-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, K4tBs2ZDYDgH92PuDw3J9nyp4MBoPVKMzzRHOA2bPNqu8CgZi1kHMclzUgDeSo8r 356UwQiP4ibpIPyfxr7BNA== 0000108703-94-000016.txt : 19941020 0000108703-94-000016.hdr.sgml : 19941020 ACCESSION NUMBER: 0000108703-94-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940903 FILED AS OF DATE: 19941017 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WYMAN GORDON CO CENTRAL INDEX KEY: 0000108703 STANDARD INDUSTRIAL CLASSIFICATION: 3460 IRS NUMBER: 041992780 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03085 FILM NUMBER: 94552963 BUSINESS ADDRESS: STREET 1: 244 WORCHESTER ST STREET 2: BOX 8001 CITY: N GRAFTON STATE: MA ZIP: 01536 BUSINESS PHONE: 5088394441 10-Q 1 WYMAN-GORDON FORM 10-Q 1ST QUARTER FISCAL 1995 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) { X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 3, 1994 OR { } 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 0-3085 WYMAN-GORDON COMPANY (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-1992780 (State or other jurisdiction (I.R.S. Employer incorporation or organization) Identification No.) 244 WORCESTER STREET, BOX 8001, NO. GRAFTON, MASSACHUSETTS 01536-8001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 508-839-4441 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Outstanding at Class September 3, 1994 Common Stock, $1 Par Value 34,719,136
Page 1 of 12 2 Part I. Item 1. FINANCIAL STATEMENTS WYMAN-GORDON COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended September 3, August 28, 1994 1993 (000's omitted, except per share data) Revenue $95,725 $58,452 Less: Cost of goods sold 86,150 50,433 Selling, general and administrative expenses 9,572 6,133 $95,722 $56,566 Income from operations 3 1,886 Other deductions: Interest on debt 2,388 2,316 Amortization of financing fees and other costs 512 225 Miscellaneous, net 424 161 3,324 2,702 Net loss $(3,321) $ (816) Net loss per share $ (.10) $ (.05) Average shares outstanding 34,715 17,932
The accompanying notes to the consolidated condensed financial statements are an integral part of these financial statements. -2- 3 WYMAN-GORDON COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
September 3, May 28, 1994 1994 (000's omitted) ASSETS Cash and cash equivalents $ 22,145 $ 42,179 Accounts receivable 74,271 56,458 Inventories 74,531 81,939 Prepaid expenses 12,488 11,275 Total current assets 183,435 191,851 Property, plant and equipment, at cost 363,688 363,100 Less accumulated depreciation 231,506 229,612 Net property, plant and equipment 132,182 133,488 Intangible assets 20,256 21,232 Pension intangible 6,527 6,527 Other assets 26,468 27,172 $368,868 $380,270 LIABILITIES Current maturities of long-term debt $ 77 $ 77 Accounts payable 40,802 45,134 Other accrued liabilities 17,007 16,252 Accrued restructuring, integration, disposal and environmental 21,638 23,875 Total current liabilities 79,524 85,338 Restructuring, integration, disposal and environmental 25,309 25,735 Long-term debt 90,385 90,385 Pension liability 17,922 17,912 Deferred income tax and other 33,311 36,569 Postretirement benefits 52,497 51,848 STOCKHOLDERS' EQUITY Preferred stock - none issued - - Common stock issued September 3, 1994 - 37,052,720 shares May 28, 1994 - 36,902,720 shares 37,053 36,903 Capital in excess of par value 44,070 43,884 Retained earnings 29,918 33,253 111,041 114,040 Less treasury stock at cost September 3, 1994 - 2,329,834 shares May 28, 1994 - 2,354,540 shares 41,121 41,557 69,920 72,483 $368,868 $380,270
The accompanying notes to the consolidated condensed financial statements are an integral part of these financial statements. -3- 4 WYMAN-GORDON COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended September 3, August 28, 1994 1993 (000's omitted) Operating activities: Net loss $ (3,321) $ (816) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 4,582 4,100 Changes in assets and liabilities net of purchase price activity: Accounts receivable 786 11,138 Inventories 7,408 79 Prepaid expenses and other assets 790 (1,038) Accrued restructuring, disposal and environmental (2,662) (3,584) Income and other taxes 721 (321) Accounts payable and accrued liabilities (6,108) 1,187 Net cash provided by operating activities 2,196 10,745 Investing activities: Net cash paid to Cooper Industries for Cameron accounts receivable factoring at acquisition (18,599) - Capital expenditures (4,503) (3,624) Deferred program costs - 1,489 Other, net 872 30 Net cash used by investing activities (22,230) (2,105) Financing activities: Net cash provided (used) by financing activities - - Increase (Decrease) in cash (20,034) 8,640 Cash, beginning of year 42,179 4,568 Cash, end of period $ 22,145 $ 13,208
The accompanying notes to the consolidated condensed financial statements are an integral part of these financial statements. -4- 5 WYMAN-GORDON COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS September 3, 1994 Note A - Basis of Presentation In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments necessary to present fairly its financial position at September 3, 1994 and its results of operations and cash flows for the three months ended September 3, 1994 and August 28, 1993. All such adjustments are of a normal recurring nature. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with Article 10 of Securities and Exchange Commission Regulation S-X and, therefore, do not include all information and footnotes necessary for a fair presentation of the financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In conjunction with its December 31, 1993 Annual Report on Form 10-K, the Company filed audited consolidated financial statements which included all information and footnotes necessary for a fair presentation of its financial position at December 31, 1993 and December 31, 1992 and its results of operations and cash flows for the years ended December 31, 1993, 1992 and 1991 in conformity with generally accepted accounting principles. Where appropriate, prior period amounts have been reclassified to permit comparison. On May 24, 1994, the Company's Board of Directors voted to change the Company's fiscal year-end from one which ended on December 31 to one which ends on the Saturday nearest to May 31. Accordingly, the Company filed a transition report on Form 10-Q for the five month transition period ended May 28, 1994. On May 26, 1994, the Company completed the acquisition of Cameron Forged Products Company ("Cameron") (see Note E ). The accompanying consolidated condensed income statement for the three months ended September 3, 1994, balance sheets as of September 3, 1994 and May 28, 1994 and statement of cash flows for the three months ended September 3, 1994 include the accounts of Cameron. Note B - Inventories Inventories consisted of:
September 3, 1994 May 28, 1994 (000's omitted) Raw material $19,236 $15,548 Work-in-process 54,592 65,014 Supplies 5,272 6,202 79,100 86,764 Less progress payments 4,569 4,825 $74,531 $81,939
-5- 6 WYMAN-GORDON COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) September 3, 1994 Note B - Inventories (Continued) If all inventories valued at LIFO cost had been valued at first-in, first-out (FIFO) cost or market which approximates current replacement cost, inventories would have been $28,737,000 and $29,799,000 higher than reported at September 3, 1994 and May 28, 1994, respectively. LIFO inventory credits to cost of goods sold in the three months ended September 3, 1994 and August 28, 1993 were $1,122,000 and $1,972,000, respectively. Note C - Cameron Integration Costs During 1994, the Company incurred charges of $24.1 million for the integration of Cameron of which $10.7 million was estimated to require cash outlays. Additionally, the Company estimated $12.2 million in cash outlays from direct costs associated with the acquisition and integration of Cameron. As of September 3, 1994, the activity charged against the reserves has been as anticipated and there have been no significant changes to the original estimates. Note D - 10 3/4% Senior Notes due 2003: Supplemental Indentures The 10 3/4% Senior Notes are guaranteed on a joint and several basis by certain of the Company's subsidiaries. As a result, the Company has included the following summarized financial information for the subsidiary guarantors as a group as of September 3, 1994 and May 28, 1994.
September 3, 1994 May 28, 1994 (000's omitted) Current assets $48,765 $45,650 Non-current assets $60,276 $56,713
Note E - Loss on long-term contracts and agreements In accordance with the Company's policy of recognizing losses on backlog and long-term pricing agreements, loss reserves of $16,316,000 and $19,000,000 are included in the accompanying September 3, 1994 and May 28, 1994 balance sheet as follows: -6- 7 WYMAN-GORDON COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) September 3, 1994 Note E - Loss on long-term contracts and agreements (Continued)
September 3, May 28, 1994 1994 (000's omitted) Other short-term liabilities $ 6,916 $ 7,000 Other long-term liabilities 9,400 12,000 Total $16,316 $19,000
These loss reserves were assumed as part of the acquisition of Cameron on May 26, 1994. Note F - Commitments and contingencies At September 3, 1994, certain lawsuits arising in the normal course of business were pending. The Company denies all material allegations of these complaints. In the opinion of management, the outcome of legal matters will not have a material adverse effect on the Company's financial position, results of operations or liquidity. -7- 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITION Results of Operations The principal markets served by the Company are commercial aerospace and defense equipment. Revenue by market for the respective periods were as follows (000's omitted):
Three Months Ended Three Months Ended September 3, 1994 August 28, 1993 % of % of Amount Total Amount Total Commercial Aerospace $63,380 66% $32,510 56% Defense equipment 29,031 30% 24,256 41% Other 3,314 4% 1,686 3% $95,725 100% $58,452 100%
Three Months Ended September 3, 1994 vs. Three Months Ended August 28, 1993 Revenues for the three months ended September 3, 1994 increased $37.3 million or 63.8% from the comparable period of the prior year. This increase in revenues is attributable to the Company's acquisition of Cameron Forged Products Company from Cooper Industries during May 1994. Capacity limitations on the part of the Company's suppliers resulted in raw material shortages which had a negative impact on revenues during the first three months of fiscal 1995. Additionally, $2.4 million of revenues for the same period of the prior year were from Wyman- Gordon Composites, Inc. which was sold by the Company during November 1994. The Company's gross margins were 10.0% of sales for the first three months of fiscal 1995 as compared to 13.7% for the same period of the prior year. Customer invoked pricing pressures and lower production volumes resulting from raw material shortages had a negative impact on margins. Gross margins benefitted from an inventory LIFO credit of $1.1 million or 1.1% of revenues for the first three months of fiscal 1995 as compared to $2.0 million or 3.4% of revenues for the same period of the prior year. Excluding the benefit of the LIFO credit, the Company's gross margins were 8.8% for the first three months of fiscal 1995 as compared to 10.4% for the same period of the prior year. Selling, general and administrative expenses were $9.6 million or 10.0% of revenues in the first three months of fiscal 1995 as compared to $6.1 million or 10.5% of revenues for the same period of the prior year. The increase in selling, general and administrative expense is attributable to the Company's newly -8- 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITION (Continued) Three Months Ended September 3, 1994 vs. Three Months Ended August 28, 1993 (Continued) acquired operations in May 1994. However, selling, general and administrative expense as a percent of sales declined reflecting the integration of Cameron with Wyman-Gordon's Forging operations. Interest expense was $2.4 million for the first three months of fiscal 1995 as compared to $2.3 million for the same period of the prior year. Amortization of financing fees and other costs increased from $0.2 million during the first three months of the prior year to $0.5 million during the same period of fiscal 1995. Fiscal 1995 includes fees from the newly created receivables backed credit facility and bond fees. Miscellaneous, net expense was $0.4 million in the first three months of fiscal 1995 as compared to $0.2 million during the same period of the prior year. Liquidity and Capital Resources The decrease in the Company's cash from $42.2 million to $22.1 million was namely the result of $18.6 million paid to Cooper Industries for Cameron accounts receivable factoring at acquisition. Cash provided by operations of $2.2 million resulted primarily from $1.3 million in income before depreciation and amortization. The Company from time to time expends cash on capital expenditures for more cost effective operations and joint development programs with the Company's customers. Capital expenditures amounted to $13.9 million, $11.2 million and $10.2 million in the years ended December 31, 1993, 1992 and 1991, respectively. Capital expenditures in the foreseeable future are not expected to vary materially from historical levels. During 1994, the Company incurred for Cameron integration costs, charges of $24.1 million of which $10.7 million will require cash outlays. Additionally, the Company estimated $12.2 million in cash outlays from direct costs associated with the acquisition and integration of Cameron Forged Products Company. As of September 3, 1994, the activity against the reserves has been as anticipated and there have been no significant changes to the original estimates. The Company expects to spend $1.2 million in fiscal 1995 and $13.4 million thereafter on environmental activities. The Company has completed all environmental projects within established timetables and is continuing to do so at the present time. -9- 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITION (Continued) In connection with its 1991 restructuring, the Company expects to expend an additional $5.1 million over the next several years, including approximately $2.4 million in fiscal 1995 and $2.7 million thereafter. As of September 3, 1994, the activity against the reserves has been as anticipated and there have been no significant changes to the original estimates. The primary sources of liquidity available in Fiscal 1995 to fund the Company's operations, anticipated expenditures in connection with the acquisition and integration of Cameron, its 1991 restructuring, planned capital expenditures and planned environmental expenditures include available cash ($22.1 million at September 3, 1994), borrowing capacity under the Company's Receivables Financing Program, cash generated by operations and reductions in working capital requirements through planned inventory reductions and accounts receivable management. Cash from operations and debt are expected to be the Company's primary sources of liquidity beyond Fiscal 1995. The Company believes that it has adequate resources to provide for its operations and the funding of restructuring, integration of Cameron, capital and environmental expenditures. -10- 11 Part II. Item 6. EXHIBITS AND REPORTS FILED ON FORM 8-K (a) Exhibits The following exhibits are being filed as part of this Form 10-Q:
Exhibit No. Description 3 Articles of Organization as Amended May 24, 1994 27 Financial Data Schedule for the Three Months Ended September 3, 1994
(b) No reports on Form 8-K have been filed with the Commission during the period covered by this report. -11- 12 SIGNATURES Pursuant to the requirements 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. WYMAN-GORDON COMPANY Date: 10/17/94 By: /s/ LUIS E. LEON Luis E. Leon Vice President, Chief Financial Officer and Treasurer Date: 10/17/94 By: /s/ JEFFREY B. LAVIN Jeffrey B. Lavin Assistant Corporate Controller -12- EX-3 2 1 ARTICLES OF ORGANIZATION As Amended May 24, 1994 THE COMMONWEALTH OF MASSACHUSETTS 1. The name by which the corporation shall be known is Wyman- Gordon Company. 2. The purposes for which the corporation is formed are as follows: forgings, forgings of all kinds, castings, machinery, tools, metal work of any kind and any and all things made in whole or in part from metals. To carry on a general forging business. To carry on a general manufacturing business and to do all things necessary or incidental to any of the above purposes or powers. To carry on the general business or merchants and dealers in any or all things manufactured by the company or used or acquired in connection with such manufacture. To acquire personal property of any kind and any amount, and real property, so far as the same may be necessary or desirable in connection with any of the foregoing powers, and to sell, mortgage, pledge, lease or otherwise dispose of such personal and real property. To acquire, hold, use, sell and deal in patented articles, patent rights, patents, licenses under patents, trade-marks, trade names, processes and formulae. To acquire, hold and dispose of its own stock and securities and stocks, bonds or securities of any other corporations and associations. To carry on the business heretofore conducted by the Wyman and Gordon Company, a Massachusetts corporation. To do any and all acts desirable in connection with or incidental to any of the above powers or purposes or calculated to enhance the value of the company's business or property. 3.(a) The total number of shares of common stock which the Company is authorized to issue is Seventy Million (70,000,000) having a par value of one dollar ($1.00) per share (the "Common Stock"). (b) The total number of shares of Preferred Stock which the Company is authorized to issue is Five Million (5,000,000) having no par value. 4. If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established: Shares of Preferred Stock may be issued from time to time in one or more series, each such series to have such distinctive designation or title as may be fixed by the Board of Directors prior to the issuance of any shares of such series. Each such series of Preferred Stock shall have such preferences, voting powers, qualifications, restrictions and special or relative rights -1- 2 or privileges, and to the fullest extent now or hereafter permitted under Massachusetts law, as shall be stated in such resolution or resolutions providing for the issuance of shares of Preferred Stock as may be adopted from time to time by the Board of Directors in accordance with the laws of the Commonwealth of Massachusetts. 5. The restrictions, if any, imposed by the articles of organization upon the transfer of shares of stock of any class are as follows: None. 6.(a) The Board of Directors may make, amend or repeal the Bylaws in whole or in part except with respect to any provision thereof which by law the Articles of Organization or the Bylaws requires action by the Stockholders. (b) No director of the Company shall have any personal liability to the Company or its Stockholders for monetary damages for breach of fiduciary duty as a director notwithstanding any provision of law imposing such liability; provided, however, that this Article 6(b) shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Company or its Stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 61 or 62 of Chapter 156B of the Massachusetts General Laws, or (iv) for any transaction from which the director derived an improper personal benefit. The preceding sentence shall not eliminate or limit the liability of a director for any act or omission occurring prior to the date upon which this Article 6(b) becomes effective. No amendment to or repeal of this Article 6(b) shall apply to or have any effect on the elimination pursuant hereto of liability or alleged liability of any director of the Company for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. Nothing in this Article 6(b) shall limit any lawful right to indemnification existing independently of this Article. (c) No Business Combination (as hereinafter defined) shall be consummated or effected unless such Business Combination shall have been approved by the affirmative vote of the holders or not less than eighty-five percent (85%) of the total voting power of all outstanding shares of voting stock of the Company, voting as a single class. Such vote shall be required notwithstanding the fact that no vote for such a transaction may be required by law or that approval by some lesser percentage of stockholders may be specified by law or in any agreement with any national securities exchange or otherwise; provided, however, that such eighty-five percent (85%) vote shall not be required, and the provisions of Massachusetts law relating to the vote required for the approval of stockholders, if any, shall apply to any such Business Combination if either of the following conditions is satisfied: -2- 3 1. The aggregate amount of the cash and the Fair Market Value (as hereinafter defined) of the property, securities or other consideration to be received per share of capital stock of the Company incident to the consummation of such Business Combination by a holder of such stock, other than an Interested Stockholder (as hereinafter defined) involved in such Business Combination, is not less than the highest of (a) the Highest Per Share Price or the Highest Equivalent Price (as those terms are hereinafter defined), paid by such Interested Stockholder in acquiring any of its holdings of the Company's capital stock during the five-year period preceding the announcement of such Business Combination; (b) a price that includes the same or a greater premium over the market price of such capital stock immediately prior to the announcement of such Business Combination as the greatest premium over market price paid by such Interested Stockholder in the purchase of any shares of any class of the Company's capital stock during the five-year period preceding the announcement of such Business Combination; or (c) the Highest Per Share Price or the Highest Equivalent Price that such Interested Stockholder shall, during the five-year period preceding the announcement of such Business Combination, have offered to the stockholders of the Company for any shares of the Company's capital stock or indicated in writing that it would be prepared to offer under specified conditions; or 2. The Continuing Directors (as hereinafter defined) shall have expressly approved such Business Combination by a two-thirds vote either in advance of or subsequent to the acquisition of outstanding shares of capital stock of the Company that caused the Interested Stockholder involved to become an Interested Stockholder. In determining whether or not to approve any such Business Combination, the Continuing Directors may give due consideration to all factors they consider relevant, including without limitation (a) the long-term and short-term effects on the profitability of the Company, (b) its social, legal, environmental and economic effects, both short-term and long-term, on the employees of the Company and its subsidiaries and on the communities and the geographic areas in which the Company and its subsidiaries operate or are located, and on any of the business and properties of the Company and its subsidiaries, and (c) the adequacy of the consideration offered in relation not only to the current market price of the Company's outstanding securities, but also to the current value of the Company in a freely negotiated transaction and the Continuing Directors' estimate of the Company's future value (including the unrealized value of its properties and assets) as an independent going concern. -3- 4 (d) Prior to the consummation of any Business Combination and prior to any vote of the Company's stockholders under Section (c) of this Article 6, a proxy statement or information statement complying with the requirements of the Securities Exchange Act of 1934, as amended, shall have been mailed to all stockholders of the Company for the purpose of informing the Company's stockholders about such proposed Business Combination and, if their approval is required by Section (c) of this Article 6, for the purpose of soliciting stockholder approval of such Business Combination. Such proxy statement or information statement shall contain at the front thereof, in a prominent place, a statement by the Continuing Directors of their position on the advisability (or inadvisability) of the proposed Business Combination. (e) For the purpose of Sections (c), (d), (e) and (f) of this Article 6: 1. The term "Business Combination" shall mean (a) any merger, consolidation or share exchange of the Company or any of its subsidiaries with or into an Interested Stockholder, in each case irrespective of which corporation or company is to be the surviving entity; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or with an Interested Stockholder (in a single transaction or a series of related transactions) of all or a substantial part of the assets of the Company (including without limitation any securities of a subsidiary of the Company) or all or a substantial part of the assets of any of its subsidiaries; (c) any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or with the Company, or to or with any of its subsidiaries (in a single transaction or series of related transactions) of all or a substantial part of the assets of an interested Stockholder; (d) the issuance or transfer by the Company or any of its subsidiaries of any securities of the Company or any of its subsidiaries to an Interested Stockholder (other than an issuance or transfer of securities which is effected on a pro- rata basis to all stockholders of the Company); (e) any acquisition by the Company or any of its subsidiaries of any securities issued by an Interested Stockholder; (f) any recapitalization or reclassification of shares of any class of voting stock of the Company or any merger or consolidation of the Company with any of its subsidiaries which would have the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of capital stock of the Company (or any securities convertible into any class of such capital stock) owned by any Interested Stockholder; (g) any merger or consolidation of the Company with any of its subsidiaries after which the provisions of Sections (c), (d), (e) and (f) of this Article 6 -4- 5 shall not appear in the articles of organization (or the equivalent charter documents) of the surviving entity; (h) any plan or proposal for the liquidation or dissolution of the Company; and (i) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination. 2. The term "Interested Stockholder" shall mean any individual, corporation, partnership or other person or entity which, as of the record date for the determination of stockholders entitled to notice of and to vote on any Business Combination, or immediately prior to the consummation of any such Business Combination, is a "Beneficial Owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect at the date of the adoption of the provisions contained in Sections (c), (d), (e) and (f) of this Article 6 by the stockholders of the Company) (the "Exchange Act") of shares of any class or series of capital stock of the Company which, when combined with the shares of such class or series of stock of which any "Affiliates" or "Associates" (as defined in Rule 12b-2 under the Exchange Act) of such individual, corporation, partnership or other person or entity are Beneficial Owners, amount to ten percent (10%) or more of the outstanding shares of such class or series of stock and any Affiliate or Associate of any such Interested Stockholder. Notwithstanding the foregoing, Cooper Industries, Inc. ("Cooper") and its Affiliates and Associates (together, the "Cooper Group") shall not be deemed to be an Interested Stockholder for so long as (A) the Cooper Group beneficially own at least 10% or more of the outstanding shares of Common Stock continuously from and after the Closing Date (as defined in the Stock Purchase Agreement, dated as of January 10, 1994, between Cooper and the Company) and (B) Cooper Group shall not acquire beneficial ownership of any shares of Common Stock in breach of the Investment Agreement, dated as of January 10, 1994 between Cooper and the Company (other than an inadvertent breach which is remedied as promptly as practicable by a transfer of the shares of Common Stock so acquired to a person or entity which is not a member of the Cooper Group). 3. The term "Continuing Director" shall mean any director of the Company who was a director on February 22, 1989, and any other director whose election as a director was recommended or approved by a majority of Continuing Directors. -5- 6 4. An action required to be taken by vote of the Continuing Directors shall be effective only if taken at a meeting at which a Continuing Director Quorum is present. A Continuing Director Quorum shall mean two-thirds of the Continuing Directors capable of exercising the powers conferred upon them under the provisions of these Articles of Organization or the Bylaws of the Company or by law. 5. Whether or not any proposed sale, lease, exchange, mortgage, pledge, transfer or other disposition of part of the assets of any entity involves a "substantial part" of the assets of such entity shall be conclusively determined by a two-thirds vote of the Continuing Directors; provided, however, that any such determination shall be effective only if made at a meeting at which a Continuing Director Quorum was present; and provided further that assets involved in any single transaction or series of related transactions having an aggregate Fair Market Value of more than fifteen percent (15%) of the total consolidated assets of an entity and its subsidiaries as at the end of such entity's last full fiscal year prior to such determination shall always be deemed to constitute a "substantial part." 6. For the purposes of Subsection (1) of Section (c) of this Article 6, the term "other consideration to be received" shall include, without limitation, Common Stock or other capital stock of the Company retained by stockholders of the Company other than any Interested Stockholders or parties to such Business Combination in the event of a Business Combination in which the Company is the surviving corporation. 7. An "Interested Stockholder" shall be deemed to have acquired a share of the capital stock of the Company at the time when such Interested Stockholder became the Beneficial Owner thereof. With respect to shares owned by Affiliates or Associates of an Interested Stockholder or other persons whose ownership is attributed to an Interested Stockholder under the foregoing definition of Interested Stockholder, for purposes of Subsection 8 of this Section (e), such Interested Stockholder shall be deemed to have purchased such shares at the higher of (a) the price paid upon the acquisition thereof by the Affiliate, Associate or other person who owns such shares, or (b) the market price of the shares in question at the time when the Interested Stockholder became the Beneficial Owner thereof. -6- 7 8. The terms "Highest Per Share Price" and "Highest Equivalent Price" shall mean the following: If there is only one class of capital stock of the Company issued and outstanding, the Highest Per Share Price shall mean the highest price than can be determined to have been paid or offered to be paid during the preceding five years by the interested Stockholder involved for any share or shares of that class of capital stock. If there is more than one class of capital stock of the Company issued and outstanding, the Highest Equivalent Price shall mean with respect to each class and series of capital stock of the Company, the amount determined by two-thirds of the Continuing Directors, on whatever basis they believe to be appropriate, to be the highest per share price equivalent to the highest price that can be determined to have been paid or offered to be paid during the preceding five years by the Interested Stockholder involved or any Affiliate or Associate of such Interested Stockholder for any share or shares of any other class or series of capital stock of the Company. In determining the Highest Per Share Price and Highest Equivalent Price, all purchases by such Interested Stockholder or any such Affiliate or Associate shall be taken into account regardless of whether the shares were purchased before or after such Interested Stockholder became an Interested Stockholder. The Highest Per Share Price and the Highest Equivalent Price shall include any brokerage commissions, transfer taxes and soliciting dealers' fees paid by such Interested Stockholder of any such Affiliate or Associate with respect to the shares of capital stock of the Company acquired by such Interested Stockholder or such Affiliate or Associate. In the event any Business Combination involving an Interested Stockholder shall be proposed, the Continuing Directors shall determine the Highest Equivalent Price for each class and series of the capital stock of the Company of which there are shares issued and outstanding. 9. The term "Fair Market Value" shall mean (a) in the case of stock, the highest closing sale price during the thirty day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or if such stock is not listed on the New York Stock Exchange, or the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the thirty day period preceding the date in question on the National Association of Securities Dealers, Inc. -7- 8 Automated Quotations System or any system then in use, or, if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by a two-thirds vote of the Continuing Directors, and (b) in the case of property on the date in question as determined by a two-thirds vote of the Continuing Directors; provided, however, that any determination made by the Continuing Directors pursuant to this Subsection 9 shall be effective only if made at a meeting at which a Continuing Director Quorum was present; and provided further than in the event the number of Continuing Directors in office shall be less than a Continuing Director Quorum, any determination of fair market value that would otherwise be made by a vote of the Continuing Directors shall be made by a court of competent jurisdiction. (f) No proposal to amend or repeal Sections (c), (d), (e) or (f) of this article 6 may be authorized and approved except by the affirmative vote of the holders of voting stock entitling them to exercise eighty-five percent (85%) of the voting power of the Company voting together as a class, unless required to vote separately by law or by other provisions of those Articles of Organization or by the terms of the stock entitling them to vote and, if a proposal upon which holders of shares of a particular class or classes are so required to vote separately, then by the affirmative vote of the holders of shares entitling them to exercise eighty- five percent (85%) of the voting power of each such class or classes; provided, however, that the provisions of this Section (f) shall not apply to any such amendment or repeal of this Article 6 that has been favorably recommended to the stockholders by resolution of the Board of Directors adopted by a two-thirds vote of the Continuing Directors at a meeting at which a Continuing Director Quorum was present, in which case any such amendment or repeal of Sections (c), (d), (e) or (f) of this Article 6 may be authorized and approved by the affirmative vote of such number of the holders of voting stock as may be required by law. -8- EX-27 3
5 3-MOS JUN-03-1995 SEP-03-1994 22,144,647 498,973 72,573,653 0 74,531,210 183,434,873 363,687,645 231,505,584 368,868,000 79,524,272 90,384,615 37,052,720 0 0 32,867,586 368,868,000 94,838,811 95,725,202 86,150,859 86,150,859 0 0 2,387,797 (3,321,414) 0 (3,321,414) 0 0 0 (3,321,414) (.10) (.10)
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