rights Agreement, dated March 16, 1999 between the Registrant and The Chase Manhattan Bank
(Exhibit 4 to Form 8-A/A filed March 23, 1999).
4.3* Form of Amended and Restated Credit Agreement, dated as of November 23, 1998 between the Registrant and The Chase
Manhattan Bank (the "Continuing Credit Agreement") (Exhibit 9.(b)(2) to Schedule 13E-4 dated November 30, 1998).
4.4* Form of Credit Agreement, dated as of November 23, 1998 between the Registrant and The Chase Manhattan Bank (the
"Credit Agreement") (Exhibit 9.(b)(3) to Schedule 13E-4 dated November 30, 1998).
</TABLE>
36
<PAGE>
<TABLE>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
4.5 Form of Waiver and Amendment, dated as of March 29, 1999, to the Credit Agreement and the Continuing Credit
Agreement.
10.1* Distribution Agreement, dated as of September 24, 1990, between Honeywell Inc. and the Registrant (Exhibit 10.1 to
Amendment No. 2 to the Form 10).
10.2* Environmental Matters Agreement, dated as of September 24, 1990, between Honeywell Inc. and the Registrant (Exhibit
10.3 to Post-Effective Amendment No. 1 to the Form 10).
10.3* Intellectual Property Agreement, dated as of September 24, 1990, between Honeywell Inc. and the Registrant (Exhibit
10.4 to Amendment No. 2 to the Form 10).
10.3.1* Amendment No. 1 to Intellectual Property Agreement, dated as of September 24, 1990 (Exhibit 10.4.1 to Form 10-K for
the fiscal year ended March 31, 1992).
10.3.2* Amendment No. 2 to Intellectual Property Agreement, dated as of September 24, 1990 (Exhibit 10.4.2 to Form 10-K for
the fiscal year ended March 31, 1992).
10.3.3* Amendment No. 3 to Intellectual Property Agreement, dated July 30, 1992 (Exhibit 10.4.3 to Form 10-Q for the quarter
ended October 3, 1993).
10.4* Tax Sharing Agreement, dated as of September 28, 1990, between Honeywell Inc. and the Registrant (Exhibit 10.5 to
Amendment No. 2 to the Form 10).
10.5*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.3 to Form 10-Q for the quarter ended October 2, 1994).
10.5.1*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.1 to Form 10-Q for the quarter ended July 4, 1994).
10.5.2*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.35 to Form 10-K for the fiscal year ended March 31, 1996).
10.5.3*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.3 to Form 10-Q for the quarter ended June 29, 1997).
10.7*# Form of Indemnification Agreement between the Registrant and its directors and officers (Exhibit 10.6 to Amendment
No. 1 to the Form 10).
10.8*# Executive Split Dollar Life Insurance Plan (Exhibit 10.9 to Form 10-K for the fiscal year ended March 31, 1998).
10.8.1*# Executive Life Insurance Agreement (Exhibit 10.9.1 to Form 10-K for the fiscal year ended March 31, 1998).
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
10.8.2*# Split Dollar Life Insurance Agreement (Exhibit 10.9.2 to Form 10-K for the fiscal year ended March 31, 1998).
10.9*# Form of Retention Agreement between the Registrant and certain of its officers (Exhibit 10.18 to Amendment No. 1 to
the Form 10).
10.10*# Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan (Exhibit 10 to Form 10-Q for the quarter
ended September 27, 1998).
10.11*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.12 to Form 10-K for the fiscal year ended December 31,
1990).
10.12*# Form of Employment Restrictions Agreement (Exhibit 10.13 to Form 10-K for the fiscal year ended December 31, 1990).
10.13*# Hercules Supplementary Employee Retirement Plan (SERP) (assumed by the Registrant as to certain of its employees)
(Exhibit 10.38 to the Form S-4).
10.14*# Management Compensation Plan (Exhibit 10.14 to Amendment No. 1 to the Form 10).
10.15*# Flexible Perquisite Account description. (Exhibit 10.1 to Form 10-Q for the quarter ended October 2, 1994).
10.16*# Restricted Stock Plan for Non-Employee Directors (Exhibit 10.13 to Amendment No. 1 to Form 10).
10.16.1*# Non-Employee Restricted Stock Plan (Appendix B to Proxy Statement dated July 3, 1996).
10.16.2*# Form of Restricted Stock Agreement (Exhibit 10.2 to Form 10-Q for the quarter ended September 29, 1996).
10.17*# Deferred Fee Plan for Non-Employee Directors (as amended and restated November 24, 1992) (Exhibit 10.18 to Form 10-K
for the fiscal year ended March 31, 1993).
10.18*# Non-employee director per diem arrangement (Exhibit 10.20 to Form 10-K for the fiscal year ended March 31, 1992).
10.19*# Income Security Plan (Exhibit 10.23 to Form 10-K for the fiscal year ended March 31, 1997).
10.19.1*# Trust Under Income Security Plan, dated May 4, 1998 (effective March 2, 1998), by and between the Registrant and U.S.
Bank National Association (Exhibit 10.20.1 to Form 10-K for the fiscal year ended March 31, 1998).
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
10.20*# Form of Employment Letter Agreement, dated October 27, 1994, between the Registrant and Richard Schwartz (Exhibit
10.1 to Form 10-Q for the quarter ended January 1, 1995).
10.20.1*# Indemnification Agreement, dated as of October 28, 1994, between the Registrant and Richard Schwartz (Exhibit 10.2 to
Form 10-Q for the quarter ended January 1, 1995).
10.20.2# Consulting Agreement and General Release between the Registrant and Richard Schwartz.
10.22*# Compensation Arrangement between the Registrant and Scott S. Meyers (Exhibit 10.32 to Form 10-K for the fiscal year
ended March 31, 1996).
10.23*# Compensation arrangement between the Registrant and Paul David Miller (Exhibit 10.1 to Form 10-Q for the quarter
ended December 27, 1998).
10.23.1*# Form of Restricted Stock Agreement (Exhibit 10.2 to Form 10-Q for the quarter ended December 27, 1998).
10.24*# Honeywell Supplementary Retirement Plan (SRP) (assumed by the Registrant as to certain of its employees) (Exhibit
10.22 to Form 10-K for the fiscal year ended March 31, 1992).
10.25*# Honeywell Supplementary Executive Retirement Plan for Compensation in Excess of $200,000 (assumed by the Registrant
as to certain of its employees (Exhibit 10.23 to Form 10-K for the fiscal year ended March 31, 1992).
10.26*# Honeywell Supplementary Executive Retirement Plan for CECP Participants (assumed by the Registrant as to certain of
its employees formerly employed by Honeywell) (Exhibit 10.24 to Form 10-K for the fiscal year ended March 31, 1992).
10.27* Purchase and Sale Agreement, dated as of October 28, 1994, between the Registrant and Hercules Incorporated (the
"Purchase Agreement"), including certain exhibits and certain schedules and a list of schedules and exhibits omitted
(Exhibit 2 to Form 8-K dated October 28, 1994).
10.28* Master Amendment to Purchase Agreement, dated as of March 15, 1995, between the Registrant and Hercules Incorporated,
including exhibits (Exhibit 2.2 to Form 8-K dated March 15, 1995).
10.29* Asset Purchase Agreement dated as of December 22, 1996 by and between the Registrant and Hughes Aircraft Company
(excluding schedules and exhibits) (Exhibit 2.1 to Form 8-K dated February 28, 1997).
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
10.29.1* Amendment to Asset Purchase Agreement dated February 28, 1997 by and between the Registrant and Hughes Aircraft
Company (excluding schedules and exhibits) (Exhibit 2.2 to Form 8-K dated February 28, 1997).
13 Annual Report (only those portions specifically incorporated herein by reference shall be deemed filed with the
Securities and Exchange Commission).
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
24 Powers of Attorney.
27 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K
During the quarter ended March 31, 1999 the Company filed the following reports
on Form 8-K:
Date of Report Items Reported
- -------------- --------------
March 16, 1999 Item 5. Other Events
Item 7(c) Exhibits
March 25, 1999 Item 5. Other Events
40
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALLIANT TECHSYSTEMS INC.
Date: June 25, 1999 By /s/ Charles H. Gauck
------------------------------
Charles H. Gauck
Vice President and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
/s/ Paul David Miller Director, Chairman of the Board and Chief Executive
- ----------------------------- Officer (Principal Executive Officer)
Paul David Miller
/s/ Peter A. Bukowick Director, President and Chief Operating Officer
- -----------------------------
Peter A. Bukowick
/s/ Scott S. Meyers Vice President, Treasurer and Chief Financial Officer
- ----------------------------- (Principal Financial Officer)
Scott S. Meyers
/s/ Paula J. Patineau Vice President and Controller (Principal Accounting
- ----------------------------- Officer)
Paula J. Patineau
* Director
- -----------------------------
Gilbert F. Decker
* Director
- -----------------------------
Thomas L. Gossage
* Director
- -----------------------------
Joel M. Greenblatt
* Director
- -----------------------------
Jonathan G. Guss
* Director
- -----------------------------
David E. Jeremiah
* Director
- -----------------------------
Gaynor N. Kelley
* Director
- -----------------------------
Joseph F. Mazzella
* Director
- -----------------------------
Daniel L. Nir
* Director
- -----------------------------
Michael T. Smith
</TABLE>
Date: June 25, 1999 *By /s/ Charles H. Gauck
-------------------------
Charles H. Gauck
Attorney-in-Fact
41
<PAGE>
INDEPENDENT AUDITORS' REPORT
Alliant Techsystems Inc.:
We have audited the consolidated financial statements of Alliant Techsystems
Inc. and subsidiaries as of March 31, 1999 and 1998, and for each of the years
ended March 31, 1999, March 31, 1998, and March 31, 1997 and have issued our
report thereon dated May 10, 1999; such financial statements and report are
included in your 1999 Annual Report to Stockholders (Exhibit 13) and are
incorporated herein by reference. Our audit also included the financial
statement schedule of Alliant Techsystems Inc., listed in Item 14. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
May 10, 1999
42
<PAGE>
SCHEDULE II
ALLIANT TECHSYSTEMS INC.
VALUATION RESERVES
For the Years Ended March 31, 1999, 1998 and 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
Balance Beginning Purchased Additions Charged Deductions from Balance at Close
of Period Company to Income Reserves of Period
------------------ -------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Reserves deducted from assets to which
they apply--reserve for estimated loss
on disposal of discontinued operations:
Net Assets of Discontinued Operations
-------------------------------------
Year ended March 31, 1999............. -- -- -- -- --
============ ============ ============ ============= ============
Year ended March 31, 1998............. $11,126 -- -- $11,126 /(1)/ --
============ ============ ============ ============= ============
Year ended March 31, 1997............. $13,700 -- -- $ 2,574 /(1)/ $11,126
============ ============ ============ ============= ============
Reserves deducted from assets to which
they apply--allowance for amortization
of intangibles:
Goodwill
--------
Year ended March 31, 1999............. $10,769 -- $4,901 /(2)/ -- $15,670
============ ============ ============ ============= ============
Year ended March 31, 1998............. $ 7,255 -- $3,514 /(2)/ -- $10,769
============ ============ ============ ============= ============
Year ended March 31, 1997............. $ 3,940 -- $3,315 /(2)/ -- $ 7,255
============ ============ ============ ============= ============
Debt Issuance Costs
-------------------
Year ended March 31, 1999............. $ 8,569 -- $6,873 /(4)/ $14,849 /(5)/ $ 593
============ ============ ============ ============= ============
Year ended March 31, 1998............. $ 7,100 -- $1,469 /(3)/ -- $ 8,569
============ ============ ============ ============= ============
Year ended March 31, 1997............. $ 2,433 -- $4,667 /(3)/ -- $ 7,100
============ ============ ============ ============= ============
</TABLE>
Notes: (1) Represents write-off of the associated assets.
(2) Represents amounts included in cost of sales.
(3) Represents amounts included in interest expense.
(4) Includes an extraordinary write-off of $5.7 million resulting from
the early extinguishment of the Company's long-term debt.
(5) Represents write-off of debt issuance costs in connection with the
Company's early extinguishment of long-term debt.
43
<PAGE>
ALLIANT TECHSYSTEMS INC.
FORM 10-K
EXHIBIT INDEX
The following exhibits are filed electronically with this report unless the
exhibit number is followed by an asterisk (*), in which case the exhibit is
incorporated by reference from the document listed. The applicable Securities
and Exchange Commission File Number is 1-10582 unless otherwise indicated.
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
3(i).1* Restated Certificate of Incorporation, effective July 20, 1990 (Exhibit 3.1 to Amendment No. 1 to Form 10
Registration Statement filed with the Securities and Exchange Commission on July 20, 1990 (the "Form 10")).
3(i).2* Certificate of Correction, effective September 21, 1990 (Exhibit 3.1 to Registration Statement on Form S-4, File No.
33-91138, filed with the Securities and Exchange Commission on April 13, 1995 (the "Form S-4")).
3(i).3* Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock of the
Registrant, effective September 28, 1990 (Exhibit 3.3 to the Form S-4).
3(ii)* By-Laws, as amended through May 10, 1999 (Exhibit 3(ii) to Form 8-K dated May 10, 1999).
4.1* Form of Certificate for common stock, par value $.01 per share (Exhibit 4.1 to Amendment No. 1 to the Form 10).
4.2* Rights Agreement, dated as of September 24, 1990, between the Registrant and Manufacturers Hanover Trust Company
(Exhibit 4.2 to Post-Effective Amendment No. 1 to the Form 10).
4.2.1* First Amendment to Rights Agreement, dated as of August 4, 1992, between the Registrant and Chemical Bank (successor
to Manufacturers Hanover Trust Company) (Exhibit 4.2.1 to Form 10-K for the fiscal year ended March 31, 1993).
4.2.2* Rescission Agreement, dated as of May 26, 1993, between the Registrant and Chemical Bank (Exhibit 4.2.2 to Form 10-K
for the fiscal year ended March 31, 1993).
4.2.3* Second Amendment to Rights Agreement, dated as of October 28, 1994, between the Registrant and Chemical Bank (Exhibit
4 to Form 8-K dated October 28, 1994).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
4.2.4* Third Amendment to Rights Agreement, dated March 16, 1999 between the Registrant and The Chase Manhattan Bank
(Exhibit 4 to Form 8-A/A filed March 23, 1999).
4.3* Form of Amended and Restated Credit Agreement, dated as of November 23, 1998 between the Registrant and The Chase
Manhattan Bank (the "Continuing Credit Agreement") (Exhibit 9.(b)(2) to Schedule 13E-4 dated November 30, 1998).
4.4* Form of Credit Agreement, dated as of November 23, 1998 between the Registrant and The Chase Manhattan Bank (the
"Credit Agreement") (Exhibit 9.(b)(3) to Schedule 13E-4 dated November 30, 1998).
4.5 Form of Waiver and Amendment, dated as of March 29, 1999, to the Credit Agreement and the Continuing Credit
Agreement.
10.1* Distribution Agreement, dated as of September 24, 1990, between Honeywell Inc. and the Registrant (Exhibit 10.1 to
Amendment No. 2 to the Form 10).
10.2* Environmental Matters Agreement, dated as of September 24, 1990, between Honeywell Inc. and the Registrant (Exhibit
10.3 to Post-Effective Amendment No. 1 to the Form 10).
10.3* Intellectual Property Agreement, dated as of September 24, 1990, between Honeywell Inc. and the Registrant (Exhibit
10.4 to Amendment No. 2 to the Form 10).
10.3.1* Amendment No. 1 to Intellectual Property Agreement, dated as of September 24, 1990 (Exhibit 10.4.1 to Form 10-K for
the fiscal year ended March 31, 1992).
10.3.2* Amendment No. 2 to Intellectual Property Agreement, dated as of September 24, 1990 (Exhibit 10.4.2 to Form 10-K for
the fiscal year ended March 31, 1992).
10.3.3* Amendment No. 3 to Intellectual Property Agreement, dated July 30, 1992 (Exhibit 10.4.3 to Form 10-Q for the quarter
ended October 3, 1993).
10.4* Tax Sharing Agreement, dated as of September 28, 1990, between Honeywell Inc. and the Registrant (Exhibit 10.5 to
Amendment No. 2 to the Form 10).
10.5*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.3 to Form 10-Q for the quarter ended October 2, 1994).
10.5.1*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.1 to Form 10-Q for the quarter ended July 4, 1994).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
10.5.2*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.35 to Form 10-K for the fiscal year ended March 31, 1996).
10.5.3*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.3 to Form 10-Q for the quarter ended June 29, 1997).
10.7*# Form of Indemnification Agreement between the Registrant and its directors and officers (Exhibit 10.6 to Amendment
No. 1 to the Form 10).
10.8*# Executive Split Dollar Life Insurance Plan (Exhibit 10.9 to Form 10-K for the fiscal year ended March 31, 1998).
10.8.1*# Executive Life Insurance Agreement (Exhibit 10.9.1 to Form 10-K for the fiscal year ended March 31, 1998).
10.8.2*# Split Dollar Life Insurance Agreement (Exhibit 10.9.2 to Form 10-K for the fiscal year ended March 31, 1998).
10.9*# Form of Retention Agreement between the Registrant and certain of its officers (Exhibit 10.18 to Amendment No. 1 to
the Form 10).
10.10*# Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan (Exhibit 10 to Form 10-Q for the quarter
ended September 27, 1998).
10.11*# Form of Non-Qualified Stock Option Agreement (Exhibit 10.12 to Form 10-K for the fiscal year ended December 31,
1990).
10.12*# Form of Employment Restrictions Agreement (Exhibit 10.13 to Form 10-K for the fiscal year ended December 31, 1990).
10.13*# Hercules Supplementary Employee Retirement Plan (SERP) (assumed by the Registrant as to certain of its employees)
(Exhibit 10.38 to the Form S-4).
10.14*# Management Compensation Plan (Exhibit 10.14 to Amendment No. 1 to the Form 10).
10.15*# Flexible Perquisite Account description. (Exhibit 10.1 to Form 10-Q for the quarter ended October 2, 1994).
10.16*# Restricted Stock Plan for Non-Employee Directors (Exhibit 10.13 to Amendment No. 1 to Form 10).
10.16.1*# Non-Employee Restricted Stock Plan (Appendix B to Proxy Statement dated July 3, 1996).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
10.16.2*# Form of Restricted Stock Agreement (Exhibit 10.2 to Form 10-Q for the quarter ended September 29, 1996).
10.17*# Deferred Fee Plan for Non-Employee Directors (as amended and restated November 24, 1992) (Exhibit 10.18 to Form
10-K for the fiscal year ended March 31, 1993).
10.18*# Non-employee director per diem arrangement (Exhibit 10.20 to Form 10-K for the fiscal year ended March 31, 1992).
10.19*# Income Security Plan (Exhibit 10.23 to Form 10-K for the fiscal year ended March 31, 1997).
10.19.1*# Trust Under Income Security Plan, dated May 4, 1998 (effective March 2, 1998), by and between the Registrant and
U.S. Bank National Association (Exhibit 10.20.1 to Form 10-K for the fiscal year ended March 31, 1998).
10.20*# Form of Employment Letter Agreement, dated October 27, 1994, between the Registrant and Richard Schwartz (Exhibit
10.1 to Form 10-Q for the quarter ended January 1, 1995). 10.20.1*# Indemnification Agreement, dated as of October
28, 1994, between the Registrant and Richard Schwartz (Exhibit 10.2 to Form 10-Q for the quarter ended January 1,
1995).
10.20.2# Consulting Agreement and General Release between the Registrant and Richard Schwartz.
10.22*# Compensation Arrangement between the Registrant and Scott S. Meyers (Exhibit 10.32 to Form 10-K for the fiscal year
ended March 31, 1996).
10.23*# Compensation arrangement between the Registrant and Paul David Miller (Exhibit 10.1 to Form 10-Q for the quarter
ended December 27, 1998).
10.23.1*# Form of Restricted Stock Agreement (Exhibit 10.2 to Form 10-Q for the quarter ended December 27, 1998).
10.24*# Honeywell Supplementary Retirement Plan (SRP) (assumed by the Registrant as to certain of its employees) (Exhibit
10.22 to Form 10-K for the fiscal year ended March 31, 1992).
10.25*# Honeywell Supplementary Executive Retirement Plan for Compensation in Excess of $200,000 (assumed by the Registrant
as to certain of its employees (Exhibit 10.23 to Form 10-K for the fiscal year ended March 31, 1992).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description of Exhibit (and document from
Number which incorporated by reference, if applicable)
<S> <C>
10.26*# Honeywell Supplementary Executive Retirement Plan for CECP Participants (assumed by the Registrant as to certain of
its employees formerly employed by Honeywell) (Exhibit 10.24 to Form 10-K for the fiscal year ended March 31,
1992).
10.27* Purchase and Sale Agreement, dated as of October 28, 1994, between the Registrant and Hercules Incorporated (the
"Purchase Agreement"), including certain exhibits and certain schedules and a list of schedules and exhibits
omitted (Exhibit 2 to Form 8-K dated October 28, 1994).
10.28* Master Amendment to Purchase Agreement, dated as of March 15, 1995, between the Registrant and Hercules
Incorporated, including exhibits (Exhibit 2.2 to Form 8-K dated March 15, 1995).
10.29* Asset Purchase Agreement dated as of December 22, 1996 by and between the Registrant and Hughes Aircraft Company
(excluding schedules and exhibits) (Exhibit 2.1 to Form 8-K dated February 28, 1997).
10.29.1* Amendment to Asset Purchase Agreement dated February 28, 1997 by and between the Registrant and Hughes Aircraft
Company (excluding schedules and exhibits) (Exhibit 2.2 to Form 8-K dated February 28, 1997).
13 Annual Report (only those portions specifically incorporated herein by reference shall be deemed filed with the
Securities and Exchange Commission).
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
24 Powers of Attorney.
27 Financial Data Schedule.
</TABLE>
<PAGE>
EXHIBIT 4.5
WAIVER AND AMENDMENT dated as of March 29, 1999 (this
"Amendment"), to each of the Credit Agreement dated as of
November 23, 1998 (the "Credit Agreement"), among ALLIANT
TECHSYSTEMS INC. (the "Borrower"), the Lenders party thereto and
THE CHASE MANHATTAN BANK, as administrative agent, and the
Amended and Restated Credit Agreement dated as of November 23,
1998 (the "Continuing Credit Agreement", and together with the
Credit Agreement, the "Credit Agreements"), among ALLIANT
TECHSYSTEMS INC., the Lenders party thereto and THE CHASE
MANHATTAN BANK, as administrative agent.
The Borrower has by its Memorandum for Lenders dated March 23, 1999 (the
"Memorandum") requested that certain provisions of the Credit Agreements be
waived or amended as set forth herein and the Lenders are willing so to waive
and amend the Credit Agreements on the terms and subject to the conditions set
forth herein. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Credit Agreements or the Memorandum, as
applicable.
Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Waivers and Amendments. (a) Notwithstanding any provision of
the Credit Agreements or the Security Documents to the contrary, no Loan Party
shall be required to pledge any Aerospace Note held by it under any Security
Document.
(b) The definition of "Consolidated Interest Charges" set forth in Section
1.01 is hereby amended by inserting at the end thereof the following phrase:
", but excluding interest charges on (i) intercompany
Indebtedness between Wholly-Owned Consolidated Subsidiaries of
the Borrower that are Subsidiary Loan Parties or between the
Borrower and a Wholly-Owned Consolidated Subsidiary of the
Borrower that is a Subsidiary Loan Party and (ii) the Aerospace
Notes described in the Borrower's Memorandum for Lenders dated
March 23, 1999"
(c) Section 5.04 of each Credit Agreement is hereby amended by inserting
at the end thereof the following sentence:
"Notwithstanding anything to the contrary in this Agreement, (a)
Alliant Assurance Ltd. will not conduct any business other than
providing insurance or self-insurance for the businesses of the
Borrower and the Subsidiary Loan Parties and (b) any cash held at
any time by Alliant Assurance Ltd. that is in excess of its
projected 45 day cash requirements will be lent to the Borrower
under an intercompany note pledged under the Pledge Agreement or
will be dividended to the Borrower."
(d) Section 6.01 of each Credit Agreement is hereby waived to the extent
required to permit Alliant Assurance Ltd. to be the holder of Aerospace Notes.
<PAGE>
(e) Section 6.04(a) of each Credit Agreement is hereby waived to the
extent required to permit the Investments in Alliant Assurance
described in the Memorandum, including for purposes of Section
6.03(b)(vii) of each Credit Agreement.
(f) The definition of "Obligations" set forth in section 1.01 of each
Credit Agreement is hereby replaced in its entirety by the following:
"Obligations" means the "Secured Obligations", as defined in the
Security Agreement.
SECTION 2. Conditions to Effectiveness. This Waiver and Amendment shall
become effective on the date (the "Effective Date") that the Administrative
Agent shall have received counterparts of this Waiver and Amendment that, when
taken together, bear the signatures of the Borrower and the Required Lenders
under each Credit Agreement.
SECTION 3. Effect of Waiver and Amendment. Except as expressly set forth
herein, this Waiver and Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Lenders, the Administrative Agent or the Borrower under either Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in either Credit Agreement or any other Loan Document, all
of which are ratified and affirmed in all respects and shall continue in full
force and effect. Nothing herein shall be deemed to entitle the Borrower to a
consent to, or a waiver, amendment, modification or other change of, any of the
terms, conditions, obligations, covenants or agreements contained in either
Credit Agreement or any other Loan Document in similar or different
circumstances. This Waiver and Amendment shall apply and be effective only with
respect to the provisions of the Credit Agreements and the Security Documents
specifically referred to herein. This Waiver and Amendment shall constitute a
"Loan Document" under each Credit Agreement.
SECTION 4. Counterparts. This Waiver and Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Waiver and
Amendment by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.
SECTION 5. Applicable Law. THIS WAIVER AND AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Headings. The headings of this Waiver and Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first above written.
ALLIANT TECHSYSTEMS INC.
by
______________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by
____________________________
Name:
Title:
LENDER: ______________________________
by
____________________________
Name:
Title:
<PAGE>
EXHIBIT 10.20.2
CONSULTING AGREEMENT AND GENERAL RELEASE
----------------------------------------
This Consulting Agreement and General Release ("Agreement" or "Consulting
Agreement"), is made by and between Richard Schwartz ("you"), a resident of the
state of Minnesota, and Alliant Techsystems Inc. ("Alliant"), a Delaware
corporation with its principal place of business in Hopkins, Minnesota. The
effective date of this Agreement is September 1, 1998. You and Alliant have
agreed that your employment has concluded as provided in this Agreement and, in
connection with such termination of employment, Alliant has agreed to provide
you with certain payments and benefits to which you would not be entitled absent
your execution of this Agreement. Further, you and Alliant desire to settle any
and all disputes related directly or indirectly to your employment by Alliant
and/or your termination from employment, in accordance with the terms and
conditions set forth in this Agreement. Finally, you and Alliant have agreed to
a consulting arrangement whereby you will assist Alliant when reasonably called
upon by Alliant's Chief Executive Officer, as described in Paragraph 5 below.
Therefore, in consideration of the mutual covenants and agreements set forth in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, you and Alliant agree as follows:
1. Termination of Employment. Effective September 1, 1998, you elected to
-------------------------
retire and your employment with Alliant terminated. Except as otherwise
provided in this Agreement or as set forth in the applicable employee benefit
plan document, all privileges of such employment ended as of the close of
business on that date.
2. Resignation as Officer/Director. Effective as of the close of business
-------------------------------
September 1, 1998, you voluntarily resigned as Chief Executive Officer of
Alliant. You have also resigned as a Director and Chairman of the Board of the
Alliant Board of Directors effective January 1, 1999.
3. Payment and Benefits. (a) In connection with your retirement, Alliant
--------------------
will provide you the following payments and benefits;
(i) Supplemental Employee Retirement Plan. Pursuant to the terms of
--------------------------------------
the Employment Agreement between you and Alliant dated October 27, 1994, Alliant
paid you a supplemental employee retirement plan benefit of Three Hundred
Thirteen Thousand Eight Hundred Ten dollars and forty three cents ($313,810.43
i.e. $300,000.00 plus interest at a rate of 5.65% per annum from January 9, 1998
to October 27, 1998). This amount is not considered "Earnings" or "Recognized
Compensation" for purposes of Alliant's qualified and non-qualified employee
benefit plans.
(ii) MIP. You will be eligible to receive a pro rata portion (5/12)
---
of your Management Incentive Plan (MIP) payment for Fiscal Year 1999. Such
payment will be based on the general performance criteria already established
prior to the beginning of such Fiscal Year and corporate results as determined
by the Personnel and Compensation Committee of Alliant's Board of Directors.
Any determinations made by the Personnel and Compensation Committee regarding
achievement of performance criteria, whether by the Company as a whole or by
you, payout percentages, adjustments for extraordinary or other events or other
reasons shall in all cases be in its sole discretion, except where modified by
the Board of Directors, shall be final and binding upon you and you hereby waive
any claim or opportunity to dispute such determination. This amount will be no
less than an amount based on the overall performance of Alliant as used to
calculate the MIP Incentive Fund for other corporate participants applied to
<PAGE>
your prorated on-plan amount, and paid in a single lump sum payment in cash at
the same time as all other MIP participants receive payment. This amount will
be considered "Earnings" or "Recognized Compensation" for purposes of Alliant's
qualified or non-qualified employee benefit plans. You will not be a participant
in the Alliant Management Incentive Plan for the fiscal year beginning April 1,
1999 or thereafter.
(iii) Stock Options. The Two Hundred Fifteen Thousand (215,000) stock
-------------
options exercisable as of September 1, 1998 will remain exercisable for a period
of three (3) years from your retirement date, on terms existing at time of
issue, as set forth in Paragraph 1.
(iv) Executive Life Insurance. You are the owner of a One Million
-------------------------
Five Hundred Thousand and No/100 dollar ($1,500,000.00) last-to-die universal
life insurance contract through the Travelers, including the cash surrender
value thereon. Alliant has reimbursed you for the premiums on such policy for
the past 4 years. Alliant will discontinue reimbursement of the premiums for the
last two years of the contract, as of your retirement date as set forth in
Paragraph 1.
(v) Executive Perquisites Account and Financial Counseling. Your
------------------------------------------------------
participation in the Executive Perquisites Account plan terminated effective as
of the close of business on September 1, 1998. There is no remaining balance
for financial counseling services.
(vi) Accrued but Unused Vacation. You have been paid your accrued and
---------------------------
unused vacation balance in the amount of $73,404.47.
(vii) Employee Benefit Plans. Your rights to benefits under all other
----------------------
Alliant employee benefit plans will be governed by the terms of such plans.
Medical and life insurance coverage for you and your spouse continued at active
rates through December 31, 1998. Thereafter, you were offered COBRA
continuation of these benefits on the same basis as all other terminated
participants. The current premium for employee plus one medical coverage is
$222.00 per month and for dental coverage is $51.00 per month.
You are not vested in the Alliant Techsystems Inc. Retirement Plan,
therefore any amounts you have accrued to date in these plans were forfeited as
of your retirement date as set forth in Paragraph 1. Further, because you did
not complete at least 5 full years of credited service as of your retirement
date you will not be offered retiree medical coverage for you or your family.
You were, however, automatically 100% vested in the Alliant Techsystems Inc.
401(k) Plan as of your first day of participation, therefore you have the right
to take a distribution of your account in that plan at your convenience. You
acknowledge that you have been provided Summary Plan Descriptions (SPD) for each
of these plans and have been advised of your right to a copy of each of the
underlying plan documents.
(b) Except as provided above, you acknowledge that you have received all
other compensation and benefits due and owing to you from Alliant and that you
have no further claim to any compensation or employee benefits from Alliant
4. Your Death. Alliant agrees that the compensation and benefits described in
-----------
Paragraphs 3(a)(i), (ii), (iii), (v), and (vii) above will be paid or provided
to, or exercised by, your estate in the event of your death.
5. Consulting Agreement. For a term of four (4) years beginning September 1,
--------------------
1998, and ending August 31, 2002, Alliant has agreed to hire you as an
independent contractor. As an independent contractor, you will report to
Alliant's Chief Executive Officer. It is anticipated that
<PAGE>
you will be available to Alliant approximately 50 hours per calendar quarter
through August 31, 2000, for consultation, and approximately 20 hours per
calendar quarter from September 1, 2000, through August 31, 2002. In
consideration for such consulting services and for your waiver of all
employment-related claims as set forth in Paragraph 12 below, Alliant will pay
to you Two Hundred Fifty Thousand and No/100 dollars ($250,000.00) per year. The
first year's consulting fee was paid to you in advance and in a lump sum. Future
amounts shall be payable in advance quarterly installments on the first day of
each quarter in the amount of Sixty Two Thousand Five Hundred and No/100 dollars
($62,500.00), beginning on the first Day of September 1999.
As an independent contractor you are not eligible to participate in any
Alliant employee benefit plans. No amounts received from Alliant during the term
of this Consulting Agreement shall be considered "Earnings" or "Recognized
Compensation" for purposes of Alliant's qualified and non-qualified employee
benefit plans. With the exception of reasonable expenses, during the term of
this Consulting Agreement you agree to waive receipt of all non-employee
Chairman of the Board and Director fees, stock awards and all other compensation
otherwise available to nonemployee directors of Alliant.
In the event of your death prior to the expiration of the term of this
Consulting Agreement, Alliant shall pay to your spouse, if she survives you, or
to your estate if your spouse does not survive you, the remaining portion of any
payments due under this Agreement.
6. Attorneys' Fees and Expenses. You agree that you are responsible for
----------------------------
payment of all of your own attorneys' fees and expenses incurred in conjunction
with the review of this Agreement and resolution of any and all purported claims
against Alliant.
7. Non-Solicitation. In consideration for the payment you will receive under
----------------
this Agreement, you agree that you will not, for a period of four (4) years,
from September 1, 1998 induce or attempt to induce any employee of Alliant to
leave his or her employment with Alliant or to become employed by any business
enterprises with which you may then be employed, associated or connected.
8. Confidential Information. You acknowledge that in the course of your
------------------------
employment with Alliant or any of its predecessor companies, you have had access
to confidential information and trade secrets relating to business affairs of
Alliant and/or its predecessor or related companies and entities. You agree
that you are obligated to not, at any time, disclose or otherwise make available
to any person, company or other party confidential information or trade secrets.
This Agreement shall not limit any obligations you have under any employee
confidentiality agreement or applicable federal or state law.
9. Restrictions Against Competition - Without prior written consent of the
--------------------------------
Board of Directors of Alliant and in consideration for the amounts paid to you
during the term of this Consulting Agreement, you agree that you will not,
directly or indirectly, own, manage, operate, control, be employed by,
participate in or be connected in any manner with the ownership, management,
operation or control of any business similar to the type of business being
conducted by Alliant during the term of this Consulting Agreement and/or which
may be in competition with Alliant during the term of this Consulting Agreement.
This Paragraph 9 does not apply to immaterial ownership interests such as
ownership in a mutual fund that has within its portfolio stock of a competitor
of Alliant.
10. Non-disparagement. You agree not to make any disparaging or negative
------------------
statements about Alliant, its products or services or its current or former
directors, officers, managers, or employees. Alliant's directors and
officers will not make any disparaging
<PAGE>
or negative statements about you. This Paragraph 10 does not apply to any
statements you make against current or former directors, officers,
managers, or employees that are made in conjunction with or directly
related to the litigation referenced in the last paragraph of Paragraph 11
of this Agreement. Further this Paragraph 10 does not preclude and current
or former directors, officers, managers, or employees from making
statements against you that are in conjunction with or directly related to
the above referenced litigation.
Statements made in the course of any litigation or legal proceeding,
whether disparaging or negative, are excluded from coverage of this Paragraph
11. Release. As an inducement to Alliant to enter into this Agreement, you
-------
fully release and discharge Alliant, its directors, officers, managers,
employees, agents, insurers, representatives, counsel, shareholders,
predecessors, successors, and other affiliates from all liability for damages or
claims of any kind arising out of any action, inaction, decision, or event
occurring through the date of your execution of this Agreement. You understand
that you are giving up any and all manner of actions or causes of actions,
suits, debts, claims, complaints, or demands of any kind whatsoever, whether
direct or indirect, fixed or contingent, known or unknown, in law or in equity,
that you have or may have for claims arising under or based on the Minnesota
Human Rights Act, Minn. Stat. section 363.01, et. seq.; Title VII of the Civil
Rights Act, 42 U.S.C. section 2000e et seq.; the Age Discrimination in
Employment Act, 29 U.S.C. section 621 et seq.; the Americans with Disabilities
Act, 42 U.S.C. section 12101, et seq.; the Older Worker's Benefit Protection
Act, 1990 Amendment to the Age Discrimination in Employment Act; the Fair Labor
Standards Act, 29 U.S.C. section 201 et seq.; or any other federal, state or
local law, including any attorneys' fees that could be awarded in connection
with these or any other claims. You further understand that this release
extends to, but is not limited to, all claims that you have or may have in
contract or tort theories, for wrongful discharge, wrongful discharge in
violation of public policy, breach of contract, interference with contractual
relations, promissory estoppel, breach of an express or implied promise, breach
of the implied covenant of good faith and fair dealing, breach of employee
handbooks, manuals or other policies, assault, battery, intentional or negligent
misrepresentation, fraud, retaliation, intentional or negligent infliction of
emotional distress, defamation, breach of fiduciary duty, negligent hiring,
retention or supervision and/or any other claim otherwise based on any theory,
whether developed or undeveloped, arising from or related to your employment or
the termination of your employment with Alliant, or any other fact or matter
occurring prior to your execution of this Agreement.
You further agree that you will not institute any claim for damages, by
charge or otherwise, nor otherwise authorize any other party, governmental or
otherwise, to institute any claim for damages via administrative or legal
proceeding against Alliant, its officers, executives, agents, assigns, insurers,
representatives, counsel, administrators, successors, predecessors,
shareholders, employees and /or directors. You also waive the right to money
damages or other legal or equitable relief awarded by any governmental agency
related to any such claim.
You further agree that you (or anyone on your behalf) will not file a
charge with the Equal Employment Opportunity Commission or similar state agency,
and that you waive your right to file a court action or to seek individual
remedies or damages in any Equal Employment Opportunity Commission or similar
state agency-filed court action, and your release of these rights shall apply
with full force and effect to any proceedings arising from or relating to such a
charge.
Excluded from this Paragraph 11 is any action(s), claim(s), cross-claim(s),
complaint(s) or subsequent litigation(s) or any involvement related, in any way,
to the case of Amtower et.
<PAGE>
al. versus Hercules Incorporated C.A. No. 97C-09-018 (WTQ) presently filed in
the Superior Court of the State of Delaware.
Excluded from this Paragraph 11 are any rights you have under the Employee
Retirement Income Security Act, 29 U.S.C. 1001 et. seq., and any rights you have
under any applicable Workers Compensation Law.
12. Consideration Period. You have been informed that the terms of this
---------------------
Agreement shall be open for consideration by you for a period of at least forty-
five (45) calendar days after the date you receive this Consulting Agreement and
General Release, during which time you may consider whether or not to accept
this Agreement and seek counsel to advise you regarding the same. You agree
that changes to this Agreement, whether material or immaterial, will not restart
this acceptance period. You further understand that you are not required to take
the entire forty-five (45) day period to decide whether you wish to execute the
Agreement and that you may do so on an accelerated basis without prejudice to
your own or Alliant's rights under this Agreement.
13. Right to Rescind and/or Revoke. You understand that you have the right to
-------------------------------
revoke or rescind this Agreement for any reason by informing Alliant of your
intent to revoke or rescind this Agreement within Thirty (30) calendar days
after you sign it. You understand that this Agreement will not become
enforceable unless and until you execute the Agreement and the applicable
revocation/rescission period has expired. Any such revocation or rescission
must be in writing and hand-delivered to Bob Gustafson or, if sent by mail,
postmarked within the applicable time period, sent by certified mail, return
receipt requested, and addressed as follows:
Mr. Robert E. Gustafson
Vice President, Human Resources
Alliant Techsystems Inc.
MN11-2042
600 Second Street NE
Hopkins, MN 55343-8384
In the event that you opt to rescind or revoke the Agreement, neither you
nor Alliant will have any rights or obligations whatsoever under this Agreement.
Any rescission or revocation, however, does not affect your termination of
employment from Alliant effective as of the date set forth in Paragraph1.
14. Enforcement Date. This Agreement does not become enforceable until Thirty
----------------
One (31) calendar days after you sign it and return it to Bob Gustafson and then
only if it has not been rescinded or revoked by you under the procedures of
Paragraph 13.
15. No Admission. This Agreement is not an admission by Alliant that any of
------------
its actions or inactions is unjustified, unwarranted, discriminatory, wrongful
or in violation of any Federal, state or local law and this Agreement shall not
be interpreted as such. Alliant disclaims any liability to you or any other
person on the part of itself, its directors, its officers, its employees, its
representatives, and its agents. You agree and acknowledge that this Agreement
shall not be interpreted to render either party to be a prevailing party for any
purpose including, but not limited to, an award of attorney's fees under any
statute or otherwise.
16. (A) Effect of Breach. In the event that you breach any material provision
----------------
of this Agreement, Alliant will have no further obligations under Paragraph 5 of
this Agreement and
<PAGE>
you agree that Alliant is entitled to repayment of all monies paid to you under
such Sections together with reasonable attorneys' fees and costs incurred to
collect the money and to seek injunctive relief.
Further, in the event that Alliant breaches any material provision of this
Agreement, you will have no further obligations under this Agreement. Alliant
agrees that if it breaches any provision of this Agreement you will be entitled
to the remainder of payments due under the Consulting Agreement (ending August
31, 2002) together with reasonable attorneys fees and costs incurred to
establish the breach and collect unpaid fees under the Consulting Agreement.
(B) Each party agrees to give the other party ten (10) days written notice
of any alleged breach in order to permit the party accused of the breach time to
correct or reverse the breach if correction or reversal is possible. The ten
(10) day period will commence on the receipt of the written notice by the
addressee. The correction or reversal must be completed within the ten (10) day
period. If correction or reversal does not occur, as set forth above, the party
asserting the breach may proceed as set forth in (A) above.
17. No Assignment. This Agreement is personal to you and may not be assigned
-------------
by you .
18. Enforceable Contract. The laws of the State of Minnesota shall govern this
---------------------
Agreement. If any part of this Agreement is construed to be in violation of any
law, such part shall be modified to achieve the objective of the parties to the
fullest extent permitted and the balance of this Agreement shall remain in full
force and effect.
19. Entire Agreement. You agree that this Agreement contains the entire
-----------------
agreement between you and Alliant with respect to the subject matter hereof and
there are no promises, undertakings or understandings outside of this Agreement,
except with respect to your continued requirement not to reveal confidential,
secret or top secret information, patent, trademark or similar matters and as
specifically set forth herein. This Agreement supersedes all prior or
contemporaneous discussions, negotiations and agreements, whether written or
oral. Your right to payments or employee benefits from Alliant are specified
exclusively and completely in this Agreement. Any modification or addition to
this Agreement must be in writing, signed by an officer of Alliant and you.
20. Change of Control. This Agreement shall be binding upon both parties
-----------------
irrespective of a Change of Control of Alliant Techsystems Inc. as defined in
the Amended and Restated Alliant Techsystems Inc. 1990 Equity Incentive Plan.
21. Severability and Survival - All agreements and covenants herein are
-------------------------
severable and, if any term, phrase, agreement or covenant is held invalid by any
competent court, this Agreement shall be interpreted as if such invalid term,
phrase, agreement or covenant were not contained herein.
22. ACKNOWLEDGEMENT. You affirm that you have read this Agreement, have had
---------------
adequate time to consider the terms of the Agreement and have been advised that
you may consult with an attorney prior to signing this Agreement. The
provisions of this Agreement are understandable to you and to the extent that
you have not understood any section, paragraph, sentence, clause or term, you
have taken steps to ensure that it was explained to you. You have entered into
this Agreement freely and voluntarily.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement by their signatures
below.
Dated: April 20, 1999 /S/ Richard Schwartz
--------------------
Richard Schwartz
Dated: April 26, 1999 Alliant Techsystems Inc.
By: /S/ Daryl L. Zimmer
-----------------------
Its: Vice President and General Counsel
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF
ALLIANT TECHSYSTEMS INC.
Jurisdiction of
Name of Subsidiary Organization
------------------ ------------
Alliant Holdings LLC Delaware
- - Alliant Conventional Munitions LLC Delaware
- Alliant Ammunition and Powder Company LLC Delaware
- New River Energetics, Inc. Delaware
- Alliant Missile Products Company LLC Delaware
- Alliant Kilgore Flares Company LLC Delaware
- - Alliant Defense Systems LLC Delaware
- Alliant Defense Electronics Systems, Inc. Delaware
- Alliant Integrated Defense Company LLC Delaware
- Alliant Power Sources Company LLC Delaware
- Alliant Precision Fuze Company LLC Delaware
- - Alliant Propulsion and Composites LLC Delaware
- Alliant Aerospace Company Minnesota
- Alliant Southern Composites Company LLC Delaware
Alliant International Holdings Inc. Minnesota
- - Alliant Assurance Ltd. Vermont
The Registrant has other subsidiaries which, if considered in the aggregate as a
single subsidiary, would not constitute a significant subsidiary as of March 31,
1999.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
Alliant Techsystems Inc.:
We hereby consent to the incorporation by reference in Registration Statements
No. 33-36981, No. 33-48851, No. 33-91138, No. 33-91196, No. 333-33305, No. 333-
38775, and No. 333-60665 of our reports dated May 10, 1998, appearing in and
incorporated by reference in this Annual Report on Form 10-K of Alliant
Techsystems Inc. for the year ended March 31, 1999.
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
June 25, 1999
<PAGE>
EXHIBIT 24
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/Gilbert F. Decker
--------------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/T. L. Gossage
----------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/Joel M. Greenblatt
---------------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/Jonathan Guss
----------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/David E. Jeremiah
--------------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/G. N. Kelley
---------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/Joseph F. Mazzella
---------------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/Daniel L. Nir
----------------
<PAGE>
ALLIANT TECHSYSTEMS INC.
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of ALLIANT TECHSYSTEMS INC., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Paul David Miller, Scott S. Meyers,
Daryl L. Zimmer and Charles H. Gauck, and each or any one of them, the
undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or officer
of the Company to the Company's Form 10-K Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year
ended March 31, 1999, or other applicable form, including any and all exhibits,
schedules, supplements, amendments and supporting documents thereto, to be filed
by the Company with the Securities and Exchange Commission, Washington, D.C., as
required in connection with the Company's registration under the Securities
Exchange Act of 1934, as amended, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand as
of the 10th day of May, 1999.
/S/Michael T. Smith
-------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-K
FILING FOR YEAR ENDED 3/31/99 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> MAR-31-1999 MAR-31-1998
<PERIOD-START> APR-01-1998 APR-01-1997
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 21,078 68,960
<SECURITIES> 408 388
<RECEIVABLES> 233,499 209,915
<ALLOWANCES> 1,056 177
<INVENTORY> 44,030 49,072
<CURRENT-ASSETS> 343,108 373,030
<PP&E> 547,114 521,550
<DEPRECIATION> 211,363 188,012
<TOTAL-ASSETS> 894,318 908,309
<CURRENT-LIABILITIES> 286,488 277,402
<BONDS> 305,993 180,810
0 44,979
0 0
<COMMON> 139 139
<OTHER-SE> 118,584 220,636
<TOTAL-LIABILITY-AND-EQUITY> 894,318 908,309
<SALES> 1,090,438 1,075,506
<TOTAL-REVENUES> 1,090,438 1,075,506
<CGS> 893,328 881,237
<TOTAL-COSTS> 893,328 881,237
<OTHER-EXPENSES> 8,874 12,447
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 24,731 27,621
<INCOME-PRETAX> 79,547 67,958
<INCOME-TAX> 11,932 0
<INCOME-CONTINUING> 67,615 67,958
<DISCONTINUED> 0 225
<EXTRAORDINARY> (16,802) 0
<CHANGES> 0 0
<NET-INCOME> 50,813 68,183
<EPS-BASIC> 4.26 5.23
<EPS-DILUTED> 4.15 5.10
</TABLE>
