-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GB+PpVrn6/2OuqBOx4ipYlW0keGhNdOzz/Tr2TWXznTiAfS9Kl7Yzlv5kIWp2EOC Defa7M9rmc8jiSGZLdMz2g== 0000950137-05-015316.txt : 20051227 0000950137-05-015316.hdr.sgml : 20051226 20051227170451 ACCESSION NUMBER: 0000950137-05-015316 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051227 DATE AS OF CHANGE: 20051227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEENAH FOUNDRY CO CENTRAL INDEX KEY: 0001040599 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 391580331 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-28751-03 FILM NUMBER: 051287419 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVE STREET 2: PO BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 9207257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVE STREET 2: PO BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 10-K 1 c00807e10vk.txt ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005. [ ] 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 333-28751 NEENAH FOUNDRY COMPANY (Exact name of registrant as specified in its charter) WISCONSIN 39-1580331 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization)
2121 BROOKS AVENUE, P.O. BOX 729, NEENAH, WISCONSIN 54957 (Address of principal executive offices) (Zip Code)
(920) 725-7000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: NONE 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 [ ] 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] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. The aggregate market value of the common equity of Neenah Foundry Company held by non-affiliates as of March 31, 2005 was zero. All of the common stock of Neenah Foundry Company is held by NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ] 1 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. On December 23, 2005, Neenah Foundry Company had 1,000 shares of Common Stock, par value $100 per share, outstanding, all of which were owned by NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company. Documents Incorporated by Reference None. 2 PART I Item 1. BUSINESS Unless otherwise stated in this document or unless the context otherwise requires, references herein to the "Company", "we", "our", "ours", and "us", include Neenah Foundry Company ("Neenah") and its wholly owned subsidiaries, namely- Deeter Foundry, Inc. ("Deeter"), Mercer Forge Corporation ("Mercer"), Dalton Corporation ("Dalton"), Advanced Cast Products, Inc. ("Advanced Cast Products"), Gregg Industries, Inc. ("Gregg"), Neenah Transport, Inc. ("Transport") and Cast Alloys, Inc. ("Cast Alloys"), which is inactive, and their respective subsidiaries. Neenah, a Wisconsin corporation, is a wholly owned subsidiary of NFC Castings, Inc. ("NFC"), a Delaware corporation, which is a wholly owned subsidiary of ACP Holding Company ("ACP"), a Delaware corporation. Overview The Company manufactures and markets a wide range of iron castings and forgings for the heavy municipal market and selected segments of the industrial markets. Neenah began business in 1872 and has built a strong reputation for producing quality iron castings. Neenah is one of the largest manufacturers of heavy municipal iron castings in the United States. Neenah's broad range of heavy municipal iron castings includes manhole covers and frames, storm sewer frames and grates, heavy duty airport castings, specialized trench drain castings, specialty flood control castings and ornamental tree grates. Neenah sells these municipal castings throughout the United States to state and local government entities, utility companies, precast concrete manhole structure producers and contractors for both new construction and infrastructure replacement. In addition, Neenah is also a leading manufacturer of a wide range of complex industrial castings, including castings for the transportation industry, a broad range of castings for the farm equipment industry, and specific components for compressors used in heating, ventilation and air conditioning (HVAC) systems. Background On April 30, 1997, pursuant to an Agreement and Plan of Reorganization with NC Merger Company and NFC, Neenah Corporation (the predecessor company) was acquired by NFC, a holding company and a wholly owned subsidiary of ACP. Prior to July 1, 1997, Neenah Foundry Company was one of three wholly owned subsidiaries of Neenah Corporation, a holding company with no significant assets or operations other than its holdings in the common stock of its three wholly owned subsidiaries. The other two wholly owned subsidiaries were Neenah Transport, Inc. and Hartley Controls Corporation, an entity that was later sold. On July 1, 1997, Neenah Foundry Company merged with and into Neenah Corporation and the surviving company changed its name to Neenah Foundry Company. On March 30, 1998, Neenah acquired all the capital stock of Deeter for $24.3 million. Since 1945, Deeter has been producing gray iron castings for the heavy municipal market. The municipal casting product line of Deeter includes manhole frames and covers, storm sewer inlet frames, grates and curbs, trench grating and tree grates. Deeter also produces a wide variety of special application construction castings. These products are utilized in waste treatment plants, airports, telephone and electrical construction projects. On April 3, 1998, Neenah acquired all the capital stock of Mercer for $47.0 million in cash. Founded in 1954, Mercer produces complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer is also a producer of microalloy forgings. On September 8, 1998, Neenah acquired all the capital stock of Dalton for $102.0 million in cash. Dalton manufactures and sells gray iron castings for refrigeration systems, air conditioners, heavy equipment, engines, gear boxes, stationary transmissions, heavy duty truck transmissions and other automotive parts. 3 On September 8, 1998, the capital stock of Advanced Cast Products, an entity held by ACP prior to the time ACP acquired its interest in NFC, was contributed to Neenah by ACP. Advanced Cast Products is an independent manufacturer of ductile iron castings. Advanced Cast Products' production capabilities also include a range of finishing operations including austempering and machining. Advanced Cast Products sells its products primarily to companies in the heavy truck, construction equipment, railroad, mining and automotive industries. On December 31, 1998, Neenah purchased Cast Alloys, a manufacturer of investment-cast titanium and stainless steel golf clubheads, for $40.1 million in cash. Neenah discontinued the operations of Cast Alloys in January 2002. On November 30, 1999, Neenah purchased Gregg, a manufacturer of gray and ductile iron castings, for $22.9 million in cash. On October 2, 2000, Neenah sold all of the issued and outstanding shares of common stock of Hartley Controls Corporation. On August 8, 2002, Neenah sold substantially all of the assets of Peerless Corporation. On December 27, 2002, Neenah sold substantially all of the assets of Belcher Corporation. Bankruptcy Proceedings Beginning in 2000, several trends converged to create an extremely difficult operating environment for the Company. First, there were dramatic cyclical declines in some of Neenah's most important markets including trucks, railroad, construction and agriculture equipment. Second, there was a major inventory adjustment by manufacturers in the residential segment of the HVAC equipment industry, resulting in fewer orders for Dalton's HVAC castings. Third, domestic foundries had been suffering from underutilized capacity, significantly increased foreign competition, continued price reduction pressure from customers and other competitors, and increased costs associated with heightened safety and environmental regulations. These factors caused and to some extent continue to cause a substantial number of foundries to cease operations or file for bankruptcy protection. Beginning in May 2000, the Company took aggressive steps to offset the impact of the decline in sales and earnings and improve cash flow in the difficult market environment: William Barrett was appointed as the new chief executive officer of NFC; Hartley Controls was sold in September 2000 for $5.0 million in total proceeds; other excess assets were sold for $5.3 million in late 2001; the operations of Cast Alloys, Inc. were discontinued in January 2002; substantially all of the assets of Advanced Cast Product's subsidiary Peerless Corporation were sold for $0.3 million in August 2002; and the assets of Belcher Corporation, a subsidiary of Advanced Cast Products, were sold for $4.0 million in December 2002. Furthermore, management also implemented a significant reduction in the number of employees, a significant reduction in capital expenditures and selected price increases. In January 2003, the Company engaged Houlihan Lokey Howard & Zukin Capital to assist in the formulation and evaluation of various options for a restructuring, reorganization, or other strategic alternatives. Despite these steps, the credit rating agencies began to downgrade our outstanding debt obligations in early 2000. Our 11 1/8% Notes became highly illiquid and traded infrequently. According to data obtained from Telerate, the price of the notes fell from a trailing 12 month high of $57.50 in June 2002 to a trailing 12 month low of $30.00 in late December 2002. The trailing six month average price as of June 23, 2003 was approximately $38.60. As of May 2003, Neenah was not in compliance with the March 31, 2003 EBITDA covenant of its old credit facility and lacked sufficient liquidity to make the then-due interest payment on the 11 1/8% Notes and maintain the liquidity covenants under the old credit facility. 4 On May 1, 2003, we launched both an exchange offer for the 11 1/8% Notes and the pre-petition solicitation of acceptances of the plan of reorganization in accordance with section 1126(b) of the Bankruptcy Code. The exchange offer, which was to be completed outside of Bankruptcy Court, did not result in the requisite percentage of 11 1/8% Notes tendered and both the exchange offer and the solicitation of acceptances for the May 1, 2003 plan of reorganization were allowed to expire. On July 1, 2003, we launched a pre-petition solicitation of acceptances with respect to an alternative joint plan of reorganization that was ultimately approved. Having received sufficient votes to approve the plan of reorganization, Neenah together with ACP, NFC and all of our wholly-owned domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, as amended, with the United States Bankruptcy Court for the District of Delaware on August 5, 2003. On that same date we submitted to the Bankruptcy Court our Amended Prepackaged Joint Plan of Reorganization, which we refer to as the Plan of Reorganization, and the Disclosure Statement that we used to solicit votes for that plan. At the time of the Chapter 11 bankruptcy filing, we had approximately $157 million of existing senior debt under our old credit facility and $282 million of principal and accrued and unpaid interest under our 11 1/8% Notes. We negotiated the continued use of our own cash collateral with our senior lenders, thereby enabling us to utilize our own cash to conduct business operations during the pendency of the Chapter 11 filing. Pursuant to the Plan of Reorganization, we conducted a rights offering, whereby holders of the 11 1/8% Notes were given the opportunity to provide up to $110 million additional financing through the purchase of up to $119.996 million face amount of 11% Senior Secured Notes (the "Notes") and warrants to acquire up to 34.2 million shares of common stock of ACP. In case holders of the 11 1/8% Notes failed to subscribe for the full $110.0 million, we also obtained standby commitment agreements from MacKay Shields LLC, Exis Differential Holdings Ltd., Citicorp Mezzanine III, L.P., Trust Company of the West and Metropolitan Life Insurance Company (the "Standby Purchasers) whereby these Standby Purchasers collectively agreed to provide up to $110 million of financing for the Plan of Reorganization by participating in the rights offering (to the extent that they were holders of the 11 1/8% Notes) as well as purchasing any and all unsubscribed securities not subscribed for by the other holders of 11 1/8% Notes. Approximately 94% of the holders of the 11 1/8% Notes participated in the rights offering and the Standby Purchasers were, therefore, only required to fund the shortfall of approximately $6.4 million. By order dated September 26, 2003, the Bankruptcy Court confirmed the Plan of Reorganization and the Plan of Reorganization became effective on October 8, 2003. October 8, 2003 is hereinafter referred to as the Effective Date. The Plan of Reorganization allowed us to emerge from bankruptcy with an improved capital structure and, because we had arranged to continue paying our trade debt on a timely basis during the pendency of the Chapter 11 case, at the time of emergence, we had sufficient trade credit to continue operations in the ordinary course of business. The Plan of Reorganization resulted in significant changes to our capital structure. Among other things, the Plan of Reorganization provided for the repayment in full of our old credit facility, the cancellation of $282.0 million in principal amount of 11 1/8% Notes, the cancellation of the PIK Note (originally issued to Citicorp Mezzanine III, L.P. by our indirect parent company, ACP) and the elimination of the interests of the former equity owners of ACP. The cash proceeds necessary to consummate the Plan of Reorganization were provided from the consummation of the New Credit Facility and the issuance of the Notes. The claims and interests of our various creditors were satisfied as follows: - our old credit facility was repaid in cash; - the PIK Note was cancelled and Citicorp Mezzanine III, L.P., the holder of that note, received Notes with a principal amount equal to $13.134 million, warrants to acquire 3.8 million shares of common stock of ACP and cash in the amount of $45,400; 5 - our outstanding 11 1/8% Notes were cancelled and each holder of 11 1/8% Notes received its pro rata share of (i) $30.0 million in cash, (ii) $100.0 million in aggregate principal amount of new 13% Senior Subordinated Notes due 2013 of the Company, (iii) 38 million shares of common stock of ACP and (iv) rights to acquire for $110 million in cash in the aggregate, units for up to $119.996 million face amount of Notes and warrants to acquire up to 34.2 million shares of common stock of ACP; - the following debt and equity instruments were cancelled without further consideration: 12% senior subordinated notes issued by ACP, 12% senior subordinated notes issued by NFC and all equity interests of ACP; and - the following claims and equity interests passed through our Chapter 11 bankruptcy proceedings unimpaired: all tax claims, intercompany debt, other secured debt and general unsecured debt and the equity interests of ACP in NFC, equity interests of NFC in Neenah and equity interests of Neenah in its direct and indirect subsidiaries. Exploration of Potential Sale Transaction On July 29, 2005, Neenah and ACP announced that Citigroup Global Markets Inc. had been engaged to assist in exploring the potential sale or merger of Neenah or ACP or a significant portion of their assets or capital stock. On November 29, 2005, Neenah announced that its board of directors, which is also the board of directors of ACP, had unanimously voted to end the sale or merger process and turn the Company's focus to successfully implementing the Company's business plan. The Company's business plan recognizes a consolidating market and is intended to position the Company for growth by expanding its revenues and further penetrating existing markets that are already being served. It also involves exploring other strategic alternatives that would have the effect of reducing costs and expanding capacity in selected markets. BUSINESS SEGMENTS - OVERVIEW We have two reportable segments, Castings and Forgings. The Castings segment manufactures and sells iron castings for the municipal and industrial markets, while the Forgings segment manufactures and sells forged components for the industrial market. The segments were determined based upon the production process utilized and the type of product manufactured. Financial information about our reportable segments and geographic areas is contained in Note 10 in the Notes to Consolidated Financial Statements. CASTINGS SEGMENT We are a leading producer of iron castings for use in heavy municipal and industrial applications. This segment sells directly to tier-one suppliers, as well as to other industrial end users. Products, Customers and Markets The castings segment provides a variety of products to both the heavy municipal and industrial markets. Sales to the heavy municipal market are comprised of storm and sanitary sewer castings, manhole covers and frames and storm sewer frames and grates. Sales also include heavy airport castings, specialized trench drain castings, specialty flood control castings and ornamental tree grates. Customers for these products include state and local government entities, utility companies, precast concrete structure producers and contractors. Sales to the industrial market are comprised of differential carriers, transmission, gear and axle housings, yokes, planting and harvesting equipment parts and compressor components. Markets for these products include medium and heavy-duty truck, farm equipment and HVAC manufacturers. 6 Heavy Municipal Our broad heavy municipal product line consists of two general categories of castings, "standard" and "specialty" castings. Standard castings principally consist of storm and sanitary sewer castings that are consistent with pre-existing dimensional and strength specifications established by local authorities. Standard castings are generally higher volume items that are routinely used in new construction and infrastructure replacement. Specialty castings are generally lower volume products which include heavy-duty airport castings, trench drain castings, flood control castings, special manhole and inlet castings and ornamental tree grates. These specialty items are frequently selected and/or specified from our municipal product catalog and tree grate catalog, which together encompass over 4,400 standard and specialty patterns. For many of these specialty products, we believe that we are the only manufacturer with existing patterns to produce such a particular casting, although a competing manufacturer could elect to make the investment in patterns or equipment necessary to produce a similar casting. We hold a number of patents and trademarks related to our heavy municipal product line. We sell our municipal castings to state and local government entities, utility companies, pre-cast concrete manhole structure producers and contractors for both new construction and infrastructure replacement. Our active municipal customers generally make purchase decisions based on a number of criteria, including acceptability of the product per local specification, quality, service, price and the customer's relationship with the foundry. During the 70 years that we have manufactured municipal products, we have emphasized servicing specific marketing needs and believe that we have built a strong reputation for customer service. We believe that we are one of the leaders in U.S. heavy municipal casting production and that we have strong name recognition. We have one of the largest sales and marketing force of any foundry serving the heavy municipal market. Our dedicated sales force works out of regional sales offices to market municipal castings to contractors and state and local governmental entities throughout the United States. We operate a number of regional distribution and sales centers throughout the United States. We believe that this regional approach enhances our knowledge of local specifications and our position in the heavy municipal market. Industrial Industrial castings have increased in complexity and are generally produced in higher numbers than municipal castings. Complexity in the industrial market is determined by the intricacy of a casting's shape, the thinness of its walls and the amount of processing by a customer required before a part is suitable for use. OEMs and their first tier suppliers have been demanding higher complexity parts principally to reduce labor costs in their own production processes by using fewer parts to manufacture the same finished product or assembly and by using parts that require less preparation before being considered a finished product. We primarily sell our industrial castings to a limited number of customers with whom we have established close working relationships. These customers base their purchasing decisions on, among other things, our technical ability, price, service, quality assurance systems, facility capabilities and reputation. Our assistance in product engineering plays an important role in winning bids for industrial castings. For the average industrial casting, 12 to 18 months typically elapse between the design phase and full production. The product life cycle of a typical industrial casting is quite long. Although the patterns for industrial castings are owned by the customer and not the foundry, as is the case with the patterns for municipal castings, industrial patterns are not readily transferable to other foundries without, in most cases, significant additional investment. Foundries, including our company, generally do not design industrial castings. Nevertheless, a close working relationship between the foundry and the customer during a product launch is critical to reduce potential production problems and minimize the customer's risk of incurring lost sales or damage to its reputation due to a delayed launch. Involvement by a foundry early in the design process generally increases the likelihood that the customer will design a casting within the manufacturing capabilities of such foundry and also improves the likelihood that such foundry will be awarded the casting for full production. 7 We estimate that we have historically retained approximately 90% of the castings that we have been awarded throughout the product life cycle, which is typical for the industry. We believe industrial customers will continue to seek out a foundry with a strong reputation for performance that is capable of providing a cost-effective combination of manufacturing technology and quality. Our strategy is to augment our relationships with existing customers by participating in the development and production of more complex industrial castings, while seeking out selected new customers who would value our performance reputation, technical ability and high level of quality and service. We employ a dedicated industrial casting sales force at all of our subsidiary locations, with the exception of Deeter. Our sales force supports ongoing customer relationships, as well as working with customers' engineers and procurement representatives and our engineers, manufacturing management and quality assurance representatives throughout all stages of the production process to ensure that the final product consistently meets or exceeds the specifications of our customers. This team approach, consisting of sales, marketing, manufacturing, engineering and quality assurance efforts is an integral part of our marketing strategy. Manufacturing Process Our foundries manufacture gray and ductile iron and cast it into intricate shapes according to customer metallurgical and dimensional specifications. We continually invest in the improvement of process controls and product performance and believe that these investments and our significant experience in the industry have made us one of the most efficient manufacturers of industrial and heavy municipal casting products. The casting process involves using metal, wood or urethane patterns to make an impression of a desired shape in a mold made primarily of sand. Cores, also made primarily of sand, are used to make the internal cavities and openings in a casting. Once the casting impression is made in the mold, the cores are set into the mold and the mold is closed. Molten metal is then poured into the mold, which fills the mold cavity and takes on the shape of the desired casting. Once the iron has solidified and cooled, the mold sand is separated from the casting and the sand is recycled. The selection of the appropriate casting method, pattern, core-making equipment and sand, and other raw materials depends on the final product and its complexity, specifications and function as well as the intended production volumes. Because the casting process involves many critical variables, such as choice of raw materials, design and production of tooling, iron chemistry and metallurgy and core and molding sand properties, it is important to monitor the process parameters closely to ensure dimensional precision and metallurgical consistency. We continually seek out ways to expand the capabilities of existing technology to improve our manufacturing processes. We also achieve productivity gains by improving upon the individual steps of the casting process such as reducing the amount of time required to make a pattern change or to produce a different casting product. Such time reductions enable us to produce castings in medium volume quantities on high volume, cost-effective molding equipment. Additionally, our extensive effort in real time process controls permits us to produce a consistent, dimensionally accurate casting, which saves time and effort in the final processing stages of production. This dimensional accuracy contributes significantly to our manufacturing efficiency. Continual testing and monitoring of the manufacturing process is important to maintain product quality. We, therefore, have adopted sophisticated quality assurance techniques and policies for our manufacturing operations. During and after the casting process, we perform numerous tests, including tensile, proof-load, radiography, ultrasonic, magnetic particle and chemical analysis. We utilize statistical process controls to measure and control significant process variables and casting dimensions. We document the results of this testing in metallurgical certifications that are sometimes included with each shipment to our industrial customers. We strive to maintain systems that provide for continual improvement of operations and personnel, emphasize defect prevention, safety and reduce variation and waste in all areas. 8 Raw Materials The primary raw materials used to manufacture ductile and gray iron castings are steel scrap, pig iron, metallurgical coke and silica sand. While there are multiple suppliers for each of these commodities, we have generally elected to maintain single-source arrangements with our suppliers for most of these major raw materials except pig iron. Due to long standing relationships with each of our suppliers, we believe that we will continue to be able to secure the proper amount and type of raw materials at competitive prices. Although the prices of the raw materials used vary, fluctuations in the price of scrap metal are the most significant to us. We have arrangements with our industrial customers that enable us to adjust industrial casting prices to reflect scrap price fluctuations. In periods of rapidly rising or falling scrap prices, these adjustments will lag the current scrap price because they are generally based on average market prices for prior periods. Such prior periods vary by customer, but are generally no longer than three months. Castings are sometimes sold to the heavy municipal market on a bid basis and after a bid is won the price for the municipal casting generally cannot be adjusted for increases in the prices of raw materials. Rapidly fluctuating scrap prices may, however, have an adverse or positive effect on our business, financial condition and results of operations. Seasonality We have historically experienced moderate cyclicality in the heavy municipal market as sales of municipal products are influenced by, among other things, public spending. There is generally not a large backlog of business in the municipal market due to the nature of the market. In the industrial market, we experience cyclicality in sales resulting from fluctuations in our markets, including the medium and heavy-duty truck and the farm equipment markets, which are subject to general economic trends. We experience seasonality in our municipal business where sales tend to be higher during the construction season, which occurs during the warmer months, generally the third and fourth quarters of our fiscal year. We attempt to maintain level production throughout the year in anticipation of such seasonality and therefore do not experience significant production volume fluctuations. We build inventory in anticipation of the construction season. This inventory build-up has a negative impact on working capital and increases our liquidity needs during the second quarter. We have not historically experienced significant seasonality in industrial casting sales. Competition The markets for our products are highly competitive. Competition is based mainly on price, but also on quality of product, range of capability, level of service and reliability of delivery. We compete with numerous domestic foundries, as well as with a number of foreign iron foundries. We also compete with several large domestic manufacturers whose products are made with materials other than ductile and gray iron, such as steel or aluminum. Industry consolidation over the past 20 years has resulted in a significant reduction in the number of foundries and a rise in the share of production by larger foundries, some of which have significantly greater financial resources than do we. Competition from foreign foundries has had an ongoing presence in the heavy municipal market and continues to be a factor, primarily in the western and eastern United States, due in part to costs associated with transportation. 9 FORGINGS SEGMENT Our forgings segment, operated by Mercer, produces complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer also produces micro alloy forgings. Mercer sells directly to original equipment manufacturers ("OEMs"), as well as to industrial end users. Mercer's subsidiary, A&M Specialties, Inc., machines forgings and castings for Mercer and other industrial applications. Until the mid-1980's, Mercer produced military tank parts, but successfully converted from a defense contractor to a commercial manufacturer. Mercer produces approximately 500 individually forged components and has developed specialized expertise in forgings of micro alloy steel. Products, Customers and Markets Mercer manufactures its products to customer specification with typical production runs of 1,000 or more units. Mercer currently operates mechanical press lines, from 1,300 tons to 4,000 tons. Key markets for Mercer include truck and automotive parts, railroad equipment and general industrial machinery. Mercer's in-house sales organization sells directly to end users and OEMs. A key element of Mercer's sales strategy is its ability to develop strong customer relationships through responsive engineering capability, dependable quality and just-in-time delivery performance. Demand for forged products closely follows the general business cycles of the various market segments and the demand level for capital goods. While there is a more consistent base level of demand for the replacement parts portion of the business, the strongest expansions in the forging industry coincide with the periods of industrial segment economic growth. Mercer's largest industry segment, the heavy truck segment, is extremely weak. Mercer's other market segments are also showing weakness following general economic slowdowns in those industrial areas. Management attributes this to normal industrial cycles in these markets and adjustments to overbuilds in inventory levels as well as high energy costs. Manufacturing Process Forgings and castings (together with a third process, fabrication) are the principal commercial metal working processes. In forging, metal is pressed, pounded or squeezed under great pressure, with or without the use of heat, into parts that retain the metal's original grain flow, imparting high strength, ductility and resistance properties. Forging itself usually entails one of four principal processes: impression die; open die; cold; and seamless rolled ring forging. Impression die forging, commonly referred to as "closed die" forging, is the principal process employed by Mercer, and involves bringing two or more dies containing "impressions" of the part shape together under extreme pressure, causing the forging stock to take the desired shape. Because the metal flow is restricted by the die, this process can yield more complex shapes and closer tolerances than the "open die" forging process. Impression die forging is used to produce products such as military and off-highway track and drive train parts; automotive and truck drive train and suspension parts; railroad engine, coupling and suspension parts; military ordinance parts and other items where close tolerances are required. Once a rough forging is produced, regardless of the forging process, it must generally still be machined. This process, known as "finishing" or "conversion," smoothes the component's exterior and mating surfaces and adds any required specification, such as groves, threads and bolt holes. The finishing process can contribute significantly to the value of the end product, in particular in certain custom situations where high value specialized machining is required. Machining can be performed either in-house by the forger, by a machine shop which performs this process exclusively or by the end-user. 10 An internal staff of engineers designs products to meet customer specifications incorporating computer assisted design workstations for tooling design. Because its forged products are inherently less expensive and stronger, Mercer has been successful in replacing certain cast parts previously supplied by third party foundries. Management believes that Mercer is an industry leader in forging techniques using micro alloy steel which produces parts which are lighter and stronger than those forged from conventional carbon steel. Raw Materials The principal raw materials used in Mercer's products are carbon and micro alloy steel. Mercer purchases substantially all of its carbon steel from four principal sources. While Mercer has never suffered an interruption of materials supply, management believes that, in the event of any disruption from any individual source, adequate alternative sources of supply are available within the immediate vicinity. Seasonality Mercer has experienced moderate cyclicality in sales resulting from fluctuations in the medium and heavy-duty truck market and the heavy industrial market, which are subject to general economic trends. Competition Mercer competes primarily in a highly fragmented industry which includes several dozen other press forgers and hammer forge shops. Hammer shops cannot typically match press forgers for high volume, single component manufacturing or close tolerance production. Competition in the forging industry has also historically been determined both by product and geography, with a large number of relatively small forgers across the country carving out their own product and customer niches. In addition, most end users manufacture some forgings internally, often maintaining a critical minimum level of production in-house and contracting out the balance. The primary basis of competition in the forging industry is price, but engineering, quality and dependability are also important, particularly with respect to building and maintaining customer relationships. Some of Mercer's competitors have significantly greater resources than Mercer. There can be no assurance that Mercer will be able to maintain or improve its competitive position in the markets in which it competes. INTELLECTUAL PROPERTY We have registered, and are in the process of registering, various trademarks and service marks with the U.S. Patent and Trademark Office. EMPLOYEES As of September 30, 2005, we had approximately 3,000 full time employees, of whom 2,448 were hourly employees and 552 were salaried employees. Nearly all of the hourly employees at Neenah, Dalton, Advanced Cast Products and Mercer are members of either the United Steelworkers of America or the Glass, Molders, Pottery, Plastics and Allied Workers International Union. A collective bargaining agreement is negotiated every three to five years. The current agreements expire as follows: Neenah, December 2006; Dalton-Warsaw, April 2008; Dalton-Kendallville, June 2007; Advanced Cast Products-Meadville, October 2010; and Mercer, June 2008. All employees at Deeter and Gregg are non-union. We believe that we have a good relationship with our employees. 11 ENVIRONMENTAL MATTERS Our facilities are subject to federal, state and local laws and regulations relating to the protection of the environment and worker health and safety, including those relating to discharges to air, water and land, the handling and disposal of solid and hazardous waste and the cleanup of properties affected by hazardous substances. Such laws include the Federal Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), and the Occupational Health and Safety Act. We believe that each of our operations are currently in substantial compliance with applicable environmental laws, and that we have no liabilities arising under such environmental laws which would have a material adverse effect on our operations, financial condition or competitive position. However, some risk of environmental liability and other cost is inherent in each of our businesses. Any of our businesses might in the future incur significant costs to meet current or more stringent compliance, cleanup or other obligations pursuant to environmental requirements. Such costs may include expenditures related to remediation of historical releases of hazardous substances or clean-up of physical structures prior to decommissioning. Under the Federal Clean Air Act Amendments of 1990, the Environmental Protection Agency ("EPA") is directed to establish maximum achievable control technology ("MACT") standards for certain industrial operations that are major sources of hazardous air pollutants ("HAPs"). The iron foundry industry will be required to implement the MACT emission limits, control technologies or work practices by April 2007. We estimate that the total cost for compliance with the MACT standard will be less than $3.0 million. The Federal Water Pollution Control Act (Clean Water Act) requires point dischargers to obtain stormwater discharge permits. The Wisconsin Department of Natural Resources (WDNR) was given permitting authority by the Environmental Protection Agency (EPA) in 1974 and continues to administer this program. Neenah has a General Permit to Discharge Stormwater Associated with Industrial Activity and is required to discharge stormwater that complies with EPA Benchmark values for various stormwater contaminants. $1.2 million is budgeted for fiscal 2006 to install stormwater treatment devices needed to achieve compliance with the EPA Benchmarks the WDNR is using for permit compliance. 12 Item 2. PROPERTIES We maintain the following manufacturing, machining, and office facilities. All of the facilities are owned, with the exception of Mercer's machining facility, which is leased.
ENTITY LOCATION PURPOSE ------ -------- ------- CASTINGS SEGMENT: Neenah Foundry Company Neenah, WI 2 manufacturing facilities Office facility Dalton Corporation Warsaw, IN Manufacturing and office facilities Kendallville, IN Manufacturing facility Stryker, OH Machining facility Advanced Cast Products, Inc. Meadville, PA Manufacturing and office facility Deeter Foundry, Inc. Lincoln, NE Manufacturing and office facility Gregg Industries, Inc. El Monte, CA Manufacturing and office facility FORGINGS SEGMENT: Mercer Forge Corporation Mercer, PA Manufacturing and office facility Sharon, PA Machining facility
In addition to the facilities above, Neenah operates thirteen distribution and sales centers. Six of those properties are owned and seven are leased. The principal equipment at the facilities consists of molding machines, presses, machining equipment, welding, grinding and painting equipment. We regard our plant and equipment as well maintained and adequate for its needs. Substantially all of the Company's tangible and intangible assets are pledged to secure the Senior Secured Notes and the Company's Credit Facility. See Note 6 in the Notes to Consolidated Financial Statements. Item 3. LEGAL PROCEEDINGS See "Reorganized Company Fiscal Year Ended September 30, 2005 Compared to the Reorganized Company Fiscal Year Ended September 30, 2004 - Settlement of Litigation" in Item 7 of this report for information concerning the settlement of a legal proceeding which is incorporated herein by reference. We are involved in routine litigation incidental to our business. Such litigation is not, in our opinion, likely to have a material adverse effect on our financial condition or results of operations. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders during the quarter ended September 30, 2005. 13 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. There is no public market for our common stock. There was one holder of record of our common stock as of December 23, 2005, NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company We have not paid any cash dividends on our common stock in the last two fiscal years nor have we repurchased any equity securities in the fourth quarter of fiscal 2005. Our Credit Facility and the indentures providing for our Senior Secured and Senior Subordinated Notes severely restrict our ability to pay dividends or repurchase equity. See "Liquidity and Capital Resources" in Item 7 and Note 6 in the Notes to Consolidated Financial Statements for a description of such limitations. 14 Item 6. SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA On August 5, 2003, ACP, NFC, and the Company filed for bankruptcy protection and emerged therefrom on October 8, 2003. Although the Plan of Reorganization became effective on October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the Effective Date, for financial reporting purposes we recorded the fresh-start adjustments necessitated by the American Institute of Certified Public Accountants Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," ("SOP 90-7") on October 1, 2003. As a result of the gain on extinguishment of debt and adjustments to the fair value of assets and liabilities, we recognized a $43.9 million reorganization gain on October 1, 2003. As a result of our emergence from Chapter 11 bankruptcy and the application of fresh-start reporting, our consolidated financial statements for the periods commencing on October 1, 2003 are referred to as the "Reorganized Company" and will not be comparable with any periods prior to October 1, 2003, which are referred to as the "Predecessor Company" (see Note 1 in the Notes to Consolidated Financial Statements). All references to the years ended September 30, 2005 and 2004 are to the Reorganized Company. All references to the years ended September 30, 2003, 2002 and 2001 are to the Predecessor Company. The following table sets forth our selected historical consolidated financial and other data as of and for the years ended September 30, 2005, 2004, 2003, 2002, and 2001 which have been derived from our historical consolidated financial statements. The information contained in the following table should also be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our historical consolidated financial statements and related notes included elsewhere in this report. All amounts are presented in thousands.
REORGANIZED PREDECESSOR ------------------- ------------------------------------- FISCAL YEAR ENDED SEPTEMBER 30, ----------------------------------------------------------- 2005 2004 2003(3) 2002(2)(3) 2001(1)(2)(3) -------- -------- -------- ---------- ------------- STATEMENT OF OPERATIONS DATA: Net sales .................................. $541,772 $450,942 $375,063 $387,707 $398,782 Cost of sales .............................. 440,818 375,124 321,834 323,740 335,264 -------- -------- -------- -------- -------- Gross profit ............................... 100,954 75,818 53,229 63,967 63,518 Selling, general and administrative expenses ................................ 34,467 27,374 26,132 28,743 27,587 Litigation settlement ...................... 6,500 -- -- -- -- Amortization expense ....................... 7,124 7,121 3,819 3,829 10,489 Provision for impairment of assets ......... -- -- -- 74 -- Other expenses (income) .................... 953 465 195 544 (434) -------- -------- -------- -------- -------- Operating income ........................... 51,910 40,858 23,083 30,777 25,876 Interest expense, net ...................... 33,406 33,363 46,620 42,647 43,009 Reorganization expense ..................... -- -- 7,874 -- -- -------- -------- -------- -------- -------- Income (loss) from continuing operations before income taxes ..................... 18,504 7,495 (31,411) (11,870) (17,133) Provision (credit) for income taxes ........ 3,409 3,881 (8,541) (5,917) (4,004) -------- -------- -------- -------- -------- Income (loss) from continuing operations ... 15,095 3,614 (22,870) (5,953) (13,129) Loss from discontinued operations, net of income taxes ............................ -- (359) (1,095) (41,750) (4,325) Gain (loss) on sale of discontinued operations, net of income taxes ......... -- -- (1,596) -- 2,404 -------- -------- -------- -------- -------- Net income (loss) .......................... $ 15,095 $ 3,255 $(25,561) $(47,703) $(15,050) ======== ======== ======== ======== ======== BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents .................. $ 3,484 $ -- $ 24,356 $ 26,164 $ 4,346 Working capital ............................ 62,937 49,918 102,866 65,050 72,140 Total assets ............................... 412,555 407,440 536,834 569,388 626,443 Total debt ................................. 271,754 283,801 439,357 451,432 434,077 Total stockholder's equity (deficit) ....... 17,353 8,784 (39,016) (12,146) 41,939
- ---------- (1) On October 2, 2000, we sold all of the issued and outstanding shares of common stock of Hartley Controls Corporation. The results of the operations of Hartley Controls Corporation have been reported separately as discontinued operations for all periods presented. (2) During the year ended September 30, 2002, we discontinued the operations of Cast Alloys. The results of Cast Alloys have been reported separately as discontinued operations for all periods presented. (3) During the year ended September 30, 2003, we sold substantially all of the assets of Belcher Corporation. The results of Belcher Corporation have been reported separately as discontinued operations for all periods presented. 15 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain matters discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this annual report are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as "believe," "anticipate," "expect" or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and otherwise herein and which may cause actual results to differ materially from those currently anticipated. The forward-looking statements made herein are made only as of the date of this report and we undertake no obligation to update such forward-looking statements to reflect subsequent events or circumstances. Due to the Company's emergence from its Chapter 11 proceedings on October 8, 2003, the Company has implemented the "fresh start" accounting provisions of AICPA Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," ("SOP 90-7") to its financial statements. Fresh start requires that, upon the Company's emergence, the Company establish a "fair value" basis for the carrying value of the assets and liabilities for the reorganized Company. Although the effective date of the Plan of Reorganization was October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the effective date, the Company accounted for the consummation of the Plan of Reorganization as if it had occurred on October 1, 2003 and implemented fresh start accounting as of that date. RECENT DEVELOPMENTS Exploration of Potential Sale Transaction. On July 29, 2005, Neenah and ACP announced that Citigroup Global Markets Inc. had been engaged to assist in exploring the potential sale or merger of Neenah or ACP or a significant portion of their assets or capital stock. On November 29, 2005, Neenah announced that its board of directors, which is also the board of directors of ACP, had unanimously voted to end the sale or merger process and turn the Company's focus to successfully implementing the Company's business plan. The Company's business plan recognizes a consolidating market and is intended to position the Company for growth by expanding its revenues and further penetrating existing markets that are already being served. It also involves exploring other strategic alternatives that would have the effect of reducing costs and expanding capacity in selected markets. RESULTS OF OPERATIONS We derive substantially all of our revenue from manufacturing and marketing a wide range of metal castings and forgings for the heavy municipal market and selected segments of the industrial markets. We have two reportable segments, Castings and Forgings. The Castings segment is a leading producer of iron castings for use in heavy municipal and industrial applications. This segment sells directly to original equipment manufacturers, hereinafter referred to as OEMs, as well as to industrial end users. The forgings segment, operated by Mercer, is a producer of complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer is also a producer of microalloy forgings. Mercer sells directly to OEMs, as well as to industrial end users. Mercer's subsidiary, A&M Specialties, Inc., machines forgings and castings for Mercer and other industrial applications. Restructuring charges and certain other expenses, such as income taxes, general corporate expenses and financing costs, are not allocated between our two operating segments. BANKRUPTCY PROCEEDINGS On August 5, 2003, we, together with ACP and NFC filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, as amended, with the United States Bankruptcy Court for the District of Delaware and submitted to the Bankruptcy Court for approval the Disclosure Statement for our Amended Prepackaged Joint Chapter 11 Plan of Reorganization, which we call the Plan of Reorganization. 16 By order dated September 26, 2003, the Bankruptcy Court confirmed the Plan of Reorganization and the Plan of Reorganization became effective on October 8, 2003. October 8, 2003 is hereinafter referred to as the "Effective Date". The Plan of Reorganization allowed us to emerge from bankruptcy with an improved capital structure. Because we had arranged to continue paying our trade debt on a timely basis, we had sufficient trade credit to continue operations in the ordinary course of business during the pendency of the Chapter 11 proceedings. On the Effective Date, we entered into a new senior credit facility. See "Liquidity and Capital Resources - Credit Facility" below for further discussion. The Plan of Reorganization resulted in significant changes to our capital structure. Among other things, the Plan of Reorganization provided for the repayment in full of our old credit facility, the cancellation of $282.0 million in principal amount of 11 1/8% Notes, the cancellation of the PIK Note (originally issued to Citicorp Mezzanine III, L.P. by our indirect parent company, ACP) and the elimination of the interests of the former equity owners of ACP. The cash proceeds necessary to consummate the Plan of Reorganization were provided from the consummation of the New Credit Facility and the issuance of 11% Senior Secured Notes (the "Notes"). The claims and interests of our various creditors were satisfied as follows: - our old credit facility was repaid in cash; - the PIK Note was cancelled and Citicorp Mezzanine III, L.P., the holder of that note, received Notes with a principal amount equal to $13.134 million, warrants to acquire 3.8 million shares of common stock of ACP and cash in the amount of $45,400; - our outstanding 11 1/8% Notes were cancelled and each holder of 11 1/8% Notes received its pro rata share of (i) $30.0 million in cash, (ii) $100.0 million in aggregate principal amount of new 13% Senior Subordinated Notes due 2013 of the Company, (iii) 38 million shares of common stock of ACP and (iv) rights to acquire for $110 million in cash in the aggregate, units for up to $119.996 million face amount of Notes and warrants to acquire up to 34.2 million shares of common stock of ACP; - the following debt and equity instruments were cancelled without further consideration: 12% senior subordinated notes issued by ACP, 12% senior subordinated notes issued by NFC and all equity interests of ACP; and - the following claims and equity interests passed through our Chapter 11 bankruptcy proceedings unimpaired: all tax claims, intercompany debt, other secured debt and general unsecured debt and the equity interests of ACP in NFC, equity interests of NFC in Neenah and equity interests of Neenah in its direct and indirect subsidiaries. As a result of the Plan of Reorganization, significant changes resulted to our capital structure. Although the Plan of Reorganization became effective on October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the Effective Date, for financial reporting purposes we recorded the fresh-start adjustments necessitated by SOP 90-7 on October 1, 2003. Reorganization value is defined by SOP 90-7 as "the fair value of the entity before considering liabilities and approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring." Our reorganization value was $290 million and was determined based on the consideration of many factors and by reliance on various valuation techniques, including comparable company analysis and discounted cash flow analyses. As a result of our emergence from Chapter 11 bankruptcy and the application of fresh-start reporting, our consolidated financial statements for the periods commencing on October 1, 2003 are referred to as the "Reorganized Company" and are not comparable with any periods prior to October 1, 2003, which are referred to as the "Predecessor Company" (see Note 1 in the Notes to Consolidated Financial Statements). 17 All references to years ended September 30, 2003, 2002, and 2001 are to the Predecessor Company. All references to the periods subsequent to October 1, 2003 are to the Reorganized Company. REORGANIZED COMPANY FISCAL YEAR ENDED SEPTEMBER 30, 2005 COMPARED TO THE REORGANIZED COMPANY FISCAL YEAR ENDED SEPTEMBER 30, 2004 Net Sales. Net sales for the year ended September 30, 2005 were $541.8 million, which was $90.9 million or 20.2% higher than the year ended September 30, 2004. The increase was due to increased demand for industrial castings used in the heavy duty truck market, increased shipments of municipal products, higher pricing (including steel scrap cost recovery) on both industrial and construction castings, and new business at all locations. Gross Profit. Gross profit was $101.0 million for the year ended September 30, 2005, which was $25.2 million or 33.2% higher than the year ended September 30, 2004. Gross profit as a percentage of net sales increased to 18.6% during the year ended September 30, 2005 from 16.8% for the fiscal year ended September 30, 2004. The majority of the increase in gross profit resulted from sales volume increases and the efficiencies achieved by operating the manufacturing plants at higher capacity. Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended September 30, 2005 were $34.5 million, an increase of $7.1 million from the $27.4 million for the year ended September 30, 2004. As a percentage of net sales, selling, general and administrative expenses increased to 6.4% for the year ended September 30, 2005 from 6.1% for the fiscal year ended September 30, 2004. The increase was due to increased expense for incentive plans based on improved profitability, the writeoff of a large accounts receivable balance of a customer who filed for Chapter 11 bankruptcy protection, a decrease in the rebate received from countervailing duties assessed on imported products, and increases in fringe benefit costs, specifically health care. Also, legal and professional costs increased in comparison to the prior year; however, the prior year cost level was abnormally low due to the majority of the 2004 legal and professional fees related to the bankruptcy reorganization, which were recorded in fresh start accounting. Settlement of Litigation. On November 22, 2004, Neenah entered into a letter of intent ("LOI") with respect to a proposed management buyout of all the outstanding stock of our wholly owned subsidiary Mercer Forge Corporation ("Mercer"). The parties to the LOI, however, were unable to agree on the terms of a definitive agreement by the extended termination date of the LOI, which had lapsed. The long-lived assets of Mercer were classified as held for use as of September 30, 2004 and continue to be so classified. On January 24, 2005, JD Holdings, LLC ("JDH"), one of the counterparties to the LOI, filed a complaint in the United States District Court for the Southern District of New York against Neenah alleging, among other things, that Neenah breached the terms of the LOI by not consummating the sale of the stock of Mercer to JDH. The complaint sought an order of specific performance of the LOI or, in the alternative, no less than $35 million in damages and, in either case, an order temporarily, preliminarily and permanently restraining Neenah from transferring the stock of Mercer to any third party. Neenah answered the complaint, denying the material allegations thereof, and filed a counterclaim against JDH alleging breach of the LOI and seeking damages for the costs associated with the negotiation of the potential transaction. The parties agreed to mediate this dispute and the litigation was stayed pending the outcome of the mediation and of follow-on settlement discussions. On August 5, 2005, the parties agreed to settle this matter. The settlement provided for a $6.5 million cash payment by the Company to JDH and the exchange of full and final releases by the parties on behalf of themselves and their respective members, officers, directors, affiliates and shareholders. Each party dismissed with prejudice the claims pending against the other in the Southern District of New York. The entry into the settlement, and the consequent avoidance of the costs and distractions of continued litigation, as well as of the uncertainty associated with the judicial process, was deemed to be in the best interests of the Company. 18 Amortization of Intangible Assets. Amortization of intangible assets was $7.1 million for each of the years ended September 30, 2005 and September 30, 2004. Other Expenses. Other expenses for the years ended September 30, 2005 and 2004 consist of losses of $1.0 million and $0.5 million, respectively, for the disposal of long-lived assets in the ordinary course of business. Operating Income. Operating income was $51.9 million for the year ended September 30, 2005, an increase of $11.1 million or 27.1% from the year ended September 30, 2004. The increase was caused by the reasons discussed above under gross profit and was partially offset by the $6.5 million litigation settlement and increased selling, general and administrative expenses. As a percentage of net sales, operating income increased from 9.1% for the year ended September 30, 2004 to 9.6% for the year ended September 30, 2005. Net Interest Expense. Net interest expense was $33.4 million for each of the years ended September 30, 2005 and 2004. Provision for Income Taxes. The provision for income taxes for the year ended September 30, 2005 is lower than the amount computed by applying our statutory rate of 35% to the income before income taxes principally due to a change in the tax method of determining LIFO inventory and the recognition of permanent differences due to the reorganization. The change in tax method of determining LIFO inventory resulted in a tax benefit of $2.7 million, which increased fiscal 2005 net income by $2.7 million. REORGANIZED COMPANY FISCAL YEAR ENDED SEPTEMBER 30, 2004 COMPARED TO THE PREDECESSOR COMPANY FISCAL YEAR ENDED SEPTEMBER 30, 2003 Net Sales. Net sales for the year ended September 30, 2004 were $450.9 million, which was $75.8 million or 20.2% higher than the year ended September 30, 2003. Approximately $34.8 million, which represents 46% of the total increase in net sales, was due to the increased cost of steel scrap charged to customers. Most of the remainder of the increase was due to significantly increased demand for industrial castings used in the heavy duty truck market and lesser increases in construction, agricultural and municipal products. New business at all locations also contributed to sales growth. Gross Profit. Gross profit was $75.8 million for the year ended September 30, 2004, which was $22.6 million or 42.4% higher than the year ended September 30, 2003. Gross profit as a percentage of net sales increased to 16.8% during the year ended September 30, 2004 from 14.2% for the fiscal year ended September 30, 2003. The increase in gross profit resulted from sales volume increases and the efficiencies achieved by operating the manufacturing plants at higher capacity. This increase was partially offset by an approximately $3.3 million increase in scrap metal costs which had not yet been recovered from customers. These increased scrap metal costs are recovered on a delayed basis from the Company's industrial customers and require a general price increase to recover the costs from municipal customers. Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended September 30, 2004 were $27.4 million, an increase of $1.3 million from the $26.1 million for the year ended September 30, 2003. As a percentage of net sales, selling, general and administrative expenses decreased to 6.1% for the year ended September 30, 2004 from 7.0% for the fiscal year ended September 30, 2003. The percentage decrease was due to relatively stable selling, general and administrative expenses spread across a larger sales volume. Amortization of Intangible Assets. Amortization of intangible assets for the year ended September 30, 2004 was $7.1 million, an increase of $3.3 million from the $3.8 million for the year ended September 30, 2003. The increase was due to the increase in amortizable identifiable intangible assets resulting from applying fresh start accounting as discussed in Note 1 in the Notes to Consolidated Financial Statements. 19 Other Expenses. Other expenses for the years ended September 30, 2004 and 2003 consist of losses of $0.5 million and $0.2 million, respectively, for the disposal of long-lived assets in the ordinary course of business. Operating Income. Operating income was $40.9 million for the year ended September 30, 2004, an increase of $17.8 million or 77.0% from the year ended September 30, 2003. The increase was caused by the reasons discussed above under gross profit and was partially offset by slightly higher selling, general and administrative expenses. As a percentage of net sales, operating income increased from 6.2% for the year ended September 30, 2003 to 9.1% for the year ended September 30, 2004. Net Interest Expense. Net interest expense decreased to $33.4 million for the year ended September 30, 2004 from $46.6 million for the year ended September 30, 2003. The decreased interest expense resulted from the reduction in borrowing due to the reorganization discussed in Note 1 in the Notes to Consolidated Financial Statements. Reorganization Expense. We recorded $7.9 million of reorganization expenses in 2003 which related to professional fees incurred in connection with the restructuring of our company and our filing for Chapter 11 bankruptcy protection as well as the write-off of debt issuance costs and premiums related to the 11 1/8% Notes. Provision for Income Taxes. The provision for income taxes for the year ended September 30, 2004 is higher than the amount computed by applying our statutory rate of 35% to the income before income taxes principally due to state income taxes and the loss of benefit on fiscal year 2004's net operating losses due to the reorganization. Loss from Discontinued Operations. During December 2002, we sold substantially all of the assets of Belcher. The disposition of Belcher resulted in a loss of $1.6 million net of income taxes, which we recognized in the year ended September 30, 2003. In accordance with the provisions of Statement of Financial Accounting Standards No. 144, or SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the results of operations for Belcher have been reported as discontinued operations in the consolidated statements of operations for all periods presented. 20 LIQUIDITY AND CAPITAL RESOURCES Credit Facility. On July 28, 2005, the Company amended its bank Loan and Security Agreement (the "Credit Facility"), which was originally entered into as of October 8, 2003 upon our emergence from bankruptcy. The following principal changes were made to the Credit Facility: (i) the revolving loan commitment under the Credit Facility was increased from $70 million to $92.1 million (provided, however, that the outstanding aggregate amount of revolving loans, letters of credit and term loans provided under the Credit Facility may not exceed the revolving loan commitment at any time), (ii) the interest rates applicable to revolving loans and term loans were reduced, (iii) the maturity of the Credit Facility was extended by one year, to October 8, 2009 (iv) the Company was provided additional flexibility to pay deferrable interest on its outstanding 13% Senior Subordinated Notes due 2013 and to make repayments, prepayments, redemptions and repurchases of the Senior Subordinated Notes, (v) the Company was authorized to sell Mercer Forge Corporation and/or Gregg Industries, Inc., subject to certain conditions, and (vi) the principal financial covenant in the Credit Facility was revised in a manner that is more favorable to the Company than before. The Company's Credit Facility, as amended on July 28, 2005, consists of a revolving credit facility of up to $92.1 million (with a $5 million sublimit available for letters of credit and term loans in the aggregate original principal amount of $22.1 million). The Credit Facility matures on October 8, 2009, and bears interest at rates based on the lenders' Base Rate, as defined in the Credit Facility, or an adjusted rate based on LIBOR. Availability under the Credit Facility is based on various advance rates against the Company's accounts receivable and inventory. Amounts under the revolving credit facility may be borrowed, repaid and reborrowed subject to the terms of the facility. At September 30, 2005, the Company had approximately $30.5 million outstanding under the revolving credit facility and approximately $16.6 million outstanding under the term loan facility. No portion of the term loan, once repaid, may be reborrowed. Substantially all of the Company's wholly owned subsidiaries are co-borrowers with the Company under the Credit Facility and are jointly and severally liable with the Company for all obligations under the Credit Facility, subject to customary exceptions for transactions of this type. In addition, NFC Castings, Inc. ("NFC"), the Company's immediate parent, and the remaining wholly owned subsidiaries of the Company jointly and severally guarantee the Company's obligations under the Credit Facility, subject to customary exceptions for transactions of this type. The borrowers' and guarantors' obligations under the Credit Facility are secured by a first priority perfected security interest, subject to customary restrictions, in substantially all of the tangible and intangible assets of the Company and its subsidiaries. The senior secured notes discussed below, and the guarantees in respect thereof, are equal in right of payment to the Credit Facility, and the guarantees in respect thereof. The liens in respect of the senior secured notes are junior to the liens securing the Credit Facility and guarantees thereof. Voluntary prepayments may be made at any time on the term loan borrowings or the revolving borrowings upon customary prior notice. Prepayments on the term loan borrowings may be made at any time without premium or penalty unless a simultaneous reduction of the revolving loan commitment amount is being made or if any such reduction of the revolving loan commitment amount has been made previously. Reductions of the revolving loan commitment are subject to certain premiums specified in the Credit Facility. Mandatory repayments are required under certain circumstances, including a sale of assets or the issuance of debt or equity. The Credit Facility requires the Company to observe certain customary conditions, affirmative covenants and negative covenants including financial covenants. The Credit Facility also contains events of default customary for these types of facilities, including, without limitation, payment defaults, material misrepresentations, covenant defaults, bankruptcy and a change of ownership of the Company, NFC or ACP Holding Company, NFC's immediate parent company. The Company is prohibited from paying dividends and is restricted to a maximum yearly stock repurchase of $250,000. At September 30, 2005, the Company is in compliance with existing bank covenants. 21 Subsequent to the end of fiscal 2005, the Company further amended the Credit Facility to allow the $6.5 million settlement in connection with the Mercer litigation, discussed above, to be added back in the calculation of Adjusted EBITDA. The amendment was executed and became effective on December 9, 2005. 11% Senior Secured Notes due 2010. The Company has outstanding Senior Secured Notes due 2010 in the principal amount of $133.1 million, with a coupon rate of 11%. These notes were issued at a price which included a discount of $11.7 million. The obligations under the Senior Secured Notes due 2010 are equal in right of payment to the Credit Facility and the associated guarantees. The liens securing the senior secured notes are junior to the liens securing the Credit Facility and guarantees thereof. Interest on the Senior Secured Notes due 2010 is payable on a semi-annual basis. The Company's obligations under the notes are guaranteed on a secured basis by each of its wholly owned subsidiaries. Subject to the restrictions in the Credit Facility, the notes are redeemable at the Company's option in whole or in part at any time on or after September 30, 2007, with not less than 30 days nor more than 60 days notice, at the redemption price specified in the indenture governing the notes (105.500% of the principal amount redeemed beginning September 30, 2007, 104.125% beginning September 30, 2008, and 102.750% beginning September 30, 2009 and thereafter), plus accrued and unpaid interest up to the redemption date. Upon the occurrence of a "change of control" as defined in the indenture governing the notes, the Company may be required to make an offer to purchase the secured notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The secured notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments (among other things, currently limiting most dividends and similar payments by Neenah and its subsidiaries to no more than approximately $14 million), (3) liens, (4) restrictions on distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The secured notes also contain customary events of default typical to this type of financing, such as (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee. 13% Senior Subordinated Notes due 2013. The Company has outstanding Senior Subordinated Notes due 2013 in the principal amount of $100 million, with a coupon rate of 13%. The obligations under the senior subordinated notes are senior to the Company's subordinated unsecured indebtedness, if any, and are subordinate to the Credit Facility and the senior secured notes. Interest on the senior subordinated notes is payable on a semi-annual basis. Not less than five percent of the interest on the senior subordinated notes must be paid in cash and up to 8% interest may be paid-in-kind. To date, all interest payments have been made in cash. The Company's obligations under the notes are guaranteed on an unsecured basis by each of its wholly owned subsidiaries. Subject to the restrictions in the Credit Facility, the notes are redeemable at our option in whole or in part at any time, with not less than 30 days nor more than 60 days notice, at the redemption price specified in the indenture governing the notes (currently 101% of the principal amount redeemed, and 100% beginning September 30, 2006 and thereafter), plus accrued and unpaid interest up to the redemption date. Upon the occurrence of a "change of control" as defined in the indenture governing the notes, the Company may be required to make an offer to purchase the subordinated notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The subordinated notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments (among other things, currently limiting most dividends and similar payments by Neenah and its subsidiaries to no more than approximately $14 million), (3) liens, (4) restrictions on distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The subordinated notes also contain customary events of default typical to this type of financing, such as, (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee. For the fiscal years ended September 30, 2005, 2004 and 2003, capital expenditures were $17.6 million, $12.7 million and $11.9 million, respectively. These amounts represent a level of capital expenditures necessary to maintain equipment and facilities. 22 The Company's principal source of cash to fund its liquidity needs will be net cash from operating activities and borrowings under the revolving loan commitment under the Credit Facility. Net cash provided by operating activities for the fiscal year ended September 30, 2005 was $33.6 million, an increase of $30.9 million from cash provided by operating activities for the fiscal year ended September 30, 2004 of $2.7 million. The increase in net cash provided by operating activities was primarily due to the increase in net income, as well as a decrease in working capital accounts (primarily from accounts receivable). Net cash provided by operating activities for the fiscal year ended September 30, 2004 was $2.7 million, a decrease of $20.3 million from cash provided by operating activities for the fiscal year ended September 30, 2003 of $23.0 million. The decrease in net cash provided by operating activities was primarily due to a large increase in the accounts receivable balance proportional to our increased sales volume. The $23.0 million cash provided by operating activities for the fiscal year ended September 30, 2003 included an income tax refund that the Company received in December 2002 of $18.4 million from the carryback of net operating losses. Future Capital Needs. Despite our significant decrease in leverage as a result of the Plan of Reorganization, we are still significantly leveraged and our ability to meet our debt obligations will depend upon future operating performance which will be affected by many factors, some of which are beyond our control. Based on our current level of operations, we anticipate that our operating cash flows and available credit facilities will be sufficient to fund our anticipated operational investments, including working capital and capital expenditure needs, for at least the next twelve months. If, however, we are unable to service our debt requirements as they become due or are unable to maintain ongoing compliance with restrictive covenants, we may be forced to adopt alternative strategies that may include reducing or delaying capital expenditures, selling assets, restructuring or refinancing indebtedness or seeking additional equity capital. There can be no assurances that any of these strategies could be effected on satisfactory terms, if at all. Adjusted EBITDA. Our borrowing arrangement contains certain financial covenants which are tied to ratios based on Adjusted EBITDA. Adjusted EBITDA is defined in the Company's Credit Facility as "EBITDA" and is generally calculated as the sum of net income (excluding non-recurring non-cash charges and certain one-time cash charges), income taxes, interest expense, and depreciation and amortization. Adjusted EBITDA is presented herein because it is a material component of the covenants contained within the Company's Credit Facility. Non-compliance with the covenants could result in the requirement to immediately repay all amounts outstanding under the Credit Facility which could have a material adverse effect on our results of operations, financial position and cash flow. Management also believes that certain investors use information concerning Adjusted EBITDA as a measure of a company's performance and ability to service its debt. Adjusted EBITDA should not be considered a substitute for, or more meaningful than, income from operations, net income, cash flows or other measures of financial performance prepared in accordance with accounting principles generally accepted in the United States. Adjusted EBITDA, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. A reconciliation of Adjusted EBITDA for the fiscal years ended September 30, 2005 and 2004 is provided below (in thousands):
2005 2004 ------- ------- Net income .......................... $15,095 $ 3,255 Income tax provision ................ 3,409 3,881 Net interest expense ................ 33,406 33,363 Depreciation and amortization ....... 18,864 17,992 Loss on disposal of equipment ....... 953 465 Loss from discontinued operations ... -- 359 Neenah non-cash inventory charge .... 242 -- Gregg non-cash inventory charge ..... -- 1,172 Deeter non-cash inventory charge .... -- 624 Gregg write-off of lease deposits ... 64 -- ------- ------- Adjusted EBITDA (as defined above) .. $72,033* $61,111 ======= =======
* Adjusted EBITDA for the year ended September 30, 2005 is $6.5 million lower than it would have been without the $6.5 million litigation settlement paid in August, 2005. As discussed above, effective December 9, 2005, the Credit Facility was amended to allow the $6.5 million settlement in connection with the Mercer litigation to be added back in the calculation of Adjusted EBITDA. 23 OFF-BALANCE SHEET ARRANGEMENTS None. CONTRACTUAL OBLIGATIONS The following table includes the Company's significant contractual obligations at September 30,2005 (in millions):
Expected Payments due by Period ------------------------------------------ Less More than 1-3 3-5 than Total 1 year years years 5 years ------ ------ ----- ------ ------- Long term debt ................................. $241.3 $ 3.2 $ 6.4 $131.7 $100.0 Interest on long term debt ..................... 179.6 28.5 56.6 55.5 39.0 Revolving line of credit ....................... 30.5 30.5 -- -- -- Interest and fees on revolving line of credit .. 0.9 0.9 -- -- -- Operating leases ............................... 6.6 2.0 2.9 1.2 0.5 ------ ----- ----- ------ ------ Total contractual obligations .................. $458.9 $65.1 $65.9 $188.4 $139.5 ====== ===== ===== ====== ======
As of September 30, 2005, the Company had no material purchase obligations other than those created in the ordinary course of business related to inventory and property, plant and equipment, which generally have terms of less than 90 days. The Company also has long-term obligations related to its pension and post-retirement plans which are discussed in detail in Note 9 of the Notes to Consolidated Financial Statements. As of the most recent actuarial measurement date, the Company anticipates making $5.1 million of contributions to pension plans in fiscal 2006. Post-retirement medical claims are paid as they are submitted and are anticipated to be $0.5 million in fiscal 2006. CRITICAL ACCOUNTING ESTIMATES Critical accounting estimates are those that are, in management's view, both very important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Future events and their effects cannot be determined with absolute certainty. The determination of estimates, therefore, requires the exercise of judgment. Actual results may differ from those estimates, and such differences may be material to the financial statements. Our accounting policies are more fully described in Note 2 in the Notes to Consolidated Financial Statements. We believe that the most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with the evaluation of the recoverability of certain assets including goodwill, other intangible assets and property, plant and equipment as well as those estimates used in the determination of reserves related to the allowance for doubtful accounts, inventory obsolescence, workers compensation and pensions and other post-retirement benefits. Various assumptions and other factors underlie the determination of these significant estimates. In addition to assumptions regarding general economic conditions, the process of determining significant estimates is fact-specific and accounts for such factors as historical experience, product mix and, in some cases, actuarial techniques. We constantly reevaluate these significant factors and make adjustments where facts and circumstances necessitate. Historically, our actual results have not significantly deviated from those determined using the estimates described above. 24 We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our consolidated financial statements: - Defined-Benefit Pension Plans. We account for our defined benefit pension plans in accordance with Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions" ("SFAS 87"), which requires that amounts recognized in financial statements be determined on an actuarial basis. The most significant element in determining our pension expense in accordance with SFAS 87 is the expected return on plan assets. We have assumed that the expected long-term rate of return on plan assets will be 7.50% to 8.50%, depending on the plan. Over the long term, our pension plan assets have earned in excess of these rates; therefore, we believe that our assumption of future returns is reasonable. The plan assets, however, have earned a rate of return substantially less than these rates in the last three years. Should this trend continue, our future pension expense would likely increase. At the measurement date, we determine the discount rate to be used to discount plan liabilities. In developing this rate, we use the Moody's Average AA Corporate Bonds index. At the measurement date of June 30, 2005, we determined the discount rate to be 5.25%. Changes in discount rates over the past few years have not materially affected our pension expense. The net effect of changes in this rate, as well as other changes in actuarial assumptions and experience, have been deferred as allowed by SFAS 87. - Other Postretirement Benefits. We provide retiree health benefits to qualified employees under an unfunded plan. We use various actuarial assumptions including the discount rate and the expected trend in health care costs and benefit obligations for our retiree health plan. Consistent with our pension plans, we used a discount rate of 5.25%. In 2005, our assumed healthcare cost trend rate was 8.0% decreasing gradually to 5.0% in 2010 and then remaining at that level thereafter. Changes in these rates could materially affect our future operating results and net worth. 25 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk related to changes in interest rates. The Company does not use derivative financial instruments for speculative or trading purposes. Interest Rate Sensitivity. The Company's earnings are affected by changes in short-term interest rates as a result of its borrowings under the Credit Facility. If market interest rates for such borrowings change by 1%, the Company's interest expense would increase or decrease by approximately $0.5 million. This analysis does not consider the effects of changes in the level of overall economic activity that could occur due to interest rate changes. Further, in the event of an upward change of such magnitude, management could take actions to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in the Company's financial structure. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and schedules are listed in Part IV Item 15 of this Annual Report on Form 10-K and are incorporated by reference in this Item 8. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. Item 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based upon such evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act. Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Item 9B. OTHER INFORMATION None. 26 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following sets forth certain information with respect to the persons who are members of the board of directors and executive officers of the Company. All executive officers hold office at the pleasure of the board of directors. Under the Company's bylaws, each director holds office until the next annual meeting of shareholders and until the director's successor has been elected and qualified. All of the directors of the Company are also directors of ACP.
NAME AGE POSITION - ---- --- -------- William M. Barrett............ 58 President, Chief Executive Officer, Director and Chairman of the Board Gary W. LaChey................ 59 Corporate Vice President - Finance, Treasurer, Secretary and Chief Financial Officer James Ackerman................ 61 President - Mercer Forge John H. Andrews............... 60 Corporate Vice President - Manufacturing Joseph L. DeRita.............. 67 Division President, Dalton Corporation Frank Headington.............. 56 Vice President - Technology Timothy Koller................ 55 Vice President - Municipal Sales & Engineering Joseph Varkoly................ 43 Vice President - Industrial Sales and Marketing Andrew B. Cohen............... 34 Director Benjamin C. Duster, IV, Esq... 50 Director Michael J. Farrell............ 55 Director Jeffrey G. Marshall........... 61 Director
Mr. Barrett has served as our President and Chief Executive Officer since May 2000. Mr. Barrett joined us in 1992 serving as General Sales Manager -- Industrial Castings until May 1, 1997. Mr. Barrett was Vice President and General Manager from May 1, 1997 to September 30, 1998 and President from October 1, 1998 to April 30, 2000. From 1985 to 1992, Mr. Barrett was the Vice President -- Sales for Harvard Industries Cast Products Group. Mr. Barrett has also been one of our directors and Chairman of the Board since May 2000. Mr. LaChey has served as our Corporate Vice President -- Finance since June 2000. Mr. LaChey joined us in 1971 and has served in a variety of positions of increasing responsibility in the finance department. Mr. LaChey was most recently Vice President -- Finance, Treasurer and Secretary. Mr. Ackerman has served as the President of Mercer Forge since 2000. Previously, Mr. Ackerman served as the Vice President/CFO of Mercer Forge since 1990. Prior to joining Mercer Forge in 1990, Mr. Ackerman worked for Sheet Metal Coating & Litho as its Controller, Dunlop Industrial/Angus Fire Armour Corp. as its Controller and Ajax Magnethermic Corporation as its Vice President-Finance (CFO). Mr. Andrews has served as our Corporate Vice President -- Manufacturing since August 2003. Mr. Andrews joined us in 1988 and has served in a variety of manufacturing positions with increasing responsibility. Prior to joining Neenah, Mr. Andrews was Division Manager for Dayton Walther Corporation's Camden Casting Center from 1986 to 1988 and served as Manufacturing Manager and then Plant Manager for Waupaca Foundry's Marinette Plant from 1973 to 1986. Mr. DeRita has served as Division President of the Dalton Corporation since 1999. He joined Newnam Manufacturing in 1989 and became the Vice President -- Sales when the Dalton Corporation acquired Newnam Manufacturing in 1992. Prior to joining our company, Mr. DeRita was the Manager of Engineering and Maintenance at Erie Malleable, the same position he held previously at Zurn Industries. 27 Mr. Headington has served as the Vice President - Technology since August 2003. Previously, Mr. Headington was our Manager of Technical Services and Director of Product Reliability since January 1989. Prior to joining the Company, Mr. Headington co-founded and operated Sintered Precision Components, a powdered metal company. Prior to his involvement with Precision Components, he was employed by Wagner Casting Company as Quality Manager. Mr. Koller has served as the Vice President - Municipal Sales & Engineering since May 1998. Mr. Koller has worked within our Municipal products area for the last 27-years serving with increasing responsibility as Sales Representative, Specifications Manager, and General Sales Manager. Mr. Varkoly has served as the Vice President - Industrial Sales & Marketing since August 2003. Previously, Mr. Varkoly was our Vice President of Business Development since March 2000. Prior to joining our company in 2000, he served as the Director - Finance of Betzdearborn, Inc. Previously, he was a Manager for Performance Improvement Management Consulting with Ernst & Young LLP and the Business Development Manager of FMC Corporation. Mr. Cohen has served as a director since October 2003. Mr. Cohen is currently a Managing Director at Dune Capital Management, LP. Previously, Mr. Cohen was employed by SAC Capital Advisors for three years. Prior to his employment at SAC Capital Advisors, he spent six years in the investment banking division of Morgan Stanley. Mr. Cohen received his BA and MBA degrees from the University of Pennsylvania. Mr. Duster has served as a director since October 2003. Mr. Duster is currently Chairman of the Board of Algoma Steel, Inc., a Toronto Stock Exchange listed integrated steel manufacturer based in Canada. Mr. Duster is also a principal in Masson & Company, a financial restructuring advisory and turnaround management firm based in New York. Mr. Farrell has served as a director since February 2003. Mr. Farrell is currently the President of Farrell & Co., a merchant banking firm specializing in heavy manufacturing companies, and the Chief Executive Officer of Standard Steel, LLC. Mr. Farrell has also served in executive capacities for MK Rail Corporation, Motor Coils Manufacturing Co. and Season-ALL Industries. Mr. Farrell currently also serves as a director of Federated Investors, Inc. Mr. Farrell is a certified public accountant. Mr. Marshall has served as a director since October 2003. Mr. Marshall is currently the Chairman of Smith Marshall, a subsidiary of the NextMedia Company Limited. Previously, he was the President and Chief Executive Officer of Aluma Enterprises, Inc., a construction technology company, for six years. Prior to joining Aluma Enterprises, Inc., Mr. Marshall successively held the positions of President and Chief Executive Officer at Marshall Steel Limited, Marshall Drummond McCall Inc. and the Ontario Clean Water Agency. AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT The current members of the Audit Committee of the board of directors are Michael J. Farrell and Jeffrey G. Marshall. The board of directors has determined that all members of the Audit Committee are independent and financially literate in accordance with the audit committee requirements of the New York Stock Exchange. The board has determined that Mr. Michael J. Farrell is an audit committee financial expert within the meaning of SEC rules. CODE OF ETHICS In December 2004, the Company adopted a Code of Ethics applicable to all officers of the Company as well as certain other key accounting staff. A copy of the Code of Ethics can be obtained free of charge by writing to the Company. 28 BOARD COMPOSITION The board of directors of ACP, the ultimate parent company of Neenah consists of five directors. ACP's Amended and Restated Bylaws permits the holders of a majority of the shares of common stock of ACP then entitled to vote at an election of directors, to remove any director or the entire board of directors at any time, with or without cause. Under ACP's Amended and Restated Bylaws, vacancies on the board of directors may be filled by the affirmative vote of a majority of the holders of ACP's outstanding stock entitled to vote thereon. Under the Stockholders Agreement discussed below, MacKay Shields LLC designated two members to the board of directors of ACP and Citicorp Mezzanine III, L.P and Trust Company of the West designated one member to the board of directors of ACP. The MacKay Shields LLC designees are Andrew B. Cohen and Benjamin C. Duster, IV, Esq. The Citicorp Mezzanine III, L.P and Trust Company of the West designees are Michael J. Farrell and Jeffrey G. Marshall, respectively. Under the Stockholders Agreement, the board of directors of any subsidiary of ACP, including Neenah, is required to consist of the same number of directors and have the same composition as the board of directors of ACP. COMPENSATION COMMITTEE The current members of the compensation committee of the board of directors are Andrew B. Cohen and Benjamin C. Duster, IV, Esq. STOCKHOLDERS AGREEMENT Under the terms of the Plan of Reorganization, ACP and each person or entity that held common stock of ACP or warrants to purchase ACP common stock as of October 8, 2003, the Effective Date of the Plan of Reorganization (the "Stockholders"), are subject to a stockholders agreement dated as of October 8, 2003 (the "Stockholders Agreement"). The Stockholders Agreement, among other things, (i) governs the composition of the board of directors of ACP and its subsidiaries, (ii) establishes the requisite approvals for certain significant corporate transactions (including acquisitions and dispositions of material businesses or assets, and the incurrence of debt), and (iii) provides for certain rights, requirements and restrictions with respect to the sale or transfer of ACP common stock or warrants to purchase ACP common stock. The Stockholders Agreement provides that the stockholders shall vote all of their shares of ACP common stock to cause the board of directors of ACP to be comprised of the then duly elected and acting chief executive officer of ACP, one member each designated by MacKay Shields LLC, Citicorp Mezzanine III, L.P. and Trust Company of the West, in each case, so long as they, together with their respective affiliates, hold at least 10.0% of the ACP common stock on a fully diluted basis (the "Minimum Ownership"); however, so long as MacKay Shields LLC is the holder of at least 20% of the ACP common stock on a fully diluted basis, it shall be entitled to designate one additional member. In addition, no designated member of the board of directors of ACP may be removed without the consent of the Stockholder which has the right to designate such member. Further, the Stockholders Agreement provides that each of MacKay Shields LLC, Citicorp Mezzanine III, L.P and Trust Company of the West (subject to the Minimum Ownership) has the ability to approve or veto the sale of ACP and/or its subsidiaries (through sale of shares, merger, recapitalization, asset sale or similar transaction) (a "Sale of the Company"), amendments to the respective charter and bylaws of each company, modifications to the number of directors of each company and affiliate transactions. The board of directors of any subsidiary of ACP is required to consist of the same number of directors and shall have the same composition as the board of directors of ACP. In addition to the general governance issues discussed above, the Stockholders Agreement provides that, so long as MacKay Shields LLC, Citicorp Mezzanine III, L.P and Trust Company of the West each have the Minimum Ownership certain sales or transfers or series of sales or transfers by any stockholder or a "group" of stockholders of ACP common stock or warrants to purchase ACP common stock which owns 10% or more of the shares of ACP common stock on a fully diluted basis may be subject to the prior right of ACP and the Stockholders party to the Stockholders Agreement who own more than 29 5% of the ACP common stock on a fully diluted basis ("5% Stockholders") to purchase such shares. Also, the Stockholders Agreement provides for "tag-along" rights for 5% Stockholders with respect to certain sales or transfers of ACP common stock and warrants to purchase ACP common stock by other 5% Stockholders. Furthermore, the Stockholders Agreement provides that the board of directors, by the vote of at least three directors, shall have the right to cause a Sale of the Company and to cause all Stockholders to consent to, approve and participate in a Sale of the Company; provided that (i) all Stockholders receive the same consideration on a per share basis, (ii) the identity of such purchaser is approved (which approval shall not be unreasonably withheld) by MacKay Shields LLC, Citicorp Mezzanine III, L.P and Trust Company of the West (subject to the Minimum Ownership) and (iii) such purchaser is not MacKay Shields LLC, Citicorp Mezzanine III, L.P or Trust Company of the West or any other 5% Stockholder, or an affiliate of any of the foregoing. The foregoing description of the Stockholders Agreement does not purport to be complete and is qualified in its entirety by reference to the Stockholders Agreement, which is filed as Exhibit 10.6 to this report. 30 ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table. The following table summarizes compensation awarded to, earned by or paid to our Chief Executive Officer and each of our other four most highly compensated executive officers (collectively, the "named executive officers") for services rendered to ACP, NFC, and the Company during the 2005, 2004 and 2003 fiscal years.
LONG-TERM COMPENSATION ---------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS --------------------------------- ------------------------ ------- OTHER ANNUAL RESTRICTED SECURITIES LTIP ALL OTHER NAME AND PRINCIPAL FISCAL COMPENSATION STOCK UNDERLYING PAYOUTS COMPENSATION POSITION YEAR SALARY $ BONUS $ $ (2) AWARDS $(3) OPTIONS # $ $(4) - ------------------ ------- -------- ------- ------------ ----------- ---------- ------- ------------ William M. Barrett ....... 2005 550,000 558,292 -- -- -- -- 27,520 President and Chief ... 2004(1) 483,337 160,800 -- -- -- -- 26,719 Executive ............. 2003(1) 342,704 103,137 -- 9,410 -- -- 23,991 Officer and Director Gary W. LaChey ........... 2005 286,749 336,400 -- -- -- -- 27,200 Corporate Vice ........ 2004(1) 242,996 74,100 -- -- -- -- 26,306 President-Finance, .... 2003(1) 234,996 102,399 -- 7,196 -- -- 23,449 Treasurer, Secretary and Chief Financial Officer James Ackerman ........... 2005 180,000 149,000 -- -- -- -- 14,647 President - Mercer .... 2004 180,000 144,000 -- -- -- -- 13,968 Forge ................. 2003 180,000 -- -- -- -- -- 12,668 John H. Andrews .......... 2005 214,004 252,791 -- -- -- -- 26,694 Corporate Vice ........ 2004(1) 193,336 60,000 -- -- -- -- 25,687 President - ........... 2003(1) 172,501 35,049 -- 1,107 -- -- 22,758 Manufacturing Joseph L. DeRita ......... 2005 256,000 313,645 -- -- -- -- 18,700 Division President, ... 2004(1) 243,000 74,100 -- -- -- -- 14,281 Dalton Corporation .... 2003(1) 235,000 1,015 -- 3,044 -- -- 17,972
- ---------- (1) Certain prior year amounts have been reclassified. (2) The Company provides its executive officers with personal benefits as part of providing a competitive compensation program. These may include such benefits as a company automobile, and personal liability insurance. These benefits are valued based upon the incremental cost to the Company. The incremental cost to the Company of such benefits did not exceed the SEC's disclosure threshold for any named executive officer for any of the three years. (3) The aggregate unvested restricted stock holdings of ACP common stock at the end of fiscal 2005 for the named executive officers were as follows: Mr. Barrett - 312,500 shares, Mr. LaChey - 238,971 shares, Mr. Ackerman - 0 shares, Mr. Andrews - 36,765 shares, and Mr. DeRita - 101,103 shares. Because there was no public market for the common stock at that date, the fair market value per share of the common stock is not able to be determined by any reference to any published price data. On October 8, 2003, Messrs. Barrett, LaChey, Ackerman, Andrews, and DeRita, respectively, were granted 1,250,000, 955,882, 0, 147,059, and 404,412 shares of ACP common stock. One-fourth of the shares vested on the date of grant, and the balance vest on an annual straight-line basis over the ensuing three years. Dividends, if any, paid on the common stock would be paid on the restricted stock. (4) All other compensation for fiscal 2005 for Messrs. Barrett, LaChey, Ackerman, Andrews, and DeRita, respectively, includes: (i) matching contributions to the 401(k) plan for each named executive officer of $5,250, $5,250, $5,593, $5,250, and $6,300; (ii) contributions pursuant to the profit sharing plan for each named executive officer of $15,375, $15,375, $0, $15,375, and $0; (iii) an executive life insurance premium for each named executive officer of $2,838, $2,518, $5,026, $2,012, and $7,064; and (iv) health insurance reimbursement premiums for each named executive officer of $4,057, $4,057, $4,028, $4,057, and $5,336. EMPLOYMENT AGREEMENTS We have entered into employment agreements with each of the named executive officers, other than Mr. Ackerman. The agreements establish a base salary as well as providing for a severance payment calculation in the event of termination (pursuant to the 2003 Severance and Change of Control Plan described below), health (subject to satisfying insurability requirements), 401(k) and other benefits that the named employees are entitled to receive. Non-competition and non-solicitation agreements have been 31 signed as part of the employment agreements, which will apply during a period of three years for our chief executive officer and two years for the chief financial officer and other members of management of the Company, in each case, after termination. 2003 MANAGEMENT ANNUAL INCENTIVE PLAN Under the 2003 Management Annual Incentive Plan, members of management and certain other specified employees will receive annual performance awards if the Company achieves certain Adjusted EBITDA targets set by the board of directors of the Company at the beginning of each fiscal year. The bonus paid will equal (i) 50% of the target bonus amount for each individual should the Company reach 85% of the Adjusted EBITDA target, (ii) 100% of the target bonus on reaching 100% of the target Adjusted EBITDA, and (iii) 200% of the target bonus on reaching 120% of the target Adjusted EBITDA. For 2005, the $6.5 million settlement in connection with the Mercer litigation was added back to calculate Adjusted EBITDA for purposes of the bonus calculation. Target bonuses range up to 30.0% of base salary depending upon job responsibility. In addition, the 2003 Management Annual Incentive Plan was amended to allow management the ability to earn additional cash compensation based on varying levels of debt reduction achieved during the year. Earned bonus is payable within ten business days of the approval of the Company's audited financial statements by the board of directors. In addition, a one time aggregate incremental $450,000 emergence bonus was paid upon emergence from Chapter 11 bankruptcy in fiscal 2004 to certain members of management upon the Effective Date. For fiscal 2006, the executives and certain other specified employees will be entitled to receive annual performance awards upon achieving certain milestones, including EBITDA targets, debt reduction targets and other certain criteria as determined from time to time by the compensation committee of the board of directors. Target bonus as a percentage of salary for each member of management will be consistent with historical levels. Target levels, timing of payments and other terms and conditions of the annual incentive plan will be determined by the compensation committee. 2003 MANAGEMENT EQUITY INCENTIVE PLAN Under the 2003 Management Equity Incentive Plan, which was established on the Effective Date, certain members of management received restricted shares which represented 5% of the common stock of ACP on a fully diluted basis as of the Effective Date. The 4,000,000 restricted shares issued pursuant to the 2003 Management Equity Incentive Plan were 25% vested upon grant and the balance vest on an annual straight-line basis over the ensuing three years subject to acceleration in the event of a Significant Transaction, as defined in the award agreement. The 2003 Management Equity Incentive Plan also provides that a pool of options for an additional 4,000,000 shares of common stock of ACP be reserved for future grants as determined by the compensation committee of the board of directors. 2003 SEVERANCE AND CHANGE OF CONTROL PLAN Under the 2003 Severance and Change of Control Plan, the executives with whom we have executed employment agreements, shall be entitled to receive Severance Payments, as defined in the 2003 Severance and Change of Control Plan, health benefits and outplacement services if the Company terminates his or her employment without cause or if he or she terminates his or her employment for Good Reason and a Change of Control Payment, health benefits and outplacement services if a participating executive's employment is terminated or the executive resigns from employment for Good Reason within 180 days of a Change of Control, as such terms are defined in the 2003 Severance and Change of Control Plan. 32 The Severance Payment is equal to (1) the severance multiple listed in each executive's employment agreement multiplied by (2) the base salary of such executive. The Change of Control Payment is equal to (1) the change of control multiple listed in each executive's employment agreement multiplied by (2) the base salary of such executive. The severance multiples for Messrs. Barrett, LaChey, Andrews, and DeRita, respectively are 2.70, 2.03, 1.88, and 2.03. The change of control multiples for Messrs. Barrett, LaChey, Andrews, and DeRita, respectively are 3.38, 2.70, 1.88, and 2.03. The plan also requires payments in certain circumstances to executives sufficient to make them whole for any excise tax imposed under Section 4999 of the Internal Revenue Code. DIRECTOR COMPENSATION Subject to certain limitations, each member of the board of directors of ACP who is not an officer of ACP shall be entitled to receive annual compensation for their services as a director of ACP and its subsidiaries, including Neenah, in the amount $40,000 ($80,000 for members of the audit committee), payable in cash quarterly in four equal installments, and are entitled to receive reimbursement for all reasonable out-of-pocket expenses, including, without limitation, travel expenses, incurred by such director in connection with the performance of such director's duties. In addition, each member of the board of directors who is not an officer is paid a fee of $1,000 for in person attendance at annual, regular, special and adjourned meetings of the board of directors or committee meetings of the board of directors. Meeting fees paid to the four outside directors for fiscal 2005 totaled $69,000. On the Effective Date, ACP issued 200,000 shares of ACP common stock, representing 0.25% of ACP's common stock on a fully-diluted basis as of the Effective Date, to each outside director. Members of the Special Litigation Committee of the board of directors (Messrs. Cohen and Marshall) were also granted a special one time payment of $20,000 to recognize their work in connection in arriving at a settlement of the Mercer litigation in 2005. 33 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The following table sets forth information known to us with respect to the beneficial ownership of the common stock of ACP, our ultimate parent company, as of December 16, 2005, or as otherwise indicated, by: - each person or entity who owns beneficially more than 5% or more of any class of ACP's voting securities; - each of the named executive officers; - each director; and - all directors and executive officers as a group.
SHARES BENEFICIALLY OWNED ------------------------- NAME OF BENEFICIAL OWNER (1) (2) NUMBER PERCENTAGE - -------------------------------- ---------- ---------- MacKay Shields LLC (3) ............................................. 19,698,751 24.4% Harbert Distressed Investment Master Fund, Ltd. (4) ................ 12,144,764 15.0% Citicorp Mezzanine III, L.P. (5) ................................... 11,890,846 14.7% Trust Company of the West (6) ...................................... 6,206,107 7.7% William M. Barrett (7) ............................................. 1,250,000 1.5% Gary W. LaChey (8) ................................................. 955,882 1.2% Joseph L. DeRita (9) ............................................... 404,412 * John H. Andrews (10) ............................................... 147,059 * James Ackerman ..................................................... 0 * Andrew B. Cohen (11) ............................................... 200,000 * Benjamin C. Duster, IV, Esq (11) ................................... 200,000 * Michael J. Farrell (11) ............................................ 200,000 * Jeffrey G. Marshall (11) ........................................... 200,000 * All executive officers and directors as a group (12 persons) (12) .. 4,366,176 5.4%
- ---------- * Less than 1 % (1) As used in this table, a beneficial owner of a security includes any person who, directly or indirectly, through contract, arrangement, understanding, relationship or otherwise has or shares (1) the power to vote, or direct the voting of, such security or (2) investing power which includes the power to dispose, or to direct the disposition of, such security. In addition, a person is deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days of December 16, 2005. Except as otherwise noted, the persons and entities listed on this table have sole voting and investment power with respect to all of the shares of common stock owned by them. Calculations are based on a total of 80,800,000 shares of common stock deemed to be outstanding as of December 16, 2005, which includes warrants to purchase common stock. The warrants have a nominal exercise price of $.01 per share (2) Includes the following number of shares issuable upon exercise of warrants presently exercisable: 9,812,706 warrants held by MacKay Shields LLC; 5,244,764 warrants held by Harbert Distressed Investment Master Fund, Ltd. The following data is the most recent available and is as of October 8, 2003: 90,644 warrants held by Exis Differential Holdings Ltd.; 7,848,293 warrants held by Citicorp Mezzanine III, L.P.; 3,113,554 warrants held by Trust Company of the West and 217,547 warrants held by Metropolitan Life Insurance Company. 34 (3) The address for MacKay Shields LLC is 9 West 57th Street, 33rd Floor, New York, NY 10019. (4) The address for Harbert Distressed Investment Master Fund, Ltd. is Third Floor, Bishop's Square, Redmond's Hill, Dublin 2, Ireland. (5) The number of shares listed above for Citicorp Mezzanine III, L.P. is as of October 8, 2003. Citicorp Mezzanine III, L.P. received 4,096,665 warrants for being a Standby Purchaser and 3,751,628 warrants in exchange for cancellation of the PIK Note. The address for Citicorp Mezzanine III, L.P. is 399 Park Avenue, 14th Floor, New York, NY 10043. (6) The number of shares listed above for Trust Company of the West is as of October 8, 2003. Includes shares held by TCW Shared Opportunity Fund II, L.P., Shared Opportunity Fund IIB LLC, TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., AIMCO CDO, Series 2000-A, TCW High Income Partners, Ltd. and TCW High Income Partners II, Ltd. The Trust Company of the West is the ultimate beneficial holder of these shares. The address for Trust Company of the West is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. (7) Includes 312,500 unvested shares of restricted stock. These shares shall vest on the next anniversary of the Effective Date (October 8, 2006), if as of such date, Mr. Barrett is still in our employ. (8) Includes 238,970 unvested shares of restricted stock. These shares shall vest on the next anniversary of the Effective Date (October 8, 2006), if as of such date, Mr. LaChey is still in our employ. (9) Includes 101,103 unvested shares of restricted stock. These shares shall vest on the next anniversary of the Effective Date (October 8, 2006), if as of such date, Mr. DeRita is still in our employ. (10) Includes 36,765 unvested shares of restricted stock. These shares shall vest on the next anniversary of the Effective Date (October 8, 2006), if as of such date, Mr. Andrews is still in our employ. (11) Pursuant to the Plan of Reorganization, Messrs. Cohen, Duster, Farrell and Marshall each received 200,000 shares of common stock as of the Effective Date. (12) Excludes 433,824 shares beneficially owned by other managerial employees. Collectively, our management and directors own an aggregate of 4,800,000 shares of common stock. 35 EQUITY COMPENSATION PLAN INFORMATION The following table sets forth, as of September 30, 2005, the number of securities outstanding under the 2003 Management Equity Incentive Plan, the weighted-average exercise price of such securities and the number of securities available for grant under this plan:
NUMBER OF NUMBER OF SECURITIES SECURITIES TO BE REMAINING AVAILABLE FOR ISSUED UPON FUTURE ISSUANCE UNDER EXERCISE OF WEIGHTED-AVERAGE EQUITY COMPENSATION OUTSTANDING EXERCISE PRICE OF PLANS (EXCLUDING OPTIONS, WARRANTS OUTSTANDING OPTIONS, SECURITIES REFLECTED IN PLAN CATEGORY AND RIGHTS WARRANTS AND RIGHTS THE FIRST COLUMN) - ------------- ----------------- -------------------- ----------------------- Equity compensation plans approved by security holders (1) -- -- 4,000,000 Equity compensation plans not approved by security holders -- -- -- --- --- --------- Total -- -- 4,000,000
- ---------- (1) The 2003 Management Equity Incentive Plan was adopted in connection with the Plan of Reorganization. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS RELATIONSHIP WITH ACP ACP is the parent company of NFC, and thus ACP indirectly owns 100% of the Common Stock of the Company. William M. Barrett, who serves as the President and Chief Executive Officer of the Company, currently serves as President and Chief Executive Officer of ACP. RELATIONSHIP WITH THE STANDBY PURCHASERS As a result of the standby purchase agreements that we entered into with the Standby Purchasers, we gave certain of the Standby Purchasers the right to designate members to the ACP board of directors. These rights are set forth in the Stockholders Agreement, which is described in Item 10 of this report and incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES We paid the following fees to Ernst & Young LLP in 2005 and 2004: Audit Fees. Fees for audit services totaled $410,900 and $513,700 for the years ended September 30, 2005 and 2004, respectively, which included fees associated with the annual audit, filings under the Securities Act of 1933, as amended, and other services performed related to regulatory filings. Audit-Related Fees. Fees for audit-related services totaled $116,500 and $21,600 for the years ended September 30, 2005 and 2004, respectively, for accounting consultations. Tax Fees. Fees for tax services totaled $509,300 and $482,000 for the years ended September 30, 2005 and 2004, respectively, and consisted primarily of tax consulting services. All Other Fees. There were no other fees incurred by the Company during the years ended September 30, 2005 and 2004. The Company's Audit Committee appoints the independent registered public accounting firm and pre-approves the services in regularly scheduled audit committee meetings. The Audit Committee has considered whether the fees of Ernst & Young LLP for non-audit services is compatible with maintaining Ernst & Young LLP's independence. 36 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Page ---- (a) (1) Consolidated Financial Statements of Neenah Foundry Company Report of Independent Registered Public Accounting Firm 38 Consolidated Balance Sheets 39 Consolidated Statements of Operations 41 Consolidated Statements of Changes in Stockholder's Equity (Deficit) 42 Consolidated Statements of Cash Flows 43 Notes to Consolidated Financial Statements 44 (2) Financial Statement Schedules Report of Independent Registered Public Accounting Firm 75 Schedule II - Valuation and Qualifying Accounts of Neenah Foundry Company 76
Schedules I, III, IV, and V are omitted since they are not applicable or not required under the rules of Regulation S-X. (3) Exhibits See (b) below (b) Exhibits See the Exhibit Index following the signature page of this report, which is incorporated herein by reference. Each management contract and compensatory plan or arrangement required to be filed as an exhibit to this report is identified in the Exhibit Index by an asterisk following its exhibit number. (c) Financial Statements Excluded From Annual Report to Shareholders Not Applicable 37 Report of Independent Registered Public Accounting Firm The Board of Directors Neenah Foundry Company We have audited the accompanying consolidated balance sheets of Neenah Foundry Company and Subsidiaries (the Company) as of September 30, 2005 and 2004 (Reorganized Company), and the related consolidated statements of operations, changes in stockholder's equity (deficit) and cash flows for the year ended September 30, 2005 and the period from October 1, 2003 to September 30, 2004 (Reorganized Company) and the year ended September 30, 2003 (Predecessor Company) and the portion of October 1, 2003 related to the Predecessor Company's reorganization gain. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Reorganized Company at September 30, 2005 and 2004, and the consolidated results of operations and cash flows for the year ended September 30, 2005 and the period from October 1, 2003 to September 30, 2004 (Reorganized Company) and the year ended September 30, 2003 (Predecessor Company) and the portion of October 1, 2003 related to the Predecessor Company's reorganization gain, in conformity with U.S. generally accepted accounting principles. As discussed in Note 1 to the financial statements, effective October 8, 2003, the Company was reorganized under a plan of reorganization confirmed by the United States Bankruptcy Court, District of Delaware. The financial statements of the Reorganized Company reflect the impact of adjustments to reflect the fair value of assets and liabilities under fresh start accounting, which was applied effective October 1, 2003. As a result, the financial statements of the Reorganized Company are presented on a different basis than those of the Predecessor Company and, therefore, are not comparable in all respects. /s/ Ernst & Young LLP Milwaukee, Wisconsin November 4, 2005 38 Neenah Foundry Company Consolidated Balance Sheets (In Thousands, Except Share and Per Share Data)
REORGANIZED SEPTEMBER 30 ------------------- 2005 2004 -------- -------- ASSETS Current assets: Cash $ 3,484 $ -- Accounts receivable, less allowance for doubtful accounts of $2,093 in 2005 and $1,142 in 2004 85,795 81,320 Inventories 59,123 61,119 Deferred income taxes 3,304 -- Other current assets 6,897 6,978 Current assets of discontinued operations -- 200 -------- -------- Total current assets 158,603 149,617 Property, plant and equipment: Land 6,708 6,287 Buildings and improvements 16,917 15,668 Machinery and equipment 74,026 63,542 Patterns 12,753 11,026 Construction in progress 2,994 1,551 -------- -------- 113,398 98,074 Less accumulated depreciation 22,148 10,798 -------- -------- 91,250 87,276 Deferred financing costs, net of accumulated amortization of $1,012 in 2005 and $487 in 2004 2,192 2,566 Identifiable intangible assets, net of accumulated amortization of $14,245 in 2005 and $7,121 in 2004 69,192 76,316 Goodwill 86,699 86,699 Other assets 4,619 4,966 -------- -------- 162,702 170,547 -------- -------- $412,555 $407,440 ======== ========
39 Neenah Foundry Company Consolidated Balance Sheets (In Thousands, Except Share and Per Share Data)
REORGANIZED SEPTEMBER 30 ------------------- 2005 2004 -------- -------- LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ 30,305 $ 29,150 Income taxes payable 5,562 2,831 Accrued wages and employee benefits 16,586 12,881 Accrued interest 7,134 7,140 Other accrued liabilities 2,411 2,122 Deferred income taxes -- 1,360 Current portion of long-term debt 33,668 44,215 -------- -------- Total current liabilities 95,666 99,699 Long-term debt 238,086 239,586 Deferred income taxes 23,759 28,636 Postretirement benefit obligations 10,404 10,575 Other liabilities 27,287 20,160 -------- -------- Total liabilities 395,202 398,656 Commitments and contingencies Stockholder's equity: Common stock, par value $100 per share; 1,000 shares authorized, issued and outstanding 100 100 Capital in excess of par value 5,429 5,429 Retained earnings 18,350 3,255 Accumulated other comprehensive loss (6,526) -- -------- -------- Total stockholder's equity 17,353 8,784 -------- -------- $412,555 $407,440 ======== ========
See accompanying notes. 40 Neenah Foundry Company Consolidated Statements of Operations (In Thousands)
REORGANIZED PREDECESSOR YEARS ENDED ------------------------ SEPTEMBER 30 YEAR ENDED ------------------- OCTOBER 1 SEPTEMBER 30 2005 2004 2003 2003 -------- -------- --------- ------------ Net sales $541,772 $450,942 $ -- $375,063 Cost of sales 440,818 375,124 -- 321,834 -------- -------- ------- -------- Gross profit 100,954 75,818 -- 53,229 Selling, general and administrative expenses 34,467 27,374 -- 26,132 Litigation settlement 6,500 -- -- -- Amortization expense 7,124 7,121 -- 3,819 Loss on disposal of property, plant and equipment 953 465 -- 195 -------- -------- ------- -------- Operating income 51,910 40,858 -- 23,083 Other income (expense): Interest expense (33,419) (33,392) -- (47,445) Interest income 13 29 -- 825 Reorganization gain (expense) -- -- 43,943 (7,874) -------- -------- ------- -------- Income (loss) from continuing operations before income taxes 18,504 7,495 43,943 (31,411) Provision (credit) for income taxes 3,409 3,881 -- (8,541) -------- -------- ------- -------- Income (loss) from continuing operations 15,095 3,614 43,943 (22,870) Discontinued operations: Loss from discontinued operations, net of income tax benefit of $(240) in 2004 and $(590) in 2003 -- (359) -- (1,095) Loss on sale of discontinued operations, net of income benefit of $(860) -- -- -- (1,596) -------- -------- ------- -------- Net income (loss) $ 15,095 $ 3,255 $43,943 $(25,561) ======== ======== ======= ========
See accompanying notes. 41 Neenah Foundry Company Consolidated Statements of Changes in Stockholder's Equity (Deficit) (In Thousands)
ACCUMULATED RETAINED OTHER CAPITAL EARNINGS COMPREHENSIVE COMMON IN EXCESS OF (ACCUMULATED (LOSS) STOCK PAR VALUE DEFICIT) INCOME TOTAL -------- ------------ ------------ ------------- -------- PREDECESSOR COMPANY Balance at September 30, 2002 $100 $ 51,317 $(55,563) $(8,000) $(12,146) Components of comprehensive loss: Net loss -- -- (25,561) -- (25,561) Pension liability adjustment, net of tax effect of $952 -- -- -- (1,309) (1,309) -------- Total comprehensive loss (26,870) ---- -------- -------- ------- -------- Balance at September 30, 2003 100 51,317 (81,124) (9,309) (39,016) Effect of fresh start accounting under plan of reorganization -- (45,888) 81,124 9,309 44,545 ---- -------- -------- ------- -------- REORGANIZED COMPANY Balance at October 1, 2003 100 5,429 -- -- 5,529 Net income -- -- 3,255 -- 3,255 ---- -------- -------- ------- -------- Balance at September 30, 2004 100 5,429 3,255 -- 8,784 Components of comprehensive income: Net income -- -- 15,095 -- 15,095 Pension liability adjustment, net of tax effect of $4,350 -- -- -- (6,526) (6,526) -------- Total comprehensive income 8,569 ---- -------- -------- ------- -------- Balance at September 30, 2005 $100 $ 5,429 $ 18,350 $(6,526) $ 17,353 ==== ======== ======== ======= ========
See accompanying notes. 42 Neenah Foundry Company Consolidated Statements of Cash Flows (In Thousands)
REORGANIZED PREDECESSOR YEARS ENDED ------------------------ SEPTEMBER 30 YEAR ENDED ------------------- OCTOBER 1 SEPTEMBER 30 2005 2004 2003 2003 -------- -------- --------- ------------ OPERATING ACTIVITIES Net income (loss) $ 15,095 $ 3,255 $ 43,943 $(25,561) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Noncash reorganization expense (gain) -- -- (68,299) 1,464 Provision for obsolete inventories 356 456 -- 424 Provision for bad debts 2,153 1,043 -- 1,760 Lower of cost or market inventory adjustment -- -- -- 1,228 Depreciation 11,740 10,871 -- 22,530 Amortization of identifiable intangible assets 7,124 7,121 -- 3,819 Amortization of deferred financing costs and premium/discount on notes 2,110 2,070 -- 2,242 Loss on sale of discontinued operations -- -- -- 2,456 Loss on disposal of property, plant and equipment 953 465 -- 195 Deferred income taxes (5,191) 3,620 -- (10,337) Changes in operating assets and liabilities: Accounts receivable (6,628) (26,847) -- (794) Inventories 1,640 (2,013) -- (6,995) Other current assets 281 (1,254) -- (3,047) Accounts payable 1,155 (2,619) -- 3,184 Accrued liabilities 6,719 7,749 -- 29,978 Postretirement benefit obligations (171) 256 -- 575 Other liabilities (3,749) (1,428) -- (119) -------- -------- -------- -------- Net cash provided by (used in) operating activities 33,587 2,745 (24,356) 23,002 INVESTING ACTIVITIES Proceeds from disposition of business, net of fees -- -- -- 648 Purchase of property, plant and equipment (17,572) (12,713) -- (11,900) Proceeds from sale of property, plant and equipment 905 55 -- 40 Other 347 475 -- (105) -------- -------- -------- -------- Net cash used in investing activities (16,320) (12,183) -- (11,317) FINANCING ACTIVITIES Proceeds from long-term debt 84 14,450 -- 815 Payments on long-term debt (13,716) (5,012) -- (13,017) Debt issuance costs (151) -- -- (1,291) -------- -------- -------- -------- Net cash provided by (used in) financing activities (13,783) 9,438 -- (13,493) -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents 3,484 -- (24,356) (1,808) Cash and cash equivalents at beginning of year -- -- 24,356 26,164 -------- -------- -------- -------- Cash and cash equivalents at end of year $ 3,484 $ -- $ -- $ 24,356 ======== ======== ======== ======== Supplemental disclosures of cash flows information: Interest paid $ 31,315 $ 24,182 $ -- $ 34,995 Income taxes paid (refunded) 5,622 568 -- (18,032)
See accompanying notes. 43 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Neenah Foundry Company (Neenah), together with its subsidiaries (collectively, the Company), manufactures gray and ductile iron castings and forged components for sale to industrial and municipal customers. Industrial castings are custom-engineered and are produced for customers in several industries, including the medium and heavy-duty truck components, farm equipment, heating, ventilation and air-conditioning industries. Municipal castings include manhole covers and frames, storm sewer frames and grates, tree grates and specialty castings for a variety of applications and are sold principally to state and local government entities, utilities and contractors. The Company's sales generally are unsecured. Neenah is a wholly owned subsidiary of NFC Castings, Inc., which is a wholly owned subsidiary of ACP Holding Company. Neenah has the following subsidiaries, all of which are wholly owned: Deeter Foundry, Inc. (Deeter); Mercer Forge Corporation and subsidiaries (Mercer); Dalton Corporation and subsidiaries (Dalton); Advanced Cast Products, Inc. and subsidiaries (Advanced Cast Products); Gregg Industries, Inc. (Gregg); Neenah Transport, Inc. (Transport) and Cast Alloys, Inc. (Cast Alloys), which is inactive. Deeter manufactures gray iron castings for the municipal market and special application construction castings. Mercer manufactures forged components for use in transportation, railroad, mining and heavy industrial applications and microalloy forgings for use by original equipment manufacturers and industrial end users. Dalton manufactures gray iron castings for refrigeration systems, air conditioners, heavy equipment, engines, gear boxes, stationary transmissions, heavy-duty truck transmissions and other automotive parts. Advanced Cast Products manufactures ductile and malleable iron castings for use in various industrial segments, including heavy truck, construction equipment, railroad, mining and automotive. Gregg manufactures gray and ductile iron castings for industrial and commercial use. Transport is a common and contract carrier licensed to operate in the continental United States. The majority of Transport's revenues are derived from transport services provided to the Company. On August 5, 2003, the Company filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court, District of Delaware (the Bankruptcy Court). On September 26, 2003, the Bankruptcy Court confirmed the Company's Plan of Reorganization, and on October 8, 2003, the Company consummated the Plan of Reorganization and emerged from its Chapter 11 reorganization proceedings with a significantly restructured balance sheet. The accompanying consolidated financial statements for 44 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 1. ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED) the year ended September 30, 2003, and the portion of October 1, 2003 related to the reorganization gain have been prepared in accordance with American Institute of Certified Public Accountant's Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code" (SOP 90-7). The Company implemented the fresh start accounting provisions (fresh start) of SOP 90-7 as of October 1, 2003. Under fresh start, the fair value of the reorganized Company was allocated among its assets and liabilities, and its accumulated deficit as of October 1, 2003 was eliminated. The implementation of fresh start resulted in a substantial reduction in the carrying value of the Company's long-lived assets, including property, plant and equipment and intangible assets, and long-term liabilities. As a result, the Predecessor financial statements are not comparable to the financial statements of the reorganized company. Although the effective date of the Plan of Reorganization was October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the effective date, the Company has accounted for the consummation of the Plan of Reorganization as if it had occurred on October 1, 2003 and implemented fresh start reporting as of that date. Fresh start required that the Company adjust the historical cost of its assets and liabilities to their fair value. The fair value of the reorganized Company, or the reorganization value, of approximately $290,000 was determined by an independent party based on multiples of earnings before interest, income taxes, depreciation and amortization (EBITDA) and discounted cash flows under the Company's financial projections. Reorganization gain for the Predecessor on October 1, 2003 consisted of the following: Net gain on extinguishment of debt $ 168,208 Net loss resulting from fresh start fair value adjustments to assets and liabilities (124,265) --------- Total reorganization gain $ 43,943 =========
45 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Neenah and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. ACCOUNTS RECEIVABLE The Company evaluates the collectibility of its accounts receivable based on a number of factors. For larger accounts, an allowance for doubtful accounts is recorded based on the applicable parties' ability and likelihood to pay based on management's review of the facts. For all other accounts, the Company recognizes an allowance based on the length of time the receivable is past due based on historical experience. INVENTORIES Inventories at September 30, 2005 and 2004 are stated at the lower of cost or market. The cost of inventories for Neenah and Dalton is determined on the last-in, first-out (LIFO) method for substantially all inventories except supplies, for which cost is determined on the first-in, first-out (FIFO) method. The cost of inventories for Deeter, Mercer, Advanced Cast Products and Gregg is determined on the FIFO method. LIFO inventories comprise 42% and 47% of total inventories at September 30, 2005 and 2004, respectively. If the FIFO method of inventory valuation had been used by all companies, inventories would have been approximately $6,901 and $4,938 higher than reported at September 30, 2005 and 2004, respectively. Additionally, cost of sales in the accompanying consolidated statement of operations would have been approximately $1,039 higher for the year ended September 30, 2005 had the Company not experienced a decrement in inventory quantities that are valued on the LIFO method. 46 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment acquired prior to September 30, 2003 are stated at fair value, as required by fresh start accounting. Additions to property, plant and equipment subsequent to October 1, 2003 are stated at cost. Depreciation for financial reporting purposes is provided over the estimated useful lives (3 to 40 years) of the respective assets using the straight-line method. DEFERRED FINANCING COSTS Costs incurred to obtain long-term financing are amortized using the effective interest method over the term of the related debt. IDENTIFIABLE INTANGIBLE ASSETS Identifiable intangible assets are amortized on a straight-line basis over the estimated useful lives of 10 to 40 years. GOODWILL Goodwill is tested for impairment annually during the fourth fiscal quarter or more frequently if an event indicates that the goodwill might be impaired in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." Based on such tests, there was no impairment of goodwill recorded in fiscal 2005 or 2004. IMPAIRMENT OF LONG-LIVED ASSETS Property, plant and equipment and identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. Such analyses necessarily involve significant judgment. 47 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE RECOGNITION Revenues are recognized when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred and ownership has transferred to customer; the price to the customer is fixed and determinable; and collectibility is reasonably assured. The Company meets these criteria for revenue recognition upon shipment of product, which corresponds with transfer of title. SHIPPING AND HANDLING COSTS Shipping and handling costs are included in cost of sales. ADVERTISING COSTS Advertising costs are expensed as incurred. Advertising costs for continuing operations were $470, $525 and $445 for the years ended September 30, 2005, 2004 and 2003, respectively. INCOME TAXES Deferred income taxes are provided for temporary differences between the financial reporting and income tax basis of the Company's assets and liabilities and are measured using currently enacted tax rates and laws. FINANCIAL INSTRUMENTS The carrying value of the Company's financial instruments, including cash, accounts receivable and accounts payable approximate fair value. The fair value of the Company's long-term debt is approximately $285,838 at September 30, 2005. The fair value of the Senior Subordinated and Senior Secured Notes with a face value of $233,130 is based on quoted market prices. RECLASSIFICATIONS Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. 48 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) NEW ACCOUNTING PRONOUNCEMENTS In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 151, "Inventory Costs, an Amendment of ARB No. 43, Chapter 4." SFAS No. 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and requires the allocation of fixed production overhead to inventory based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 is not expected to have a material impact on the Company's financial condition, results of operations or cash flows. On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment," which is a revision of SFAS No. 123, "Accounting for Stock-Based Compensation". SFAS No. 123(R) supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees," and amends SFAS No. 95, "Statement of Cash Flows." Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Under the amended compliance dates adopted by the Securities and Exchange Commission, SFAS No. 123(R) must be adopted by the Company no later than October 1, 2005, the beginning of the Company's next fiscal year. The adoption of SFAS No. 123(R) will not have a material impact on the Company's results of operations or financial position as the Company has no stock-based compensation plans. 3. DISCONTINUED OPERATIONS On December 27, 2002, the Company sold substantially all of the assets of Belcher Corporation (Belcher) foundry (a wholly-owned subsidiary of Advanced Cast Products) for cash of $648 (net of fees and escrow deposits), a $1,500 note receivable and $1,000 of preferred stock of the buyer. The disposition of Belcher resulted in a loss of $1,596, net of taxes of $860. Included in the loss on disposal is a curtailment loss on Belcher's defined-benefit pension plan of $367, net of taxes of $198, which was retained by the Company. The results of operations of Belcher have been reported as discontinued operations in the consolidated statements of operations for all periods presented. 49 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 3. DISCONTINUED OPERATIONS (CONTINUED) Revenues for Belcher, which were previously included in the Castings segment, for the year ended September 30, 2003 were $3,186. Interest allocated to Belcher of $139 for the year ended September 30, 2003 was based on the purchase price of Belcher in relation to the purchase price of all other acquisitions funded by additional Company borrowings. 4. INVENTORIES Inventories consist of the following as of September 30:
2005 2004 ------- ------- Raw materials $ 6,905 $ 5,218 Work in process and finished goods 37,088 41,566 Supplies 15,130 14,335 ------- ------- $59,123 $61,119 ======= =======
5. INTANGIBLE ASSETS Identifiable intangible assets consist of the following as of September 30:
2005 2004 ----------------------- ----------------------- GROSS GROSS CARRYING ACCUMULATED CARRYING ACCUMULATED AMOUNT AMORTIZATION AMOUNT AMORTIZATION -------- ------------ -------- ------------ Amortizable intangible assets: Customer lists $67,000 $13,401 $67,000 $6,700 Tradenames 16,282 823 16,282 411 Other 155 21 155 10 ------- ------- ------- ------ $83,437 $14,245 $83,437 $7,121 ======= ======= ======= ======
The Company does not have any intangible assets deemed to have indefinite lives. The Company expects to recognize amortization expense of $7,124 in each of the five fiscal years subsequent to September 30, 2005. 50 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 6. LONG-TERM DEBT Long-term debt consists of the following as of September 30:
2005 2004 -------- -------- 13% Senior Subordinated Notes $100,000 $100,000 11% Senior Secured Notes, less unamortized discount of $7,921 and $9,506 124,607 123,022 Term Loan Facilities 16,564 19,719 Revolving Credit Facility 30,502 39,477 Other 81 1,583 -------- -------- 271,754 283,801 Less current portion 33,668 44,215 -------- -------- $238,086 $239,586 ======== ========
The Company's Credit Facility provides for a revolving credit line of up to $92,085 (with a $5,000 sublimit available for letters of credit and a term loan in the aggregate original principal amount of $22,085 which requires annual principal payments of $3,155 through fiscal 2008, with the remainder due in fiscal 2009). The Credit Facility matures on October 8, 2009. The Credit Facility contains various financial and nonfinancial covenants and is secured by substantially all of the Company's tangible and intangible assets. The interest rate on the Credit Facility is based on LIBOR (4% at September 30, 2005) or prime plus an applicable margin, based upon the Company meeting certain financial statistics. The weighted-average interest rate on the revolving credit line outstanding borrowings at September 30, 2005 is 5.85%. Substantially all of Neenah's wholly owned subsidiaries are co-borrowers with Neenah under the Credit Facility and are jointly and severally liable with Neenah for all obligations under the Credit Facility, subject to customary exceptions for transactions of this type. In addition, NFC Castings, Inc. (NFC), Neenah's immediate parent, and the remaining wholly owned subsidiaries of Neenah jointly and severally guarantee Neenah's obligations under the Credit Facility, subject to customary exceptions for transactions of this type. The borrowers' and guarantors' obligations under the Credit Facility are secured by a first priority perfected security interest, subject to customary restrictions, in substantially all of the tangible and intangible assets of the Company and its subsidiaries. The Senior Secured Notes, and the guarantees in respect thereof, are equal in right of payment to the Credit Facility, and the guarantees in respect thereof. The liens in respect of the Senior Secured Notes are junior to the liens securing the Credit Facility and guarantees thereof. Borrowings under the Revolving Credit Facility have been classified as current liabilities in the accompanying consolidated balance sheets in accordance with the consensus of Emerging Issues Task Force No. 95-22, 51 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) "Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements that include both a Subjective Acceleration Clause and a Lock-Box Arrangement." The Senior Secured Notes mature on September 30, 2010 and bear interest at 11%. Interest is payable semiannually on January 1 and July 1. The Senior Secured Notes are secured by substantially all of the Company's tangible and intangible assets; however, they are second in priority to the borrowings under the Credit Facility. The Company's obligations under the Senior Secured Notes are guaranteed on a secured basis by each of its wholly owned subsidiaries. 52 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 6. LONG-TERM DEBT (CONTINUED) The Senior Subordinated Notes are unsecured, mature on September 30, 2013 and bear interest at 13%. Interest of 5% is payable in cash and 8% may be paid-in-kind semiannually on January 1 and July 1. Through July 1, 2005, the Company has paid the interest in cash. The Senior Secured and the Senior Subordinated Notes contain covenants which restrict the Company from incurring additional indebtedness and restricts dividend payments, stock redemptions and certain other transactions. The Senior Secured and the Senior Subordinated Notes are fully, unconditionally, jointly and severally guaranteed by all subsidiaries. Scheduled annual principal payments on long-term debt for fiscal years subsequent to September 30, 2005 are: 2006 $ 33,668 2007 3,166 2008 3,167 2009 7,112 2010 124,620 Thereafter 100,021 -------- $271,754 ========
7. COMMITMENTS AND CONTINGENCIES The Company leases certain plants, warehouse space, machinery and equipment, office equipment and vehicles under operating leases. Rent expense for continuing operations under these operating leases for the years ended September 30, 2005, 2004 and 2003 totaled $2,920, $2,999 and $2,885, respectively. Minimum rental payments due under operating leases for fiscal years subsequent to September 30, 2005, are as follows: 2006 $2,015 2007 1,637 2008 1,267 2009 689 2010 538 Thereafter 479 ------ $6,625 ======
53 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 7. COMMITMENTS AND CONTINGENCIES (CONTINUED) The Company is partially self-insured for workers' compensation claims. An accrued liability is recorded for claims incurred but not yet paid or reported and is based on current and historical claim information. The accrued liability may ultimately be settled for an amount different than the recorded amount. Adjustments of the accrued liability are recorded in the period in which they become known. Approximately 67% of the Company's work force is covered by collective bargaining agreements. The collective bargaining agreement for Advanced Cast Products was scheduled to expire in October 2005 and has been extended through fiscal 2009. In the normal course of business, the Company is named in legal proceedings. There are currently no material legal proceedings pending with respect to the Company. On August 5, 2005 the Company settled a legal matter related to the proposed sale of one of its subsidiaries by paying a cash settlement of $6,500. 8. INCOME TAXES The provision (credit) for income taxes consists of the following:
REORGANIZED PREDECESSOR ---------------- ----------- YEARS ENDED SEPTEMBER 30 ------------------------------ 2005 2004 2003 ------- ------ -------- Current: Federal $ 7,032 $ (700) $ -- State 1,568 721 346 8,600 21 346 Deferred (5,191) 3,620 (10,337) ------- ------ -------- $ 3,409 $3,641 $ (9,991) ======= ====== ========
The provision (credit) for income taxes is included in the consolidated statements of operations as follows:
REORGANIZED PREDECESSOR --------------- ----------- YEARS ENDED SEPTEMBER 30 ----------------------------- 2005 2004 2003 ------ ------ ------- Continuing operations $3,409 $3,881 $(8,541) Discontinued operations -- (240) (1,450) ------ ------ ------- $3,409 $3,641 $(9,991) ====== ====== =======
54 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 8. INCOME TAXES (CONTINUED) The provision (credit) for income taxes differs from the amount computed by applying the federal statutory rate of 35% to income (loss) before income taxes as follows:
REORGANIZED PREDECESSOR ---------------- ----------- YEARS ENDED SEPTEMBER 30 ------------------------------ 2005 2004 2003 ------- ------ -------- Provision (credit) at statutory rate $ 6,476 $2,414 $(12,443) State income taxes, net of federal taxes 815 469 225 Reorganization expenses -- -- 2,244 Permanent differences due to reorganization (885) 763 -- Change in tax method of determining LIFO inventory (2,679) -- -- Other (318) (5) (17) ------- ------ -------- Provision (credit) for income taxes $ 3,409 $3,641 $ (9,991) ======= ====== ========
55 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 8. INCOME TAXES (CONTINUED) Deferred income tax assets and liabilities consist of the following as of September 30:
2005 2004 -------- -------- Deferred income tax liabilities: Inventories $ (905) $ (4,118) Property, plant and equipment (10,939) (10,243) Identifiable intangible assets (27,677) (30,526) Other (382) (570) -------- -------- (39,903) (45,457) Deferred income tax assets: Employee benefit plans 14,972 12,208 Accrued vacation 2,191 2,148 Other accrued liabilities 1,414 587 State net operating loss carryforwards 264 -- Other 871 518 -------- -------- Total deferred tax assets 19,712 15,461 Valuation allowance for deferred income tax assets (264) -- ======== ======== 19,448 15,461 ======== ======== Net deferred income tax liability $(20,455) $(29,996) ======== ======== Included in the consolidated balance sheets as: Current deferred income tax asset (liability) $ 3,304 $ (1,360) Noncurrent deferred income tax liability (23,759) (28,636) -------- -------- $(20,455) $(29,996) ======== ========
As of September 30, 2005, the Company has state net operating loss carryforwards of $2,733 which expire through fiscal 2015. A full valuation allowance has been established for all state net operating loss carryforwards due to the uncertainty regarding the realization of the deferred tax benefit through future earnings. 56 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 9. EMPLOYEE BENEFIT PLANS DEFINED-BENEFIT PENSION PLANS AND POSTRETIREMENT BENEFITS The Company sponsors five defined-benefit pension plans covering the majority of its hourly employees. Retirement benefits under the pension plans are based on years of service and defined-benefit rates. The Company has elected a measurement date of June 30 for all of its pension plans. The Company funds the pension plans based on actuarially determined cost methods allowable under Internal Revenue Service regulations. The Company also sponsors unfunded defined-benefit postretirement health care plans covering substantially all salaried and hourly employees at Neenah and their dependents. For salaried employees at Neenah, benefits are provided from the date of retirement for the duration of the employee's life, while benefits for hourly employees at Neenah are provided from retirement to age 65. Retirees' contributions to the plans are based on years of service and age at retirement. The Company funds benefits as incurred. The Company has elected a measurement date of June 30 for these plans. FASB Financial Staff Position No. FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003" (the Act), addresses the impact of the Act enacted in December 2003. The Act provides a prescription drug subsidy benefit for Medicare eligible employees starting in 2006. During fiscal 2005, it was determined that the benefit levels of the Company's defined-benefit postretirement health care plan covering salaried employees met the criteria set forth by the Act to qualify for the subsidy. Effective with the June 30, 2005 measurement date, the effects of the subsidy were used in measuring the plan's benefit obligation and net periodic postretirement benefit cost. The effect of the subsidy was to reduce the net periodic postretirement benefit cost by approximately $56 for the year ended September 30, 2005 and reduce the accumulated postretirement benefit obligation by approximately $415 as of the June 30, 2005 measurement date. The amount of subsidy payments expected to be received is approximately $42 per year in fiscal 2006 and future years. 57 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 9. EMPLOYEE BENEFIT PLANS (CONTINUED) OBLIGATIONS AND FUNDED STATUS The following table summarizes the funded status of the pension plans and postretirement benefit plans and the amounts recognized in the consolidated balance sheets at September 30, 2005 and 2004:
PENSION POSTRETIREMENT BENEFITS BENEFITS ------------------- ------------------- 2005 2004 2005 2004 -------- -------- -------- -------- Change in benefit obligation: Benefit obligation, October 1 $ 62,190 $ 60,049 $ 8,914 $ 10,319 Service cost 2,008 1,964 161 215 Interest cost 3,870 3,663 363 393 Plan amendments -- -- -- (461) Actuarial (gains) losses 12,548 (1,761) (1,655) (1,185) Benefits paid (2,454) (1,725) (432) (367) -------- -------- -------- -------- Benefit obligation, September 30 $ 78,162 $ 62,190 $ 7,351 $ 8,914 ======== ======== ======== ======== Change in plan assets: Fair value of plan assets, October 1 $ 49,020 $ 43,489 $ -- $ -- Actual return on plan assets 3,892 3,845 -- -- Company contributions 4,190 3,411 432 367 Benefits paid (2,454) (1,725) (432) (367) -------- -------- -------- -------- Fair value of plan assets, September 30 $ 54,648 $ 49,020 $ -- $ -- ======== ======== ======== ======== Funded status of the plans: Benefit obligation in excess of plan assets $(23,514) $(13,170) $ (7,351) $ (8,914) Unrecognized prior service cost -- -- (429) (461) 4th quarter contributions 1,200 -- 109 122 Unrecognized net (gains) losses 10,789 (1,986) (2,733) (1,322) -------- -------- -------- -------- $(11,525) $(15,156) $(10,404) $(10,575) ======== ======== ======== ======== Amounts recognized in the consolidated balance sheets at September 30: Accrued pension or postretirement benefit liability $(22,401) $(15,156) $(10,404) $(10,575) Deferred income tax asset 4,350 -- -- -- Accumulated other comprehensive loss 6,526 -- -- -- -------- -------- -------- -------- $(11,525) $(15,156) $(10,404) $(10,575) ======== ======== ======== ========
The accumulated benefit obligation for the Company's defined benefit pension plans was $78,162 and $62,190 at September 30, 2005 and 2004, respectively. 58 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 9. EMPLOYEE BENEFIT PLANS (CONTINUED) BENEFIT COSTS Components of net periodic benefit cost for the years ended September 30 are as follows:
PENSION BENEFITS POSTRETIREMENT BENEFITS --------------------------- ----------------------- 2005 2004 2003 2005 2004 2003 ------- ------- ------- ----- ---- ------ Service cost $ 2,008 $ 1,964 $ 1,798 $ 161 $286 $ 319 Interest cost 3,870 3,663 3,433 363 523 592 Expected return on plan assets (4,157) (3,630) (3,265) -- -- -- Amortization of prior service cost -- -- 146 (32) (32) 45 Recognized net actuarial (gain) loss 2 20 515 (244) (33) 47 ------- ------- ------- ----- ---- ------ Net periodic benefit cost $ 1,723 $ 2,017 $ 2,627 $ 248 $744 $1,003 ======= ======= ======= ===== ==== ======
The net periodic benefit costs are included in continuing operations in the consolidated statements of operations for all periods, except for the year ended September 30, 2003, of which $195 is recorded as discontinued operations. ASSUMPTIONS Weighted-average assumptions used to determine benefit obligations as of September 30 are as follows:
PENSION BENEFITS POSTRETIREMENT BENEFITS ---------------- ----------------------- 2005 2004 2005 2004 ---- ---- ---- ---- Discount rate 5.25% 6.25% 5.25% 6.25%
59 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 9. EMPLOYEE BENEFIT PLANS (CONTINUED) Weighted-average assumptions used to determine net periodic benefit cost for the years ended September 30 are as follows:
PENSION BENEFITS POSTRETIREMENT BENEFITS --------------------------------------------- ----------------------- 2005 2004 2003 2005 2004 2003 ------------- ------------- ------------- ---- ---- ---- Discount rate 6.25% 6.25% 6.25% to 7.25% 6.25% 6.25% 6.25% Expected long-term rate of return on plan assets 7.50% TO 8.50% 7.50% to 8.50% 7.50% to 8.50% -- -- --
For measurement purposes, the healthcare cost trend rate was assumed to be 8% decreasing gradually to 5.0% in 2010 and then remaining at that level thereafter. The healthcare cost trend rate assumption has a significant effect on the amounts reported. A one percentage point change in the healthcare cost trend rate would have the following effect:
1% Increase 1% Decrease ----------- ----------- Effect on total of service cost and interest cost $ 114 $ (87) Effect on postretirement benefit obligation 1,454 (1,122)
PENSION PLAN ASSETS The following table summarizes the weighted-average asset allocations of the pension plans at September 30:
2005 2004 ---- ---- Asset category: Equity securities 47% 47% Debt securities 34 37 Real estate 3 3 Other 16 13 --- --- 100% 100% === ===
60 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 9. EMPLOYEE BENEFIT PLANS (CONTINUED) The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by maximizing investment returns within that prudent level of risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks as well as growth, value, and small and large capitalizations. The Company's targeted asset allocation ranges as a percentage of total market value are as follows: equity securities 45% to 50% and debt securities 35% to 40%. None of the plans' equity securities are invested in common stock of the plan sponsor's parent company, ACP Holding Company. Additionally, cash balances are maintained at levels adequate to meet near term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews. The Company's overall expected long-term rate of return on assets is 7.50% to 8.50%. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based on historical returns adjusted to reflect the current view of the long-term investment market. BENEFIT PAYMENTS AND CONTRIBUTIONS The following benefit payments, which reflect expected future service, as appropriate, and are net of expected Medicare subsidy receipts, are expected to be paid for fiscal years subsequent to September 30, 2005: 2006 $ 2,613 2007 2,758 2008 2,907 2009 3,259 2010 3,471 2011 - 2015 22,017 ------- $37,025 =======
The Company expects to contribute $5,071 to its pension plans during fiscal 2006. 61 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 9. EMPLOYEE BENEFIT PLANS (CONTINUED) DEFINED-CONTRIBUTION RETIREMENT PLANS The Company sponsors various defined-contribution retirement plans (the Plans) covering substantially all salaried and certain hourly employees. The Plans allow participants to make 401(k) contributions in amounts ranging from 1% to 15% of their compensation. The Company matches between 35% and 50% of the participants' contributions up to a maximum of 6% of the employee's compensation, as defined. The Company may make additional voluntary contributions to the Plans as determined annually by the Board of Directors. Total Company contributions for continuing operations amounted to $1,861, $1,195 and $1,694 for the years ended September 30, 2005, 2004 and 2003, respectively. OTHER EMPLOYEE BENEFITS The Company provides unfunded supplemental retirement benefits to certain active and retired employees at Dalton. At September 30, 2005, the present value of the current and long-term portion of these supplemental retirement obligations totaled $232 and $2,347, respectively. At September 30, 2004, the present value of the current and long-term portion of these supplemental retirement obligations totaled $215 and $2,656, respectively. Certain of Dalton's hourly employees are covered by a multi-employer, defined-benefit pension plan pursuant to a collective bargaining agreement. The Company's expense for the years ended September 30, 2005, 2004 and 2003, was $337, $361 and $417, respectively. Substantially all of Mercer's union employees are covered by a multiemployer, defined-benefit pension plan pursuant to a collective bargaining agreement. The Company's expense for the years ended September 30, 2005, 2004 and 2003, was $290, $141 and $102, respectively. 10. SEGMENT INFORMATION The Company has two reportable segments, Castings and Forgings. The Castings segment manufactures and sells gray and ductile iron castings for the industrial and municipal markets, while the Forgings segment manufactures forged components for the industrial market. The Other segment includes machining operations and freight hauling. 62 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 10. SEGMENT INFORMATION (CONTINUED) The Company evaluates performance and allocates resources based on the operating income before depreciation and amortization charges of each segment. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are recorded at cost plus a share of operating profit. The following segment information is presented for continuing operations:
REORGANIZED PREDECESSOR ------------------- ----------- YEARS ENDED SEPTEMBER 30 --------------------------------- 2005 2004 2003 -------- -------- ----------- Revenues from external customers: Castings $491,159 $414,575 $ 349,410 Forgings 44,348 29,853 20,861 Other 22,507 22,035 19,185 Elimination of intersegment revenues (16,242) (15,521) (14,393) -------- -------- --------- $541,772 $450,942 $ 375,063 ======== ======== ========= Income (loss) from continuing operations: Castings $ 15,095 $ 3,614 $ (22,870) Forgings (570) (2,482) (6,819) Other 189 1,980 (150) Elimination of intersegment loss 381 502 6,969 -------- -------- --------- $ 15,095 $ 3,614 $ (22,870) ======== ======== ========= Total assets: Castings $475,725 $478,820 $ 641,870 Forgings 7,040 8,110 38,454 Other 13,268 12,097 10,971 Elimination of intersegment assets (83,478) (91,587) (154,461) -------- -------- --------- $412,555 $407,440 $ 536,834 ======== ======== =========
63 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 10. SEGMENT INFORMATION (CONTINUED)
CASTINGS FORGINGS OTHER TOTAL -------- -------- ------ ------- Year ended September 30, 2005 (Reorganized): Interest expense $29,543 $3,387 $ 489 $33,419 Interest income 13 -- -- 13 Provision for income taxes 1,642 479 1,288 3,409 Depreciation and amortization expense 16,979 815 1,070 18,864 Expenditures for long-lived assets 15,966 948 658 17,572 Year ended September 30, 2004 (Reorganized): Interest expense $29,392 $3,476 $ 524 $33,392 Interest income 29 -- -- 29 Provision (credit) for income taxes 3,648 (385) 618 3,881 Depreciation and amortization expense 16,254 749 989 17,992 Expenditures for long-lived assets 11,589 398 726 12,713 Year ended September 30, 2003 (Predecessor): Interest expense $41,907 $4,803 $ 735 $47,445 Interest income 825 -- -- 825 Provision (credit) for income taxes (8,331) (622) 412 (8,541) Depreciation and amortization expense 22,522 2,277 1,296 26,095 Expenditures for long-lived assets 11,112 217 571 11,900
GEOGRAPHIC INFORMATION
LONG-LIVED NET SALES ASSETS (1) --------- ---------- Year ended September 30, 2005 (Reorganized): United States $509,104 $ 91,250 Foreign countries 32,668 -- -------- -------- $541,772 $ 91,250 ======== ======== Year ended September 30, 2004 (Reorganized): United States $428,081 $ 87,276 Foreign countries 22,861 -- -------- -------- $450,942 $ 87,276 ======== ======== Year ended September 30, 2003 (Predecessor): United States $364,318 $162,969 Foreign countries 10,745 -- -------- -------- $375,063 $162,969 ======== ========
(1) Represents tangible long-lived assets only. 64 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES The following tables present condensed consolidating financial information for fiscal 2005 and the period from October 1, 2003 to September 30, 2004 (Reorganized Company) and fiscal 2003 (Predecessor Company) for: (a) Neenah, and (b) on a combined basis, the guarantors of the Senior Secured Notes and the Senior Subordinated Notes, which include all of the wholly owned subsidiaries of Neenah (Subsidiary Guarantors). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are jointly, severally and unconditionally liable under the guarantees, and the Company believes separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. 65 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2005
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ ASSETS Current assets: Cash (overdraft) and cash equivalents $ 4,952 $ (1,468) $ -- $ 3,484 Accounts receivable, net 37,085 48,710 -- 85,795 Inventories 22,754 36,369 -- 59,123 Deferred income taxes 4,537 (1,233) -- 3,304 Other current assets 3,908 2,989 -- 6,897 -------- -------- --------- -------- Total current assets 73,236 85,367 -- 158,603 Investments in and advances to subsidiaries 114,430 -- (114,430) -- Property, plant and equipment, net 36,519 54,731 -- 91,250 Deferred financing costs, identifiable intangible assets and goodwill, net 140,435 17,648 -- 158,083 Other assets 1,834 2,785 -- 4,619 -------- -------- --------- -------- $366,454 $160,531 $(114,430) $412,555 ======== ======== ========= ======== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ 8,442 $ 21,863 $ -- $ 30,305 Net intercompany payable -- 81,907 (81,907) -- Income taxes payable 5,562 -- -- 5,562 Accrued wages and employee benefits 7,701 8,885 -- 16,586 Accrued interest 7,134 -- -- 7,134 Other accrued liabilities 469 1,942 -- 2,411 Current portion of long-term debt 33,658 10 -- 33,668 -------- -------- --------- -------- Total current liabilities 62,966 114,607 (81,907) 95,666 Long-term debt 238,015 71 -- 238,086 Deferred income taxes 20,539 3,220 -- 23,759 Postretirement benefit obligations 10,404 -- -- 10,404 Other liabilities 17,177 10,110 -- 27,287 Stockholder's equity 17,353 32,523 (32,523) 17,353 -------- -------- --------- -------- $366,454 $160,531 $(114,430) $412,555 ======== ======== ========= ========
66 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2004
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ ASSETS Current assets: Cash (overdraft) and cash equivalents $ 1,683 $ (1,683) $ -- $ -- Accounts receivable, net 39,487 41,833 -- 81,320 Inventories 25,481 35,638 -- 61,119 Deferred income taxes 4,086 (4,086) -- -- Other current assets 3,638 3,540 -- 7,178 -------- -------- --------- -------- Total current assets 74,375 75,242 -- 149,617 Investments in and advances to subsidiaries 111,982 -- (111,982) -- Property, plant and equipment, net 31,683 55,593 -- 87,276 Deferred financing costs, identifiable intangible assets and goodwill, net 146,515 19,066 -- 165,581 Other assets 1,895 3,071 -- 4,966 -------- -------- --------- -------- $366,450 $152,972 $(111,982) $407,440 ======== ======== ========= ======== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ 8,457 $ 20,693 $ -- $ 29,150 Net intercompany payable -- 73,527 (73,527) -- Income taxes payable 2,831 -- -- 2,831 Accrued wages and employee benefits 5,616 7,265 -- 12,881 Accrued interest 7,140 -- -- 7,140 Other accrued liabilities 467 1,655 -- 2,122 Deferred income taxes -- 1,360 -- 1,360 Current portion of long-term debt 42,632 1,583 -- 44,215 -------- -------- --------- -------- Total current liabilities 67,143 106,083 (73,527) 99,699 Long-term debt 239,586 -- -- 239,586 Deferred income taxes 27,747 889 -- 28,636 Postretirement benefit obligations 10,575 -- -- 10,575 Other liabilities 12,615 7,545 -- 20,160 Stockholder's equity 8,784 38,455 (38,455) 8,784 -------- -------- --------- -------- $366,450 $152,972 $(111,982) $407,440 ======== ======== ========= ========
67 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS - REORGANIZED COMPANY YEAR ENDED SEPTEMBER 30, 2005
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ Net sales $241,467 $306,635 $ 6,330) $541,772 Cost of sales 177,897 269,251 (6,330) 440,818 -------- -------- ------- -------- Gross profit 63,570 37,384 -- 100,954 Selling, general and administrative expenses 24,169 16,798 -- 40,967 Amortization expense 5,705 1,419 -- 7,124 Loss on disposal of equipment 367 586 -- 953 -------- -------- ------- -------- Operating income 33,329 18,581 -- 51,910 Other income (expense): Interest expense (17,767) (15,652) -- (33,419) Interest income -- 13 -- 13 -------- -------- ------- -------- (17,767) (15,639) -- (33,406) -------- -------- ------- -------- Income from operations before income taxes and equity in losses of subsidiaries 15,562 2,942 -- 18,504 Provision (credit) for income taxes (3,784) 7,193 -- 3,409 -------- -------- ------- -------- 19,346 (4,251) -- 15,095 Equity in losses of subsidiaries (4,251) -- 4,251 -- -------- -------- ------- -------- Net income (loss) $ 15,095 $ (4,251) $ 4,251 $ 15,095 ======== ======== ======= ========
68 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS - REORGANIZED COMPANY YEAR ENDED SEPTEMBER 30, 2004
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ Net sales $198,331 $258,266 $(5,655) $450,942 Cost of sales 144,649 236,130 (5,655) 375,124 -------- -------- ------- -------- Gross profit 53,682 22,136 -- 75,818 Selling, general and administrative expenses 13,249 14,125 -- 27,374 Amortization expense 5,705 1,416 -- 7,121 Loss on disposal of equipment 465 -- -- 465 -------- -------- ------- -------- Operating income 34,263 6,595 -- 40,858 Other income (expense): Interest expense (17,295) (16,097) -- (33,392) Interest income 21 8 -- 29 -------- -------- ------- -------- (17,274) (16,089) -- (33,363) -------- -------- ------- -------- Income (loss) from continuing operations before income taxes and equity in losses of subsidiaries 16,989 (9,494) -- 7,495 Provision (credit) for income taxes (1,890) 5,771 -- 3,881 -------- -------- ------- -------- 18,879 (15,265) -- 3,614 Equity in losses of subsidiaries (15,624) -- 15,624 -- -------- -------- ------- -------- Income (loss) from continuing operations 3,255 (15,265) 15,624 3,614 Loss from discontinued operations, net of income taxes -- (359) -- (359) -------- -------- ------- -------- Net income (loss) $ 3,255 $(15,624) $15,624 $ 3,255 ======== ======== ======= ========
69 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS - PREDECESSOR COMPANY YEAR ENDED SEPTEMBER 30, 2003
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ Net sales $160,529 $220,102 $(5,568) $375,063 Cost of sales 117,301 210,101 (5,568) 321,834 -------- -------- ------- -------- Gross profit 43,228 10,001 -- 53,229 Selling, general and administrative expenses 11,766 14,366 -- 26,132 Amortization expense 1,832 1,987 -- 3,819 Loss on disposal of equipment 214 (19) -- 195 -------- -------- ------- -------- Operating income (loss) 29,416 (6,333) -- 23,083 Other income (expense): Interest expense (25,589) (21,856) -- (47,445) Interest income 822 3 -- 825 Reorganization expense (7,874) -- -- (7,874) -------- -------- ------- -------- (32,641) (21,853) -- (54,494) -------- -------- ------- -------- Loss from continuing operations before income taxes and equity in losses of subsidiaries (3,225) (28,186) -- (31,411) Provision (credit) for income taxes (8,846) 305 -- (8,541) -------- -------- ------- -------- 5,621 (28,491) -- (22,870) Equity in losses of subsidiaries (31,182) -- 31,182 -- -------- -------- ------- -------- Loss from continuing operations (25,561) (28,491) 31,182 (22,870) Loss from discontinued operations, net of income taxes -- (1,095) -- (1,095) Loss on sale of discontinued operations, net of income tax -- (1,596) -- (1,596) ======== ======== ======= ======== Net loss $(25,561) $(31,182) $31,182 $(25,561) ======== ======== ======= ========
70 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - REORGANIZED COMPANY YEAR ENDED SEPTEMBER 30, 2005
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net income (loss) $ 15,095 $(4,251) $ 4,251 $ 15,095 Noncash adjustments 6,637 12,608 -- 19,245 Changes in operating assets and liabilities 5,428 (6,181) -- (753) -------- ------- ------- -------- Net cash provided by operating activities 27,160 2,176 4,251 33,587 INVESTING ACTIVITIES Investments in and advances to subsidiaries (4,129) 8,380 (4,251) -- Purchase of property, plant and equipment (7,678) (9,894) -- (17,572) Other 197 1,055 -- 1,252 -------- ------- ------- -------- Net cash used in investing activities (11,610) (459) (4,251) (16,320) FINANCING ACTIVITIES Proceeds from long-term debt -- 84 -- 84 Payments on long-term debt (12,130) (1,586) -- (13,716) Debt issuance costs (151) -- -- (151) -------- ------- ------- -------- Net cash used in financing activities (12,281) (1,502) -- (13,783) -------- ------- ------- -------- Increase in cash and cash equivalents 3,269 215 -- 3,484 Cash (overdraft) and cash equivalents at beginning of year 1,683 (1,683) -- -- -------- ------- ------- -------- Cash (overdraft) and cash equivalents at end of year $ 4,952 $(1,468) $ -- $ 3,484 ======== ======= ======= ========
71 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - REORGANIZED COMPANY YEAR ENDED SEPTEMBER 30, 2004
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net income (loss) $ 3,255 $(15,624) $ 15,624 $ 3,255 Noncash adjustments 8,792 16,854 -- 25,646 Changes in operating assets and liabilities (11,999) (14,157) -- (16,156) -------- -------- -------- -------- Net cash provided by (used in) operating activities 48 (12,927) 15,624 2,745 INVESTING ACTIVITIES Investments in and advances to subsidiaries (6,749) 22,373 (15,624) -- Purchase of property, plant and equipment (3,897) (8,816) -- (12,713) Other 121 409 -- 530 -------- -------- -------- -------- Net cash provided by (used in) investing activities (10,525) 13,966 (15,624) (12,183) FINANCING ACTIVITIES Proceeds from long-term debt 14,450 -- -- 14,450 Payments on long-term debt (2,366) (2,646) -- (5,012) -------- -------- -------- -------- Net cash provided by (used in) financing activities 12,084 (2,646) -- 9,438 -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents 1,607 (1,607) -- -- Cash (overdraft) and cash equivalents at beginning of year 76 (76) -- -- -------- -------- -------- -------- Cash (overdraft) and cash equivalents at end of year $ 1,683 $ (1,683) $ -- $ -- ======== ======== ======== ========
72 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 11. GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - PREDECESSOR YEAR ENDED SEPTEMBER 30, 2003
SUBSIDIARY NEENAH GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net loss $(25,561) $(31,182) $ 31,182 $(25,561) Noncash adjustments 2,711 23,070 -- 25,781 Changes in operating assets and liabilities 32,264 (9,482) -- 22,782 -------- -------- -------- -------- Net cash provided by (used in) operating activities 9,414 (17,594) 31,182 23,002 INVESTING ACTIVITIES Investments in and advances to subsidiaries 1,086 30,096 (31,182) -- Purchase of property, plant and equipment (4,930) (6,970) -- (11,900) Other 89 494 -- 583 -------- -------- -------- -------- Net cash provided by (used in) investing activities (3,755) 23,620 (31,182) (11,317) FINANCING ACTIVITIES Proceeds from long-term debt 815 -- -- 815 Payments on long-term debt (10,041) (2,976) -- (13,017) Debt issuance costs (1,291) -- -- (1,291) -------- -------- -------- -------- Net cash used in financing activities (10,517) (2,976) -- (13,493) -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents (4,858) 3,050 -- (1,808) Cash (overdraft) and cash equivalents at beginning of year 29,290 (3,126) -- 26,164 -------- -------- -------- -------- Cash (overdraft) and cash equivalents at end of year $ 24,432 $ (76) $ -- $ 24,356 ======== ======== ======== ========
73 Neenah Foundry Company Notes to Consolidated Financial Statements (continued) (In Thousands) 12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
YEAR ENDED SEPTEMBER 30, 2005 ----------------------------------------------------- 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER ----------- ----------- ----------- ----------- Net sales $121,864 $131,527 $145,685 $142,696 Gross profit 19,168 20,460 31,347 30,979 Net income 612 1,175 6,130(a) 7,178
YEAR ENDED SEPTEMBER 30, 2004 ----------------------------------------------------- 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER ----------- ----------- ----------- ----------- Net sales $89,825 $105,113 $124,717 $131,287 Gross profit 11,482 13,739 26,063 24,534 Net income (loss) (4,684) (3,644) 8,786 2,797
(a) Net income as previously reported $3,451 Adjustment to recognize tax benefit of change in tax method 2,679 ------ Net income as restated $6,130 ======
The Company made an election to change its tax method of determining LIFO inventory resulting in a tax benefit of $2,679. The effect is to increase previously reported fiscal 2005 third quarter net income by $2,679. 74 Report of Independent Registered Public Accounting Firm The Board of Directors Neenah Foundry Company We have audited the consolidated financial statements of Neenah Foundry Company as of September 30, 2005 and 2004 (Reorganized Company) and for the years ended September 30, 2005 and 2004 (Reorganized Company) and the year ended September 30, 2003 (Predecessor Company) and have issued our report thereon dated November 4, 2005 (included elsewhere in this Annual Report on Form 10-K). Our audits also included the financial statement schedule listed in the index at Item 15(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ Ernst & Young LLP Milwaukee, Wisconsin November 4, 2005 75 Schedule II NEENAH FOUNDRY COMPANY VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED SEPTEMBER 30, 2003, 2004, AND 2005 (Dollars in Thousands)
BALANCE AT ADDITIONS BEGINNING CHARGED TO BALANCE AT DESCRIPTION OF PERIOD EXPENSE DEDUCTIONS END OF PERIOD ----------- ---------- ---------- ---------- ------------- Allowance for doubtful accounts receivable: 2003 $1,062 $1,760 $ 447 (A) $2,375 ====== ====== ====== ====== 2004 $2,375 $1,043 $2,276 (A) $1,142 ====== ====== ====== ====== 2005 $1,142 $2,153 $1,202 (A) $2,093 ====== ====== ====== ====== (A) Uncollectible accounts written off, net of recoveries Reserve for obsolete inventory: 2003 $ 829 $ 424 $ 59 (B) $1,194 ====== ====== ====== ====== 2004 $1,194 $ 231 $ 690 (B) $ 735 ====== ====== ====== ====== 2005 $ 735 $ 356 $ 90 (B) $1,001 ====== ====== ====== ====== (B) Reduction for disposition of inventory
76 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. Date: December 27, 2005 NEENAH FOUNDRY COMPANY (Registrant) /s/ Gary W. LaChey ---------------------------------------- Gary W. LaChey Corp. Vice President - Finance (Principal Financial and Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on December 27, 2005, by the following persons on behalf of the registrant and in the capacities indicated. /s/ William M. Barrett /s/ Gary W. LaChey - ------------------------------------- ---------------------------------------- William M. Barrett Gary W. LaChey President and Corp. Vice President - Finance Chief Executive Officer, Director (Principal Financial and Principal (Principal Executive Officer) Accounting Officer) /s/ Jeffrey G. Marshall /s/ Michael J. Farrell - ------------------------------------- ---------------------------------------- Jeffrey G. Marshall Michael J. Farrell Director Director /s/ Benjamin C. Duster, IV, Esq. /s/ Andrew B. Cohen - ------------------------------------- ---------------------------------------- Benjamin C. Duster, IV, Esq. Andrew B. Cohen Director Director 77 SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT The Company is not required to nor does it intend to furnish an Annual Report or a Proxy Statement to security holders. 78 NEENAH FOUNDRY COMPANY (THE "REGISTRANT") (COMMISSION FILE NO. 333-28751) EXHIBIT INDEX TO 2005 ANNUAL REPORT ON FORM 10-K
EXHIBIT FILED NUMBER DESCRIPTION INCORPORATED HEREIN BY REFERENCE TO HEREWITH - ------- ----------- ----------------------------------- -------- 2.1 Disclosure Statement for Pre-Petition Exhibit T3E-1 to application for of Votes with respect to the qualification of indenture on Form T-3 Prepackaged Joint Plan of filed 7/1/03 (File No. 022-28687) Reorganization of ACP Holding Company, NFC Castings, Inc., and Neenah Foundry Company 2.2 Prepackaged Joint Plan of Exhibit T3E-2 to application for Reorganization of ACP Holding Company, qualification of indenture on Form T-3 NFC Castings, Inc. Neenah Foundry filed 7/1/03 (File No. 022-28687) Company and Certain of its Subsidiaries under Chapter 11 of the United States Bankruptcy Code 3.1 Amended and Restated Certificate X [Articles] of Incorporation of Neenah Foundry Company 3.2 Third Amended and Restated Certificate of X Incorporation of ACP Holding Company 3.3 Amended and Restated Certificate of X Incorporation of NFC Castings, Inc. 3.4 Amended and Restated Certificate of Exhibit 3.2 to Amendment No. 1 to the Incorporation of Advanced Cast Registrant's Form S-4 Registration Products, Inc. Statement (File No. 333-111008) filed on January 28, 2004 (the "1/28/04 S-4 Amendment") 3.5 Amended and Restated Articles of Exhibit 3.3 to the 1/28/04 S-4 Amendment Incorporation of Dalton Corporation 3.6 Certificate of Incorporation of Dalton Exhibit 3.4 to the 1/28/04 S-4 Amendment Corporation, Warsaw Manufacturing Facility 3.7 Amended and Restated Articles of Exhibit 3.5 to the 1/28/04 S-4 Amendment Incorporation of Dalton Corporation, Stryker Machining Facility Co.
79
EXHIBIT FILED NUMBER DESCRIPTION INCORPORATED HEREIN BY REFERENCE TO HEREWITH - ------- ----------- ----------------------------------- -------- 3.8 Articles of Incorporation of Dalton Exhibit 3.6 to the 1/28/04 S-4 Amendment Corporation, Ashland Manufacturing Facility 3.9 Articles of Incorporation of Dalton Exhibit 3.7 to the 1/28/04 S-4 Amendment Corporation, Kendallville Manufacturing facility 3.10 Articles of Incorporation of Deeter Exhibit 3.8 to the 1/28/04 S-4 Amendment Foundry, Inc. 3.11 Articles of Incorporation of Gregg Exhibit 3.9 to the 1/28/04 S-4 Amendment Industries, Inc. 3.12 Articles of Incorporation of A&M Exhibit 3.10 to the 1/28/04 S-4 Amendment Specialties, Inc. 3.13 Restated Articles of Incorporation of Exhibit 3.11 to the 1/28/04 S-4 Amendment Neenah Transport, Inc. 3.14 Restated Articles of Incorporation of Exhibit 3.12 to the 1/28/04 S-4 Amendment Cast Alloys, Inc. 3.15 [Reserved] 3.16 [Reserved] 3.17 Certificate of Incorporation of Mercer X Forge Corporation 3.18 Amended and Restated Bylaws of ACP Holding X Company 3.19 Amended Bylaws of NFC Castings, Inc. X 3.20 Amended Bylaws of Neenah Foundry Exhibit 3.15 to the 1/28/04 S-4 Amendment Company 3.21 Bylaws of Advanced Cast Products, Inc. Exhibit 3.16 to the 1/28/04 S-4 Amendment 3.22 Amended Code of Bylaws of Dalton Exhibit 3.17 to the 1/28/04 S-4 Amendment Corporation 3.23 Amended Code of Bylaws of Dalton Exhibit 3.18 to the 1/28/04 S-4 Amendment Corporation, Warsaw Manufacturing Facility
80
EXHIBIT FILED NUMBER DESCRIPTION INCORPORATED HEREIN BY REFERENCE TO HEREWITH - ------- ----------- ----------------------------------- -------- 3.24 Code of Regulations of Dalton Exhibit 3.19 to the 1/28/04 S-4 Amendment Corporation, Stryker Manufacturing Facility 3.25 Amended and Restated Code of Exhibit 3.20 to the 1/28/04 S-4 Amendment Regulations of Dalton Corporation, Ashland Manufacturing Facility 3.26 Amended Code of Bylaws of Dalton Exhibit 3.21 to the 1/28/04 S-4 Amendment Corporation, Kendallville Manufacturing Facility 3.27 Bylaws of Deeter Foundry, Inc. Exhibit 3.22 to the 1/28/04 S-4 Amendment 3.28 Bylaws of Gregg Industries, Inc. Exhibit 3.23 to the 1/28/04 S-4 Amendment 3.29 Amended A&M Specialties, Inc. Bylaws Exhibit 3.24 to the 1/28/04 S-4 Amendment 3.30 Amended Neenah Transport, Inc. Bylaws Exhibit 3.25 to the 1/28/04 S-4 Amendment 3.31 Bylaws of Cast Alloys, Inc. Exhibit 3.26 to the 1/28/04 S-4 Amendment 3.32 [Reserved] 3.33 Bylaws of Mercer Forge Corporation X 4.1 Warrant Agreement, dated October 8, by Exhibit 10.4 hereto and between ACP Holding Company and the Bank of New York as warrant agent 4.2 Stockholders Agreement, dated October Exhibit 10.6 hereto 8, 2003, by and among ACP Holding Company, the Standby Purchasers, the Executives and Directors (as such terms are defined therein) 4.3 Indenture by and among Neenah Foundry Exhibit 10.7 hereto Company, the guarantors named therein, and the Bank of New York, as Trustee, dated October 8, 2003, for the 13% Senior Subordinated Notes due 2013
81
EXHIBIT FILED NUMBER DESCRIPTION INCORPORATED HEREIN BY REFERENCE TO HEREWITH - ------- ----------- ----------------------------------- -------- 4.4 Form of Note for the 13% Senior Exhibit 10.8 hereto Subordinated Notes due 2013 4.5 Indenture by and among Neenah Foundry Exhibit 10.21 hereto Company, the guarantors named therein and The Bank of New York, as Trustee, dated October 8, 2003, for the 11% Senior Secured Notes due 2010 4.6 Form of Note for the 11% Senior Exhibit 10.22 hereto Secured Notes due 2010 10.1 Loan and Security Agreement, dated Exhibit 10.1 to the 1/28/04 S-4 Amendment October 8, 2003, by and among Neenah Foundry Company, its subsidiaries party thereto, the various lenders party thereto and Fleet Capital Corporation, as agent 10.2 Amendment No. 1 to Loan and Security Exhibit 10.1 to the Registrant's Form Agreement, dated October 8, 2003, by 8-K dated July 28, 2005 and among Neenah Foundry Company, its subsidiaries party thereto, the various lenders party thereto and Fleet Capital Corporation, as agent 10.2(a) Amendment No. 2 to Loan and Security X Agreement, dated October 8, 2003, by and among Neenah Foundry Company, its subsidiaries party thereto, the various lenders party thereto and Fleet Capital Corporation, as agent 10.3 Subscription Agreement, dated as of Exhibit 10.2 to the Registrant's Form October 7, 2003, by and among ACP S-4 Registration Statement (File No. Holding Company, Neenah Foundry 333-111008) filed on December 8, 2003 Company, the subsidiary Guarantors (the "Form S-4") named therein and the Investors as defined therein 10.4 Warrant Agreement, dated October 8, X 2003, by and between ACP Holding Company and the Bank of New York as warrant agent 10.5 Registration Rights Agreement, dated Exhibit 10.4 to the 1/28/04 S-4 Amendment October 8, 2003, by and between ACP Holding Company and the initial
82
EXHIBIT FILED NUMBER DESCRIPTION INCORPORATED HEREIN BY REFERENCE TO HEREWITH - ------- ----------- ----------------------------------- -------- holders 10.6 Stockholders Agreement, dated October Exhibit 10.5 to the Form S-4 8, 2003, by and among ACP Holding Company, the Standby Purchasers, the Executives and Directors (as such terms are defined therein) 10.7 Indenture by and among Neenah Foundry Exhibit 10.6 to the Form S-4 Company, the guarantors named therein, and the Bank of New York, as Trustee, dated October 8, 2003, for the 13% Senior Subordinated Notes due 2013 10.8 Form of Note for the 13% Senior Exhibit 10.6 to the Form S-4 Subordinated Notes due 2013 10.9 Registration Rights Agreement, dated Exhibit 10.8 to the Form S-4 October 8, 2003, by and among ACP Holding Company and the parties named therein for the 13% Senior Subordinated Noted due 2013 10.10* Form of Amendment to the Employment X Agreements and Restricted Grants listed in Exhibits 10.10(a) through 10.18 10.10(a)* Employment Agreement and Restricted Exhibit 10.9 to the 1/28/04 S-4 Amendment Stock Grant by and among Neenah Foundry Company, ACP Holding Company and John Andrews 10.11* Employment Agreement and Restricted Exhibit 10.10 to the 1/28/04 S-4 Stock Grant by and among Neenah Amendment Foundry Company, ACP Holding Company and William M. Barrett 10.12* Employment Agreement and Restricted Exhibit 10.11 to the 1/28/04 S-4 Stock Grant by and among Dalton Amendment Corporation, ACP Holding Company and Joseph L. DeRita 10.13* Employment Agreement and Restricted Exhibit 10.12 to the 1/28/04 S-4 Stock Grant by and among Neenah Amendment Foundry Company, ACP Holding Company and Frank C. Headington
83
EXHIBIT FILED NUMBER DESCRIPTION INCORPORATED HEREIN BY REFERENCE TO HEREWITH - ------- ----------- ----------------------------------- -------- 10.14* Employment Agreement and Restricted Exhibit 10.13 to the 1/28/04 S-4 Stock Grant by and among Neenah Amendment Foundry Company, ACP Holding Company and Timothy Koller 10.15* Employment Agreement and Restricted Exhibit 10.14 to the 1/28/04 S-4 Stock Grant by and among Neenah Amendment Foundry Company, ACP Holding Company and Gary W. LaChey 10.16* Employment Agreement and Restricted Exhibit 10.15 to the 1/28/04 S-4 Stock Grant by and among Neenah Amendment Foundry Company, ACP Holding Company and William Martin 10.17* Employment Agreement and Restricted Exhibit 10.16 to the 1/28/04 S-4 Stock Grant by and among Dalton Amendment Corporation, ACP Holding Company and Steve Shaffer 10.18* Employment Agreement and Restricted Exhibit 10.17 to the 1/28/04 S-4 Stock Grant by and among Neenah Amendment Foundry Company, ACP Holding Company and Joseph Varkoly 10.19* Neenah Foundry Company 2003 Management Exhibit 10.18 to the Form S-4 Annual Incentive Plan 10.19(a)* Summary of Amendment to Neenah Foundry X Company 2003 Management Annual Incentive Plan 10.20* Neenah Foundry Company 2003 Severance Exhibit 10.19 to the Form S-4 and Change of Control Plan 10.21 Indenture by and among Neenah Foundry Exhibit 4.1 to the Form S-4 Company, the guarantors named therein and The Bank of New York, as Trustee, dated October 8, 2003, for the 11% Senior Secured Notes due 2010
84
EXHIBIT INCORPORATED HEREIN FILED NUMBER DESCRIPTION BY REFERENCE TO HEREWITH - ------- ----------- ------------------- -------- 10.22 Form of Note for the 11% Senior Exhibit 4.1 to the Form S-4 Secured Notes due 2010 10.23 Lien Subordination Agreement, dated Exhibit 4.3 to the Form S-4 October 8, 2003, by and among Fleet Capital Corporation, Neenah Foundry Company, the subsidiaries named therein, NFC Castings, Inc. and The Bank of New York as Trustee on behalf of the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010 10.24 Registration Rights Agreement, dated Exhibit 4.4 to the Form S-4 October 8, 2003, by and among Neenah Foundry Company, the Guarantors named therein and The Bank of New York as Trustee for the 11% Senior Secured Notes due 2010 10.25 Subordinated Security Agreement, dated Exhibit 4.5 to the Form S-4 October 8, 2003, by Neenah Foundry Company and the guarantors named therein in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Noted due 2010 10.26 Subordinated Pledge Agreement, dated Exhibit 4.6 to the Form S-4 October 8, 2003, by Dalton Corporation in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010. 10.27 Subordinated Pledge Agreement, dated Exhibit 4.7 to the Form S-4 October 8, 2003, by Mercer Forge Corporation in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010 10.28 Subordinated Copyright, Patent, Exhibit 4.8 to the Form S-4 Trademark and License Mortgage, dated October 8, 2003, by Neenah Foundry Company in favor of The Bank of New York as Trustee for the Noteholders
85
EXHIBIT INCORPORATED HEREIN FILED NUMBER DESCRIPTION BY REFERENCE TO HEREWITH - ------- ----------- ------------------- -------- under the Indenture governing the 11% Senior Secured Notes due 2010 10.29 Subordinated Copyright, Patent, Exhibit 4.9 to the Form S-4 Trademark and License Mortgage, dated October 8, 2003, by Advanced Cast Products, Inc. in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010 10.30 Subordinated Copyright, Patent, Exhibit 4.10 to the Form S-4 Trademark and License Mortgage, dated October 8, 2003, by Peerless Corporation in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010 10.31 Subordinated Pledge Agreement, dated Exhibit 4.11 to the Form S-4 October 8, 2003, by Neenah Foundry Company in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Securities due 2010 10.32 Subordinated Pledge Agreement, dated Exhibit 4.12 to the Form S-4 October 8, 2003, by Advanced Cast Products, Inc. in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Securities due 2010 10.33* 2003 Management Equity Incentive Plan X 12.1 Ratio of Earnings to Fixed Charges X 21 Subsidiaries of Neenah Foundry Company X 31.1 Certification of Chief Executive X Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to section
86
EXHIBIT INCORPORATED HEREIN FILED NUMBER DESCRIPTION BY REFERENCE TO HEREWITH - ------- ----------- ------------------- -------- 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial X Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002 32 Chief Executive and Chief Financial X Officers' certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
- ---------- * Denotes management contract or executive compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K. 87 EX-3.1 2 c00807exv3w1.txt AMENDED AND RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NEENAH FOUNDRY COMPANY (Under Section 180.1008 of the Business Corporation Law of the State of Wisconsin) The undersigned, being a duly elected officer of Neenah Foundry Company, a corporation organized and existing under and by virtue of the Business Corporation Law of the State of Wisconsin (the "Corporation"), does hereby certify as follows: 1. That the Corporation filed its original Articles of Incorporation with the Wisconsin Secretary of State on February 23,1987 (the "Certificate"). 2. That the Corporation filed a voluntary petition under chapter 11 of title 11 of the United States Code, as amended with the Bankruptcy Court of Delaware on August 5, 2003, and that this Certificate is being filed pursuant to Section 180.1008 of the Business Corporation Law of the State of Wisconsin and shall become effective pursuant to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries filed with the Delaware Bankruptcy Court on August 5, 2003, and amended on September 17, 2003, without further action by the board of directors or shareholders of the Corporation pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. The Corporation's Certificate is restated in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the "Restated Certificate"). 3. That the Bankruptcy Court of Delaware has jurisdiction of the bankruptcy proceedings under chapter 11 of title 11 of the United States Code, as amended. AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NEENAH FOUNDRY COMPANY The following Amended and Restated Articles of Incorporation duly adopted pursuant to the authority and provisions of the Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes ("WBCL"), supersede and take the place of the existing articles of incorporation and any amendments thereto. ARTICLE ONE The name of the corporation is Neenah Foundry Company (hereinafter called the "Corporation"). ARTICLE TWO The purpose for which the Corporation is organized are to engage in any lawful activity within the purposes for which a corporation may be organized under the WBCL, chapter 180 of the Wisconsin Statutes. ARTICLE THREE The total number of shares which the Corporation shall have the authority to issue is One Thousand (1,000) shares, all of which shall be shares of Class A Common Stock, with a par value of $100.00 (One Hundred) per share. ARTICLE FOUR The number of the board of directors shall be fixed by or in the manner provided in the Bylaws. ARTICLE FIVE The address of the Corporation's registered office in the state of Wisconsin is 25 West Main Street, Madison, Wisconsin 53703. The name of its registered agent at such address is CSC-Lawyers Incorporating Service Company. ARTICLE SIX To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE SIX shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE SEVEN The Corporation shall not issue nonvoting equity securities. ARTICLE EIGHT The Corporation reserves the right to amend or repeal any provisions contained in this Certificate of Incorporation from time to time and at any time in the manner now or hereafter prescribed by the laws of the State of Wisconsin, and all rights conferred upon stockholders and directors are granted subject to such reservation. * * * * IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Articles of Incorporation of the Corporation pursuant to the Business Corporation Law of the State of Wisconsin, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate this 8th day of October, 2003. By: /s/ Gary W. LaChey -------------------------- Gary W. LaChey Chief Financial Officer, Vice President - Finance, Treasurer and Secretary IN THE UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE ) Chapter 11 ) ACP Holding Company, et al.,(1) ) Case No. 03-12414 (PJW) ) (JOINTLY ADMINISTERED) ) Debtors, ) RELATED DOCKET NO. 137 ORDER CONFIRMING AMENDED PREPACKAGED JOINT PLAN OF REORGANIZATION OF ACP HOLDING COMPANY, NFC CASTINGS, INC., NEENAH FOUNDRY COMPANY AND CERTAIN OF ITS SUBSIDIARIES UNDER CHAPTER 11 OF THE BANKRUPTCY CODE The above-captioned debtors and debtors in possession (collectively, the "Debtors") having filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (as amended, the "Bankruptcy Code") on August 5, 2003 (the "Petition Date"); the Debtors having filed on the Petition Date the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc. Neenah Foundry Company and Certain of its Subsidiaries Under Chapter 11 of the Bankruptcy Code (the "Original Plan") and the Disclosure Statement dated as of July 1,2003(2) the Debtors having distributed the Original Plan and the Disclosure Statement to all Holders of Impaired Claims against the Debtors, together with a solicitation of votes to accept or reject the Plan, beginning on or about July 2, 2003, the Affidavit - ---------- (1) The Debtors consist of the following entities: ACP Holding Company, NFC Casting, Inc.,Neenah Foundry Company, Cast Alloys, Inc. Neenah Transport, Inc., Advanced Cast Products, Inc., Gregg Industries, Inc. Merer Forge Corporation, Deeter Foundry, Inc., Dalton Corporation, Belchere Corporation, Peerless Corporation, A&M Specialies, Inc., Dalton Corporation, Warsaw Manufacturing Facility, Dalton Corporation, Ashland Manufacturing facility, Dalton Corporation, Kendallville Manufacturing Facility, Dalton Corporation, Stryker Machining Facility. (2) Unless otherwise specified, capitalized terms and phrases used herein have the meaning assigned to them in the Plan. The rules of interpretation set forth in Article I.A of the Plan shall apply to these Findings of Fact, Conclusions of Law and Order (this "confirmation order"). In accordance with section iii.B of the Confirmation Order, if there is any direct conflict between the (terms of the Plan and the terms of this Confirmation Order, the terms of this is Confirmation Order shall control. Ss, 178.50, 180.0124, 181.0124 State of Wisconsin 188.0112 DEPARTMENT OF FINANCIAL INSTITUTIONS Wis. Stats. Division of Corporate & Consumer Services ARTICLES OF CORRECTION 1. Neenah Foundry Company -------------------------------------------------------------------------- (Name of the corporation, limited liability company, or limited liability partnership before any correction that may be affected by these articles of correction) 2. Amended and Restated Cert. of Incorporation filed with the Department of Financial -------------------------------------------------------------------------- (Describe the document) Institutions on October 8, 2003 (date) was [X] Incorrect at the time of filing (Complete items 1, 2, 3,4 & 6) [ ] Defectively executed (Complete items 1,2,3 & 5) { (X) Check any that apply [ ] Defective in attestation, seal, verification or acknowledgment (Complete items 1,2,3 & 6) 3. Describe the defect(s): (Specify the incorrect statement and the reason why it is incorrect, or the manner in which the execution is defective.) Article Six refers to the laws of the State of Delaware, which is incorrect since Neenah Foundry Company is a Wisconsin corporation 4. Enter the statement in its corrected condition: The first sentence in Article Six should read as follows: "To the fullest extent permitted by the Business Corporation Law of the State of Wisconsin as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty at a director." FILING FEE - Business corporation, limited liability company or limited liability partnership - S40.00; Nonstock (including non-profit) corporation - $10.00. See instructions, suggestions and procedures on following pages. DFI/CORP/53(R0Z-10-03) Use of this form is voluntary. 4. Enter the statement in its corrected condition (cont'd): 5. Make the corrected execution: Executed on ------------- ------------------------------- (Date) (Signature) Select and mark (X) below the appropriate title ------------------------------- of the person executing the document. (Printed name) For a corporation For a limited liability company Title: [ ] President [ ] Secretary Title: [ ] Member OR [ ] Manager or other officer title____________ For a limited liability partnership Title: [ ] Partner 6. Executed on 12/05/03 /s/ Gary Lachey (Date) ------------------------------- (Signature) Select and mark (X) below the appropriate title Gary LaChey ------------------------------- of the person executing the document. (Printed name) For a corporation For a limited liability company Title: [ ] President [ ] Secretary Title:[ ] Member OR [ ] Manager or other officer title Corporate V.P. Finance For a limited liability partnership Title: [ ] Partner This document was drafted by Cindy R. Reilly ---------------------------------------------- (Name the individual who drafted the document) DFI/CORP/53(R02-10-03) EX-3.2 3 c00807exv3w2.txt THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3.2 THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ACP HOLDING COMPANY (Under Section 303 of the General Corporation Law of the State of Delaware) The undersigned, being a duly elected officer of ACP Holding Company, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows: 1. That the Corporation filed its original Certificate of Incorporation with the Delaware Secretary of State on August 30, 1989 (the "Certificate"). 2. That the Corporation filed a voluntary petition under chapter 11 of title 11 of the United States Code, as amended with the Bankruptcy Court of Delaware on August 5, 2003, and that this Certificate is being filed pursuant to Section 303 of the General Corporation Law of the State of Delaware and shall become effective pursuant to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries filed with the Delaware Bankruptcy Court on August 5, 2003, and amended on September 17, 2003, without further action by the board of directors or shareholders of the Corporation pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. The Corporation's Certificate is restated in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the "Restated Certificate"). IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Certificate of Incorporation of the Corporation pursuant to the General Corporation Law of the State of Delaware, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate of Restated Certificate of Incorporation this 8th day of October, 2003. By: /s/ Gary W. LaChey ------------------------- Gary W. LaChey Chief Financial Officer, Vice President - Finance, Treasurer and Secretary EXHIBIT A THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ACP HOLDING COMPANY ARTICLE ONE The name of the corporation is ACP Holding Company, (hereinafter called the "Corporation"). ARTICLE TWO The address of the Corporation's registered office in the state of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The name of its registered agent at such address is Corporation Service Company. ARTICLE THREE The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE FOUR The total number of shares which the Corporation shall have the authority to issue is One Hundred Million (100,000,000) shares, all of which shall be shares of Common Stock, with a par value of $0.01 (One Cent) per share. ARTICLE FIVE The Corporation is to have perpetual existence. ARTICLE SIX The directors shall have the power to adopt, amend or repeal By-Laws, except as may be otherwise be provided in the By-Laws. ARTICLE SEVEN The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware. ARTICLE EIGHT To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE EIGHT shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE NINE The Corporation shall not issue nonvoting equity securities. ARTICLE TEN The Corporation reserves the right to amend or repeal any provisions contained in this Certificate of Incorporation from time to time and at any time in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights conferred upon stockholders and directors are granted subject to such reservation. * * * * 2 EX-3.3 4 c00807exv3w3.txt AMENDED AND RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3.3 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NFC CASTINGS, INC. (Under Section 303 of the General Corporation Law of the State of Delaware) The undersigned, being a duly elected officer of NFC Castings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows: 1. That the Corporation filed its original Certificate of Incorporation with the Delaware Secretary of State on November 12, 1996 (the "Certificate"). 2. That the Corporation filed a voluntary petition under chapter 11 of title 11 of the United States Code, as amended with the Bankruptcy Court of Delaware on August 5, 2003, and that this Certificate is being filed pursuant to Section 303 of the General Corporation Law of the State of Delaware and shall become effective pursuant to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries filed with the Delaware Bankruptcy Court on August 5, 2003, and amended on September 17, 2003, without further action by the board of directors or shareholders of the Corporation pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. The Corporation's Certificate is restated in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the "Restated Certificate"). IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Certificate of Incorporation of the Corporation pursuant to the General Corporation Law of the State of Delaware, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate of Restated Certificate of Incorporation this 8th day of October, 2003. By: /s/ Gary W. LaChey ------------------------------ Gary W. LaChey Chief Financial Officer, Vice President - Finance, Treasurer and Secretary EXHIBIT A AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NFC CASTINGS, INC. ARTICLE ONE The name of the corporation is NFC Castings, Inc. (hereinafter called the "Corporation"). ARTICLE TWO The address of the Corporation's registered office in the state of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The name of its registered agent at such address is Corporation Service Company. ARTICLE THREE The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE FOUR The total number of shares which the Corporation shall have the authority to issue is One Thousand (1,000) shares, all of which shall be shares of Common Stock, with a par value of $0.01 (One Cent) per share. ARTICLE FIVE The Corporation is to have perpetual existence. ARTICLE SIX The directors shall have the power to adopt, amend or repeal By-Laws, except as may be otherwise be provided in the By-Laws. ARTICLE SEVEN The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware. ARTICLE EIGHT To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE EIGHT shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE NINE The Corporation shall not issue nonvoting equity securities. ARTICLE TEN The Corporation reserves the right to amend or repeal any provisions contained in this Certificate of Incorporation from time to time and at any time in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights conferred upon stockholders and directors are granted subject to such reservation. * * * * 2 EX-3.17 5 c00807exv3w17.txt CERTIFICATE OF INCORPORATION EXHIBIT 3.17 CERTIFICATE OF INCORPORATION OF MERCER FORGE CORPORATION 1. The name of the corporation is MERCER FORGE CORPORATION. 2. The address of the corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The purposes of the corporation are to engage in any lawful act or activities for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of all classes of stock which the corporation shall have authority to issue is One Thousand (1,000) shares of the par value of One Dollar ($1.00) each, all of which shall be Common stock. 5. The name and mailing address of the sole incorporator is Michael A. O. deFreitas, c/o Hodgson, Russ, Andrews, Woods & Goodyear, 1800 One M & T Plaza, Buffalo, New York 14203. 6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to adopt, amend or repeal the by-laws of the corporation. 7. Election of directors need not be by written ballot unless the by-laws of the corporation shall so provide. 8. The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate, hereby declaring and certifying that this is his act and deed and the facts herein stated are true, and accordingly has hereunto set his hand this [ILLEGIBLE] day of October, 1985. /s/ Michael A. O. deFreitas ------------------------------- Michael A. O. deFreitas EX-3.18 6 c00807exv3w18.txt AMENDED AND RESTATED BYLAWS EXHIBIT 3.18 AMENDED AND RESTATED BYLAWS OF ACP HOLDING COMPANY A DELAWARE CORPORATION ARTICLE I OFFICES Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of the corporation's registered agent at such address shall be Corporation Service Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Place and Time of Meetings. An annual meeting of the stockholders shall be held each year for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting may be determined by resolution of the board of directors or as set by the president of the corporation. Section 2. Special Meetings. Special meetings of stockholders may be called for any purpose (including, without limitation, the filling of board vacancies and newly created directorships), and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by two or more members of the board of directors or the president and shall be called by the president upon the written request of holders of shares entitled to cast not less than fifty percent (50%) of the outstanding shares of the corporation's voting common stock. Section 3. Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. 1 Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders List. The officer having charge of the stock ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. Except as otherwise provided by applicable law or by the corporation's certificate of incorporation, a majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time in accordance with Section 7 of this Article, until a quorum shall be present or represented. Section 7. Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the corporation's certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Where a separate vote by class is required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of such class. 2 Section 9. Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware or by the corporation's certificate of incorporation and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him, her or it by proxy. Every proxy must be signed by the stockholder granting the proxy or by his, her or its attorney-in-fact. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Section 11. Action by Written Consent. Unless otherwise provided in the corporation's certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than a majority of the shares entitled to vote, or, if greater, not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. 3 ARTICLE III DIRECTORS Section 1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors. Section 2. Number, Election and Term of Office. The number of directors shall be five (5). The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause or a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Except as otherwise provided by the corporation's certificate of incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the holders of the corporation's outstanding stock entitled to vote thereon. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Section 5. Annual Meetings. The annual meeting of each newly elected board of directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president or vice president on at least 24 hours notice to each director, either personally, by telephone, by mail, or by telegraph; in like manner and on like notice the president must call a special meeting on the written request of at least a majority of the directors. Section 7. Quorum, Required Vote and Adjournment. A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the 4 directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these bylaws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the corporation's certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. 5 ARTICLE IV OFFICERS Section 1. Number. The officers of the corporation shall be elected by the board of directors and shall consist of a chairman, if any is elected, a president, one or more vice presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person, except that no person may simultaneously hold the office of president and secretary. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable. Section 2. Election and Term of Office. The officers of the corporation shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. The Chairman of the Board. The Chairman of the Board, if one shall have been elected, shall be a member of the board, an officer of the corporation, and, if present, shall preside at each meeting of the board of directors or shareholders. The Chairman of the Board shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. He shall advise the president, and in the president's absence, other officers of the corporation, and shall perform such other duties as may from time to time be assigned to him by the board of directors. Section 7. The President. The president shall be the chief executive officer of the corporation. In the absence of the Chairman of the Board or if a Chairman of the Board shall have not been elected, the president shall preside at all meetings of the stockholders and board of directors at which he or she is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of 6 directors are carried into effect. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these bylaws. Section 8. Vice-presidents. The vice-president, if any, or if there shall be more than one, the vice-presidents in the order determined by the board of directors shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these bylaws may, from time to time, prescribe. Section 9. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these bylaws or by law; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 10. The Treasurer and Assistant Treasurer. The treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe. 7 Section 11. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 12. Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS Section 1. Nature of Indemnity. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, fiduciary or agent or in any other capacity while serving as a director, officer, employee, fiduciary or agent, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is 8 required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Nonexclusivity of Article V. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the corporation's certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another 9 corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contract Rights. The provisions of this Article V shall be deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI CERTIFICATES OF STOCK Section 1. Form. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by the chairman of the board, the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such chairman of the board, president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably 10 require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting 11 shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the corporation's certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the corporation's certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. 12 Section 4. Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors. Section 6. Corporate Seal. The board of directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of these bylaws is or becomes inconsistent with any provision of the corporation's certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. 13 ARTICLE VIII AMENDMENTS These bylaws may be amended, altered, or repealed and new bylaws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the bylaws has been conferred upon the board of directors shall not divest the stockholders of the same powers. 14 EX-3.19 7 c00807exv3w19.txt AMENDED BYLAWS EXHIBIT 3.19 AMENDMENT TO NFC CASTINGS, INC. BYLAWS RESOLVED, that the bylaws of NFC Castings, Inc. is hereby amended and restated in its' entirety to read as set forth in Exhibit A attached hereto and made a part hereof. This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of Neenah Foundry Company, pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. AMENDED AND RESTATED BYLAWS OF NFC CASTINGS, INC. A DELAWARE CORPORATION ARTICLE I OFFICES Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of the corporation's registered agent at such address shall be Corporation Service Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Place and Time of Meetings. An annual meeting of the stockholders shall be held each year for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting may be determined by resolution of the board of directors or as set by the president of the corporation. Section 2. Special Meetings. Special meetings of stockholders may be called for any purpose (including, without limitation, the filling of board vacancies and newly created directorships), and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by two or more members of the board of directors or the president and shall be called by the president upon the written request of holders of shares entitled to cast not less than fifty percent (50%) of the outstanding shares of the corporation's voting common stock. Section 3. Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders List. The officer having charge of the stock ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. Except as otherwise provided by applicable law or by the corporation's certificate of incorporation, a majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time in accordance with Section 7 of this Article, until a quorum shall be present or represented. Section 7. Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the corporation's certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Where a separate vote by class is required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of such class. 2 Section 9. Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware or by the corporation's certificate of incorporation and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him, her or it by proxy. Every proxy must be signed by the stockholder granting the proxy or by his, her or its attorney-in-fact. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Section 11. Action by Written Consent. Unless otherwise provided in the corporation's certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than a majority of the shares entitled to vote, or, if greater, not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. 3 ARTICLE III DIRECTORS Section 1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors. Section 2. Number, Election and Term of Office. The number of directors which shall constitute the first board shall be no less one (1). Thereafter, the number of directors shall be established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause or a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Except as otherwise provided by the corporation's certificate of incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the holders of the corporation's outstanding stock entitled to vote thereon. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Section 5. Annual Meetings. The annual meeting of each newly elected board of directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president or vice president on at least 24 hours notice to each director, either personally, by telephone, by mail, or by telegraph; in like manner and on like notice the president must call a special meeting on the written request of at least a majority of the directors. Section 7. Quorum, Required Vote and Adjournment. A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the 4 board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these bylaws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the corporation's certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if 5 all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. ARTICLE IV OFFICERS Section 1. Number. The officers of the corporation shall be elected by the board of directors and shall consist of a chairman, if any is elected, a president, one or more vice presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person, except that no person may simultaneously hold the office of president and secretary. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable. Section 2. Election and Term of Office. The officers of the corporation shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. The Chairman of the Board. The Chairman of the Board, if one shall have been elected, shall be a member of the board, an officer of the corporation, and, if present, shall preside at each meeting of the board of directors or shareholders. The Chairman of the Board shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. He shall advise the president, and in the president's absence, other officers of the corporation, and shall perform such other duties as may from time to time be assigned to him by the board of directors. Section 7. The President. The president shall be the chief executive officer of the corporation. In the absence of the Chairman of the Board or if a Chairman of the Board shall have not been elected, the president shall preside at all meetings of the stockholders and board of 6 directors at which he or she is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these bylaws. Section 8. Vice-presidents. The vice-president, if any, or if there shall be more than one, the vice-presidents in the order determined by the board of directors shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these bylaws may, from time to time, prescribe. Section 9. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these bylaws or by law; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 10. The Treasurer and Assistant Treasurer. The treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of 7 the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe. Section 11. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 12. Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS Section 1. Nature of Indemnity. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, fiduciary or agent or in any other capacity while serving as a director, officer, employee, fiduciary or agent, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event 8 within 30 days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Nonexclusivity of Article V. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the corporation's certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. 9 Section 6. Employees and Agents. Persons who are not covered by the foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contract Rights. The provisions of this Article V shall be deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI CERTIFICATES OF STOCK Section 1. Form. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by the chairman of the board, the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such chairman of the board, president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly 10 authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or 11 registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the corporation's certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the corporation's certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify of abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any 12 instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors. Section 6. Corporate Seal. The board of directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of these bylaws is or becomes inconsistent with any provision of the corporation's certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. 13 ARTICLE VIII AMENDMENTS These bylaws may be amended, altered, or repealed and new bylaws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the bylaws has been conferred upon the board of directors shall not divest the stockholders of the same powers. 14 EX-3.33 8 c00807exv3w33.txt BYLAWS OF MERCER FORGE CORPORATION EXHIBIT 3.33 BY-LAWS OF MERCER FORGE CORPORATION INDEX TO BY-LAWS
Page ---- Article I - Meetings of Stockholders Section 1. Annual Meeting 1 Section 2. Special Meetings 1 Section 3. Notice and Purpose of Meetings 2 Section 4. Procedure 2 Section 5. List of Stockholders 2 Section 6. Quorum 3 Section 7. Adjournments 3 Section 8. Voting; Proxies 4 Section 9. Consent of Stockholders in Lieu of Meeting 5 Section 10. Waiver of Notice 5 Section 11. Inspectors of Election 6 Section 12. Duties of Inspectors of Election 7 Article II - Directors Section 1. General Powers 7 Section 2. Number and Qualifications 7 Section 3. Election and Term of Office 8 Section 4. Resignation 8 Section 5. Removal of Directors 8 Section 6. Vacancies 8 Section 7. First Meeting of Newly Elected Directors 9 Section 8. Regular Meetings of Directors 9 Section 9. Special Meetings of Directors 10 Section 10. Notice of Special Meetings 10 Section 11. Quorum and Action by the Board 11 Section 12. Procedure 11 Section 13. Committees of Directors 12 Section 14. Compensation of Directors 13 Section 15. Action Without a Meeting 14 Section 16. Presence at Meeting by Telephone 14 Section 17. Waiver of Notice 14 Article III - Officers Section 1. Officers 15 Section 2. Term of Office 15 Section 3. Removal 15 Section 4. Resignation 16 Section 5. Vacancies 16 Section 6. The President 16 Section 7. The Vice Presidents 16 Section 8 The Secretary and Assistant Secretaries 17
Section 9. The Treasurer and Assistant Treasurer 17 Section 10. Officers Holding Two or More Offices 18 Section 11. Duties of Officers May Be Delegated 18 Section 12. Compensation 18 Section 13. Security 19 Article IV - Indemnification of Officers and Directors Section 1. Bight of Indemnification 19 Section 2. Expenses 19 Section 3. Other Bights of Indemnification 20 Article V - Shares and Their Transfer Section 1. Certificates 20 Section 2. Issuance of Certificates 21 Section 3. More Than One Class of Stock 21 Section 4. Stock Ledger 22 Section 5. Transfer of Shares 22 Section 6. Registered Stockholders 23 Section 7. Regulations 23 Section 8. Lost, Stolen and Destroyed Certificates 24 Section 9. Fixing of Record Date 24 Article VI - Finances Section 1. Corporate Funds 26 Section 2. Fiscal Year 26 Section 3. Dividends; Reserves 27 Section 4. Loans to Employees and Officers 27 Article VII - Corporate Seal Section 1. Form of Seal 28 Section 2. Use of Seal 28 Article VIII - Amendments Section 1. Procedure for Amending By-Laws 28
BY-LAWS OF MERCER FORGE CORPORATION ARTICLE I Meetings of Stockholders Section 1. Annual Meeting. The annual meeting of stockholders of the corporation for the election of directors and for the transaction of other business shall be held at such time and such place within or without the State of Delaware as shall be determined by the Board of Directors or the President and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Special Meetings. A special meeting of stockholders may be called by the Board of Directors or the President, and shall be called by the President, the Secretary or an Assistant Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of the holders of record of a majority of the outstanding shares of the stock of the corporation entitled to vote at the meeting. Each special meeting of stockholders shall be held at such time and place within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice of the meeting. - 2 - Section 3. Notice and Purpose of Meetings. Written notice of each meeting of stockholders stating the place, date and hour of the meeting and, in the case of a special meeting, in general terms, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the meeting to each stockholder of record entitled to vote at the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with first-class postage thereon prepaid, directed to each stockholder at his address as it appears on the records of the corporation. Section 4. Procedure. At each meeting of stockholders the order of business and all other matters of procedure may be determined by the person presiding at the meeting. Section 5. List of Stockholders. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares of the stock of the corporation registered in the name of each stockholder. Such list shall be open to examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a - 3 - place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. Except as otherwise required by law or the certificate of incorporation, a quorum at all meetings of stockholders shall consist of the holders of record of not less than a majority of the outstanding shares of the stock of the corporation entitled to vote at the meeting, present in person or represented by proxy, except when the stockholders are required to vote by class, in which event the holders of record of not less than a majority of the outstanding shares of the appropriate class shall be present in person or represented by proxy. Section 7. Adjournments. The stockholders entitled to vote who are present in person or represented by proxy at any meeting of stockholders, whether or not a quorum shall be present at the meeting, shall have power by a majority of the votes cast to adjourn the meeting from time to time without notice other than announcement at the meeting of the time and place to which the meeting is adjourned. At any adjourned meeting held without notice at which a quorum shall be present any business may be - 4 - transacted that might have been transacted on the original date of the meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. Section 8. Voting; Proxies. Unless otherwise provided in the certificate of incorporation, each stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of the stock of the corporation standing in his name on the record of stockholders on the record date fixed for the meeting or, if no record date for the meeting was fixed, on the date of the meeting. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may act in person or persons or may authorize another person to act for him by proxy, but no proxy shall be voted or acted upon after three years from its date unless it provides for a longer period. Directors elected at any meeting of stockholders shall, except as otherwise required by law, be elected by a plurality of the votes cast. All other corporate action to be taken by vote of stockholders shall, except as otherwise required by law or the certificate of incorporation, be authorized by a majority of the - 5 - votes cast. Unless otherwise provided in the certificate of incorporation, the vote for directors shall be by ballot, but the vote upon any other question before a meeting of stockholders shall not be by ballot unless required by law or unless the person presiding at such meeting shall so direct or unless any stockholder present in person or by proxy and entitled to vote thereon shall so demand. Section 9. Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action (including, without limitation, adoption, amendment or repeal of by-laws) which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares of the stock of the corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 10. Waiver of Notice. Whenever notice is - 6 - required by law or these by-laws to be given to any stockholder, a written waiver thereof, signed by such stockholder in person or by proxy, whether before or after the time stated therein, shall be deemed equivalent to notice. The attendance of any stockholder at a meeting in person or by proxy shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders need be specified in any written waiver of notice. Section 11. Inspectors of Election. The Board of Directors may, in advance of any meeting of the stockholders, appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed in advance of the meeting, the person presiding at such meeting may, and on the request of any stockholder entitled to vote thereat shall, appoint one or more inspectors. In case any inspector appointed fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of - 7 - inspector at such meeting with strict impartiality and according to the best of his ability. No person who is a candidate for the office of director of the corporation shall act as an inspector at any meeting of the stockholders at which directors are elected. Section 12. Duties of Inspectors of Election. Whenever one or more inspectors of election may be appointed as provided in these by-laws, he or they shall determine the number of shares outstanding and entitled to vote, the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. ARTICLE II Directors Section 1. General Powers. The property, business and affairs of the corporation shall be managed by or under the direction of its Board of Directors. Section 2. Number and Qualifications. The Board of Directors shall consist of one or more members. The exact number of directors shall be fixed from time to time by action of the - 8 - stockholders or by vote of a majority of the entire Board of Directors. Section 3. Election and Term of Office. Except as otherwise required by law or these by-laws, each director shall be elected at the annual meeting of stockholders of the corporation and shall hold office until the next annual meeting of stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal. Section 4. Resignation. Any director may resign at any time by giving written notice to the corporation. Such resignation shall take effect at the time specified therein; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. Removal of Directors. Except as otherwise provided by law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares of the stock of the corporation then entitled to vote at an election of directors. Section 6. Vacancies. Newly created directorships and vacancies in the Board of Directors, including vacancies resulting from the resignation of directors effective immediately or at a future date or from the removal of directors, with or without - 9 - cause, may be filled by vote of the stockholders, by vote of a majority of the directors then in office (including directors whose resignations are effective at a future date), although less than a quorum, or by the sole remaining director. Each director so chosen shall hold office until the next annual meeting of stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal. A vote to fill a vacancy or vacancies created by the resignation or resignations of a director or directors effective at a future date shall take effect when the resignation or resignations become effective. Section 7. First Meeting of Newly Elected Directors. The first meeting of the newly elected Board of Directors may be held immediately after the annual meeting of stockholders and at the same place as the annual meeting of stockholders, provided a quorum be present, and no notice of the meeting shall be necessary. In the event the first meeting of the newly elected Board of Directors is not held at said time and place, it shall be held as provided in Section 8 or 9 of this Article II. Section 8. Regular Meetings of Directors. Regular meetings of the Board of Directors may be held without notice at such time and such place within or without the State of Delaware as may be fixed from time to time by resolution of the Board of - 10 - Directors. If any day fixed for a regular meeting shall be a legal holiday at a place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Section 9. Special Meetings of Directors. A special meeting of the Board of Directors may be called by the President, or, in the absence or disability of the President, any Vice President, or by any two directors or if there is only one director by that one director. Each special meeting of the Board of Directors may be held at such time and such place within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 10. Notice of Special Meetings. Notice of each special meeting of the Board of Directors, stating the time and place thereof, shall be given by the President, any Vice President, the Secretary, any Assistant Secretary or any member of the Board of Directors, to each member of the Board of Directors (a) not less than three days before the meeting by depositing the notice in the United States mail, with first-class postage thereon prepaid, directed to each member of the Board of Directors at the address designated by him for such purpose (or, if none is designated, at his last known address), or (b) not less than twenty-four hours before the meeting by either (i) delivering the - 11 - same to each member of the Board of Directors personally, (ii) sending the same by telephone, telegraph, cable or wireless to the address designated by him for such purposes (or, if none is designated, to his last known address) or (iii) delivering the notice to the address designated by him for such purpose (or, if none is designated, to his last known address). The notice of any meeting of the Board of Directors need not specify the purpose or purposes for which the meeting is called, except as otherwise required by law or these by-laws. Section 11. Quorum and Action by the Board. At all meetings of the Board of Directors, except as otherwise required by law or these by-laws, a quorum shall be required for the transaction of business and shall consist of not less than a majority of the entire Board of Directors, and the vote of a majority of the directors present shall decide any question that may come before the meeting. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time or place without notice other than announcement at the meeting of the time and place to which the meeting is adjourned. Section 12. Procedure. The order of business and all other matters of procedure at every meeting of directors may be determined by the person presiding at the meeting. - 12 - Section 13. Committees of Directors. The Board of Directors may, by resolution adopted by vote of a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member or alternate member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member or alternate member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the property, business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority of the Board of Directors in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a - 13 - dissolution of the corporation or a revocation of a dissolution, amending the by-laws of the corporation, declaring a dividend or authorizing the issuance of stock. Each such committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required, A majority vote of all the members of any such committee may fix its rules or procedure, determine its actions and fix the time and place within or without the State of Delaware for its meetings and specify the number of members required to constitute a quorum and what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise provide. The Board of Directors may at any time fill vacancies in, change the membership of or discharge any such committee. Section 14. Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance art each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like compensation for attending committee meetings. - 14 - Section 15. Action Without a Meeting. Any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board of Directors or committee shall be filed with the minutes of the proceedings of the Board of Directors or committee. Section 16. Presence at Meeting by Telephone. Members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting by such means shall constitute presence in person at the meeting. Section 17. Waiver of Notice. Whenever notice is required by law or these by-laws to be given to any director, a written waiver thereof, signed by such director, whether before or after the time stated therein, shall be deemed equivalent to notice. - 15 - ARTICLE III Officers Section 1. Officers. The Board of Directors shall annually, at the first meeting of the Board of Directors after the annual meeting of stockholders, elect a President, one or more Vice Presidents, a Secretary, and a Treasurer. The Board of Directors may from time to time elect or appoint such additional officers as it may determine. Such additional officers shall have such authority and perform such duties as the Board of Directors may from time to time prescribe. Section 2. Term of Office. The President, each Vice-President, the Secretary and the Treasurer shall each, unless otherwise determined by the Board of Directors, hold office until the first meeting of the Board of Directors following the next annual meeting of stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal. Each additional officer appointed or elected by the Board of Directors shall hold office for such term as shall be determined from time to time by the Board of Directors and until his successor has been elected or appointed and qualified, or until his earlier death, resignation or removal. Section 3. Removal. Any officer may be removed or have his authority suspended by the Board of Directors at any time, with or without cause. - 16 - Section 4. Resignation. Any officer may resign at any time by giving written notice to the corporation. Such resignation shall take effect at the time specified therein; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. Vacancies. A vacancy in any office arising for any reason may be filled by the Board of Directors. Section 6. The President. The President shall be the chief executive officer of the corporation. He shall preside at all meetings of stockholders and of the Board of Directors. He shall have the powers and duties of immediate supervision and management of the corporation which usually pertain to his office, and shall perform all such other duties as are properly required of him by the Board of Directors. Section 7. The Vice Presidents. The Vice Presidents may be designated by such title or titles as the Board of Directors may determine, and each Vice President in such order of seniority as may be determined by the Board of Directors shall, in the absence or disability of the President, or at his request, perform the duties and exercise the powers of the President. Each of the Vice Presidents also shall have such powers as usually pertain to his office and shall perform such duties as usually pertain to his office or as are properly required of him by the Board of Directors. - 17 - Section 8. The Secretary and Assistant Secretaries. The Secretary shall issue notices of all meetings of stockholders and of the Board of Directors where notices of such meetings are required by law or these by-laws. He shall attend meetings of stockholders and of the Board of Directors and keep the minutes thereof in a book or books to be provided for that purpose. He shall affix the corporate seal to and sign such instruments as require the seal and his signature and shall perform such other duties as usually pertain to his office or as are properly required of him by the Board of Directors. The Assistant Secretaries may, in the absence or disability of the Secretary, or at his request or the request of the President, perform the duties and exercise the powers of the Secretary, and shall perform such other duties as the board of directors shall prescribe. Section 9. The Treasurer and Assistant Treasurers. The Treasurer shall have the care and custody of all the moneys and securities of the corporation. He shall cause to be entered in books of the corporation to be kept for that purpose full and accurate accounts of all moneys received by him and paid by him on account of the corporation. He shall make and sign such reports, statements and instruments as may be required of him by the Board of Directors or by the laws of the United States or of any state, - 18 - country or other jurisdiction in which the corporation transacts business, and shall perform such other duties as usually pertain to his office or as are properly required of him by the Board of Directors. The Assistant Treasurers may, in the absence or disability of the Treasurer, or at his request or the request of the President, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties as the Board of Directors shall prescribe. Section 10. Officers Holding Two or More Offices. Any two or more offices may be held by the same person but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument be required by law or otherwise to be executed or verified by two or more officers. Section 11. Duties of Officers May be Delegated. In case of the absence or disability of any officer of the corporation, or in case of a vacancy in any office or for any other reason that the Board of Directors may deem sufficient, the Board of Directors, except as otherwise provided by law, may temporarily delegate the powers or duties of any officer to any other officer or to any director. Section 12. Compensation. The compensation of all - 19 - officers shall be determined by the Board of Directors. The compensation of all other employees shall be fixed by the President within such limits as may be prescribed by the Board of Directors. Section 13. Security. The corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise, as may be required from time to time by the Board of Directors. ARTICLE IV Indemnification of Officers and Directors Section 1. Right of Indemnification. Every person now or hereafter serving as a director or officer of the corporation and every such director or officer serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified by the corporation in accordance with and to the fullest extent permitted by law for the defense of, or in connection with, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative. Section 2. Expenses. Expenses incurred by an officer or director in defending a civil or criminal action, suit or - 20 - proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of such director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article IV. Section 3. Other Rights of Indemnification. The right of indemnification herein provided shall not be deemed exclusive of any other rights to which any such director or officer may now or hereafter be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. ARTICLE V Shares and Their Transfer Section 1. Certificates. Every stockholder of the corporation shall be entitled to a certificate or certificates, to be in such form as the Board of Directors shall prescribe, certifying the number of shares of the stock of the corporation owned by him. - 21 - Section 2. Issuance of Certificates. Certificates representing shares of stock of the corporation shall be numbered in the order in which they are issued and shall be signed by the President or any Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer of the corporation who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, such certificate may nevertheless be issued by the corporation with the same effect as if he were such officer at the date of issue. Section 3. More Than One Class of Stock. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except for restrictions on transfer of stock (as provided in section 202 of the General Corporation Law of Delaware), in lieu of the foregoing requirements, there may be set forth on the face - 22 - or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 4. Stock Ledger. A record shall be kept by the Secretary, by the transfer agent, or by any other officer, employee or agent designated by the Board of Directors, of the name of the individual, firm or corporation holding the shares of the stock of the corporation represented by each certificate, the number of shares represented by such certificate, the date of issue thereof and, in case of cancellation, the date of cancellation thereof. Section 5. Transfer of Shares. Upon surrender to the corporation or the transfer agent of the corporation of a certificate representing shares of the stock of the corporation duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Whenever any transfer of shares shall be made for - 23 - collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the corporation for transfer, both the transferor and transferee request the corporation to do so. Section 6. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of the stock of the corporation to receive dividends, and to vote as such owner, and to hold liable for call and assessments a person registered on its books as the owner of such shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. Section 7. Regulations. The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with law, the certificate of incorporation or these by-laws, concerning the issue, transfer and registration of certificates representing shares of the stock of the corporation. It nay appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents or one or more registrars, and may require all such certificates to bear the signature or signatures of any of them. - 24 - Section 8. Lost, Stolen and Destroyed Certificates. The Board of Directors may in its discretion cause a new certificate representing shares of the stock of the corporation to be issued in place of any certificate theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon satisfactory proof of that fact by the person claiming the certificate to have been lost, stolen or destroyed; but the Board of Directors may in its discretion refuse to issue a new certificate except upon the order of a court having jurisdiction in such matters. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 9. Fixing of Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or - 25 - exchange of shares of the stock of the corporation, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty or less than ten days before the date of such meeting, nor more than sixty days prior to any other action. Only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to notice of and to vote at such meeting of stockholders and any adjournment thereof, or to receive payment of such dividend or such other distribution or such allotment of rights, or to exercise such rights in respect of any such change, conversion or exchange of shares of the stock of the corporation, or to participate in such other action, or to give such consent, as the case may be, notwithstanding any transfer of any shares of the stock of the corporation on the books of the corporation after any such record date so fixed. A determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. If no record date is fixed by the Board of Directors, (a) the record date for determining stockholders entitled to notice of or to vote at any meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business - 26 - on the day next preceding the day on which the meeting is held, (b) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed, and (c) the, record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. ARTICLE VI Finances Section 1. Corporate Funds. The funds of the corporation shall be deposited in its name with such banks, trust companies or other depositories as the Board of Directors may from time to time designate. All checks, notes, drafts and other negotiable instruments of the corporation shall be signed by such officer or officers, employee or employees, agent or agents as the Board of Directors may from time to time designate. No officers, employees or agents of the corporation, alone or with others, shall have power to make any checks, notes, drafts or other negotiable instruments in the name of the corporation or to bind the corporation thereby, except as provided in this Section 1. Section 2. Fiscal Year. The fiscal year of the corporation shall be the calendar year unless otherwise provided by the Board of Directors. - 27 - Section 3. Dividends; Reserves. Dividends upon the stock of the corporation, payable out of funds legally available therefor, may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the stock of the corporation. Before declaring any dividend, the Board of Directors may set aside out of any funds of the corporation legally available for dividends such Sum or sums as the Board of Directors from time to time in its discretion shall deem proper as a reserve for working capital, for contingencies, for equalizing dividends or for such other purpose or purposes as the Board of Directors shall deem conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created. Section 4. Loans to Employees and Officers. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation, including any officer or employee who is also a director of the corporation, whenever in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. - 28 - ARTICLE VII Corporate Seal Section 1. Form of Seal. The corporate seal shall have inscribed thereon the name of the corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware", and shall otherwise be in such form as shall be prescribed from time to time by the Board of Directors. Section 2. Use of Seal. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced in any manner. ARTICLE VIII Amendments Section 1. Procedure For Amending By-Laws. By-laws of the corporation may be adopted, amended or repealed (a) at any meeting of stockholders, notice of which shall have referred to the proposed action, by the holders of a majority of the shares of the corporation then entitled to vote at an election of directors, or (b), if the power to adopt, amend or repeal by-laws shall have been conferred upon the directors in the certificate of incorporation, at any meeting of the Board of Directors, notice of which shall have referred to the proposed action, by the vote of a majority of the entire Board of Directors. EX-10.2A 9 c00807exv10w2a.txt AMENDMENT #2 TO LOAN AND SECURITY AGREEMENT EXHIBIT 10.2(a) AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT This Amendment No. 2 to Loan and Security Agreement (this "Amendment") dated December 9, 2005, is by and among Borrowers (as defined below), the undersigned Lenders and Bank of America, N.A., successor to Fleet Capital Corporation, as Agent for the Lenders who are from time to time party to that certain Loan and Security Agreement (as amended from time to time, and as amended hereby, the "Loan Agreement") dated as of October 8, 2003, by and among Neenah Foundry Company, a Wisconsin corporation ("Neenah"), as a Borrower, the Subsidiaries of Neenah that are party thereto as Borrowers (Neenah and such Subsidiaries are collectively, "Borrowers" and each, a "Borrower"), Fleet Capital Corporation, as Agent and as a Lender, Wachovia Capital Finance Corporation (Central), f/k/a Congress Financial Corporation (Central), as Syndication Agent and as a Lender, General Electric Capital Corporation, as Documentation Agent and as a Lender, and the other Lenders party thereto. All capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the same meanings herein as in the Loan Agreement. Borrowers have requested that Agent and Lenders agree to amend the definition of the term EBITDA contained in the Loan Agreement, as more particularly set forth herein. Subject to each of the terms and conditions set forth herein, Agent and the undersigned Lenders have agreed to the request described above. Now, therefore, the parties hereto hereby agree as follows: 1. Amendment. Subject to the prior satisfaction of the conditions set forth in Section 2 of this Amendment, and in reliance on the representations and warranties set forth in Section 3 of this Amendment, the parties hereto agree to amend and restate the definition of the term EBITDA contained in Exhibit 8.3 to the Loan Agreement in its entirety as follows: "EBITDA - with respect to any period, the sum of net earnings (or loss) before interest expense, income taxes, depreciation and amortization for such period (but excluding any extraordinary gains for such period), all as determined for Parent, Borrowers and the Borrowers' Subsidiaries on a Consolidated basis and in accordance with GAAP; plus amounts deducted in determining net earnings (or loss) in respect of: (a) the fees, costs and expenses actually incurred in connection with the consummation of the Plan of Reorganization, and the closing of the Agreement and the transactions contemplated thereby, in the actual amounts and during the actual fiscal periods incurred, (b) non-recurring, non-cash items, (c) one-time cash expenses relating to the closing of the facility of Dalton Corporation, Kendallville Manufacturing Facility located at 200 West Ohio Street, Kendallville, Indiana of up to a maximum aggregate amount of $4,000,000 and (d) one-time charges incurred in connection with the settlement of the litigation matter JD Holdings LLC v. Neenah Foundry Company, relating to the possible sale of Mercer Forge Corporation, in the amount of up to a maximum aggregate of $6,500,000 during the actual fiscal periods incurred; and minus the amount of any cash items not otherwise deducted in determining net income (or loss) to the extent that such items were previously added back to EBITDA as non-recurring, non-cash items on a prior measurement date." 2. Conditions to Effectiveness. The effectiveness of this Amendment shall be subject to the prior satisfaction of the following conditions: (a) Agent shall have received an execution version of this Amendment signed by the parties hereto; and (b) no Default or Event of Default shall be in existence. 3. Representations and Warranties. To induce Agent and the Lenders party hereto to execute and deliver this Amendment, each Borrower hereby represents and warrants to Lenders that, after giving effect to this Amendment: (a) All representations and warranties contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of this Amendment, in each case as if then made, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date); (b) No Default or Event of Default has occurred and is continuing; and (c) The execution and delivery by such Borrower of this Amendment does not require the consent or approval of any Person, except such consents and approvals as have been obtained. 4. Scope. This Amendment shall have the effect of amending the Loan Agreement and the other Loan Documents as appropriate to express the agreements contained herein. In all other respects, the Loan Agreement and the other Loan Documents shall remain in full force and effect in accordance with their respective term. 5. Reaffirmation and Confirmation. Each Borrower hereby ratifies, affirms, acknowledges and agrees that the Loan Agreement and the other Loan Documents represent the valid, enforceable and collectible obligations of such Borrower, and each Borrower further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Loan Agreement or any of the Loan Documents. Each Borrower hereby agrees that this Amendment in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The Liens and rights securing payment of the Obligations are hereby ratified and confirmed by each Borrower in all respects. -2- 6. Counterparts. This Amendment may be executed in counterpart and by different parties hereto in separate counterparts, each of which, when taken together, shall constitute but one and the same instrument. 7. Expenses. All of Agent's reasonable costs and expenses, including, without limitation, attorney's fees, incurred in connection with the preparation of this Amendment and all related documents shall be paid by Borrowers upon the request of Agent. -3- IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first above written. BORROWERS: NEENAH FOUNDRY COMPANY By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer DEETER FOUNDRY INC. By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer MERCER FORGE CORPORATION By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer DALTON CORPORATION By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer DALTON CORPORATION, STRYKER MACHINING FACILITY CO. By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer Signature Page to Amendment No. 2 to Loan and Security Agreement DALTON CORPORATION, WARSAW MANUFACTURING FACILITY By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer ADVANCED CAST PRODUCTS, INC. By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer GREGG INDUSTRIES, INC. By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer A & M SPECIALTIES, INC. By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer NEENAH TRANSPORT, INC. By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer DALTON CORPORATION, KENDALLVILLE MANUFACTURING FACILITY By /s/ GARY LaChey ------------------------------------- Its Corporate Vice President - Finance and Chief Financial Officer Signature Page to Amendment No. 2 to Loan and Security Agreement BANK OF AMERICAN A., successor to FLEET CAPITAL CORPORATION, as Agent and as a Lender By /s/ Robert Lund ------------------------------------- Its Senior Vice President WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), f/k/a CONGRESS FINANCIAL CORPORATION (CENTRAL), as a Lender By /s/ Laura Wheeland ------------------------------------- Its Vice President GENERAL ELECTRIC CAPITAL CORPORATION, as Lender By /s/ Bond Harberts ------------------------------------- Its Duly Authorized Signatory THE CIT GROUP/BUSINESS CREDIT, INC., as a Lender By /s/ Eustachio Bruno ------------------------------------- Its AVP Signature Page to Amendment No. 2 to Loan and Security Agreement EX-10.4 10 c00807exv10w4.txt WARRANT AGREEMENT EXHIBIT 10.4 EXECUTION VERSION WARRANT AGREEMENT by and between ACP HOLDING COMPANY and THE BANK OF NEW YORK as Warrant Agent For up to 38,000,000 Warrants Dated as of October 8, 2003 TABLE OF CONTENTS Page ---- Article 1 DEFINITIONS .............................................................................. 1 Article 2 ISSUANCE OF WARRANTS ..................................................................... 4 2.1 Initial Issuance ......................................................................... 4 2.2 Initial Share Amount ..................................................................... 4 2.3 Form of Warrant Certificates ............................................................. 4 2.4 Execution of Warrant Certificates ........................................................ 4 2.5 Countersignature of Warrant Certificates ................................................. 4 2.6 Tax Treatment ............................................................................ 5 Article 3 EXERCISE PERIOD .......................................................................... 5 Article 4 EXERCISE OF WARRANTS ..................................................................... 5 4.1 The Exercise Price ....................................................................... 5 4.2 Manner of Exercise ....................................................................... 6 4.3 When Exercise Effective .................................................................. 6 4.4 Delivery of Certificates, Etc ............................................................ 6 4.5 Fractional Shares ........................................................................ 7 4.6 Contingent Exercise ...................................................................... 7 Article 5 ADJUSTMENT OF THE AMOUNT OF COMMON STOCK ISSUABLE AND THE EXERCISE PRICE UPON EXERCISE ... 8 5.1 Adjustment for Change in Capital Stock ................................................... 8 5.2 Distributions ............................................................................ 8 5.3 Adjustments for Mergers and Consolidations ............................................... 9 5.4 No De Minimis Adjustments; Calculation to Nearest Cent and One-hundredth of Share ........ 9 5.5 Notice of Adjustment; Warrant Agent's Disclaimer ......................................... 9 5.6 Other Notices ............................................................................ 10 5.7 No Change in Warrant Terms on Adjustment ................................................. 10 5.8 Other Adjustments ........................................................................ 10 5.9 Other Events ............................................................................. 10 Article 6 MERGER, CONSOLIDATION, ETC ............................................................... 11 Article 7 NOTIFICATION OF CERTAIN EVENTS ........................................................... 11 7.1 Corporate Action ......................................................................... 11
i Page ---- 7.2 Available Information ................................................................... 12 Article 8 RESERVATION OF STOCK .................................................................... 12 Article 9 LOSS OR MUTILATION ...................................................................... 13 Article 10 WARRANT REGISTRATION .................................................................... 13 10.1 Registration ............................................................................ 13 10.2 Transfer or Exchange .................................................................... 13 10.3 Valid and Enforceable ................................................................... 14 10.4 Endorsement ............................................................................. 14 10.5 No Service Charge ....................................................................... 14 10.6 Treatment of Holders of Warrant Certificates ............................................ 14 10.7 Cancellation ............................................................................ 14 Article 11 WARRANT AGENT ........................................................................... 14 11.1 Obligations Binding ..................................................................... 14 11.2 No Liability ............................................................................ 15 11.3 Instructions ............................................................................ 15 11.4 Agents .................................................................................. 15 11.5 Cooperation ............................................................................. 16 11.6 Agent Only .............................................................................. 16 11.7 Right to Counsel ........................................................................ 16 11.8 Compensation ............................................................................ 16 11.9 Accounting .............................................................................. 17 11.10 No Conflict ............................................................................. 17 11.11 Resignation; Termination ................................................................ 17 11.12 Change of Warrant Agent ................................................................. 18 11.13 Successor Warrant Agent ................................................................. 18 Article 12 REMEDIES, ETC ........................................................................... 18 Article 13 MISCELLANEOUS ........................................................................... 19 13.1 Notices ................................................................................. 19 13.2 Governing Law and Consent to Forum ...................................................... 19 13.3 Benefits of this Agreement .............................................................. 20 13.4 Agreement of Holders of Warrant Certificates ............................................ 20 13.5 Counterparts ............................................................................ 20
ii Page ---- 13.6 Amendments .............................................................................. 20 13.7 Consent to Jurisdiction ................................................................. 20 13.8 Headings ................................................................................ 21 EXHIBITS Exhibit A: Form of Warrant Certificate ................................................................ A-1
iii EXECUTION VERSION WARRANT AGREEMENT THIS WARRANT AGREEMENT is made and entered into as of October 8, 2003 by and between ACP Holding Company, a Delaware corporation (the "COMPANY"), and The Bank of New York, a New York banking corporation, as Warrant Agent (the "WARRANT AGENT"). WITNESSETH: WHEREAS, in connection with the financial restructuring of the Company, pursuant to the Joint Prepackaged Plan of Reorganization of the Company, NFC Castings, Inc., Neenah Foundry Company ("NEENAH") and certain of its subsidiaries, dated as of July 1, 2003, including the Plan supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date (the "PLAN"), the Company is issuing warrants which are exercisable to purchase up to 38,000,000 shares of Common Stock (as defined herein), subject to adjustment as provided herein (the "WARRANTS"), to the holders of certain allowed claims against Neenah (the "CLAIMS"), in the amounts set forth next to their names in Schedule I hereto, in partial exchange for such Claims and in accordance with the Plan; WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to act, in connection with the issuance, transfer, exchange, replacement and exercise of the Warrant Certificates (as defined herein) and other matters as provided herein; and WHEREAS, the Company desires to enter into this Agreement to set forth the terms and conditions of the Warrants and the rights of the holders thereof; NOW, THEREFORE, in consideration of the foregoing premises and of the mutual agreements set forth herein, the Company and the Warrant Agent hereby agree as follows: ARTICLE 1 DEFINITIONS As used herein, the following terms have the following respective meanings: "Agreement" means this Warrant Agreement, as the same may be amended or modified from time to time hereafter. "Bankruptcy Court" means the United States Bankruptcy Court for the District of Delaware that has jurisdiction of the chapter 11 case of the Company under title 11 of the United States Code. "Business Day" means any day other than a Saturday or a Sunday or a day on which commercial banking institutions in New York City, New York are authorized or required by law to be closed; provided, that, in determining the period within which certificates or Warrants are to be issued and delivered at a time when shares of Common Stock (or Other Securities) are listed or admitted to trading on any national securities exchange or in the over-the-counter market and in determining the Fair Value of any securities listed or admitted to trading on any national securities exchange or in the over-the-counter market, "Business Day" shall mean any day when the principal exchange on which such securities are then listed or admitted to trading is open for trading or, if such securities are traded in the over-the-counter market in the United States, such market is open for trading; and provided, further, that any reference in this Agreement to "days" (unless Business Days are specified) shall mean calendar days. "Claims" has the meaning specified in the recitals hereto. "Commission" means the Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act of 1933, as amended, or the Exchange Act, whichever is the relevant statute for the particular purpose. "Common Stock" means the Company's Common Stock, par value $0.01 per share. "Company" has the meaning specified in the preamble hereof. "Effective Date" means the date on which the Plan became effective. "Exchange Act" means the Securities Exchange Act of 1934, or any successor Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be amended and in effect at the time. Any reference herein to a particular section of the Securities Exchange Act of 1934 shall include a reference to the comparable section, if any, of any such successor Federal statute. "Exercise Period" means the period commencing on the Effective Date (as defined in the Plan) and ending at 5:00 P.M., New York time, on the tenth anniversary of the Effective Date. "Exercise Price" has the meaning specified in Section 4.1 hereof. "Fair Value" means (i) with respect to Common Stock or any Other Security, in each case, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock or, if an Other Security in the minimum denomination in which such security is traded, on the primary national or regional stock exchange on which such 2 security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock or Other Security, as the case may be, is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock or Other Security, in each case quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock (or Other Security) shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock or Other Security as determined reasonably and in good faith by the Board of Directors of the Company. Anything herein to the contrary notwithstanding, in case the Company shall issue any shares of Common Stock, rights, options, or Other Securities in connection with the acquisition by the Company of the stock or assets of any other Person or the merger of any other Person into the Company, the Fair Value of the Common Stock or Other Securities so issued shall be determined as of the date the number of shares of Common Stock, rights, options or Other Securities was determined (as set forth in a written agreement between the Company and the other party to the transaction) rather than on the date of issuance of such shares of Common Stock, rights, options or Other Securities. "Officers' Certificate" means a certificate signed on behalf of the Company by two officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company. "Original Issue Date" means the Effective Date. "Other Securities" or "Other Security" means any stock (other than Common Stock) and other securities of the Company or any other Person (corporate or otherwise) that the holders of the Warrants at any time shall be entitled to receive or shall have received, upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or that at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities. "Other Shares" has the meaning specified in Section 5.2 hereof. "Person" means any individual, partnership, association, joint venture, corporation, limited liability company, business trust, unincorporated organization, government or department, agency or subdivision thereof, or other person or entity, and shall include any successor (by merger or otherwise) of any such Person. "Plan" has the meaning specified in the recitals hereto. "Warrant Agent" has the meaning specified in the preamble hereof. "Warrant Certificates" has the meaning specified in Section 2.3 hereof. "Warrants" has the meaning set forth in the recitals hereto. 3 ARTICLE 2 ISSUANCE OF WARRANTS 2.1 Initial Issuance. On the date hereof (the "ORIGINAL ISSUE DATE"), the Company shall, pursuant to the Plan, deliver to the Company's disbursing agent under the Plan for re-distribution to the holders of the certain claims against the Company a global certificate for an aggregate of up to 38,000,000 Warrants. 2.2 Initial Share Amount. The number of shares of Common Stock available to be purchased upon exercise of the Warrants shall be one share of Common Stock for each exercised Warrant, subject to adjustments from and after the Original Issue Date as provided in Article 5 of this Agreement. 2.3 Form of Warrant Certificates. The Warrants shall be evidenced by certificates substantially in the form attached hereto as Exhibit A (the "WARRANT CERTIFICATES") or may, if the Company so directs, be issued in book-entry form. Each Warrant Certificate shall be dated as of the Original Issue Date or, in the event of a division, exchange, substitution or transfer of any of the Warrants, on the date of such event. The Warrant Certificate may have such further legends and endorsements stamped, printed, lithographed or engraved thereon as the Company may deem appropriate (which do not affect the rights, duties or responsibilities of the Warrant Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation pursuant thereto or with any applicable rule or regulation of any securities exchange, market or trading facility on which the Warrants may be listed or admitted for trading. 2.4 Execution of Warrant Certificates. Warrant Certificates shall be executed on behalf of the Company by its President and Chief Executive Officer or Vice President -- Finance, Treasurer, Secretary and Chief Financial Officer, either manually or by facsimile signature printed thereon. In case any such officer of the Company whose signature shall have been placed upon any Warrant Certificate shall cease to be such officer of the Company before countersignature by the Warrant Agent or issuance and delivery thereof, such Warrant Certificate nevertheless may be countersigned by the Warrant Agent and issued and delivered with the same force and effect as though such person had not ceased to be such officer of the Company. The term "holder" or "holder of a Warrant Certificate" as used herein shall mean any Person in whose name at the time any Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose. 2.5 Countersignature of Warrant Certificates. Upon the execution of this Agreement, the Company will execute and deliver to the Warrant Agent one or more Warrant Certificates representing the number of Warrants issued pursuant to the Plan. Upon receipt of written instructions from an authorized signatory of the Company, Warrant Certificates shall be manually countersigned by an authorized signatory of the Warrant Agent and shall not be valid for any purpose unless so countersigned. Such 4 manual countersignature shall constitute conclusive evidence of such authorization. No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the manual signature of the Warrant Agent. The Warrant Agent is hereby authorized to countersign, in accordance with the provisions of this Section 2.5, and deliver any new Warrant Certificates, as directed in writing by the Company pursuant to Section 2.1 and as and when directed in writing by the Company pursuant to the provisions of Articles 9 and 10. Each Warrant Certificate shall, when manually countersigned by an authorized signatory of the Warrant Agent, entitle the registered holder thereof to exercise the rights as the holder of the number of Warrants set forth thereon, subject to the provisions of this Agreement. 2.6 Tax Treatment. (a) The Company and Neenah have determined that the Warrants issued hereby are part of an investment unit within the meaning of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the "CODE"), which includes Neenah's 11 % Second Secured Notes due 2010 (the "NOTES"). Notwithstanding anything to the contrary contained herein, the Company and Neenah have further determined for United States federal, state and local income tax purposes, with respect to such an investment unit with a principal amount of $1,000, the "issue price" of the Warrants and the Notes equals $1.34 and $915.36, respectively. (b) For U.S. federal, state and local income tax purposes, the Company and Neenah intend that the issuance of the Warrants in partial exchange for Claims (against Neenah) pursuant to the Plan be governed by Section 1.1032-3 of the U.S. Treasury Regulations, so that Neenah is deemed to have acquired the Warrants from the Company immediately before it distributes the Warrants to the holders of Claims in partial exchange for such Claims. ARTICLE 3 EXERCISE PERIOD Each Warrant shall entitle the holder thereof to purchase from the Company one (1) share of Common Stock (subject to the adjustments provided herein), at any time during the Exercise Period. Any Warrant not exercised during the Exercise Period shall become null and void, and all rights of the holder of the Warrant Certificate evidencing such Warrant under the Warrant Certificate or this Agreement shall cease. ARTICLE 4 EXERCISE OF WARRANTS 4.1 The Exercise Price. The exercise price of each Warrant is $0.01 per share of Common Stock (the "EXERCISE PRICE"). The Exercise Price is subject to adjustment pursuant to Article 5 hereof. 5 4.2 Manner of Exercise. (a) During the Exercise Period, all or any whole number of Warrants represented by a Warrant Certificate may be exercised by the registered holder thereof during normal business hours on any Business Day, by surrendering such Warrant Certificate, with the subscription form set forth therein duly completed and executed by such holder, by hand, by overnight courier or by mail to the Warrant Agent at its office addressed to The Bank of New York, 101 Barclay Street, Floor 8W, New York, New York 10286, Attn: Corporate Trust Administration. Such Warrant Certificate shall be accompanied by payment in full in respect of each Warrant that is exercised, which shall be made by certified or official bank or bank cashier's check payable to the order of the Company, or by wire transfer of immediately available funds to an account designated by the Warrant Agent for the benefit of the Company, except as otherwise provided herein. Such payment shall be in an amount equal to the product of the number of shares of Common Stock (without giving effect to any adjustment therein) designated in such subscription form multiplied by the Exercise Price for the Warrants being exercised (plus such additional consideration as may be provided herein). Upon such surrender and payment prior to the expiration of the Exercise Period, such holder shall thereupon be entitled to receive the number of duly authorized, validly issued, registered, fully paid and nonassessable shares of Common Stock (or Other Securities) determined as provided in Articles 2 and 3, and as and if adjusted pursuant to Article 5. 4.3 When Exercise Effective. Each exercise of any Warrant pursuant to Section 4.2 shall be deemed to have been effected immediately prior to the close of business on the Business Day on which the Warrant Certificate representing such Warrant, duly executed, with accompanying payment, shall have been delivered as provided in Section 4.2, and at such time the Person or Persons in whose name or names the certificate or certificates for Common Stock (or Other Securities) shall be issuable upon such exercise as provided in Section 4.4 shall be deemed to have become the holder or holders of record thereof. 4.4 Delivery of Certificates. Etc. (a) As promptly as practicable after the exercise of any Warrant, and in any event within three (3) Business Days thereafter, the Company at its expense (other than as to payment of taxes or governmental charges which will be paid by the holder) will cause to be issued and delivered to such holder, or as such holder may otherwise direct in writing (subject to Article 11), (i) a certificate or certificates for the number of shares of Common Stock (or Other Securities) to which such holder is entitled, and (ii) if less than all the Warrants represented by a Warrant Certificate are exercised, a new Warrant Certificate or Certificates of the same tenor and for the aggregate number of Warrants that were not exercised, executed and countersigned in accordance with Sections 2.4 and 2.5. 6 (b) The Warrant Agent shall countersign any new Warrant Certificate, register it in such name or names as may be directed in writing by such holder, and shall deliver it to the Person entitled to receive the same in accordance with this Section 4.4. The Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates executed on behalf of the Company for such purpose. (c) Upon any exercise of Warrants, the Warrant Agent shall, from time to time, as promptly as practicable, advise the Treasurer of the Company or his or her designee of (i) the number of Warrants exercised, (ii) the instruction of each holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Common Stock to which such holder is entitled upon such exercise, (iii) the timing of delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such exercise, and (iv) such other information as the Company shall reasonably require. (d) The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issue of the Common Stock to a Person other than a registered holder; and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Certificate or share of Common Stock until such tax or other charge shall have been paid or it has been established to the Company's reasonable satisfaction that no such tax or other charge is due. The Warrant Agent shall have no duty or obligation under this Section 4 or any other similar provision of this Agreement unless and until it is satisfied that all such taxes and/or governmental charges have been paid in full. 4.5 Fractional Shares. No fractional shares of Common Stock (or Other Securities) shall be issued upon the exercise of any Warrant. If more than one Warrant Certificate shall be delivered for exercise at one time by the same holder, the number of full shares or securities that shall be issuable upon exercise shall be computed on the basis of the aggregate number of Warrants exercised. As to any fraction of a share of Common Stock (or Other Securities), the Company shall pay a cash adjustment in respect thereto in an amount equal to the product of the Fair Value per share of Common Stock (or Other Securities) as of the Business Day next preceding the date of such exercise multiplied by such fraction of a share. The Warrant Agent shall have no duty or obligation under this Section 4.5 (including but not limited to the payment, calculation or valuation of any fraction of a share of Common Stock) unless and until the Company has provided or caused to be provided to the Warrant Agent sufficient cash necessary to satisfy the Company's obligations with respect to any fraction of a share of Common Stock. 4.6 Contingent Exercise. Each holder shall have the right to exercise its Warrants contingent upon and subject to the effectiveness of a registration statement relating to the shares of Common Stock available to be purchased upon exercise of such holder's Warrants. 7 ARTICLE 5 ADJUSTMENT OF THE AMOUNT OF COMMON STOCK ISSUABLE AND THE EXERCISE PRICE UPON EXERCISE 5.1 Adjustment for Change in Capital Stock. If the Company shall (i) declare or pay a dividend on its outstanding shares of Common Stock or make a distribution to holders of its Common Stock, in either case in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue by reclassification of its shares of Common Stock other securities of the Company, then the number of shares of Common Stock issuable for each Warrant shall be proportionally increased or decreased, as applicable, and the Exercise Price in effect immediately prior thereto shall be proportionally decreased or increased, as applicable, so that the holder of any Warrants thereafter exercised shall be entitled to receive the number and kind of shares of Common Stock or other securities that the holder would have owned or been entitled to receive after the happening of any of the events described above had such Warrants been exercised immediately prior to the happening of such event or any record date with respect thereto. Each adjustment made pursuant to this Section 5.1 shall become effective on the date of the dividend payment, subdivision, combination or issuance retroactive to the record date with respect thereto, if any, for such event. All such adjustments shall be made successively. 5.2 Distributions. If after the date hereof the Company shall distribute to all holders of its shares of Common Stock evidences of its indebtedness, shares of another class of capital stock other than Common Stock ("OTHER SHARES"), assets (excluding cash distributions made as a dividend payable out of earnings or out of surplus legally available for dividends under the laws of the jurisdiction of incorporation of the Company) or rights to subscribe to shares of Common Stock, then in each such case, unless the Company elects to reserve such indebtedness, assets, rights or shares for distribution to each holder of a Warrant upon the exercise of the Warrants so that such holder will receive upon such exercise, in addition to the shares of Common Stock to which such holder is entitled, the amount and kind of such indebtedness, assets, rights or shares which such holder would have received if such holder had, immediately prior to the record date for the distribution of such indebtedness, assets, rights or shares, exercised the Warrants and received Common Stock, the Exercise Price in effect immediately prior to such distribution shall be decreased to an amount determined by multiplying such Exercise Price by a fraction, the numerator of which is the Fair Value of a share of the Common Stock at the date of such distribution less the fair value of the evidences of indebtedness, Other Shares, assets or subscription rights as the case may be, so distributed (as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive, and described in a reasonably detailed statement filed with the Warrant Agent) and the denominator of which is the Fair Value of a share of Common Stock at such date. Such adjustment shall be made whenever any such distribution is made, and shall become effective retroactively on the date 8 immediately after the record date for the determination of stockholders entitled to receive such distribution. 5.3 Adjustments for Mergers and Consolidations. In case the Company, after the date hereof, shall merge or consolidate (other than a merger or consolidation in which the Company is the continuing corporation and which does not result in any change in the shares of Common Stock) with another Person, then, in the case of any such transaction, proper provision shall be made so that, upon the basis and terms and in the manner provided in this Agreement, the holders of the Warrants, upon the exercise thereof at any time after the consummation of such transaction (subject to the Exercise Period), shall be entitled to receive (at the aggregate Exercise Price in effect at the time of the transaction for all Common Stock or Other Securities issuable upon such exercise immediately prior to such consummation), in lieu of the Common Stock or Other Securities issuable upon such exercise prior to such consummation, the greatest amount of securities, cash or other property to which such holder would have been entitled as a holder of Common Stock (or Other Securities) upon such consummation if such holder had exercised the rights represented by the Warrants held by such holder immediately prior thereto. 5.4 No De Minimis Adjustments; Calculation to Nearest Cent and One-hundredth of Share. No adjustment in the Exercise Price shall be required under this Article 5 unless such adjustment would require an increase or decrease of at least one percent (1%) of such price. All calculations under this Article 5 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. 5.5 Notice of Adjustment; Warrant Agent's Disclaimer. (a) Whenever the Exercise Price and securities issuable shall be adjusted as provided in this Article 5, the Company shall forthwith file with the Warrant Agent a statement, signed by the President and Chief Executive Officer or Vice President -- Finance, Treasurer, Secretary and Chief Financial Officer of the Company, stating in detail the facts and computations requiring such adjustment, the method of calculation thereof, the Exercise Price that will be effective after such adjustment and the impact of such adjustment on the number and kind of securities issuable upon exercise of the Warrants. The Company shall also cause the Warrant Agent to mail (first class, postage prepaid) a notice setting forth any such adjustments to each registered holder of Warrants at its last address appearing on the Warrant register. (b) Except as provided in paragraph (a) above, the Warrant Agent shall have no duty with respect to any statement filed with it except to keep the same on file and available for inspection by registered holders of Warrants during reasonable business hours. The Warrant Agent shall not at any time be under any duty or responsibility to any holder of a Warrant to determine whether any facts exist which may require any adjustment to the Exercise Price or securities issuable, or with respect to the nature or extent of any adjustment of the Exercise Price or securities issuable when made or with respect to the method employed in making such adjustment. The Warrant Agent shall not be responsible for the Company's failure to comply with any provision of this Article 5. The Warrant Agent shall have no duty or obligation with respect to this Article 5 unless 9 and until it has received specific instructions (and sufficient cash, if required) from the Company with respect to its duties and obligations under such Article. 5.6 Other Notices. In case the Company after the date hereof shall propose to take any action of the type described in Section 5.1 or 5.2 of this Article 5, the Company shall give notice to the Warrant Agent and to each registered holder of a Warrant in the manner set forth in Section 5.5 of this Article 5, which notice shall specify the date on which a record shall be taken with respect to any such action. Such notice shall be given at least ten (10) days prior to the record date with respect thereto. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action. Where appropriate, such notice may be given in advance and may be included as part of a notice required to be mailed under the provision of Section 5.5 of this Article 5. 5.7 No Change in Warrant Terms on Adjustment. Irrespective of any adjustments in the Exercise Price or the number of shares of Common Stock (or any inclusion of Other Securities) issuable upon exercise, Warrants theretofore or thereafter issued may continue to express the same prices and number of shares as are stated in the similar Warrants issuable initially, or at some subsequent time, pursuant to this Agreement, and the Exercise Price and such number of shares issuable upon exercise specified thereon shall be deemed to have been so adjusted. 5.8 Other Adjustments. After taking into account the provisions of this Article 5, the Company shall be entitled, but not required, to make such reductions in the Exercise Price, in addition to those required by Section 5.2, as it shall determine to be advisable in order that any dividend in or distribution of shares of Common Stock or shares of capital stock or any class other than Common Stock, subdivision, reclassification or combination of shares of Common Stock, issuance of rights or warrants, or any other transaction having similar effect, shall not be treated as a distribution of property by the Company to its shareholders under Section 305 of the Internal Revenue Code of 1986, as amended, or any successor provision and shall not be taxable to any stockholder or holder of Warrants for federal, state or local income tax purposes. 5.9 Other Events. If any event occurs that would adversely affect each holder's rights but not expressly provided for by this Section (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price so as to protect each holder's rights; provided, however, that no such adjustment will increase the Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant to this Section 5.9. 10 ARTICLE 6 MERGER, CONSOLIDATION, ETC. Notwithstanding anything contained herein to the contrary, the Company will not effect a merger or consolidation unless, prior to the consummation of such transaction, each Person (other than the Company) which may be required to deliver any Common Stock, Other Securities, securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to the Warrant Agent, the obligations of the Company under this Agreement and under each of the Warrants, including, without limitation, the obligation to deliver such shares of Common Stock, Other Securities, cash or property as may be required pursuant to Article 5 hereof or the certificate or articles of incorporation or other constituent document, and shall provide for adjustments equivalent to the adjustments provided for in Article 5 hereof. ARTICLE 7 NOTIFICATION OF CERTAIN EVENTS 7.1 Corporate Action. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (excluding cash distributions made as a dividend payable out of earnings or out of surplus legally available for dividends under the laws of the jurisdiction of incorporation of the Company) or other distribution of any kind, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right or interest of any kind; or (b) (i) any capital reorganization of the Company, (ii) any reclassification of the capital shares of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a split-up or combination), (iii) the consolidation or merger of the Company with or into any other corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any change in the shares of Common Stock), (iv) the sale or transfer of the properties and assets of the Company as, or substantially as, an entirety to another Person, or (v) an exchange offer for Common Stock (or Other Securities); or (c) the voluntary or involuntary dissolution, liquidation, or winding up of the Company, the Company shall cause to be filed with the Warrant Agent and mailed to each holder of a Warrant a notice specifying (x) the date or expected date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of any such dividend, distribution or right, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, 11 distribution, or right are to be determined, and the amount and character of such dividend, distribution or right, or (y) the date or expected date on which any such reorganization, reclassification, consolidation, merger, sale, transfer, exchange offer, dissolution, liquidation or winding up is expected to become effective, and the time, if any such time is to be fixed, as of which holders of record of Common Stock (or Other Securities) shall be entitled to exchange their shares of Common Stock (or Other Securities) for the securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, transfer, exchange offer, dissolution, liquidation or winding up. Such notice shall be delivered not less than twenty (20) days prior to such date therein specified, in the case of any such date referred to in clause (x) of the preceding sentence, and not less than thirty (30) days prior to such date therein specified, in the case of any such date referred to in clause (y) of the preceding sentence. Failure to give such notice within the time provided or any defect therein shall not affect the legality or validity of any such action. 7.2 Available Information. The Company shall promptly file with the Warrant Agent copies of its annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) that the Company, in each case, is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not required to make such filings, the Company shall promptly deliver to the Warrant Agent copies of any annual, quarterly or other reports and financial statements that are generally provided to holders of equity or debt securities of the Company (other than bank or similar institutional debt) in their capacity as holders of such securities. Delivery of such reports, information and documents to the Warrant Agent is for informational purposes only and the Warrant Agent's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Warrant Agent is entitled to rely exclusively on Officers' Certificates). ARTICLE 8 RESERVATION OF STOCK The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock (or out of authorized Other Securities), solely for issuance and delivery upon exercise of Warrants, the full number of shares of Common Stock (and Other Securities) from time to time issuable upon the exercise of all Warrants and any other outstanding warrants, options or similar rights, from time to time outstanding. All shares of Common Stock (and Other Securities) shall be duly authorized and, when issued upon such exercise, shall be duly and validly issued, and (in the case of shares) fully paid and nonassessable, and free from all taxes, liens, charges, security interests, encumbrances and other restrictions created by or through the Company. 12 ARTICLE 9 LOSS OR MUTILATION Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and of an indemnity bond reasonably satisfactory to them in form or amount, and (in the case of mutilation) upon surrender and cancellation thereof, then, in the absence of written notice to the Company or the Warrant Agent that the Warrants represented thereby have been acquired by a bona fide purchaser, the Company shall execute and deliver to the Warrant Agent and, upon the Company's request, an authorized signatory of the Warrant Agent shall manually countersign and deliver, to the registered holder of the lost, stolen, destroyed or mutilated Warrant Certificate, in exchange for or in lieu thereof, a new Warrant Certificate of the same tenor and for a like aggregate number of Warrants. Upon the issuance of any new Warrant Certificate under this Article 9, the Company may require the payment of a sum sufficient to cover any stamp tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Warrant Agent) in connection therewith. Every new Warrant Certificate executed and delivered pursuant to this Article 9 in lieu of any lost, stolen or destroyed Warrant Certificate shall be entitled to the same benefits of this Agreement equally and proportionately with any and all other Warrant Certificates, whether or not the allegedly lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone. The provisions of this Article 9 are exclusive and shall preclude (to the extent lawful) all other rights or remedies with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates. ARTICLE 10 WARRANT REGISTRATION 10.1 Registration. The Warrant Certificates shall be issued in registered form only and shall be registered in the names of the record holders of the Warrant Certificates to whom they are to be delivered (any such delivery to a registered holder of a Warrant will be at its last address as shown on the register of the Company). The Warrant Agent shall maintain or cause to be maintained a register in which, subject to such reasonable regulations as it may prescribe, the Warrant Agent shall provide for the registration of Warrants and of transfers or exchanges of Warrant Certificates as provided in this Agreement. Such register shall be maintained at the office of the Warrant Agent located at the respective address therefor as provided in Section 13.1. Such register shall be open for inspection upon notice at all reasonable times by the Warrant Agent and each holder of a Warrant. 10.2 Transfer or Exchange. At the option of the holder, Warrant Certificates may be exchanged or transferred for other Warrant Certificates for a like aggregate number of Warrants, upon surrender of the Warrant Certificates to be 13 exchanged at the office of the Warrant Agent maintained for such purpose at the respective address therefor as provided in Section 13.1, and upon payment of the taxes and charges herein provided. Whenever any Warrant Certificates are so surrendered for exchange or transfer, the Company shall execute, and an authorized signatory of the Warrant Agent shall manually countersign and deliver, the Warrant Certificates that the holder making the exchange is entitled to receive. 10.3 Valid and Enforceable. All Warrant Certificates issued upon any registration of transfer or exchange of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such registration of transfer or exchange. 10.4 Endorsement. Every Warrant Certificate surrendered for registration of transfer or exchange shall (if so required by the Company or the Warrant Agent) be duly endorsed, or be accompanied by an instrument of transfer in form reasonably satisfactory to the Company and the Warrant Agent and duly executed by the registered holder thereof or such holder's officer or representative duly authorized in writing. 10.5 No Service Charge. No service charge shall be made to the Warrant Holder for any registration of transfer or exchange of Warrant Certificates. 10.6 Treatment of Holders of Warrant Certificates. The Company and the Warrant Agent may treat the registered holder of a Warrant Certificate as the absolute owner thereof for any purpose and as the Person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding. 10.7 Cancellation. Any Warrant Certificate surrendered for registration of transfer, exchange or the exercise of the Warrants represented thereby shall, if surrendered to the Company, be delivered to the Warrant Agent, and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent. Any such Warrant Certificate shall not be reissued and, except as provided in this Article 10 in case of an exchange or transfer, in Article 9 in case of a mutilated Warrant Certificate and in Article 4 in case of the exercise of less than all the Warrants represented thereby, no Warrant Certificate shall be issued hereunder in lieu thereof. The Warrant Agent shall deliver to the Company from time to time or otherwise dispose of such cancelled Warrant Certificates in a reasonably prompt manner. ARTICLE 11 WARRANT AGENT 11.1 Obligations Binding. The Warrant Agent undertakes the duties and obligations expressly imposed by this Agreement (and no implied duties or obligations) upon the terms and conditions set forth in this Article 11. The Company, 14 and the holders of Warrants by their acceptance thereof, shall be bound by all of such terms and conditions. 11.2 No Liability. The Warrant Agent shall not by countersigning Warrant Certificates or by any other act hereunder be accountable with respect to or be deemed to make any representations as to the validity or authorization of the Warrants or the Warrant Certificates (except as to its countersignature thereon), as to the validity, authorization or value (or kind or amount) of any Common Stock or of any Other Securities or other property delivered or deliverable upon exercise of any Warrant, or as to the purchase price of such Common Stock, securities or other property. The Warrant Agent shall not (i) be liable for any recital or statement of fact contained herein or in the Warrant Certificates or for any action taken, suffered or omitted by the Warrant Agent in good faith in the belief that any Warrant Certificate or any other document or any signature is genuine or properly authorized, (ii) be responsible for determining whether any facts exist that may require any adjustment of the purchase price and the number of shares of Common Stock purchasable upon exercise of Warrants, or with respect to the nature or extent of any such adjustments when made, or with respect to the method of adjustment employed, (iii) be responsible for any failure on the part of the Company to issue, transfer or deliver any Common Stock or Other Securities or property upon the surrender of any Warrant for the purpose of exercise or to comply with any other of the Company's covenants and obligations contained in this Agreement or in the Warrant Certificates or (iv) be liable for any action taken, suffered or omitted to be taken in connection with this Agreement except for its own bad faith, gross negligence or willful misconduct (each as finally determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). Anything to the contrary notwithstanding, in no event shall the Warrant Agent be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Warrant Agent has been advised of the likelihood of such loss or damage. Any liability of the Warrant Agent under this Agreement will be limited to the amount of fees paid by the Company to the Warrant Agent. 11.3 Instructions. The Warrant Agent is hereby authorized to accept advice or instructions with respect to the performance of its duties hereunder from the President and Chief Executive Officer or Vice President -- Finance, Treasurer, Secretary and Chief Financial Officer of the Company and to apply to any such officer for advice or instructions. The Warrant Agent shall be fully protected and authorized in relying upon the most recent advice or instructions received by any such officer. The Warrant Agent shall not be liable for any action taken, suffered or omitted by it in accordance with the advice or instructions of any such officer, except to the extent that it is determined in a final judgment by a court of competent jurisdiction that such action or omission resulted directly from the Warrant Agent's gross negligence, bad faith or willful misconduct. 11.4 Agents. The Warrant Agent may execute and exercise any of the rights and powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys, agents or employees and shall not be liable for the negligence or misconduct of any such person appointed with due care by it hereunder. The Warrant 15 Agent shall not be under any obligation or duty to institute, appear in, or defend any action, suit or legal proceeding in respect hereof, but this provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent may consider necessary. The Warrant Agent shall promptly notify the Company in writing of any claim made or action, suit or proceeding instituted against the Warrant Agent (of which it receives written notice) arising out of or in connection with this Agreement. 11.5 Cooperation. The Company will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further acts, instruments and assurances as may reasonably be required by the Warrant Agent in order to enable the Warrant Agent to carry out or perform its duties under this Agreement. Whenever in the performance of its duties hereunder the Warrant Agent is unsure of or has questions as to what action it is required to take under this Agreement, the Warrant Agent shall promptly seek clarification thereof from the Company, and the Warrant Agent shall be fully protected and incur no liability in not taking any such action prior to receiving a written response from the Company. 11.6 Agent Only. The Warrant Agent shall act solely as agent for the Company in accordance with the terms and conditions hereof. The Warrant Agent shall not be liable except for the performance of such duties as are specifically set forth herein, and no implied covenants or obligations shall be read into this Agreement against the Warrant Agent, whose duties and obligations shall be determined solely by the express provisions hereof. 11.7 Right to Counsel. The Warrant Agent may at any time consult with legal counsel satisfactory to it (who may be legal counsel for the Company), and the Warrant Agent shall incur no liability or responsibility to the Company or to any Warrant holder for any action taken, suffered or omitted by the Warrant Agent in good faith in accordance with the opinion or advice of such counsel. 11.8 Compensation. The Company agrees to pay the Warrant Agent reasonable compensation for all services rendered by it hereunder and to reimburse the Warrant Agent for its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company further agrees to indemnify the Warrant Agent and hold it harmless against any and all liabilities, including, but not limited to, any loss, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, without limitation, reasonable counsel fees and expenses), incurred without the Warrant Agent's bad faith, gross negligence or willful misconduct (each as finally determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), for any action taken, suffered or omitted by the Warrant Agent in connection with the acceptance, administration, exercise and performance of its duties under this Agreement and the Warrants, including the costs and expenses of defending against any claim of liability in the premises. The indemnities provided herein shall survive the termination of this Agreement, the termination and the expiration of the Warrants, and the resignation or 16 removal of the Warrant Agent. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. 11.9 Accounting. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all moneys received by the Warrant Agent on behalf of the Company on the purchase of shares of Common Stock (or Other Securities) through the exercise of Warrants. The Warrant Agent shall advise the Company by telephone at the end of each day on which a payment for the exercise of Warrants is received of the amount so deposited to such account. The Warrant Agent shall as soon as practicable confirm such telephone advice to the Company in writing. 11.10 No Conflict. Subject to applicable law, the Warrant Agent and any stockholder, affiliate, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Subject to applicable law, nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other Person. 11.11 Resignation; Termination. The Warrant Agent may resign its duties and be discharged from all further duties and liabilities hereunder (except liabilities arising as a result of the Warrant Agent's bad faith, gross negligence or willful misconduct) after giving thirty (30) days' prior written notice to the Company. The Company may remove the Warrant Agent upon thirty (30) days' written notice, and the Warrant Agent shall thereupon in like manner be discharged from all further duties and liabilities hereunder, except as to liabilities determined by a court of competent jurisdiction to have been caused by the Warrant Agent's bad faith, negligence or willful misconduct. The Company shall cause to be mailed promptly (by first class mail, postage prepaid) to each registered holder of a Warrant at such holder's last address as shown on the register of the Company, at the Company's expense, a copy of such notice of resignation or notice of removal, as the case may be. Upon such resignation or removal the Company shall promptly appoint in writing a new warrant agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation by the resigning Warrant Agent or after such removal, then the holder of any Warrant may apply to any court of competent jurisdiction for the appointment of a new warrant agent. Pending appointment of a successor to the Warrant Agent, either by the Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. Any successor warrant agent, whether appointed by the Company or by such a court, shall be (i) a Person, incorporated under the laws of the United States or of any state thereof and authorized under such laws to conduct shareholder services business, be subject to supervision and examination by Federal or state authority, and have a combined capital and surplus of not less than $50,000,000 as set forth in its most recent published annual report of condition; or (ii) an affiliate of such a Person described above. After acceptance in writing of such appointment by the new warrant agent it shall be vested with the same powers, rights, 17 duties and responsibilities as if it had been originally named herein as the Warrant Agent, without any further assurance, conveyance, act or deed; but if for any reason it shall be necessary or expedient to execute and deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of the Company and shall be legally and validly executed and delivered by the resigning or removed Warrant Agent. Not later than the effective date of any such appointment the Company shall file notice thereof with the resigning or removed Warrant Agent and shall forthwith cause a copy of such notice to be mailed (by first class, postage prepaid) to each registered holder of a Warrant at such holder's last address as shown on the register of the Company. Failure to give any notice provided for in this Section 11.11, or any defect in any such notice, shall not affect the legality or validity of the resignation of the Warrant Agent or the appointment of a new warrant agent, as the case may be. 11.12 Change of Warrant Agent. If at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and if at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force and effect provided in the Warrant Certificates and this Agreement. 11.13 Successor Warrant Agent. Any Person into which the Warrant Agent or any new warrant agent may be merged or any Person resulting from any consolidation to which the Warrant Agent or any new warrant agent shall be a party or any Person succeeding to all or substantially all the agency business of the Warrant Agent or any new warrant agent shall be a successor Warrant Agent under this Agreement without any further act, provided that such Person would be eligible for appointment as a new warrant agent under the provisions of Section 11.11 of this Article 11. The Company shall promptly cause the successor Warrant Agent to mail notice of its succession as Warrant Agent (by first class mail, postage prepaid) to each registered holder of a Warrant at its last address as shown on the register of the Company. ARTICLE 12 REMEDIES, ETC. Prior to the exercise of the Warrants represented thereby, no holder of a Warrant Certificate, as such, shall be entitled to any rights of a stockholder of the Company, including, but not limited to, the right to vote, to receive dividends or other distributions, to exercise any preemptive right or to receive any notice of meetings of stockholders, and no such holder shall be entitled to receive notice of any proceedings of the Company except as provided in this Agreement. Nothing contained in this Agreement shall be construed as imposing any liabilities on such holder to purchase any securities or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors or stockholders of the Company or otherwise. 18 ARTICLE 13 MISCELLANEOUS 13.1 Notices. Any notice, demand or delivery authorized by this Agreement shall be sufficiently given or made if sent by first class mail, postage prepaid, delivered by hand or delivered by overnight courier, in each case addressed to any registered holder of a Warrant at such holder's last known address appearing on the register of the Company or the Warrant Agent, and to the Company or the Warrant Agent as follows, or delivered by facsimile (in the case of notices to any registered holder, to the last known facsimile number of such holder appearing on the register of the Company or the Warrant Agent): If to the Company: ACP Holding Company 2121 Brooks Avenue Neenah, Wisconsin 54956 Attn: William M. Barrett Facsimile: (920) 729-3633 If to the Warrant Agent: The Bank of New York 101 Barclay Street, Floor 8W New York, New York 10286 Attn: Corporate Trust Administration Facsimile: (212) 815-5707 or such other address as shall have been furnished in writing, in accordance with this Section 13.1, to the party giving or making such notice, demand or delivery. 13.2 Governing Law and Consent to Forum. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD CAUSE THE APPLICATION OF THE INTERNAL LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK. EACH OF THE COMPANY AND THE WARRANT AGENT HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PERSON TO SERVE PROCESS IN ANY MANNER 19 PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION. 13.3 Benefits of this Agreement. This Agreement shall be binding upon and inure to the benefit of the Company and the Warrant Agent and their respective successors and assigns, and the registered and beneficial holders from time to time of the Warrants and of holders of the Common Stock, where applicable. Nothing in this Agreement is intended or shall be construed to confer upon any other Person, any right, remedy or claim under or by reason of this Agreement or any part hereof. 13.4 Agreement of Holders of Warrant Certificates. Every holder of a Warrant Certificate, by accepting the same, covenants and agrees with the Company, the Warrant Agent and with every other holder of a Warrant Certificate that the Warrant Certificates are transferable on the registry books of the Warrant Agent only upon the terms and conditions set forth in this Agreement, and the Company and the Warrant Agent may deem and treat the Person in whose name the Warrant Certificate is registered as the absolute owner for all purposes whatsoever and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. 13.5 Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 13.6 Amendments. This Agreement may be amended by the parties hereto, without the consent of the holder of any Warrant Certificate, for the purpose of curing any manifest error, or of curing, correcting or supplementing any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may mutually deem necessary or desirable; provided, that such action shall not adversely affect the interests of the holders of the Warrant Certificates. Any other amendment shall require the consent of the holders of Warrants representing a majority in number of the then outstanding Warrants. Any such modification or amendment will be conclusive and binding on all present and future holders of Warrant Certificates whether or not they have consented to such modification or amendment or waiver and whether or not notation of such modification or amendment is made upon such Warrant Certificates. Any instrument given by or on behalf of any holder of a Warrant Certificate in connection with any consent to any modification or amendment will be conclusive and binding on all subsequent holders of such Warrant Certificate. 13.7 Consent to Jurisdiction. Notwithstanding anything to the contrary contained in Section 13.2 hereof, (a) the parties hereby expressly acknowledge and agree that, to the extent permitted by applicable law, the Bankruptcy Court shall have exclusive jurisdiction to hear and determine any and all disputes concerning the distribution of Warrants hereunder to holders of Claims pursuant to the Plan, and (b) the Warrant Agent 20 hereby consents to the jurisdiction of the Bankruptcy Court with respect to any such disputes and waives any argument of lack of such jurisdiction. 13.8 Headings. The table of contents hereto and the descriptive headings of the several sections hereof are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 21 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written. ACP HOLDING COMPANY By: /s/ Gary La Chey -------------------------------- Name: Title: THE BANK OF NEW YORK By: /s/ Patricia Gallagher ------------------------ Name: Patricia Gallagher Title: Vice President 22 SCHEDULE I
Name of Holder Number of Warrants Issued to Holder - -------------- ----------------------------------- MacKay Shields LLC 9,879,031 Citigroup Mezzanine III, L.P. 4,096,665 Trust Company of the West 3,113,554 Metropolitan Life Insurance Company 217,547 Exis Differential Holdings, Ltd. 90,644 Citigroup Mezzanine III, L.P. as holder of PIK Notes under rollover pursuant to the Plan 3,751,628 Other holders of existing subordinated notes who exercised their rights in the Rights Offering 16,850,931 Total 38,000,000
EXHIBIT A FORM OF WARRANT CERTIFICATE A-1 CUSIP No. [ ] Warrant No. 1 Number of Warrant(s): [ ] Exercisable During the Period that Commences at 9:00 a.m., New York City time, on [ ], 2003 and Terminates at 5:00 p.m., New York City time, on [ ], 20[ ] except as provided below. WARRANT TO PURCHASE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF ACP HOLDING COMPANY This certifies that or registered assigns, is the registered owner of the number of warrants set forth above (the "WARRANTS"), each of which represents the right, at any time after [ ], 2003 (the "ORIGINAL ISSUE DATE") and on or before 5:00 p.m., New York City time, on [ ], 20[ ] (the "EXERCISE PERIOD"), to purchase from ACP Holding Company, a Delaware corporation (the "COMPANY"), at the price per share of $0.01 (the "EXERCISE PRICE"), one share of Common Stock, $0.01 par value, of the Company as such stock was constituted as of the Original Issue Date, subject to adjustment as provided in the Warrant Agreement hereinafter referred to, upon surrender hereof, with the subscription form on the reverse hereof duly executed, by hand or by mail to The Bank of New York, 101 Barclay Street, Floor 8W, New York, New York 10286, Attention: Corporate Trust Administration, or to any successor thereto, as the warrant agent under the Warrant Agreement, at the office of such successor maintained for such purpose (any such warrant agent being herein called the "WARRANT AGENT") (or, if such exercise shall be in connection with an underwritten public offering of shares of such Common Stock (or Other Securities) (as such term and other capitalized terms used herein are defined in the Warrant Agreement) subject to the Warrant Agreement, at the location at which the Company shall have agreed to deliver such securities), and simultaneous payment in full (by certified or official bank or bank cashier's check payable to the order of the Company, or by wire transfer of immediately available funds to an account designated by the Warrant Agent for the benefit of the Company) of the Exercise Price in respect of each Warrant represented by this Warrant Certificate that is so exercised, all subject to the terms and conditions hereof and of the Warrant Agreement. Upon any partial exercise of the Warrants represented by this Warrant Certificate, there shall be issued to the holder hereof a new Warrant Certificate representing the Warrants that were not exercised. No fractional shares may be issued upon the exercise of rights to purchase hereunder, and as to any fraction of a share otherwise issuable, the Company will make a cash payment in lieu of such issuance, as provided in the Warrant Agreement. This Warrant Certificate is issued under and in accordance with a Warrant Agreement, dated as of October [ ], 2003 (the "WARRANT AGREEMENT"), between the Company and The Bank of New York, as Warrant Agent, and is subject to the terms and provisions contained therein. The Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the registered holders of the Warrants. The holder of this Warrant Certificate consents to all terms and provisions of the Warrant Agreement by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent and may be obtained by writing to the Warrant Agent. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent. Dated: [ ],2003 ACP HOLDING COMPANY By: ___________________________ Name: Title: Countersigned: THE BANK OF NEW YORK By: __________________________ Name: Title: 2 REVERSE OF WARRANT CERTIFICATE ACP HOLDING COMPANY The transfer of this Warrant Certificate and all rights hereunder is registrable by the registered holder hereof, in whole or in part, on the register of the Company upon surrender of this Warrant Certificate at the office or agency of the Company or the office of the Warrant Agent maintained for such purpose at 101 Barclay Street, Floor 8W, New York, New York 10286, Attention: Corporate Trust Administration, duly endorsed or accompanied by a written instrument of transfer duly executed and in form satisfactory to the Company and the Warrant Agent, by the registered holder hereof or his attorney duly authorized in writing and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer or registration thereof. Upon any partial transfer the Company will cause to be delivered to such holder a new Warrant Certificate or Certificates with respect to any portion not so transferred. This Warrant Certificate may be exchanged at the office or agency of the Company or the office of the Warrant Agent maintained for such purpose at 101 Barclay Street, Floor 8W, New York, New York 10286, Attention: Corporate Trust Administration, for Warrant Certificates representing the same aggregate number of Warrants, each new Warrant Certificate to represent such number of Warrants as the holder hereof shall designate at the time of such exchange. Prior to the exercise of the Warrants represented hereby, the holder of this Warrant Certificate, as such, shall not be entitled to any rights of a stockholder of the Company, including, but not limited to, the right to vote, to receive dividends or other distributions, to exercise any preemptive right or to receive any notice of meetings of stockholders, and shall not be entitled to receive notice of any proceedings of the Company except as provided in the Warrant Agreement. Nothing contained herein shall be construed as imposing any liabilities upon the holder of this Warrant Certificate to purchase any securities or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors or stockholders of the Company or otherwise. This Warrant Certificate shall be void and all rights represented hereby shall cease unless exercised before the close of business on [ ], 20[ ]. This Warrant Certificate shall not be valid for any purpose until it shall have been manually countersigned by an authorized signatory of the Warrant Agent. Witness the facsimile seal of the Company and the signature of its duly authorized officer. 3 SUBSCRIPTION FORM (TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT) To: ACP HOLDING COMPANY, a Delaware corporation THE BANK OF NEW YORK, a New York banking corporation, as Warrant Agent Attention: ___________________ The undersigned (i) irrevocably exercises [ ] Warrants represented by the within Warrant Certificate, (ii) purchases one share of common stock, par value $0.01 per share, of ACP Holding Company (before giving effect to the adjustments provided in the Warrant Agreement referred to in the within Warrant Certificate) for each Warrant so exercised and herewith makes payment in full of the purchase price of $0.01 per share, in respect of each Warrant so exercised as provided in the Warrant Agreement (such payment being by certified or official bank or bank cashier's check payable to the order of ACP Holding Company, or by wire transfer of immediately available funds to an account designated by the Warrant Agent for the benefit of ACP Holding Company), all on the terms and conditions specified in the within Warrant Certificate and the Warrant Agreement, (iii) surrenders this Warrant Certificate and all right, title and interest therein to ACP Holding Company and (iv) directs that the securities or other property deliverable upon the exercise of such Warrants be registered or placed in the name and at the address specified below and delivered thereto. Dated: [ ], 20[ ] _________________________________________ (Owner)* _________________________________________ (Signature of Authorized Representative) _________________________________________ (Street Address) _________________________________________ (City) (State) (Zip Code) 4 Securities or property to be issued and delivered to: __________________________________ Signature Guaranteed** Please insert social security or other identifying number __________________ Name ___________________________________________________________________________ Street Address _________________________________________________________________ City, State and Zip Code _______________________________________________________ *The signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. **The signature must be guaranteed by a Securities Transfer Association medallion program ("stamp") participant or an institution receiving prior approval from the Warrant Agent. 5 FORM OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant Certificate hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant Certificate, with respect to the number of warrants set forth below: Name of No. of Assignee Address Warrants -------- ------- -------- Please insert social security or other identifying number of Assignee _____________________ and does hereby irrevocably constitute and appoint _______ attorney to make such transfer on the books of ACP Holding Company maintained for the purpose, with full power of substitution in the premises. Dated: [ ], 20[ ] Name ______________________________* Signature of Authorized Representative ____________________ Signature Guaranteed _____________** * The signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. ** The signature must be guaranteed by a Securities Transfer Association medallion program ("stamp") participant or an institution receiving prior approval from the Warrant Agent. 6 EX-10.10 11 c00807exv10w10.txt FORM OF AMENDMENT TO THE EMPLOYMENT AGREEMENTS EXHIBIT 10.10 FORM OF AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS AMENDMENT NO. 1 TO THE EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT ("Employment Agreement") by and among [Neenah Foundry Company] [or subsidiary of Neenah Foundry Company], ACP Holding Company ("ACP") and ______ (this "Amendment") is effective as of _____, 2004. Capitalized terms not otherwise defined herein shall have the meanings assigned to such capitalized terms in the Employment Agreement. 1. Amendment of the Employment Agreement. The Employment Agreement is hereby amended as follows: (a) Section 2.02 (b) is deleted and replaced in full with the following text: "All Unvested Shares will automatically become vested immediately prior to a Significant Transaction." (b) The definition of "Stockholders Agreement" is amended by adding the following text to the end thereof: ", as amended from time to time." (c) The definition of "Tag-Along Transaction" is deleted and replaced in full with the following text: "Tag-Along Transaction" means any transaction involving a sale by one or more parties of 50% or more of the Shares (as defined in the Stockholders Agreement). 2. Miscellaneous. (a) Governing Law. This Amendment shall be governed by the corporate laws of the State of Wisconsin without giving effect to any choice of law provisions that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. (b) Severability. Whenever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Amendment. (c) Effect on the Employment Agreement. Except as it is expressly modified by this Amendment, the Employment Agreement remains in full force and effect. ****** IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused this Agreement to be executed this _____________ day of ____________, 2004. ----------------------------------- [Employee] [NEENAH FOUNDRY COMPANY] [OR SUBSIDIARY OF NEENAH FOUNDRY COMPANY] By: ------------------------------------- Name: Title: ACP HOLDING COMPANY By: ------------------------------------- Name: Title: EX-10.19A 12 c00807exv10w19a.txt AMENDMENT TO 2003 MANAGEMENT ANNUAL INCENTIVE PLAN Exhibit 10.19(a) SUMMARY OF AMENDMENT TO NEENAH FOUNDRY COMPANY 2003 MANAGEMENT ANNUAL INCENTIVE PLAN Effective January 29, 2004, the 2003 Management Annual Incentive Plan (the "Plan") was amended to allow Plan Participants the ability to earn additional cash compensation based on varying levels of total debt reduction achieved during a fiscal year. Under the Plan, total debt reduction is calculated by comparing the total debt balance at the beginning of the year to the total debt balance at the end of the year. Incentive payments are made to Plan Participants based upon the achievement of the following levels of total debt reduction: o No incentive payment on the first $3 million of total debt reduction; o An incentive payment of 2.5% of the next $2 million of total debt reduction (from $3 million to $5 million); o An incentive payment of 5% of the next $5 million of total debt reduction (from $5 million to $10 million); and o An incentive payment of 10% of amounts over $10 million of total debt reduction. Total debt is calculated under the Plan as the sum of the following balance sheet items: o Current portion of Long Term Debt; o Revolver Note Payable; and o Long Term Debt. Each participant's Target Bonus Percentage (which is the percentage of the participant's Annual Incentive Bonus that is based on EBITDA) has been reduced by 5%. EX-10.33 13 c00807exv10w33.txt 2003 MANAGEMENT EQUITY INCENTIVE PLAN EXHIBIT 10.33 NEENAH FOUNDRY COMPANY 2003 MANAGEMENT EQUITY INCENTIVE PLAN 1. Purpose. This plan shall be known as the Neenah Foundry Company 2003 Management Equity Incentive Plan (the "Plan"). The purpose of the Plan shall be to promote the long-term growth and profitability of Neenah Foundry Company (the "Company") and its Subsidiaries by (i) providing certain directors, officers and employees of, and certain other individuals who perform services for, or to whom an offer of employment has been extended by, the Company and the Subsidiaries with incentives to maximize stockholder value and otherwise contribute to the success of the Company and (ii) enabling the Company to attract, retain and reward the best available persons for positions of responsibility. Grants of incentive or non-qualified stock options and restricted stock awards may be made under the Plan. 2. Definitions. For purposes of this Plan, except when the context clearly indicates otherwise, the following terms shall have the meanings set forth below. "ACP" means ACP Holding Company, a Delaware corporation. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended from time to time. "Board of Directors" and "Board" mean the board of directors of the Company. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means the Compensation Committee of the Board or such other committee that consists solely of two or more individuals, each of whom is a Non-Employee Director and an "outside director" within the meaning of Treasury Regulation Section 1.162-27(e)(3). "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" has the meaning set forth in Section 1 hereof. "Company Group" means ACP, the Company and their respective Subsidiaries. "Effective Date" means the effective date of the Plan of Reorganization. "Employment Agreement" means the written agreement between any Plan Participant and the Company or any of its Subsidiaries pursuant to which such Plan Participant becomes employed by any member of the Company Group. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fair Market Value" of a share of Common Stock of ACP means, as of the date in question, and except as otherwise provided in any Grant Agreement entered into pursuant to agreements in effect as of the effective date of the Plan of Reorganization, the officially-quoted closing selling price of the stock (or if no selling price is quoted, the bid price) on the principal securities exchange on which the Common Stock is then listed for trading (including for this purpose the Nasdaq National Market) (the "Market") for the applicable trading day or, if the Common Stock is not then listed or quoted in the Market, the Fair Market Value shall be the fair value of the Common Stock determined in good faith by the Board and, in the case of an Incentive Stock Option, in accordance with Section 422 of the Code; provided, that when shares received upon exercise of an option are immediately sold in the open market, the net sale price received may be used to determine the Fair Market Value of any shares used to pay the exercise price or applicable withholding taxes and to compute the withholding taxes. "Family Member" has the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto. "Good Reason" means, with respect to any Plan Participant, the termination of such Plan Participant's employment by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (1) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits, (2) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location or (3) solely with respect to William Barrett, the failure of the Company to nominate Mr. Barrett to the boards of directors of ACP and each of its Subsidiaries. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Grant Agreement" means, in the case of each Initial Plan Participant, such person's Employment Agreement, and in each other case, the written agreement that each Plan Participant is required to enter into with the Company and ACP containing the terms and conditions of such grant as are determined by the Committee, in its sole discretion, consistent with the Plan. "Incentive Stock Option" means an option conforming to the requirements of Section 422 of the Code and any successor thereto. "Initial Plan Participants" means each of William Barrett, Gary LaChey, Joseph DeRita, Frank Headington, Timothy Koller, William Martin, Joseph Varkoly, Steve Shaffer, and John Andrews. "Non-Employee Director" has the meaning given to such term in Rule 16b-3 under the Exchange Act and any successor thereto. "Non-qualified Stock Option" means any stock option other than an Incentive Stock Option. 2 "Plan" has the meaning set forth in Section 1 hereof. "Plan Participant" means each Initial Plan Participant and any other employee of the Company Group selected by the Board or the Committee. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. "Shares" has the meaning set forth in Section 4 hereof. "Significant Injury" means significant economic or reputational injury or both (such determination to be made by the Board in its reasonable judgment) to the Company Group. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Transaction" has the meaning given to such term in Section 13 hereof. 3. Administration. The Plan shall be administered by the Committee; provided, that the Board may, in its discretion, at any time and from time to time, resolve to administer the Plan, in which case the term "Committee" shall be deemed to mean the Board for all purposes herein. Subject to the provisions of the Plan and the terms of any Grant Agreement (including the Grant Agreements of the Initial Plan Participants), the Committee shall be authorized to: (i) select persons to participate in the Plan; (ii) determine the form and substance of grants made under the Plan to each participant, and the conditions and restrictions, if any, subject to which such grants will be made; (iii) determine the form and substance of the Grant Agreements reflecting the terms and conditions of each grant made under the Plan; (iv) certify that the conditions and restrictions applicable to any grant have been met; (v) modify the terms of grants made under the Plan; (vi) make any adjustments necessary or desirable in connection with grants made under the Plan to eligible participants located outside the United States; (vii) adopt, amend, or rescind rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Grant Agreement, in the manner and to the extent it shall deem necessary or advisable, including so that the Plan and the operation of the Plan comply with Rule 16b-3 under the Exchange Act, the Code to the extent applicable and other applicable law and make such other determinations for carrying out the Plan as it may deem appropriate; and (viii) exercise such powers and perform such acts as are deemed necessary or advisable to promote the best interests of the Company with respect to the Plan; provided, that in no event shall any amendment, notification, adjustment, correction or supplement to the Plan pursuant to the foregoing clauses (i) through (viii) adversely 3 affect any Plan Participant without such Plan Participant's consent. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with applicable federal and state laws and rules and regulations promulgated pursuant thereto. No member of the Committee and no officer of the Company shall be liable for any action taken or omitted to be taken by such member, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for such person's own willful misconduct or as expressly provided by statute. The expenses of administering the Plan shall be borne by the Company. 4. Shares Available for the Plan. Subject to adjustments as provided in Section 13, an aggregate of 8,000,000 shares of Common Stock (the "Shares") may be issued pursuant to the Plan. Such Shares may be in whole or in part authorized and unissued or held by the Company as treasury shares. If any grant under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited as to any Shares, or is tendered or withheld as to any Shares in payment of the exercise price of the grant or the taxes payable with respect to the exercise, then such unpurchased, forfeited, tendered or withheld Shares shall thereafter be available for further grants under the Plan. Set forth on Schedule I attached hereto are the total number of Shares being issued to the Initial Plan Participants on the Effective Date in the form of restricted stock. The Shares set forth on Schedule I are being issued to each Initial Plan Participant in consideration for the services that have been performed by such Initial Plan Participant in connection with the reorganization of the Company Group pursuant to the Plan of Reorganization. Without limiting the generality of the foregoing provisions of this Section 4 or the generality of the provisions of Sections 3, 6 or 14 or any other section of this Plan, the Committee may, at any time or from time to time, and on such terms and conditions (that are consistent with and not in contravention of the other provisions of this Plan) as the Committee may determine, enter into Grant Agreements (or take other actions with respect to the options) for new options containing terms (including exercise prices) more (or less) favorable than the then-outstanding options. 5. Participation. Participation in the Plan shall be limited to those directors (including Non-Employee Directors), officers (including non-employee officers) and employees of, and other individuals performing services for, or to whom an offer of employment has been extended by, the Company and the Subsidiaries selected by the Committee (including participants located outside the United States). Nothing in the Plan or in any Grant Agreement shall confer any right on a participant to continue in the employ as a director, officer or employee of or in the performance of services for the Company or shall interfere in any way with the right of the Company to terminate the employment or performance of services or to reduce the compensation or responsibilities of a participant at any time. By accepting any award under the Plan, each participant and each person claiming under or through him or her shall be conclusively deemed 4 to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee. Incentive Stock Options or Non-qualified Stock Options, restricted stock awards, or any combination thereof, may be granted to such persons and for such number of Shares as the Committee shall determine, subject to the limitations contained herein (such individuals to whom grants are made being sometimes herein called "optionees" or "grantees," as the case may be). Determinations made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan, whether or not such individuals are similarly situated. A grant of any type made hereunder in any one year to an eligible participant shall neither guarantee nor preclude a further grant of that or any other type to such participant in that year or subsequent years. 6. Incentive and Non-qualified Options. The Committee may from time to time grant to eligible participants Incentive Stock Options, Non-qualified Stock Options, or any combination thereof; provided, that the Committee may grant Incentive Stock Options only to eligible employees of the Company or its Subsidiaries (as defined for this purpose in Section 424(f) of the Code or any successor thereto). The options granted under the Plan shall be evidenced by a Grant Agreement and shall take such form as the Committee shall determine, subject to the terms and conditions of the Plan. It is the Company's intent that Non-qualified Stock Options granted under the Plan not be classified as Incentive Stock Options and any grant of such options shall state this, that any Incentive Stock Options granted comply with Section 6(c) herein and otherwise be consistent with and contain or be deemed to contain all provisions required under Section 422 of the Code and any successor thereto, and that any ambiguities in construction be interpreted in order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not qualify as such for any reason, then to the extent of such non-qualification, the stock option represented thereby shall be a Non-qualified Stock Option duly granted under the Plan, provided that such stock option otherwise meets the Plan's requirements for Non-qualified Stock Options. (a) Price. The price per Share deliverable upon the exercise of each option (the "exercise price") shall be established by the Committee, except that in the case of the grant of any option, the exercise price may not be less than 100% of the Fair Market Value of a share of Common Stock as of the date of grant of the option, and in the case of the grant of any Incentive Stock Option to an employee who, at the time of the grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or any of the Subsidiaries, the exercise price may not be less than 110% of the Fair Market Value of a share of Common Stock as of the date of grant of the option, in each case unless otherwise permitted by Section 422 of the Code or any successor thereto. (b) Payment. Options may be exercised, in whole or in part, upon payment of the exercise price of the Shares to be acquired. Unless otherwise determined by the Committee, payment shall be made (i) in cash (including check, bank draft, money order or wire transfer of immediately available funds), (ii) by delivery of outstanding shares of Common Stock with a Fair 5 Market Value on the date of exercise equal to the aggregate exercise price payable with respect to the options' exercise, (iii) by means of any cashless exercise procedures approved by the Committee and as may be in effect on the date of exercise, or (iv) by any combination of the foregoing. In the event a grantee is permitted to, and elects to pay the exercise price payable with respect to an option pursuant to clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not fractional shares of Common Stock) may be tendered in payment, (B) such grantee must present evidence acceptable to the Company that he or she has owned any such shares of Common Stock tendered in payment of the exercise price (and that such tendered shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may, at the election of the grantee, be made either by (A) physical delivery of the certificate(s) for all such shares of Common Stock tendered in payment of the exercise price, accompanied by duly executed instruments of transfer in a form acceptable to the Company, or (B) direction to the grantee's broker to transfer, by book entry, such shares of Common Stock from a brokerage account of the grantee to a brokerage account specified by the Company. When payment of the exercise price is made by delivery of Common Stock, the difference, if any, between the aggregate exercise price payable with respect to the option being exercised and the Fair Market Value of the shares of Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may tender shares of Common Stock having a Fair Market Value exceeding the aggregate exercise price payable with respect to the option being exercised (plus any applicable taxes). (c) Terms of Options. Notwithstanding anything to the contrary contained herein, all Incentive Stock Options (i) shall have an exercise price per share of Common Stock of not less than 100% of the Fair Market Value of such share on the date of grant, (ii) shall not be exercisable more than 10 years after the date of grant, (iii) shall not be transferable other than by will or under the laws of descent and distribution and, during the lifetime of the Plan Participant to whom such Incentive Stock Options were granted, may be exercised only by such Plan Participant (or his guardian or legal representative), and (iv) shall be exercisable only during the Plan Participant's employment by the Company; provided, that the Committee may, in its discretion, provide at the time that an Incentive Stock Option is granted that such Incentive Stock Option may be exercised for a period ending upon either (x) the termination of this Plan in the event of a Plan Participant's death while an employee of the Company, or (y) the date which is three months after termination of the Plan Participant's employment for any other reason; provided further, that if an Incentive Stock Option is granted to a person who owns, on the date of grant, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or of any parent or subsidiary of the Company in existence on such date of grant), (A) the price at which each share of Common Stock may be purchased upon exercise of such Incentive Stock Option may not be less than 110% of the Fair Market Value of such share on the date of grant, and (B) the Incentive Stock Option, by its terms, may not be exercised more than five years after the date of grant. The Committee's discretion to extend the period during which an Incentive Stock Option is exercisable shall only apply to the extent that (i) the Plan Participant was entitled to exercise such Incentive Stock Option on the date of termination and 6 (ii) such Incentive Stock Option would not have expired had the Plan Participant continued to be employed by the Company. No option shall be exercisable in whole or in part more than ten years from the date it is granted, and no Incentive Stock Option granted to an employee who at the time of the grant owns more than 10% of the total combined voting power of all classes of stock of the Company or any of the Subsidiaries shall be exercisable more than five years from the date it is granted. All rights to purchase Shares pursuant to an option shall, unless sooner terminated, expire on the date designated by the Committee. The Committee shall determine the date on which each option shall become exercisable and may provide that an option shall become exercisable in installments. The Shares constituting each installment may be purchased in whole or in part at any time after such installment becomes exercisable, subject to such minimum exercise requirements as may be designated by the Committee. Prior to the exercise of an option and delivery of the Shares represented thereby, the optionee shall have no rights as a stockholder with respect to any Shares covered by such outstanding option (including any dividend or voting rights). (d) Limitations on Grants. If required by Section 422(d) of the Code, the aggregate Fair Market Value (determined as of the grant date) of Shares with respect to which Incentive Stock Options are exercisable for the first time during any calendar year under all equity incentive plans of the Company and the Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may not exceed $100,000. 7. Restricted Stock. In addition to the Shares of restricted stock granted to the Initial Plan Participants, the Committee may at any time and from time to time grant Shares of restricted stock under the Plan to such participants and in such amounts as it determines.(1) Each grant of restricted stock shall be evidenced by a Grant Agreement which shall specify the applicable restrictions on such Shares and such other terms and conditions as the Committee shall determine consistent with this Plan. - ---------- (1) Limitation, if any, on the number of shares that may be the subject of grants of restricted stock under the Plan to be determined. 7 Except as otherwise provided in any Grant Agreement, the participant will be required to pay the Company the aggregate par value of any Shares of restricted stock (or such larger amount as the Board may determine to constitute capital under Section 154 of the Delaware General Corporation Law, as amended, or any successor thereto) within ten days of the date of grant, unless such Shares of restricted stock are treasury shares. Except as otherwise provided in any Grant Agreement, certificates representing Shares of restricted stock granted under the Plan will be held in escrow by the Company on the participant's behalf during any period of restriction thereon and, following the end of such period of restriction, during any period during which such Shares may not be sold pursuant to the first sentence of the next following paragraph of the Plan, will bear an appropriate legend specifying the applicable restrictions thereon, and the participant will be required to execute a blank stock power therefor. Only with respect to grants of Non-qualified Stock Options or restricted stock, each Grant Agreement may provide that the recipient of the grant shall make an effective election under Section 83(b) of the Code within thirty (30) days receipt of such Non-qualified Stock Options or restricted stock. Except as otherwise provided in any Grant Agreement, during such period of restriction the participant shall have all of the rights of a holder of Common Stock, including but not limited to the rights to receive dividends and to vote, and any stock or other securities received as a distribution with respect to such participant's restricted stock shall be subject to the same restrictions as then in effect for the restricted stock, including vesting restrictions to the extent the related shares of restricted stock are subject to vesting. Except as otherwise provided in the Grant Agreement, during the period in which a participant is a director, officer or employee of, or performing other services for the Company or a Subsidiary, any Shares granted pursuant to a restricted stock award may not be sold, transferred, pledged, exchanged, assigned, hypothecated, or otherwise disposed of until all applicable restrictions have lapsed with respect to all Shares subject to such award. Except as otherwise provided in any Grant Agreement, at such time as a participant ceases to be, or in the event a participant does not become, a director, officer or employee of, or otherwise performing services for, the Company or its Subsidiaries for any reason, all Shares of restricted stock granted to such participant on which the restrictions have not lapsed shall be immediately forfeited to the Company. 8. Withholding Taxes. (a) Participant Election. If permitted by the Committee, a participant may elect to deliver shares of Common Stock (or have the Company withhold Shares acquired upon exercise of an option or deliverable upon grant or vesting of restricted stock, as the case may be) to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with the exercise of an option or the delivery of restricted stock upon grant or vesting, as the case may be. Such election must be made on or before the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The fair market value of the shares to be withheld or delivered will be the Fair Market Value as of the date the amount of tax to be withheld is determined. In the event a participant elects to deliver or have the Company withhold shares of Common Stock pursuant to this Section 8(a), such delivery or withholding must be made subject to the conditions and pursuant to the procedures set forth in Section 6(b) 8 with respect to the delivery or withholding of Common Stock in payment of the exercise price of options. (b) Company Requirement. The Company shall be entitled, if necessary or desirable, to withhold amounts due and payable by the Company to any Plan Participant (including salary or bonus) either pursuant to Section 8(a) or this Section 8(b), the amount of any federal, state or local taxes of any kind required by law to be withheld with respect to any grant or delivery of Shares. The Company may defer any such grant or delivery of Shares unless indemnified to its satisfaction for such withholding obligation. 9. Change in Control. The Committee may set forth in any Grant Agreement the effect, if any, that a "change in control" or other, similar transaction shall have on any options or restricted stock awards granted hereunder. 10. Transferability. Unless otherwise provided in any Grant Agreement, no option granted under the Plan shall be transferable by a participant other than by will or the laws of descent and distribution or to a participant's Family Member by gift or a qualified domestic relations order as defined by the Code. Unless otherwise provided in any Grant Agreement, an option may be exercised only by the optionee or grantee thereof; by his or her Family Member if such person has acquired the option by gift or qualified domestic relations order; by the executor or administrator of the estate of any of the foregoing or any person to whom the option is transferred by will or the laws of descent and distribution; or by the guardian or legal representative of any of the foregoing; provided, that Incentive Stock Options may be exercised by any Family Member, guardian or legal representative only if permitted by the Code and any regulations thereunder. All provisions of this Plan shall in any event continue to apply to any option granted under the Plan and transferred as permitted by this Section 10, and any transferee of any such option shall be bound by all provisions of this Plan as and to the same extent as the applicable original grantee. 11. Listing, Registration and Qualification. If the Committee determines that the listing, registration or qualification upon any securities exchange or under any law of Shares subject to any option or restricted stock grant is necessary or desirable as a condition of, or in connection with, the granting of same or the issue or purchase of Shares thereunder, no such option may be exercised in whole or in part, and no Shares may be issued, unless such listing, registration or qualification is effected free of any conditions not acceptable to the Committee. 12. Transfer of Employee. Unless there shall otherwise be an event constituting Good Reason, the transfer of an employee from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another Subsidiary shall not be considered a termination of employment; nor shall 9 it be considered a termination of employment if an employee is placed on military or sick leave or such other leave of absence that is considered by the Committee as continuing intact the employment relationship. 13. Adjustments. In the event of a reorganization, recapitalization, stock split, reverse stock split, stock dividend, combination of shares, merger, consolidation, distribution of assets, or any other change in the corporate structure or shares of ACP, the Committee shall make such equitable adjustments as it determines in good faith are necessary or appropriate (i) in the number and kind of Shares or other property available for issuance under the Plan (including, without limitation, the total number of Shares available for issuance under the Plan pursuant to Section 4), (ii) in the number and kind of options, Shares or other property covered by grants previously made under the Plan, and (iii) in the exercise price of outstanding options, but in each case only to the extent necessary to prevent enlargement or reduction of (A) in the case of clause (i), the number of Shares available for issuance under the Plan as a percentage of ACP's capitalization immediately prior to such change, and (B) in the case of clauses (ii) and (iii), the value of the rights of the holders of grants under the Plan immediately prior to such change. Any such adjustment shall be final, conclusive and binding for all purposes of the Plan. Any such adjustment in the Shares subject to outstanding Incentive Stock Options (including any adjustments in the exercise price) shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code and only to the extent otherwise permitted by Sections 422 and 424 of the Code. Except as otherwise provided in any Grant Agreement, in the event of (A) a merger or consolidation of ACP or any other member of the Company Group, (B) the sale, lease, exchange or other disposition of all or substantially all of the assets of ACP or any other member of the Company Group or (C) the liquidation or dissolution of ACP or any other member of the Company Group (each a "Transaction"), the Plan and any options or restricted stock awards granted hereunder shall continue in effect in accordance with their respective terms, except that following a Transaction either (i) each outstanding option or restricted stock award shall be treated as provided for in the agreement entered into in connection with the Transaction or (ii) if not so provided in such agreement, each optionee or grantee shall be entitled to receive in respect of each Share subject to any outstanding options or restricted stock awards, as the case may be, upon exercise of any option or payment or transfer in respect of any restricted stock award, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share; provided, that such stock, securities, cash, property, or other consideration shall remain subject to all of the conditions and restrictions that were applicable to the options and restricted stock awards prior to such Transaction, but giving effect to the Transaction. 14. Amendment or Substitution of Awards under the Plan. The terms of any outstanding award, payment, grant or incentive under the Plan may be amended from time to time by the Committee solely to provide rights under the Plan that are more favorable to any Plan Participant; provided, that if such amendment adversely affects 10 the rights of any Plan Participant, such amendment shall be deemed to affect such Plan Participant only upon such Plan Participant's written consent. 15. Commencement Date; Termination Date. The date of commencement of the Plan shall be the Effective Date. No termination of the Plan shall materially and adversely affect any of the rights or obligations of any Plan Participant, without such Plan Participant's written consent, under any grant of options or other incentives theretofore granted under the Plan. 16. Severability. Whenever possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Plan. 17. Governing Law. The Plan shall be governed by the corporate laws of the State of Delaware, without giving effect to any choice of law provisions that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. * * * * 11 SCHEDULE I On file with Company EX-12.1 14 c00807exv12w1.txt RATIO OF EARNINGS TO FIXED CHARGES . . . EXHIBIT 12.1 RATIO OF EARININGS TO FIXED CHARGES
REORGANIZED PREDECESSOR ----------------- ---------------------------------- FOR THE YEARS ENDED SEPTEMBER 30, ------------------------------------------------------ 2005 2004 2003 2002 2001 ------- ------- -------- -------- -------- Earnings to fixed charges calculation (1) Income (loss) from continuing operations before income taxes.... $18,504 $ 7,495 $(31,411) $(11,870) $(17,133) Fixed charges........................ 34,392 34,392 48,407 44,515 44,380 ------- ------- -------- -------- -------- $52,896 $41,887 $ 16,996 $ 32,645 $ 27,247 ======= ======= ======== ======== ======== Fixed charges: Interest expense..................... $33,419 $33,392 $ 47,445 $ 43,466 $ 43,454 Interest portion of rent expense..... 973 1,000 962 1,049 926 ------- ------- -------- -------- -------- $34,392 $34,392 $ 48,407 $ 44,515 $ 44,380 ======= ======= ======== ======== ======== Ratio of earning to fixed charges.... 1.54 1.22 N/A(2) N/A(2) N/A(2)
(1) For purposes of the computation, the ratio of earnings to fixed charges has been calculated by dividing (a) income from continuing operations before income taxes plus fixed charges by (b) fixed charges. Fixed charges are equal to interest expense plus the portion of the rent expense estimated to represent interest (2) Earnings were insufficient to cover fixed charges for the years ended September 30, 2001, 2002 and 2003 by $17.1 million, $11.9 million, and $31.4 million, respectively. 91 EX-21 15 c00807exv21.txt SUBSIDIARIES . . . EXHIBIT 21
Subsidiary Jurisdiction of Organization - ---------- ---------------------------- Gregg Industries, Inc. California Cast Alloys, Inc. California Advanced Cast Products, Inc. Delaware Mercer Forge Corporation Delaware Dalton Corporation Indiana Dalton Corporation, Warsaw, Indiana Manufacturing Facility Dalton Corporation, Kendallville, Indiana Manufacturing Facility Deeter Foundry, Inc. Nebraska Dalton Corporation, Stryker Machining Facility Co. Ohio Dalton Corporation, Ashland Manufacturing Facility Ohio A&M Specialties, Inc. Pennsylvania Neenah Transport, Inc Wisconsin
92 EX-31.1 16 c00807exv31w1.txt CERTIFICATION OF CHIEF EXECUTIVE OFFICER EXHIBIT 31.1 RULE 15d-14(a) CERTIFICATION OF CEO I, William M. Barrett, President and Chief Executive Officer of Neenah Foundry Company, certify that: 1. I have reviewed this annual report on Form 10-K of Neenah Foundry Company. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 27, 2005 /s/ William M. Barrett ---------------------------------------- William M. Barrett President and Chief Executive Officer EX-31.2 17 c00807exv31w2.txt CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 31.2 RULE 15d-14(a) CERTIFICATION OF CFO I, Gary W. LaChey, Corporate Vice President - Finance and Chief Financial Officer of Neenah Foundry Company, certify that: 1. I have reviewed this annual report on Form 10-K of Neenah Foundry Company. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 27, 2005 /s/ Gary W. LaChey ---------------------------------------- Gary W. LaChey Corporate Vice President- Finance and Chief Financial Officer EX-32.1 18 c00807exv32w1.txt CERTIFICATION OF CEO AND CFO EXHIBIT 32.1 Certification of the President and Chief Executive Officer and Corporate Vice President - Finance and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned President and Chief Executive Officer, and Corporate Vice President - Finance and Chief Financial Officer of Neenah Foundry Company (the "Company"), hereby certify, based on our knowledge, that the Annual Report on Form 10-K of the Company for the year ended September 30, 2005 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. DATE: December 27, 2005 /s/ William M. Barrett ---------------------------------------- William M. Barrett President and Chief Executive Officer /s/ Gary W. LaChey ---------------------------------------- Gary W. LaChey Corporate Vice President - Finance and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----