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-----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, Ty9/5cBnW1Kv1J2j10C6yAXKx2LihMxj/74B0IjUSrmoBuwBDsoS1jAcurv7q/NH +8JpjjUCCfs3FSioBeBS/Q== 0000950137-08-010698.txt : 20080813 0000950137-08-010698.hdr.sgml : 20080813 20080813164533 ACCESSION NUMBER: 0000950137-08-010698 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20080630 FILED AS OF DATE: 20080813 DATE AS OF CHANGE: 20080813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEENAH FOUNDRY CO CENTRAL INDEX KEY: 0001040599 STANDARD INDUSTRIAL CLASSIFICATION: IRON & STEEL FOUNDRIES [3320] IRS NUMBER: 391580331 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-28751-03 FILM NUMBER: 081013766 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 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEENAH ENTERPRISES, INC. CENTRAL INDEX KEY: 0000855667 STANDARD INDUSTRIAL CLASSIFICATION: IRON & STEEL FOUNDRIES [3320] IRS NUMBER: 251618281 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-52681 FILM NUMBER: 081013767 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE STREET 2: . CITY: NEENAH STATE: WI ZIP: 54957 BUSINESS PHONE: 920-725-7000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE STREET 2: . CITY: NEENAH STATE: WI ZIP: 54957 FORMER COMPANY: FORMER CONFORMED NAME: ACP HOLDING CO DATE OF NAME CHANGE: 19890926 10-Q 1 c34851e10vq.htm FORM 10-Q e10vq

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Indicate by check mark whether the registrants (1) have 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 periods that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated flier, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


	Neenah Enterprises, Inc.	Neenah Foundry Company
Large accelerated filer	o	o

Accelerated filer	o	o

Non-accelerated filer	þ	þ

Smaller reporting company	o	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


		Neenah Enterprises, Inc.		Yes o No þ
		Neenah Foundry Company		Yes o No þ

Indicate by check mark whether the registrants have filed all documents and reports required to be filed by Sections 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 þ No o


Neenah Enterprises, Inc.		As of July 31, 2008, Neenah Enterprises, Inc. had 14,251,934 shares of common stock outstanding.

Neenah Foundry Company		As of July 31, 2008, Neenah Foundry Company had 1,000 shares of common stock outstanding, all of which were owned by NFC Castings, Inc, a wholly owned subsidiary of Neenah Enterprises, Inc.

NEENAH ENTERPRISES, INC.
NEENAH FOUNDRY COMPANY
Form 10-Q Index
For the Quarter Ended June 30, 2008


	Page
Part I. Financial Information
Item 1. Financial Statements

Neenah Enterprises, Inc.

Condensed consolidated balance sheets — Neenah Enterprises, Inc. as of June 30, 2008 and September 30, 2007		3
Condensed consolidated statements of operations — Neenah Enterprises, Inc. for the three and nine months ended June 30, 2008 and 2007		4
Condensed consolidated statements of cash flows — Neenah Enterprises, Inc. for the nine months ended June 30, 2008 and 2007		5
Notes to condensed consolidated financial statements — June 30, 2008		6

Neenah Foundry Company

Condensed consolidated balance sheets — Neenah Foundry Company as of June 30, 2008 and September 30, 2007		11
Condensed consolidated statements of operations — Neenah Foundry Company for the three and nine months ended June 30, 2008 and 2007		12
Condensed consolidated statements of cash flows — Neenah Foundry Company for the nine months ended June 30, 2008 and 2007		13
Notes to condensed consolidated financial statements — June 30, 2008		14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		25

Item 3. Quantitative and Qualitative Disclosures About Market Risk		32

Item 4. Controls and Procedures		32

Part II. Other Information
Item 1. Legal Proceedings		33

Item 6. Exhibits		33

Signatures		34
EX-10.6
EX-31.1
EX-31.2
EX-31.3
EX-31.4
EX-32.1
EX-32.2

NEENAH ENTERPRISES, INC.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	June 30,		September 30,
	2008		2007(1)
	(Unaudited)
Assets
Current assets:
Cash	$	—	$	—
Accounts receivable, net		97,057		81,085
Inventories		69,268		64,196
Deferred income taxes		3,070		3,070
Refundable income taxes		5,684		6,501
Other current assets		7,096		6,479

Total current assets		182,175		161,331

Property, plant and equipment		214,703		179,522
Less accumulated depreciation		59,890		47,972

		154,813		131,550

Deferred financing costs, net		3,114		3,457
Identifiable intangible assets, net		49,609		54,951
Goodwill		86,699		86,699
Other assets		6,733		5,986

	$	483,143	$	443,974


Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	36,478	$	27,764
Accrued wages and employee benefits		10,711		13,139
Accrued interest		186		5,449
Accrued interest — related party		—		2,344
Other accrued liabilities		2,701		4,763
Current portion of long-term debt		66,451		17,152
Current portion of capital lease obligations		213		213

Total current liabilities		116,740		70,824

Long-term debt		225,000		225,000
Long-term debt — related party		75,000		75,000
Capital lease obligations		1,065		1,222
Deferred income taxes		28,134		28,134
Postretirement benefit obligations		5,386		5,269
Other liabilities		8,804		7,960

Total liabilities		460,129		413,409

Commitments and contingencies

Stockholders’ equity:
Preferred stock, par value $0.01 per share — 1,000,000 shares authorized, no shares issued and outstanding		—		—
Common stock, par value $0.01 per share — 35,000,000 shares authorized, 13,741,337 and 13,672,764 issued and outstanding at June 30, 2008 and September 30, 2007, respectively		138		137
Capital in excess of par value		5,939		5,686
Retained earnings		12,886		20,571
Accumulated other comprehensive income		4,051		4,171

Total stockholders’ equity		23,014		30,565

	$	483,143	$	443,974

See notes to condensed consolidated financial statements.


(1)		The balance sheet as of September 30, 2007 has been derived from the audited financial statements as of that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

NEENAH ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)


	Three Months Ended						Nine months ended
	June 30,						June 30,
	2008			2007			2008			2007
Net sales	$	154,322		$	126,838		$	370,205		$	355,969
Cost of sales		132,745			104,126			326,259			303,574

Gross profit		21,577			22,712			43,946			52,395
Selling, general and administrative expenses		8,887			10,436			26,787			27,865
Restructuring costs		—			—			1,227			—
Amortization of intangible assets		1,780			1,782			5,342			5,342
Loss (gain) on disposal of equipment		(37	)		42			(56	)		(22	)

Total operating expenses		10,630			12,260			33,300			33,185

Operating income		10,947			10,452			10,646			19,210
Interest expense		(6,116	)		(4,870	)		(16,800	)		(17,781	)
Interest expense — related party		(2,344	)		(2,344	)		(7,032	)		(4,688	)
Debt refinancing costs		—			—			—			(20,429	)

Income (loss) before income taxes		2,487			3,238			(13,186	)		(23,688	)
Income tax provision (benefit)		112			1,274			(5,501	)		(9,219	)

Net income (loss)	$	2,375		$	1,964		$	(7,685	)	$	(14,469	)


Income (loss) per share:
Basic	$	0.17		$	0.19		$	(0.56	)	$	(1.50	)
Diluted	$	0.15		$	0.15		$	(0.56	)	$	(1.50	)

Shares used in the computation of income (loss) per share:
Basic		13,691			10,240			13,687			9,677
Diluted		16,121			12,740			13,687			9,677

See notes to condensed consolidated financial statements.

NEENAH ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)


	Nine months ended
	June 30,
	2008			2007
Operating activities
Net loss	$	(7,685	)	$	(14,469	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		17,752			15,385
Amortization of deferred financing costs and discount on notes		343			670
Write-off of deferred financing costs and discount on notes		—			7,512
Stock-based compensation		250			—
Changes in operating assets and liabilities		(24,132	)		(26,999	)

Net cash used in operating activities		(13,472	)		(17,901	)

Investing activities
Purchase of property, plant and equipment		(35,673	)		(33,315	)

Net cash used in investing activities		(35,673	)		(33,315	)

Financing activities
Net change in revolver balance		49,299			(5,790	)
Proceeds from long-term debt		—			225,000
Proceeds from long-term debt — related party		—			75,000
Payments on long-term debt and capital lease obligations		(157	)		(165,026	)
Payments on long-term debt — related party		—			(75,115	)
Proceeds from exercise of stock warrants		3			—
Debt issuance costs		—			(3,763	)

Net cash provided by financing activities		49,145			50,306

Decrease in cash		—			(910	)
Cash at beginning of period		—			910

Cash at end of period	$	—		$	—

See notes to condensed consolidated financial statements.

NEENAH ENTERPRISES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except share and per share data)

Note 1 — Basis of Presentation

Neenah Enterprises, Inc. (“NEI”) is a Delaware corporation which has no business activity other than its ownership of NFC Castings, Inc. Neenah Foundry Company (Neenah) is a wholly owned subsidiary of NFC Castings, Inc. NEI, alone or together with its subsidiaries as appropriate in the context, is referred to as “the Company.” The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending September 30, 2008. Certain reclassifications have been made to the fiscal 2007 condensed consolidated financial statements to conform to the fiscal 2008 presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in NEI’s Annual Report on Form 10-K for the year ended September 30, 2007.

Note 2 — Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. (FIN) 48, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes.” The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company adopted FIN 48 as of October 1, 2007. As a result of the adoption of FIN 48, the Company had no change to the liability for unrecognized tax benefits. The total gross liability for unrecognized tax benefits (excluding penalties and interest) was $2.3 million at October 1, 2007. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate in future periods. The Company’s accounting policy is to recognize interest and penalties related to unrecognized tax benefits as income tax expense. Accrued interest was $.8 million at October 1, 2007 and $1.0 million at June 30, 2008. There were no penalties accrued. There was a decrease of $1.1 million in the gross liability for unrecognized tax benefits during the three and nine month periods ended June 30, 2008 due to the reversal of reserves for tax contingencies which are no longer required due to completion of an IRS examination in the third quarter of fiscal 2008. The Company and/or its subsidiaries files income tax returns in the United States Federal and various state jurisdictions. The Company is no longer subject to income tax examinations for any significant tax jurisdictions for any tax year before 2005.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS 158) which requires employers that sponsor defined benefit pension and postretirement benefit plans to recognize previously unrecognized actuarial gains and losses and prior service costs in the statement of financial position and to recognize future changes in these amounts in the year in which changes occur through comprehensive income. Additionally, employers are required to measure the funded status of a plan as of the date of its year-end statement of financial position and provide additional disclosures. On September 30, 2007, the Company adopted the provisions of SFAS 158 by recognizing the funded status of its defined benefit pension and postretirement benefit plans in the balance sheet. In addition, the Company will be required to measure the plan assets and benefit obligations as of the date of the year-end balance sheet by September 30, 2009. The Company is currently evaluating the impact the change in the measurement date will have on its consolidated financial statements and notes thereto.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The Company is required to adopt SFAS 157 effective October 1, 2008. The Company does not expect the adoption of SFAS 157 to have a material impact on its future results of operations and financial condition.

In September 2006, the FASB issued Staff Position No. AUG AIR-1, “Accounting for Planned Major Maintenance Activities” (FSP). This FSP prohibits the use of the accrue-in-advance method of accounting for planned major maintenance activities in annual and interim financial reporting periods and was effective for fiscal years beginning after December 15, 2006. Prior to the adoption of this FSP, the Company determined its planned maintenance costs for the year and amortized these costs ratably throughout the year. On October 1, 2007, the Company began accounting for its planned major maintenance activities in accordance with FSP No. AUG AIR-1 by expensing the costs in the month in which they were incurred. The implementation of FSP No. AUG AIR-1 will not have any impact on the Company’s year end financial position or full year results of operations and cash flows as all maintenance costs incurred have been and continue to be expensed in the fiscal year in which the maintenance activity occurs. In accordance with FSP No. AUG AIR-1, the Company’s financial position, results of operations and cash flows for each quarter of the fiscal year ended September 30, 2007 were adjusted to apply the FSP retrospectively. The following financial statement line items as of and for the three and nine month periods ended June 30, 2007 were adjusted as follows (in thousands, except per share data):


Statement of Operations	As Originally				Effect of
Three Months Ended June 30, 2007	Reported		As Adjusted		Change
Cost of sales	$	104,541	$	104,126	$	(415	)
Gross profit		22,297		22,712		415
Operating income		10,037		10,452		415
Income before income taxes		2,823		3,238		415
Income tax provision		1,113		1,274		161
Net income		1,710		1,964		254

Income per share:
Basic		0.17		0.19		0.02
Diluted		0.13		0.15		0.02


Statement of Operations	As Originally						Effect of
Nine months ended June 30, 2007	Reported			As Adjusted			Change
Cost of sales	$	304,314		$	303,574		$	(740	)
Gross profit		51,655			52,395			740
Operating income		18,470			19,210			740
Loss before income taxes		(24,428	)		(23,688	)		740
Income tax benefit		(9,507	)		(9,219	)		288
Net loss		(14,921	)		(14,469	)		452

Loss per share:
Basic		(1.54	)		(1.50	)		0.04
Diluted		(1.54	)		(1.50	)		0.04


Statement of Cash Flows	As Originally						Effect of
Nine months ended June 30, 2007	Reported			As Adjusted			Change
Net loss	$	(14,921	)	$	(14,469	)	$	452
Changes in operating assets and liabilities		(26,547	)		(26,999	)		(452	)

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115” (SFAS 159). SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The Company is required to adopt SFAS 159 effective October 1, 2008. The Company does not expect the adoption of SFAS 159 to have a material impact on its future results of operations and financial condition.

Note 3 — Inventories

The components of inventories are as follows:


	June 30,		September 30,
	2008		2007
Raw materials	$	8,658	$	6,941
Work in process and finished goods		42,954		41,407
Supplies		17,656		15,848


	$	69,268	$	64,196

Note 4 — Comprehensive Income (Loss)

Comprehensive income for the three-month periods ended June 30, 2008 and 2007 was $2,375 and $1,964, respectively. Comprehensive loss for the nine-month periods ended June 30, 2008 and 2007 was $7,805 and $14,469, respectively. Amounts included in accumulated other comprehensive income (loss) relate to unrecognized pension and post retirement benefit plan liabilities.

Note 5 — Employee Benefit Plans

Components of Net Periodic Benefit Cost

The Company has five defined-benefit pension plans covering the majority of its hourly employees and also sponsors unfunded defined benefit postretirement health care plans covering substantially all salaried and hourly employees at Neenah and their dependents. Components of net periodic benefit costs are as follows for the three and nine month periods ended June 30, 2008 and 2007:


	Pension Benefits						Postretirement Benefits
	Three months ended June 30,						Three months ended June 30,
	2008			2007			2008			2007
Service cost	$	461		$	586		$	55		$	50
Interest cost		1,098			1,675			81			75
Expected return on plan assets		(1,365	)		(1,984	)		—			—
Amortization of prior service cost (credit)		4			8			(13	)		(12	)
Recognized net actuarial gain		—			—			(53	)		(51	)

Net periodic benefit cost	$	198		$	285		$	70		$	62


	Pension Benefits						Postretirement Benefits
	Nine months ended June 30,						Nine months ended June 30,
	2008			2007			2008			2007
Service cost	$	1,383		$	1,349		$	165		$	150
Interest cost		3,292			3,251			243			225
Expected return on plan assets		(4,093	)		(3,862	)		—			—
Amortization of prior service cost (credit)		13			22			(39	)		(38	)
Recognized net actuarial gain		—			—			(159	)		(154	)

Net periodic benefit cost	$	595		$	760		$	210		$	183

Employer Contributions

For the nine months ended June 30, 2008, $1,563 of contributions have been made to the defined-benefit pension plans. The Company presently anticipates contributing an additional $500 to fund its pension plans in fiscal 2008 for a total of $2,063.

Note 6 — Refinancing Transactions

On December 29, 2006, the Company repaid its outstanding indebtedness under Neenah’s then existing credit facility, repurchased all $133,130 of Neenah’s outstanding 11% Senior Secured Notes due 2010 through an issuer tender offer, retired $75,000 of Neenah’s outstanding 13% Senior Subordinated Notes due 2013 (the 13% Notes) by exchanging them for $75,000 of new 12 ¹/₂% Senior Subordinated Notes due 2013 (the 12 ¹/₂% Notes) in a private transaction, and issued a notice to redeem the remaining $25,000 of 13% Notes that remained outstanding after the initial exchange. The remaining 13% Notes were redeemed on February 2, 2007. To fund these payments and to provide cash for capital expenditures, ongoing working capital requirements and general corporate purposes, Neenah (a) issued $225,000 of 9 ¹/₂% Senior Secured Notes due 2017 (the 9 ¹/₂% Notes) and $75,000 of the 12 ¹/₂% Notes and (b) entered into an amended and restated credit facility (the 2006 Credit Facility) providing for borrowings in an amount up to $100,000. The 12 ¹/₂% Notes were issued in a related party transaction with a substantial stockholder of the Company in exchange for the 13% Notes held by such stockholder.

As a result of the refinancing transactions discussed above, Neenah incurred $20,429 of debt refinancing costs in the year ended September 30, 2007. This amount consisted of a $12,917 tender premium paid to repurchase the 11% Senior Secured Notes, $5,940 to write off the unamortized discount on the 11% Senior Secured Notes and $1,572 to write off the unamortized deferred financing costs on the indebtedness existing prior to the refinancing.

Note 7 — Cost Reduction Actions

On November 16, 2007, the Company announced a restructuring plan to reduce costs and improve general operating efficiencies. The restructuring primarily consisted of salaried headcount reductions at the Company’s operating facilities. In connection with the restructuring plan, the Company incurred employee termination costs of $1,227, which were recognized as a charge to operations during the first quarter of fiscal 2008. The employee termination costs are presented as restructuring costs in the condensed consolidated statement of operations. During the first nine months of fiscal 2008, $810 of employee termination costs were paid, with the remaining $417 recorded in accrued wages and employee benefits in the condensed consolidated balance sheet. A majority of the employee termination costs relate to headcount reductions in the castings segment with a small portion attributable to the forgings segment.

Note 8 — Contingencies

Fox River Cleanup Matter. Certain areas of the Lower Fox River System in Wisconsin have been designated for remedial activities under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) due to PCB contamination. Neenah Foundry Company (“Neenah”) operates a facility near this area. With respect to the Fox River PCB site, Appleton Papers Inc. (“API”) and NCR Corporation (“NCR”) commenced an action in U.S. District Court for the Eastern District of Wisconsin on January 7, 2008 seeking to allocate among all responsible parties the equitable shares of response costs and natural resources damages associated with the environmental contamination of the Fox River. API and NCR indicated that they believe that other parties, including Neenah, should participate in the funding of this work because they allegedly contributed to the environmental contamination and are responsible parties. Accordingly, in a letter dated March 12, 2008, API and NCR notified Neenah that they were thereby terminating the 2004 tolling and standstill agreement among Neenah, NCR, API, and Arjo Wiggins Appleton Ltd., with the intent of adding Neenah as a party to the referenced litigation. On April 14, 2008, Neenah was served with a third amended complaint and joined as a defendant in the pending lawsuit brought by plaintiffs API and NCR. Plaintiffs make claims against Neenah (and other defendants) for response costs allegedly incurred by plaintiffs, contribution, and declaratory relief. No case management dates have yet been set in the case. Neenah will assert factual and legal defenses to these claims. The Company is also exploring the possibility of reimbursement of certain expenses and defense costs incurred relating to the case from its liability insurance carriers. There have been no amounts accrued for potential liability in this case as of June 30, 2008.

In addition to those legal proceedings discussed in our reports to the SEC, we are involved in various claims and litigation in the normal course of business. Although the results of legal proceedings cannot be predicted with certainty, in the judgment of management, the ultimate resolution of these matters is not likely to have a material adverse effect on our consolidated financial statements.

Note 9 — 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 and sells forged components for the industrial market. The Other segment includes machining operations and freight hauling.

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 in the Company’s Annual Report on Form 10-K for the year ended September 30, 2007. The following segment information is presented:


	Three months ended						Nine months ended
	June 30,						June 30,
	2008			2007			2008			2007
Revenues from external customers:
Castings	$	141,328		$	116,328		$	332,659		$	321,841
Forgings		11,100			8,548			31,309			28,011
Other		4,651			4,365			13,612			13,065
Elimination of intersegment revenues		(2,757	)		(2,403	)		(7,375	)		(6,948	)

	$	154,322		$	126,838		$	370,205		$	355,969


Net income (loss):
Castings	$	2,315		$	2,549		$	(8,091	)	$	(14,180	)
Forgings		(110	)		(585	)		8			(298	)
Other		155			(78	)		222			(226	)
Elimination of intersegment loss		15			78			176			235

	$	2,375		$	1,964		$	(7,685	)	$	(14,469	)


	June 30,			September 30,
	2008			2007
Total assets:
Castings	$	468,474		$	431,906
Forgings		23,445			19,015
Other		9,005			8,336
Elimination of intersegment assets		(17,781	)		(15,283	)

	$	483,143		$	443,974

NEENAH FOUNDRY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	June 30,		September 30,
	2008		2007(1)
	(Unaudited)
Assets
Current assets:
Cash	$	—	$	—
Accounts receivable, net		97,057		81,085
Inventories		69,268		64,196
Deferred income taxes		3,070		3,070
Refundable income taxes		5,684		6,501
Other current assets		7,096		6,479

Total current assets		182,175		161,331

Property, plant and equipment		214,703		179,522
Less accumulated depreciation		59,890		47,972

		154,813		131,550

Deferred financing costs, net		3,114		3,457
Identifiable intangible assets, net		49,609		54,951
Goodwill		86,699		86,699
Other assets		6,733		5,986

	$	483,143	$	443,974


Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	36,478	$	27,764
Accrued wages and employee benefits		10,711		13,139
Accrued interest		186		5,449
Accrued interest — related party		—		2,344
Other accrued liabilities		2,958		5,016
Current portion of long-term debt		66,451		17,152
Current portion of capital lease obligations	213			213

Total current liabilities		116,997		71,077

Long-term debt		225,000		225,000
Long-term debt — related party		75,000		75,000
Capital lease obligations		1,065		1,222
Deferred income taxes		28,134		28,134
Postretirement benefit obligations		5,386		5,269
Other liabilities		8,804		7,960

Total liabilities		460,386		413,662

Commitments and contingencies

Stockholder’s equity:
Common stock		100		100
Capital in excess of par value		5,720		5,470
Retained earnings		12,886		20,571
Accumulated other comprehensive income		4,051		4,171

Total stockholder’s equity		22,757		30,312

	$	483,143	$	443,974

See notes to condensed consolidated financial statements.


(1)		The balance sheet as of September 30, 2007 has been derived from the audited financial statements as of that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

NEENAH FOUNDRY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands)


	Three Months Ended						Nine months ended
	June 30,						June 30,
	2008			2007			2008			2007
Net sales	$	154,322		$	126,838		$	370,205		$	355,969
Cost of sales		132,745			104,126			326,259			303,574

Gross profit		21,577			22,712			43,946			52,395
Selling, general and administrative expenses		8,887			10,436			26,787			27,865
Restructuring costs		—			—			1,227			—
Amortization of intangible assets		1,780			1,782			5,342			5,342
Loss (gain) on disposal of equipment		(37	)		42			(56	)		(22	)

Total operating expenses		10,630			12,260			33,300			33,185

Operating income		10,947			10,452			10,646			19,210
Interest expense		(6,116	)		(4,870	)		(16,800	)		(17,781	)
Interest expense — related party		(2,344	)		(2,344	)		(7,032	)		(4,688	)
Debt refinancing costs		—			—			—			(20,429	)

Income (loss) before income taxes		2,487			3,238			(13,186	)		(23,688	)
Income tax provision (benefit)		112			1,274			(5,501	)		(9,219	)

Net income (loss)	$	2,375		$	1,964		$	(7,685	)	$	(14,469	)

See notes to condensed consolidated financial statements.

NEENAH FOUNDRY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)


	Nine months ended
	June 30,
	2008			2007
Operating activities
Net loss	$	(7,685	)	$	(14,469	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		17,752			15,385
Amortization of deferred financing costs and discount on notes		343			670
Write-off of deferred financing costs and discount on notes		—			7,512
Stock-based compensation		250			—
Changes in operating assets and liabilities		(24,129	)		(26,999	)

Net cash used in operating activities		(13,469	)		(17,901	)

Investing activities
Purchase of property, plant and equipment		(35,673	)		(33,315	)

Net cash used in investing activities		(35,673	)		(33,315	)

Financing activities
Net change in revolver balance		49,299			(5,790	)
Proceeds from long-term debt		—			225,000
Proceeds from long-term debt — related party		—			75,000
Payments on long-term debt and capital lease obligations		(157	)		(165,026	)
Payments on long-term debt — related party		—			(75,115	)
Debt issuance costs		—			(3,763	)

Net cash provided by financing activities		49,142			50,306

Decrease in cash		—			(910	)
Cash at beginning of period		—			910

Cash at end of period	$	—		$	—

See notes to condensed consolidated financial statements.

NEENAH FOUNDRY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)

Note 1 — Basis of Presentation

Neenah Foundry Company (Neenah), together with its subsidiaries (collectively, the Company), is a wholly owned subsidiary of NFC Castings, Inc., which is a wholly owned subsidiary of Neenah Enterprises, Inc. (NEI). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending September 30, 2008. Certain reclassifications have been made to the fiscal 2007 condensed consolidated financial statements to conform to the fiscal 2008 presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in Neenah’s Annual Report on Form 10-K for the year ended September 30, 2007.

Note 2 — Recent Accounting Pronouncements


Statement of Operations	As Originally				Effect of
Three Months Ended June 30, 2007	Reported		As Adjusted		Change
Cost of sales	$	104,541	$	104,126	$	(415	)
Gross profit		22,297		22,712		415
Operating income		10,037		10,452		415
Income before income taxes		2,823		3,238		415
Income tax provision		1,113		1,274		161
Net income		1,710		1,964		254


Statement of Operations	As Originally						Effect of
Nine months ended June 30, 2007	Reported			As Adjusted			Change
Cost of sales	$	304,314		$	303,574		$	(740	)
Gross profit		51,655			52,395			740
Operating income		18,470			19,210			740
Loss before income taxes		(24,428	)		(23,688	)		740
Income tax benefit		(9,507	)		(9,219	)		288
Net loss		(14,921	)		(14,469	)		452


Statement of Cash Flows	As Originally						Effect of
Nine months ended June 30, 2007	Reported			As Adjusted			Change
Net loss	$	(14,921	)	$	(14,469	)	$	452
Changes in operating assets and liabilities		(26,547	)		(26,999	)		(452	)

Note 3 — Inventories

The components of inventories are as follows:


	June 30,		September 30,
	2008		2007
Raw materials	$	8,658	$	6,941
Work in process and finished goods		42,954		41,407
Supplies		17,656		15,848

	$	69,268	$	64,196

Note 4 — Comprehensive Income (Loss)

Note 5 — Employee Benefit Plans

Components of Net Periodic Benefit Cost


	Pension Benefits						Postretirement Benefits
	Three months ended June 30,						Three months ended June 30,
	2008			2007			2008			2007
Service cost	$	461		$	586		$	55		$	50
Interest cost		1,098			1,675			81			75
Expected return on plan assets		(1,365	)		(1,984	)		—			—
Amortization of prior service cost (credit)		4			8			(13	)		(12	)
Recognized net actuarial gain		—			—			(53	)		(51	)

Net periodic benefit cost	$	198		$	285		$	70		$	62


	Pension Benefits						Postretirement Benefits
	Nine months ended June 30,						Nine months ended June 30,
	2008			2007			2008			2007
Service cost	$	1,383		$	1,349		$	165		$	150
Interest cost		3,292			3,251			243			225
Expected return on plan assets		(4,093	)		(3,862	)		—			—
Amortization of prior service cost (credit)		13			22			(39	)		(38	)
Recognized net actuarial gain		—			—			(159	)		(154	)

Net periodic benefit cost	$	595		$	760		$	210		$	183

Employer Contributions

Note 6 — Refinancing Transactions

On December 29, 2006, the Company repaid its outstanding indebtedness under its then existing credit facility, repurchased all $133,130 of its outstanding 11% Senior Secured Notes due 2010 through an issuer tender offer, retired $75,000 of its outstanding 13% Senior Subordinated Notes due 2013 (the 13% Notes) by exchanging them for $75,000 of new 12 ¹/₂% Senior Subordinated Notes due 2013 (the 12 ¹/₂% Notes) in a private transaction, and issued a notice to redeem the remaining $25,000 of 13% Notes that remained outstanding after the initial exchange. The remaining 13% Notes were redeemed on February 2, 2007. To fund these payments and to provide cash for capital expenditures, ongoing working capital requirements and general corporate purposes, the Company (a) issued $225,000 of 9 ¹/₂% Senior Secured Notes due 2017 (the 9 ¹/₂% Notes) and $75,000 of the 12 ¹/₂% Notes and (b) entered into an amended and restated credit facility (the 2006 Credit Facility) providing for borrowings in an amount up to $100,000. The 12 ¹/₂% Notes were issued in a related party transaction with a substantial stockholder of the Company’s ultimate parent, NEI, in exchange for the 13% Notes held by such stockholder.

As a result of the refinancing transactions discussed above, the Company incurred $20,429 of debt refinancing costs in the year ended September 30, 2007. This amount consisted of a $12,917 tender premium paid to repurchase the 11% Senior Secured Notes due 2010, $5,940 to write off the unamortized discount on the 11% Senior Secured Notes and $1,572 to write off the unamortized deferred financing costs on the indebtedness existing prior to the refinancing.

Note 7 — Cost Reduction Actions

Note 8 — Contingencies

Note 9 — Subsidiary Guarantors

The following tables present condensed consolidating financial information as of June 30, 2008 and September 30, 2007 and for the three and nine months ended June 30, 2008 and 2007 for: (a) Neenah and (b) on a combined basis, the guarantors of the 9¹/₂% Notes due 2017 and the 12¹/₂% Notes due 2013, 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, fully 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.

Condensed Consolidating Balance Sheet
June 30, 2008


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Assets
Current assets:
Cash	$	1,834		$	(1,834	)	$	—		$	—
Accounts receivable, net		44,374			52,683			—			97,057
Inventories		27,833			41,435			—			69,268
Deferred income taxes		(409	)		3,479			—			3,070
Refundable income taxes		5,684			—			—			5,684
Other current assets		4,066			3,030			—			7,096

Total current assets		83,382			98,793			—			182,175

Investments in and advances to subsidiaries		129,814			—			(129,814	)		—
Property, plant and equipment, net		92,201			62,612			—			154,813
Deferred financing costs and intangible assets, net		38,969			13,754			—			52,723
Goodwill		86,699			—			—			86,699
Other assets		2,392			4,341			—			6,733

	$	433,457		$	179,500		$	(129,814	)	$	483,143


Liabilities and Stockholder’s Equity
Current liabilities:
Accounts payable	$	9,359		$	27,119		$	—		$	36,478
Net intercompany payable		—			130,092			(130,092	)		—
Accrued liabilities		5,602			8,253			—			13,855
Current portion of long-term debt		66,451			213			—			66,664

Total current liabilities		81,412			165,677			(130,092	)		116,997

Long-term debt and capital lease obligations		300,000			1,065			—			301,065
Deferred income taxes		18,663			9,471			—			28,134
Postretirement benefit obligations		5,386			—			—			5,386
Other liabilities		5,239			3,565			—			8,804
Stockholder’s equity (deficit)		22,757			(278	)		278			22,757

	$	433,457		$	179,500		$	(129,814	)	$	483,143

Note 9 — Subsidiary Guarantors (continued)

Condensed Consolidating Balance Sheet
September 30, 2007


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Assets
Current assets:
Cash	$	969		$	(969	)	$	—		$	—
Accounts receivable, net		37,052			44,033			—			81,085
Inventories		25,143			39,053			—			64,196
Refundable income taxes		6,501			—			—			6,501
Deferred income taxes		(409	)		3,479			—			3,070
Other current assets		4,072			2,407			—			6,479

Total current assets		73,328			88,003			—			161,331

Investments in and advances to subsidiaries		123,314			—			(123,314	)		—
Property, plant and equipment, net		73,683			57,867			—			131,550
Deferred financing costs and intangible assets, net		43,591			14,817			—			58,408
Goodwill		86,699			—			—			86,699
Other assets		1,711			4,275			—			5,986

	$	402,326		$	164,962		$	(123,314	)	$	443,974

Liabilities and Stockholder’s Equity
Current liabilities:
Accounts payable	$	10,236		$	17,528		$	—		$	27,764
Net intercompany payable		—			111,947			(111,947	)		—
Accrued liabilities		16,040			9,908			—			25,948
Current portion of long-term debt		17,152			213			—			17,365

Total current liabilities		43,428			139,596			(111,947	)		71,077

Long-term debt and capital lease obligations		300,000			1,222			—			301,222
Deferred income taxes		19,945			8,189			—			28,134
Postretirement benefit obligations		5,269			—			—			5,269
Other liabilities		3,372			4,588			—			7,960
Stockholder’s equity		30,312			11,367			(11,367	)		30,312

	$	402,326		$	164,962		$	(123,314	)	$	443,974

Note 9 — Subsidiary Guarantors (continued)

Condensed Consolidating Statement of Operations
Three months ended June 30, 2008


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Net sales	$	71,606		$	84,875		$	(2,159	)	$	154,322
Cost of sales		56,379			78,525			(2,159	)		132,745

Gross profit		15,227			6,350			—			21,577

Selling, general and administrative expenses		4,848			4,039			—			8,887
Amortization of intangible assets		1,426			354			—			1,780
Gain on disposal of equipment		(22	)		(15	)		—			(37	)

Operating income		8,975			1,972			—			10,947

Net interest expense		(4,248	)		(4,212	)		—			(8,460	)

Income (loss) before income taxes and equity in loss of subsidiaries		4,727			(2,240	)		—			2,487
Income tax provision (benefit)		1,588			(1,476	)		—			112

		3,139			(764	)		—			2,375
Equity in loss of subsidiaries		(764	)		—			764			—

Net income (loss)	$	2,375		$	(764	)	$	764		$	2,375

Condensed Consolidating Statement of Operations
Three months ended June 30, 2007


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Net sales	$	58,062		$	70,426		$	(1,650	)	$	126,838
Cost of sales		41,745			64,031			(1,650	)		104,126

Gross profit		16,317			6,395			—			22,712

Selling, general and administrative expenses		5,541			4,895			—			10,436
Amortization of intangible assets		1,427			355			—			1,782
Loss (gain) on disposal of equipment		(2	)		44			—			42

Operating income		9,351			1,101			—			10,452

Net interest expense		(3,107	)		(4,107	)		—			(7,214	)


Income (loss) before income taxes and equity in loss of subsidiaries		6,244			(3,006	)		—			3,238
Income tax provision (benefit)		2,441			(1,167	)		—			1,274

		3,803			(1,839	)		—			1,964
Equity in loss of subsidiaries		(1,839	)		—			1,839			—

Net income (loss)	$	1,964		$	(1,839	)	$	1,839		$	1,964

Note 9 — Subsidiary Guarantors (continued)

Condensed Consolidating Statement of Operations
Nine months ended June 30, 2008


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Net sales	$	161,839		$	213,383		$	(5,017	)	$	370,205
Cost of sales		132,696			198,580			(5,017	)		326,259

Gross profit		29,143			14,803			—			43,946

Selling, general and administrative expenses		14,595			12,192			—			26,787
Restructuring costs		885			342			—			1,227
Amortization of intangible assets		4,279			1,063			—			5,342
Gain on disposal of equipment		(24	)		(32	)		—			(56	)

Operating income		9,408			1,238			—			10,646

Net interest expense		(11,179	)		(12,653	)		—			(23,832	)

Loss before income taxes and equity in loss of subsidiaries		(1,771	)		(11,415	)		—			(13,186	)
Income tax benefit		(739	)		(4,762	)		—			(5,501	)

		(1,032	)		(6,653	)		—			(7,685	)
Equity in loss of subsidiaries		(6,653	)		—			6,653			—

Net loss	$	(7,685	)	$	(6,653	)	$	6,653		$	(7,685	)

Condensed Consolidating Statement of Operations
Nine months ended June 30, 2007


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Net sales	$	158,076		$	202,550		$	(4,657	)	$	355,969
Cost of sales		120,861			187,370			(4,657	)		303,574

Gross profit		37,215			15,180			—			52,395

Selling, general and administrative expenses		14,162			13,703			—			27,865
Amortization of intangible assets		4,279			1,063			—			5,342
Gain on disposal of equipment		(13	)		(9	)		—			(22	)

Operating income		18,787			423			—			19,210

Net interest expense		(10,134	)		(12,335	)		—			(22,469	)
Debt refinancing costs		(20,429	)		—			—			(20,429	)


Loss before income taxes and equity in loss of subsidiaries		(11,776	)		(11,912	)		—			(23,688	)
Income tax benefit		(4,582	)		(4,637	)		—			(9,219	)

		(7,194	)		(7,275	)		—			(14,469	)
Equity in loss of subsidiaries		(7,275	)		—			7,275			—

Net loss	$	(14,469	)	$	(7,275	)	$	7,275		$	(14,469	)

Note 9 — Subsidiary Guarantors (continued)

Condensed Consolidating Statement of Cash Flows
Nine months ended June 30, 2008


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Operating activities
Net loss	$	(7,685	)	$	(6,653	)	$	6,653		$	(7,685	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,284			9,468			—			17,752
Amortization of deferred financing costs and discount on notes		343			—			—			343
Stock-based compensation		250			—			—			250
Changes in operating assets and liabilities		(20,603	)		(3,526	)		—			(24,129	)

Net cash used in operating activities		(19,411	)		(711	)		6,653			(13,469	)

Investing activities
Investments in and advances to subsidiaries		(6,500	)		13,153			(6,653	)		—
Purchase of property, plant and equipment		(22,523	)		(13,150	)		—			(35,673	)

Net cash provided by (used in) investing activities		(29,023	)		3			(6,653	)		(35,673	)

Financing activities
Net change in revolver balance		49,299			—			—			49,299
Payments on long-term debt and capital lease obligations		—			(157	)		—			(157	)

Net cash provided by (used in) financing activities		49,299			(157	)		—			49,142


Increase (decrease) in cash		865			(865	)		—			—
Cash at beginning of period		969			(969	)		—			—

Cash at end of period	$	1,834		$	(1,834	)	$	—		$	—

Note 9 — Subsidiary Guarantors (continued)

Condensed Consolidating Statement of Cash Flows
Nine months ended June 30, 2007


				Subsidiary
	Neenah			Guarantors			Eliminations			Consolidated

Operating activities
Net loss	$	(14,469	)	$	(7,275	)	$	7,275		$	(14,469	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		6,934			8,451			—			15,385
Amortization of deferred financing costs and discount on notes		670			—			—			670
Write-off of deferred financing costs and discount on notes		7,512			—						7,512
Changes in operating assets and liabilities		(30,873	)		3,874			—			(26,999	)

Net cash provided by (used in) operating activities		(30,226	)		5,050			7,275			(17,901	)

Investing activities
Investments in and advances to subsidiaries		950			6,325			(7,275	)		—
Purchase of property, plant and equipment		(24,386	)		(8,929	)		—			(33,315	)

Net cash used in investing activities		(23,436	)		(2,604	)		(7,275	)		(33,315	)

Financing activities
Net change in revolver balance		(5,790	)		—						(5,790	)
Proceeds from long-term debt		300,000			—						300,000
Payments on long-term debt and capital lease obligations		(239,996	)		(145	)		—			(240,141	)
Debt issuance costs		(3,763	)		—			—			(3,763	)

Net cash provided by (used in) financing activities		50,451			(145	)		—			50,306


Increase (decrease) in cash		(3,211	)		2,301			—			(910	)
Cash at beginning of period		2,433			(1,523	)		—			910

Cash at end of period	$	(778	)	$	778		$	—		$	—

Note 10 — Segment Information


	Three months ended						Nine months ended
	June 30,						June 30,
	2008			2007			2008			2007
Revenues from external customers:
Castings	$	141,328		$	116,328		$	332,659		$	321,841
Forgings		11,100			8,548			31,309			28,011
Other		4,651			4,365			13,612			13,065
Elimination of intersegment revenues		(2,757	)		(2,403	)		(7,375	)		(6,948	)

	$	154,322		$	126,838		$	370,205		$	355,969


Net income (loss):
Castings	$	2,315		$	2,549		$	(8,091	)	$	(14,180	)
Forgings		(110	)		(585	)		8			(298	)
Other		155			(78	)		222			(226	)
Elimination of intersegment loss		15			78			176			235

	$	2,375		$	1,964		$	(7,685	)	$	(14,469	)


	June 30,			September 30,
	2008			2007
Total assets:
Castings	$	468,474		$	431,906
Forgings		23,445			19,015
Other		9,005			8,336
Elimination of intersegment assets		(17,781	)		(15,283	)

	$	483,143		$	443,974

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

As used in this report, except as the context otherwise requires, the terms “NEI,” “Company,” “we,” “our,” “ours,” and “us” refers to Neenah Enterprises, Inc. and its direct and indirect subsidiaries, collectively and individually, as appropriate from the context. Except as the context otherwise requires, “Neenah” refers to our indirect subsidiary, Neenah Foundry Company, and its wholly-owned subsidiaries.

In addition to historical information, this Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report include some “forward-looking statements” that involve risks and uncertainties that could cause our actual results to differ materially from those currently anticipated. Forward-looking statements give our current expectations or forecasts of future events. The words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are generally intended to identify forward-looking statements. Factors that could cause our results to differ materially from current expectations include material disruptions to the major industries we serve; continued price fluctuations in the scrap metal market; increases in price or interruptions in the availability of metallurgical coke; regulatory restrictions or requirements; developments affecting the valuation or prospects of the casting and forging industries generally or our business in particular; the outcome of legal proceedings in which we are involved; and other factors described or referenced in our Form 10-K for the year ended September 30, 2007 or subsequent SEC filings. You should not place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements after the date of this document.

Recent Developments

Steel Scrap Cost Increases. In recent months, we have experienced significant increases in the cost of steel scrap used in our manufacturing process. From December 2007 to July 2008, the cost of steel scrap (measured by quoted prices for shredded steel by Iron Age publication for the Chicago market) has risen $313 per ton, an increase of 112%. Of all the varying costs of raw materials, fluctuations in the cost of steel scrap impact our business the most. The cost for steel scrap is subject to market forces that are unpredictable and largely beyond our control, including demand by U.S. and international industries, freight costs and speculation. Although we have surcharge arrangements with our industrial customers that enable us to adjust industrial casting prices to reflect steel scrap cost fluctuations, these adjustments have historically lagged behind the current cost of steel scrap during periods of rapidly rising or falling steel scrap costs because these adjustments were generally based on average market costs for prior periods. We have made changes to our surcharge procedures with our industrial customers in an attempt to recover scrap cost increases on a more real time basis. We have historically recovered steel scrap cost increases for municipal products through periodic price increases. However, the recent increases in steel scrap costs have forced us to institute price increases coupled with a surcharge on our municipal casting products. Our ability to recover the steel scrap increases from our customers will determine the extent of the adverse effect they will have on our business, financial condition and results of operations.

New Mold Line. We have recently completed the installation phase of our $54 million capital project to replace a 40-year-old mold line at our Neenah facility. This new state-of-the-art mold line is expected to significantly enhance operating efficiencies, increase capacity and provide expanded molding capabilities for our municipal and industrial product lines. As of June 30, 2008, $45.3 million (excluding capitalized interest of $2.3 million) had been spent on the new mold line project with approximately $8.7 million remaining to be spent to complete the project. Start-up operations began on schedule during the quarter ended June 30, 2008 with mold counts currently running near projected capacity. The remaining components of the project include a tear down and salvage of the replaced mold line in August 2008, enhanced core-making capabilities, and the inclusion of ductile iron capacity by December 2008. Based on our current and projected level of operations, we anticipate that our operating cash flows and borrowings under the 2006 Credit Facility will be sufficient to fund this and other anticipated operational investments, including working capital and capital expenditure needs, over the remaining project timeframe. We expect to place the new mold line into service during the quarter ending September 30, 2008.

Increase of 2006 Credit Facility. On July 17, 2008, we received the consent and waiver of our existing lenders to increase the maximum amount of financing available under the 2006 Credit Facility (as defined in “Refinancing Transactions” below) from $100 million to $110 million. The increase occurred in accordance with the accordion feature in the 2006 Credit Facility.

Asset Purchase. On August 5, 2008, we purchased substantially all of the business and assets of Morgan’s Welding, Inc., a steel fabricator located in Pennsylvania, for a cash purchase price of $3.85 million plus the assumption of approximately $0.3 million of current liabilities, subject to a working capital adjustment. The purchase was financed through borrowings under our existing 2006 Credit Facility. This purchase is expected to significantly improve our ability to service customers in the municipal markets in the Northeastern United States.

Labor Agreement at Mercer. In June 2008, production employees at the Mercer facility agreed to a new four-year collective bargaining agreement. This new agreement expires in June 2012.

Labor Agreement at Dalton. In April 2008, production employees at the Dalton-Warsaw facility agreed to a new five-year collective bargaining agreement. This new agreement expires in April 2013.

Order for Abatement at Gregg Facility. Due to neighborhood complaints, we were operating the Gregg facility under the terms of an order for abatement with the California South Coast Air Quality Management District (SCAQMD). Despite being in compliance with federal and state emission laws, the order required us to comply with certain operating parameters in an effort to reduce odors. Failure to operate within such criteria could have resulted in the SCAQMD suspending operations at the Gregg facility. The order expired on September 20, 2007 and Gregg is continuing to negotiate settlements with the SCAQMD regarding outstanding notices of violation (NOV’s) for odor complaints. Gregg does not expect any issues in settling the NOV’s and is expecting to conclude negotiations in the near future. We believe we are in compliance with all other operating requirements and that our actions have resulted in a substantial reduction in the intensity and frequency of downwind odors.

Cost Reduction Actions. On November 16, 2007, we announced a restructuring plan intended to reduce costs and improve general operating efficiencies. The restructuring primarily consisted of salaried headcount reductions at the Company’s operating facilities. In connection with the restructuring plan, the Company incurred employee termination costs of approximately $1.2 million, on a pretax basis, which were recognized as a charge to operations during the first quarter of fiscal 2008.

Reverse Stock Split. On August 3, 2007, an amendment to NEI’s certificate of incorporation effected a 1-for-5 reverse stock split, among other things. All of the share and per share amounts in this filing have been retroactively restated to adjust for the reverse stock split.

Refinancing Transactions. On December 29, 2006, we repaid our outstanding indebtedness under Neenah’s then existing credit facility, repurchased all $133.1 million of Neenah’s outstanding 11% Senior Secured Notes due 2010 through an issuer tender offer, retired $75 million of Neenah’s outstanding 13% Senior Subordinated Notes due 2013 (the “13% Notes”) by exchanging them for $75 million of new 12 ¹/₂% Senior Subordinated Notes due 2013 (the “12 ¹/₂% Notes”) in a private transaction, and called for redemption all $25 million of Neenah’s 13% Notes that remained outstanding after the exchange for 12 ¹/₂% Notes. The remaining 13% Notes were redeemed on February 2, 2007. To fund these payments and to provide cash for our capital expenditures, ongoing working capital requirements and general corporate purposes, Neenah (a) issued $225 million of new 9 ¹/₂% Senior Secured Notes due 2017 (the “9 ¹/₂% Notes”) and the $75 million of 12 ¹/₂% Notes and (b) entered into an amended and restated credit facility (the “2006 Credit Facility”) providing for borrowings in an amount of up to $100 million. The 9 ¹/₂% Notes were initially issued in a private offering that was not registered under the Securities Act, and were subsequently registered pursuant to an exchange offer in which the unregistered notes were exchanged for freely transferable notes. That exchange offer was completed on April 18, 2007. We refer to these actions collectively as the “Refinancing Transactions.”

Results of Operations

The following discussions compare the results of operations of the Company for the three and nine months ended June 30, 2008, to the results of the operations of the Company for the three and nine months ended June 30, 2007.

Three months ended June 30, 2008 and 2007

Net sales. Net sales for the three months ended June 30, 2008 were $154.3 million, which were $27.5 million or 21.7% higher than the quarter ended June 30, 2007. The increase was due an increase in volume of 7.5% with the remainder of the increase due to surcharge and price increases as a result of the pass through of higher metal costs to the customer. Sales of heavy-duty truck products were up approximately $9.8 million in the third quarter of fiscal 2008 from the third quarter of fiscal 2007. Sales of municipal products were up approximately $6.1 million in the third quarter of fiscal 2008 from the third quarter of fiscal 2007. Sales to heating, ventilation and air conditioning (HVAC) customers were up approximately $4.9 million in the third quarter of fiscal 2008 from the third quarter of fiscal 2007. Sales to the construction and agriculture equipment market were up approximately $4.2 million in the third quarter of fiscal 2008 from the third quarter of fiscal 2007. Sales to other markets were up approximately $2.4 million in the third quarter of fiscal 2008 from the third quarter of fiscal 2007.

Cost of sales. Cost of sales for the three months ended June 30, 2008 were $132.7 million, an increase of $28.6 million, or 27.5%, as compared to the quarter ended June 30, 2007. Cost of sales as a percentage of net sales increased to 86.0% for the three months ended June 30, 2008 from 82.1% for the three months ended June 30, 2007, primarily as a result of an approximately 69% increase in raw material unit costs, principally in the price of steel scrap.

Gross profit. Gross profit for the three months ended June 30, 2008 was $21.6 million, a decrease of $1.1 million, or 4.8%, as compared to the quarter ended June 30, 2007. Gross profit as a percentage of net sales decreased to 14.0% for the three months ended June 30, 2008 from 17.9% for the three months ended June 30, 2007, primarily as a result of the increased raw material costs.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended June 30, 2008 were $8.9 million, a decrease of $1.5 million, or 14.4%, as compared to the $10.4 million for the quarter ended June 30, 2007. Selling, general and administrative expenses as a percentage of net sales decreased to 5.8% for the quarter ended June 30, 2008 from 8.2% for the quarter ended June 30, 2007. The decrease was due to lower legal and professional fees, as we incurred substantial fees in the prior year related to the registration of NEI common stock under Section 12(g) of the Securities Exchange Act of 1934 and the quotation of the shares on the OTC Bulletin Board and other corporate initiatives.

Amortization of intangible assets. Amortization of intangible assets was $1.8 million for the three months ended June 30, 2008 and 2007.

Operating income. Operating income was $10.9 million for the three months ended June 30, 2008, an increase of $0.4 million from operating income of $10.5 million for the quarter ended June 30, 2007. As a percentage of net sales, the operating income decreased to 7.1% for the three months ended June 30, 2008 from operating income of 8.3% for the three months ended June 30, 2007. The increase in operating income was primarily due to reduced selling, general and administrative expenses partially offset by the increase in raw materials costs.

Net interest expense. Net interest expense was $8.5 million for the three months ended June 30, 2008 compared to $7.2 million for the quarter ended June 30, 2007. The increase in interest expense was the result of the increased level of borrowing on the revolving line of credit.

Income tax provision. The effective tax rate for the three months ended June 30, 2008 and 2007 was 4.5% and 39.3%, respectively. The decrease in the effective tax rate is primarily due to the reversal of reserves for tax contingencies which are no longer required due to completion of an IRS examination in the third quarter of fiscal 2008.

Nine months ended June 30, 2008 and 2007

Net sales. Net sales for the nine months ended June 30, 2008 were $370.2 million, which were $14.2 million or 4.0% higher than the nine months ended June 30, 2007. Sales volume was down 6.8% but was offset by surcharge and price increases as a result of the pass through of higher metal costs to the customer. Sales to the construction and agriculture equipment market were up approximately $18.0 million for the nine months ended June 30, 2008 compared to the nine months ended June 30, 2007. Sales to the HVAC market were up approximately $6.9 million for the nine months ended June 30, 2008 compared to the nine months ended June 30, 2007. Due to new emission standards that took effect January 1, 2007, heavy-duty truck production declined significantly in calendar year 2007 (which includes the first quarter of our fiscal year 2008), as many buyers of heavy-duty trucks accelerated purchases into calendar year 2006, artificially increasing our sales to customers in the heavy-duty truck market in calendar year 2006 (which includes the first quarter of our fiscal year 2007). As a result of this and slower than expected recovery of the heavy-duty truck market, sales of heavy-duty truck products were down approximately $14.3 million for the nine months ended June 30, 2008 compared to the nine months ended June 30, 2007. Sales to other markets were up approximately $3.6 million for the nine months ended June 30, 2008 compared to the nine months ended June 30, 2007.

Cost of sales. Cost of sales for the nine months ended June 30, 2008 were $326.3 million, an increase of $22.7 million, or 7.5%, as compared to the nine months ended June 30, 2007. Cost of sales as a percentage of net sales increased to 88.1% for the nine months ended June 30, 2008 from 85.3% for the nine months ended June 30, 2007, primarily as a result of an approximately 40% increase in raw material unit costs, principally in the price of steel scrap, and the inability to spread fixed manufacturing costs over additional inventory due to lower production levels.

Gross profit. Gross profit for the nine months ended June 30, 2008 was $43.9 million, a decrease of $8.5 million, or 16.2%, as compared to the nine months ended June 30, 2007. Gross profit as a percentage of net sales decreased to 11.9% for the nine months ended June 30, 2008 from 14.7% for the nine months ended June 30, 2007, primarily as a result of the increased raw material costs and a decreased ability to absorb fixed costs due to lower production levels as discussed above.

Selling, general and administrative expenses. Selling, general and administrative expenses for the nine months ended June 30, 2008 were $26.8 million, a decrease of $1.1 million, or 3.9%, as compared to the $27.9 million for the nine months ended June 30, 2007. Selling, general and administrative expenses as a percentage of net sales decreased to 7.2% for the nine months ended June 30, 2008 from 7.8% for the nine months ended June 30, 2007. The decrease was due to lower legal and professional fees, as we incurred substantial fees in the prior year related to our public stock listing and other corporate initiatives.

Restructuring costs. The Company recorded $1.2 million of restructuring costs during the nine months ended June 30, 2008. These costs consisted of employee termination costs incurred as a result of salaried headcount reductions at the Company’s operating facilities.

Amortization of intangible assets. Amortization of intangible assets was $5.3 million for the nine months ended June 30, 2008 and 2007.

Operating income. Operating income was $10.6 million for the nine months ended June 30, 2008, a decrease of $8.6 million from operating income of $19.2 million for the nine months ended June 30, 2007. As a percentage of net sales, operating income decreased to 2.9% for the nine months ended June 30, 2008 from 5.4% for the nine months ended June 30, 2007. The decrease in operating income was due to the reduced production volume, the increase in raw materials costs and employee termination costs.

Net interest expense. Net interest expense was $23.8 million for the nine months ended June 30, 2008 compared to $22.5 million for the nine months ended June 30, 2007. The increase in interest expense was the result of the increased level of borrowing on the revolving line of credit.

Debt Refinancing Costs. The Company recorded $20.4 million of debt refinancing costs during the nine months ended June 30, 2007 related to the Refinancing Transactions discussed in “Recent Developments”. This amount consisted of a $12.9 million tender premium paid to repurchase Neenah’s 11% Senior Secured Notes due 2010, $5.9 million to write off the unamortized discount on Neenah’s 11% Senior Secured Notes and $1.6 million to write off the unamortized deferred financing costs on Neenah’s indebtedness existing prior to the refinancing.

Income tax provision. The effective tax rate for the nine months ended June 30, 2008 and 2007 was 41.7% and 38.9%, respectively. The increase in the effective tax rate is primarily due to the reversal of reserves for tax contingencies which are no longer required due to completion of an IRS examination in the third quarter of fiscal 2008.

Liquidity and Capital Resources

As of June 30, 2008, our outstanding indebtedness consisted of Neenah’s $225.0 million of outstanding 9¹/₂% Notes, $1.3 million of capital lease obligations, Neenah’s $75.0 million of outstanding 12¹/₂% Notes, and $66.5 million of borrowings outstanding under Neenah’s 2006 Credit Facility. Our primary sources of liquidity in the future will be cash flow from operations and borrowings under Neenah’s 2006 Credit Facility. We expect that ongoing requirements for debt service, capital expenditures, including the remaining expenditures for Neenah’s new mold line, and other operating needs will be funded from these sources of funds.

2006 Credit Facility. The 2006 Credit Facility provides for borrowings in an amount up to $100.0 million and includes a provision permitting us from time to time to request increases (subject to the lenders’ consent) in the aggregate amount by up to $10.0 million with the increases to be funded through additional commitments from existing lenders or new commitments from financial institutions acceptable to the current lenders. In July, 2008 we requested an additional $10.0 million of availability based on this provision, which was funded through additional commitments from existing lenders, increasing the maximum amount available to $110 million. The 2006 Credit Facility matures on December 31, 2011. Outstanding borrowings bear interest at rates based on the lenders’ Base Rate, as defined, or, if Neenah so elects, at an adjusted rate based on LIBOR. Availability under the 2006 Credit Facility is subject to customary conditions and is limited by our borrowing base determined by the amount of our accounts receivable, inventories and casting patterns and core boxes. Amounts under the 2006 Credit Facility may be borrowed, repaid and reborrowed subject to the terms of the facility.

Most of Neenah’s wholly owned subsidiaries are co-borrowers under the 2006 Credit Facility and are jointly and severally liable with Neenah for all obligations under the 2006 Credit Facility, subject to customary exceptions for transactions of this type. In addition, NFC Castings, Inc. (“NFC”), NEI’s immediate subsidiary, and Neenah’s remaining wholly owned subsidiaries jointly, fully, severally and unconditionally guarantee the borrowers’ obligations under the 2006 Credit Facility, subject to customary exceptions for transactions of this type. The borrowers’ and guarantors’ obligations under the 2006 Credit Facility are secured by first priority liens, subject to customary restrictions, in Neenah’s and the guarantors’ accounts receivable, inventories, casting patterns and core boxes, business interruption insurance policies, certain inter-company loans, cash and deposit accounts and related assets, subject to certain exceptions, and any proceeds of the foregoing, and by second priority liens (junior to the liens securing the 9¹/₂% Notes) on substantially all of our and the guarantors’ remaining assets. The 9¹/₂% Notes discussed below, and the guarantees in respect thereof, are equal in right of payment to the 2006 Credit Facility, and the guarantees in respect thereof.

The 2006 Credit Facility requires Neenah to prepay outstanding principal amounts upon certain asset sales, upon certain equity offerings, and under certain other circumstances. It also requires us to observe certain customary conditions, affirmative covenants and negative covenants including financial covenants and it requires us to maintain a specified minimum interest coverage ratio or specified fixed charge coverage ratio whenever our unused availability is less than $15.0 million. At June 30, 2008, we had $66.5 million outstanding under the 2006 Credit Facility and had unused availability of $33.5 million. At June 30, 2008, we were in compliance with applicable bank covenants.

Non-compliance with the covenants could result in the requirement to immediately repay all amounts outstanding under the 2006 Credit Facility which could have a material adverse effect on our results of operations, financial position and cash flow. The 2006 Credit Facility also contains events of default customary for these types of facilities, including, without limitation, payment defaults, material misrepresentations, covenant defaults, bankruptcy and certain changes of ownership or control of NEI, Neenah, or NFC. We are prohibited from paying dividends, with certain limited exceptions, and are restricted to a maximum yearly stock repurchase of $1.0 million.

9¹/₂% Notes. The $225.0 million of outstanding 9¹/₂% Notes will mature on January 1, 2017. The 9¹/₂% Notes are fully and unconditionally guaranteed by Neenah’s existing and certain future direct and indirect wholly-owned domestic restricted subsidiaries. The 9¹/₂% Notes and the guarantees are secured by first-priority liens on substantially all of Neenah’s and the guarantors’ assets (other than accounts receivable, inventory, casting patterns and core boxes, business interruption insurance policies, certain inter-company loans, cash and deposit accounts and related assets, subject to certain exceptions, and any proceeds of the foregoing) and by second-priority liens, junior to the liens for the benefit of the lenders under the 2006 Credit Facility, on Neenah’s and the guarantors’ accounts receivable, inventories, casting patterns and core boxes, business interruption insurance policies, certain inter-company loans, cash and deposit accounts and related assets, subject to certain exceptions, and any proceeds of the foregoing. Interest on the 9¹/₂% Notes is payable on a semi-annual basis. Subject to the restrictions in the 2006 Credit Facility, the 9¹/₂% Notes are redeemable at our option in whole or in part at any time on or after January 1, 2012, at the redemption price specified in the indenture governing the 9¹/₂% Notes (104.750% of the principal amount redeemed beginning January 1, 2012, 103.167% beginning January 1, 2013, 101.583% beginning January 1, 2014 and 100.000% beginning January 1, 2015 and thereafter), plus accrued and unpaid interest up to the redemption date. Subject to certain conditions, until January 1, 2010, we also have the right to redeem up to 35% of the 9¹/₂% Notes with the proceeds of one or more equity offerings at a redemption price equal to 109.500% of the face amount thereof plus accrued and unpaid interest. Upon the occurrence of a “change of control” as defined in the indenture governing the notes, Neenah is required to make an offer to purchase the 9¹/₂% Notes at 101.000% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The 9¹/₂% Notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments, (3) liens, (4) distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The 9¹/₂% 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.

12¹/₂% Notes. The $75.0 million of Neenah’s outstanding 12¹/₂% Notes will mature on September 30, 2013. The 12¹/₂% Notes were issued to Tontine Capital Partners, L.P. (“TCP”) in exchange for an equal principal amount of Neenah’s 13% Notes that were then held by TCP. The obligations under the 12¹/₂% Notes are senior to Neenah’s subordinated unsecured indebtedness, if any, and are subordinate to the 2006 Credit Facility and the 9¹/₂% Notes. Interest on the 12¹/₂% Notes is payable on a semi-annual basis. Not less than five percent (500 basis points) of the interest on the 12¹/₂% Notes must be paid in cash and the remainder (up to 7¹/₂% or 750 basis points) of the interest may be deferred at our option. We must pay interest on any interest so deferred at a rate of 12¹/₂% per annum. Neenah’s obligations under the 12¹/₂% Notes are guaranteed on an unsecured basis by each of Neenah’s wholly owned subsidiaries. Subject to the restrictions in the 2006 Credit Facility and in the indenture for the 9¹/₂% Notes, the 12¹/₂% 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 100.000% of the principal amount thereof, plus accrued and unpaid interest up to the redemption date. Upon the occurrence of a “change of control,” Neenah is required to make an offer to purchase the 12¹/₂% Notes at 101.000% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The 12¹/₂% Notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments, (3) liens, (4) distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The 12¹/₂% 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.

Under the capital structure resulting from the Refinancing Transactions, we currently have no principal amortization requirements. We have been using cash flow from operations and a portion of our unused availability under the 2006 Credit Facility to fund the new mold line described above under “Recent Developments.”

For the nine months ended June 30, 2008 and June 30, 2007, capital expenditures were $35.7 million and $33.3 million, respectively. The increased level of capital expenditures for the nine months ended June 30, 2008 includes $18.3 million (including capitalized interest of $1.2 million) for the new mold line at the Neenah location described above under “Recent Developments.” Capital expenditures for the nine months ended June 30, 2007 included $19.7 million (including capitalized interest of $1.4 million) for the new mold line at the Neenah location.

Our primary sources of liquidity are cash flow from operations and borrowings under Neenah’s 2006 Credit Facility. At June 30, 2008, we had $66.5 million outstanding under the 2006 Credit Facility and had unused availability of $33.5 million. As noted above, in July 2008 our maximum availability under the 2006 Credit Facility was increased by $10 million. Net cash used in operating activities during the nine months ended June 30, 2008 was $13.5 million, a decrease of $4.4 million from net cash of $17.9 million used in operating activities during the nine months ended June 30, 2007. The decrease in cash used in operating activities was primarily due to $12.9 million paid in the quarter ended December 31, 2006 for the tender premium to repurchase Neenah’s 11% Senior Secured Notes and due to changes in working capital balances. Operating cash flows for the nine months ended June 30, 2008 are not necessarily indicative of the operating cash flows that may be expected for the remainder of fiscal 2008, due to the seasonality of our business.

Future Capital Needs. We are significantly leveraged. Our ability to meet debt obligations will depend upon future operating performance which will be affected by many factors, some of which are beyond our control. We are nearing completion of a major capital project to replace an existing mold line that is expected to enhance efficiency, increase capacity and provide expanded molding capabilities. Based on our current level of operations, we anticipate that our operating cash flows and borrowings under the 2006 Credit Facility will be sufficient to fund 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 if we are unable to maintain ongoing compliance with applicable 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.

Off-Balance Sheet Arrangements

None.

Contractual Obligations

The following table includes the Company’s significant contractual obligations at June 30, 2008 (in millions):


			Less Than						More Than
	Total		1 year		1-3 Years		3-5 Years		5 Years
Long-term debt	$	300.0	$	—	$	—	$	—	$	300.0
Interest on long-term debt		231.0		30.8		61.5		61.5		77.2
Revolving line of credit		66.5		66.5		—		—		—
Interest and fees on revolving line of credit		3.3		3.3		—		—		—
Capital leases		1.3		0.2		0.4		0.4		0.3
Operating leases		5.2		1.9		2.3		0.8		0.2
New mold line commitments		8.7		8.7		—		—		—

Total contractual obligations	$	616.0	$	111.4	$	64.2	$	62.7	$	377.7

As of June 30, 2008, the Company had no material purchase obligations other than those arising in the ordinary course of business related to inventories 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 included in our Annual Report on Form 10-K for the year ended September 30, 2007. For the nine months ended June 30, 2008, $1.6 million of contributions have been made to the Company’s pension plans. The Company presently anticipates contributing an additional $0.5 million to fund its pension plans in fiscal 2008 for a total of $2.1 million. Post-retirement medical claims are paid as they are submitted and are anticipated to be $0.5 million in fiscal 2008. As of June 30, 2008, the Company’s expected payment for significant contractual obligations excludes approximately $1.1 million of liabilities for unrecognized tax benefits associated with the adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” The Company cannot make a reasonably reliable estimate of the period of potential cash settlement for these liabilities for unrecognized tax benefits.

Critical Accounting Estimates

There have been no changes in critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2007.

Accounting Changes

The Company adopted provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” and FASB Staff Position No. AUG AIR-1, “Accounting for Planned Major Maintenance Activities” on October 1, 2007. See Note 2 to the Notes to Unaudited Consolidated Condensed Financial Statements in this Form 10-Q for information regarding these accounting changes.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk related to changes in interest rates. We do not use derivative financial instruments for speculative or trading purposes.

Interest Rate Sensitivity. Although the 9¹/₂% Notes and the 12¹/₂% Notes are subject to fixed interest rates, the Company’s earnings are affected by changes in short-term interest rates as a result of its borrowings under the 2006 Credit Facility. As of June 30, 2008, the Company had $66.5 million outstanding under the 2006 Credit Facility. If market interest rates for such borrowings change by 1% during the remainder of the fiscal year ending September 30, 2008, the Company’s interest expense would increase or decrease by approximately $0.1 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 4. Controls and Procedures

Disclosure Control and Procedures. NEI’s and Neenah’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of NEI’s and Neenah’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, NEI’s and Neenah’s disclosure controls and procedures are effective (i) in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by NEI and Neenah in the reports that NEI and Neenah file or submit under the Exchange Act and (ii) to ensure that information required to be disclosed in the reports that NEI and Neenah file or submit under the Exchange Act is accumulated and communicated to NEI’s and Neenah’s management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting. There have not been any changes in NEI’s and Neenah’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 fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, NEI’s and Neenah’s internal control over financial reporting.

NEENAH ENTERPRISES, INC.
NEENAH FOUNDRY COMPANY

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The following should be read in conjunction with Item 3. “Legal Proceedings” in Part I of our 2007 Annual Report on Form 10-K and Item 1. “Legal Proceedings” in Part II of our Quarterly Reports on Form 10-Q for the quarters ended December 31, 2007 and March 31, 2008.

See “Recent Developments—Order for Abatement at Gregg Facility” under Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I of this report, which is incorporated herein by reference.

Item 6. Exhibits

(a) Exhibits

See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


	NEENAH ENTERPRISES, INC. NEENAH FOUNDRY COMPANY
DATE: August 13, 2008	/s/ Jeffrey S. Jenkins
	Jeffrey S. Jenkins
	Corporate Vice President — Finance and Interim Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)

Exhibit Index
to
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2008


Exhibit No.	Description	Incorporated Herein by Reference to	Filed Herewith
10.1	Increase Notice dated July 17, 2008, pursuant to Amended and Restated Loan and Security Agreement, as amended	Exhibit 10.1 to Neenah Enterprises, Inc.’s Current Report on Form 8-K dated July 17, 2008

10.2	Consulting Agreement — Gary LaChey	Exhibit 10.1 to Neenah Enterprises, Inc.’s Current Report on Form 8-K dated May 14, 2008

10.3	Amended and Restated Employment Agreement — Robert E. Ostendorf, Jr.	Exhibit 10.2 to Neenah Enterprises, Inc.’s Current Report on Form 8-K dated May 14, 2008

10.4	Amended and Restated Employment Agreement — John H. Andrews	Exhibit 10.3 to Neenah Enterprises, Inc.’s Current Report on Form 8-K dated May 14, 2008

10.5	Employment Agreement — Jeffrey S. Jenkins	Exhibit 10.4 to Neenah Enterprises, Inc.’s Current Report on Form 8-K dated May 14, 2008

10.6	Amended and Restated Employment Agreement — Frank Headington		X

10.7	Amended and Restated 2003 Severance and Change of Control Plan	Exhibit 10.5 to Neenah Enterprises, Inc.’s Current Report on Form 8-K dated May 14, 2008

31.1	Certification of Chief Executive Officer of Neenah Enterprises, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X

31.2	Certification of Chief Financial Officer of Neenah Enterprises, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X

31.3	Certification of Chief Executive Officer of Neenah Foundry Company pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X

31.4	Certification of Chief Financial Officer of Neenah Foundry Company pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X

32.1	Certification of Chief Executive Officer and Chief Financial Officer of Neenah Enterprises, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		X

32.2	Certification of Chief Executive Officer and Chief Financial Officer of Neenah Foundry Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		X

EX-10.6 2 c34851exv10w6.htm EX-10.6 exv10w6

Exhibit 10.6

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement” or the “Employment Agreement”) is by and among Neenah Foundry Company, a Wisconsin corporation (“Employer”), Neenah Enterprises, Inc. (formerly ACP Holding Company), a Delaware corporation (“NEI”), and Frank C. Headington (“Executive”) and amends and restates the Employment Agreement and Restricted Stock Grant dated October 8, 2003 among the same parties.

WITNESSETH:

WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer’s business;

WHEREAS, the Employer desires to enter into this Employment Agreement with Executive, and Executive is willing to enter into this Employment Agreement with Employer upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, intending to be legally bound, Employer agrees to employ Executive, and Executive hereby agrees to be employed by Employer, upon the following terms and conditions:

ARTICLE I
EMPLOYMENT

1.01 Position. Employer hereby agrees to employ Executive as Employer’s Corporate Vice President — Technology, and Executive hereby agrees to such employment and will devote such Executive’s full business time and attention to the business and affairs of the Company Group and the performance of Executive’s duties in such capacity and such other duties as may be assigned to Executive from time to time by and under the supervision and direction of the board of directors of Employer (the “Board”), or its designated representative.

1.02 Term. The period from the Effective Date until the Executive’s Termination Date is referred to herein as the “Employment Period.”

1.03 Cash Compensation. During the Employment Period, Executive will receive a minimum base salary of $171,818.00 per year (as adjusted from time to time, the “Base Salary”). The Base Salary shall be paid by Employer in regular installments in accordance with Employer’s general payroll practices (as in effect from time to time) and shall be subject to customary withholding. The Base Salary may be increased (but not decreased) at any time and from time to time by action of the Board or any committee thereof having authority to take such action. In addition to the Base Salary, Executive shall be eligible to receive an annual bonus determined in accordance with the annual incentive plan of the Company Group as in effect from time to time. The amount of Executive’s bonus will be based on Executive’s performance and the performance of the Consolidated Company versus predetermined initial goals established by

the Compensation Committee of the Board. Executive’s performance goals would be similar to those of other senior executives of the Consolidated Company.

1.04 Executive Benefits. During the Employment Period, the coverages and benefits provided to Executive pursuant to employee benefit plans, policies, programs or arrangements maintained by Employer or any other member of the Consolidated Company shall be no less favorable than the plans, policies, programs and arrangements provided to other senior executives of the Consolidated Company. Employer and each other member of the Company Group shall give Executive full credit for such Executive’s service with the Company Group for purposes of eligibility and benefit accrual (except to the extent that benefits would be duplicated) and determination of the level of benefits under any employee benefit plans, policies, programs or arrangements maintained by Employer or any member of the Company Group to the same extent recognized by the Company Group immediately prior to the Effective Date.

1.05 Reimbursement. Employer shall reimburse Executive for all reasonable expenses incurred by Executive in the course of performing Executive’s duties under this Agreement that are consistent with the policies of Employer in effect from time to time with respect to travel, entertainment and other business expenses, subject to the requirements of Employer with respect to reporting and documentation of such expenses. All reimbursement requests must be submitted within 6 months of Executive’s Termination Date and will be paid within 12 months of Executive’s Termination Date.

1.06 Severance Plan. If the Employment Period is terminated, Executive shall receive the severance payments and benefits to which Executive is entitled pursuant to the Severance Plan (as defined below). Executive represents and certifies that Executive has carefully reviewed this Agreement and the Company’s Amended and Restated 2003 Severance and Change of Control Plan (the “Severance Plan”), a copy of which is attached as Exhibit A hereto. For purposes of Section 4(a) of the Severance Plan, “Payout Period” will be 1.88 years and “Severance Multiple” will be 1.88, and for purposes of Section 4(b) of the Severance Plan, “Change of Control Multiple” will be 1.88. However, in order for the Executive to receive the “Severance Payments” and benefits or “Change of Control Payment” and benefits outlined in this Section 1.06 and the Severance Plan, the Executive will be required to execute, return in a timely manner, and not revoke a full and final release of all claims in a manner and form substantially similar to the Full and Final Release of Claims which is attached hereto as Exhibit B.

ARTICLE II
EQUITY COMPENSATION

2.01 Equity Incentive Plan Grants. Executive shall be eligible to participate in and receive grants under the equity incentive plan of the Company Group as in effect from time to time (the “Equity Incentive Plan”), if and to the extent so selected to participate by the committee of the Board administering the Equity Incentive Plan.

2.02 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the shares of NEI Common Stock received pursuant to the Equity Incentive Plan may or may not have not been registered pursuant to the Securities Act or the securities laws of any

state and may not be sold or transferred in the absence of an effective registration statement or an exemption from registration thereunder.

2.03 Excise Payments. If the Employment Period is terminated by the Consolidated Company other than for Cause or if Executive resigns for Good Reason, in each case, in connection with a Change of Control, Executive shall receive payment of an additional amount (the “Gross-Up Amount”) such that the net amount retained by the Executive, after payment of (a) any excise taxes due on the payment under Section 4999 of the Code or any corresponding or applicable state law provision (“Excise Taxes”) and (b) any federal, state or local income tax and any Excise Taxes due in respect of the Gross-Up Amount, shall equal that payment. Any Gross-Up Amount paid under this Agreement shall be in addition to, but not in duplication of, any Gross-Up Amount as defined in and paid under the Severance Plan. Notwithstanding the foregoing or anything in the Severance Plan, Executive shall not receive a payment pursuant to this paragraph or pursuant to the comparable provisions in the Severance Plan if the payments to the Executive which are considered Parachute Payments (as defined in Code Section 280G) do not exceed 330% of Executive’s Base Amount (as defined in Code Section 280G), and in such event the cash payments to the Executive pursuant to the Severance Plan shall be reduced so that the payments to the Executive which are considered Parachute Payments do not exceed 299% of the Executive’s Base Amount. The Gross-Up Amount shall be paid 30 days after Executive’s Termination Date if NEI Common Stock is not publicly tradable on an established securities market and 6 months after Executive’s Termination Date if NEI Common Stock is publicly tradable on an established securities market.

ARTICLE III
CONFIDENTIALITY PROVISIONS

3.01 Confidential Information. Executive acknowledges that the information and data obtained by Executive during his relationship with Employer concerning the business or affairs of Employer (“Confidential Information”) are the property of Employer. Therefore, Executive agrees that, except as required by law or court order, Executive shall not during the “Employment Period” and during the Restricted Period (defined below) and for an additional five (5) years following the Restricted Period, disclose to any unauthorized person or use for Executive’s own account any Confidential Information without the prior written consent of the Board, unless and to the extent that the aforementioned matters become generally known to and available for use by the public other than as a result of Executive’s acts or omissions to act. Executive shall deliver to Employer upon Executive’s resignation as an employee of Employer or removal from such position, or at any other time Employer may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) relating to the Confidential Information and the business of the Consolidated Company that Executive may then possess or have under Executive’s control.

ARTICLE IV
COVENANTS

4.01 Duties. Executive agrees to be a loyal employee of the Employer. Executive agrees to devote his best efforts full-time to the performance of his duties for Employer, and to give proper time and attention to furthering Employer’s business; provided, however, that the

Executive may (i) with the Employer’s consent which shall not be unreasonably withheld, serve on industry, trade, civic or charitable boards or committees, or (ii) manage personal investments, as long as such activities do not interfere with the performance of the Executive’s duties and responsibilities hereunder.

4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Consolidated Company is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and iron casting components for the heavy duty truck non-engine drive train and HVAC compressor markets, as well as engine blocks and heads for the automotive market (collectively, the “Company Business”); (ii) the Company Business is national in scope; (iii) Executive’s work for Employer and the Consolidated Company has given and will continue to give him access to the confidential affairs and proprietary information of the Consolidated Company (collectively, “Confidential Company Information”); (iv) the continued success of the Consolidated Company depends in large part on keeping this information from becoming known to its competitors; and (v) each of NEI and Employer would not have entered into this Agreement but for the covenants and agreements set forth in this Article IV. Accordingly, Executive covenants and agrees that:

(a) During the period commencing on the date hereof and ending on the first anniversary following the Employment Period (the “Restricted Period”), Executive shall not in the United States of America, directly or indirectly, own, operate, manage, control, participate in, consult with, advise, or otherwise engage (including by himself, in association with any Person, or through any Person) (i) in the Company Business; (ii) in any business that otherwise competes with Employer or any other member of the Consolidated Company as such businesses exist or are in process on the date of the termination of the Employment Period; or (iii) become interested in any such Person (other than Employer) as a partner, shareholder, principal, agent, consultant or in any other relationship or capacity; provided, that Executive may own, directly or indirectly, solely as an investment, securities of any such Person that are traded on any national securities exchange if Executive (A) is not a controlling person of, or a member of a group that controls, such Person, (B) does not, directly or indirectly, own five percent (5%) or more of any class of securities of such Person and (C) has no active participation in the business of such Person.

(b) Executive agrees that, except as required by law or court order, during the Employment Period and during the Restricted Period and for an additional five (5) years following the Restricted Period, Executive shall keep secret and retain in strictest confidence, and shall not use for his benefit or the benefit of others, except in connection with the business and affairs of Employer and any other member of the Consolidated Company, all Confidential Company Information including, without limitation, information with respect to (i) prospective facilities, (ii) sales figures, (iii) profit or loss figures, and (iv) customers, clients, suppliers, sources of supply and customer lists and shall not disclose such Confidential Company Information to anyone outside of the Consolidated Company except with the express written consent of the Board and except for Confidential Company Information that is at the time of receipt or thereafter becomes publicly known through no wrongful act of the Executive. Executive shall deliver to Employer at the termination of the Employment Period, or at any other time Employer may request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies thereof) relating to the

Confidential Company Information, Work Product (as defined below) or the business of Employer or any other member of the Consolidated Company that he may then possess or have under his control.

(c) During the Restricted Period, Executive shall not, without the prior written consent of the Board, directly or indirectly, (i) induce or attempt to induce any employee of Employer or any other member of the Consolidated Company to leave the employ of Employer or such member of the Consolidated Company, or in any way interfere with the relationship between Employer or any other member of the Consolidated Company and any employee thereof, or (ii) induce or attempt to induce any customer, supplier, licensee, licensor, franchisee or other business relation of Employer or any other member of the Consolidated Company to cease doing business with Employer or any member of the Consolidated Company, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and Employer or any other member of the Consolidated Company (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Consolidated Company).

(d) All inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, characters, props, molds and all similar or related information (whether or not patentable) that relate to Employer’s or any other member of the Consolidated Company actual or anticipated business, research and development or existing or future products or services and that are first conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Consolidated Company (collectively, “Work Product”) belong to Employer or any other member of the Consolidated Company. Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments) at Employer’s expense. Executive acknowledges and agrees that upon termination of the Employment Period, or at the request of the Board from time to time, Executive shall deliver all Work Product in his possession to Employer.

4.03 Nondisparagement. Employer shall instruct the directors, officers, agents and representatives of members of the Company Group to not make (orally or in writing) disparaging remarks about Executive. Executive shall not make (orally or in writing) disparaging remarks about any member of the Company Group or their directors and officers.

ARTICLE V
CERTAIN DEFINITIONS

“Affiliate” means, in respect of any Person, any other Person who, directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person. For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”) when used in respect of any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract, or otherwise.

“Base Salary” has the meaning given to such term in Section 1.03 hereof.

“Board” has the meaning given to such term in Section 1.01 hereof.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Wisconsin or is a day on which the banking institutions located in Wisconsin are closed.

“Cause” means, with respect to Executive, the occurrence of one or more of the following events: (i) such Executive’s willful and material breach of, or gross negligence or malfeasance in the performance of, Executive’s duties under this Agreement; (ii) any material insubordination by Executive with respect to carrying out the reasonable instructions of the Board; (iii) the conviction for, or the entering of a guilty plea or plea of nolo contendere with respect to, a felony, the equivalent thereof or other crime with respect to which imprisonment of more than one year is a possible punishment or that is expected to result in Significant Injury; (iv) Executive’s breach of a fiduciary obligation to the Consolidated Company or breach of any confidentiality or non-competition obligation set forth herein; (v) any act of moral turpitude or willful misconduct by Executive that (1) is intended to result in personal enrichment of Executive or any related person at the expense of the Consolidated Company or (2) is reasonably expected to result in Significant Injury; provided, however, that Executive shall have 21 days (or such longer period as is reasonable under the circumstances) after written notice by Employer of any such event constituting “Cause” hereunder in which to cure any failure or default under subsections (i) and (ii) that is curable.

“Change of Control” means the consummation of any transaction or series of related transactions, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than Tontine together with its Affiliates, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of NEI or the Company on a fully diluted basis; (ii) substantially all of the assets of NEI and its subsidiaries taken as a whole are sold or NEI is merged or recapitalized and the stockholders of NEI do not own a majority of the voting stock of the surviving corporation, or (iii) after the first fully distributed public offering of voting stock of any member of the Consolidated Company (1) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), shall own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of NEI or the Company on a fully diluted basis, having ordinary voting power in excess of 35% and in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by Tontine together with its Affiliates, or (2) a majority of the seats on the boards of directors of NEI or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) is replaced during a twelve-month period by persons who were neither (i) nominated by Tontine nor (ii) appointed by directors so nominated, in each case, whether as the result of the purchase, issuance or sale of securities of any member of the Consolidated Company or any merger, consolidation, liquidation, dissolution, recapitalization or similar transaction involving any member of the Consolidated Company. Notwithstanding the foregoing, no Change of Control shall have occurred unless the transaction or series of transactions results in a change in control within the meaning of Code Section 409A and the regulations thereunder. This Change of Control definition shall be interpreted in a manner which is consistent with Code Section 409A and the regulations thereunder.

“Change of Control Multiple” has the meaning given to such term in Section 1.06 hereof.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute.

“Company” means Neenah Foundry Company, and (except to the extent the context requires otherwise) any “subsidiary corporation” of Neenah Foundry Company, as such term is defined in Section 424(f) of the Code.

“Company Business” has the meaning given to such term in Section 4.02 hereof.

“Confidential Company Information” has the meaning given to such term in Section 4.02 hereof.

“Confidential Information” has the meaning given to such term in Section 3.01 hereof.

“Consolidated Company” or “Company Group” means NEI, the Company and their respective Subsidiaries.

“Effective Date” means the date as of which this Agreement is executed on the signature page hereof. The Employment Agreement and Restricted Stock Grant which is superseded by this Amended and Restated Employment Agreement was originally effective October 8, 2003.

“Employer” has the meaning given to such term in the introductory paragraph hereof.

“Employment Period” has the meaning given to such term in Section 1.02 hereof.

“Equity Incentive Plan” has the meaning given to such term in Section 2.01(a) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force.

“Excise Taxes” has the meaning given to such term in Section 2.03 hereof.

“Executive” has the meaning given to such term in the introductory paragraph hereof.

“Good Reason” means termination of the Executive’s employment within a year following a material diminution in the Executive’s Base Salary, a material diminution in Executive’s authority, duties and responsibilities or a material change in the geographic location at which the Executive must perform services. Executive may not terminate for Good Reason unless he provides the Consolidated Company with notice of the condition constituting the Good Reason within 90 days of the existence of the condition and the Company fails to remedy the condition within 30 days of such notice.

“Gross-Up Amount” has the meaning given to such term in Section 2.03 hereof.

“NEI” has the meaning given to such term in the introductory paragraph hereof.

“NEI Common Stock” means NEI’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.

“Payout Period” has the meaning given to such term in Section 1.06 hereof.

“Person” shall mean an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

“Restricted Period” has the meaning given to such term in Section 4.02(a) hereof.

“Securities Act” means the Securities Act of 1933, as amended, or any similar federal law then in force.

“Severance Multiple” has the meaning given to such term in Section 1.06 hereof.

“Severance Plan” has the meaning given to such term in Section 1.06 hereof.

“Significant Injury” means significant economic or reputational injury to the Consolidated Company (such determination to be made by the Board in its reasonable judgment).

“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, are owned directly or indirectly by such Person.

“Termination Date” means the date, based on the facts and circumstances, that the Consolidated Company reasonably anticipates that no further services will be performed after such date or that the level of bona fide services that the Executive will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or independent contractor) over the immediately preceding 36 month period. Executive shall be considered to have terminated in connection with a leave of absence as provided in applicable regulations issued under Code Section 409A.

“Tontine” means Tontine Capital Partners, L.P., a Delaware limited partnership.

“Work Product” has the meaning given to such term in Section 4.02(d) hereof.

ARTICLE VI
GENERAL PROVISIONS

6.01 Severability. If it is determined that any of the provisions of this Agreement, including, without limitation, any of the restrictive covenants in Article IV, or any part thereof, is invalid or unenforceable, the remainder of the provisions of this Agreement shall not thereby be affected and shall be given full effect, without regard to the invalid portions.

6.02 Authorization to Modify Restrictions. The provisions of this Agreement will be enforceable to the fullest extent permissible under applicable law, and the unenforceability (or modification to conform to law) of any provision will not render unenforceable, or impair, the remainder of this Agreement. If any provision is found invalid or unenforceable, in whole or in part, this Agreement will be considered amended to delete or modify, as necessary, the offending provision or provisions and to alter its bounds to render it valid and enforceable.

6.03 No Waiver. The failure of either Employer or Executive to insist upon the performance of any term in this Agreement, or the waiver of any breach of any such term, shall not waive any such term or any other term of this Agreement. Instead, this Agreement shall remain in full force and effect as if no such forbearance or waiver had occurred.

6.04 Entire Agreement. This Agreement and the Severance Plan represent the entire agreement of the parties with respect to Executive’s employment with Employer and may be amended only by a writing signed by each of them, except as set forth in the Severance Plan. This Employment Agreement amends and restates in all respects the Employment Agreement and Restricted Stock Grant, previously executed between the Employer, NEI and the Executive on October 8, 2003.

6.05 Dispute Resolution.

(a) Any dispute, controversy or claim arising out of or relating to this Agreement or any term or provision of this Agreement, including without limitation any claims of breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

(b) Notwithstanding the foregoing, each of the Company and Executive at all times shall have the right to bring an action to enforce the covenants set forth in Article IV of this Agreement through the courts as it deems necessary or desirable. The parties agree that any such action may be brought in a state or federal court located within Wisconsin. The parties waive any and all objections to jurisdiction or venue. The parties further agree that service of process may be made by registered mail to the address referred to in Section 6.09 of this Agreement, and that such service shall be deemed effective service of process. The arbitrator(s) may award reasonable attorneys’ fees and other reasonable costs to the Executive if the Executive prevails in the arbitration with respect to one material issue in dispute.

6.06 Governing Law. This Agreement will be governed by and construed in accordance with the law of the State of Wisconsin without regard to conflicts of laws principles.

6.07 Assignment. This Agreement, and Executive’s rights and obligations hereunder, may not be assigned by Executive and any purported assignment by Executive in violation hereof shall be null and void. In the event of any sale, transfer or other disposition of all or substantially all of Employer’s assets or business, whether by sale, merger, consolidation, recapitalization, reorganization or otherwise, Employer may assign this Agreement and its rights hereunder without Executive’s consent.

6.08 Counterparts; Section Headings. This Agreement may be executed in any number of counterparts. Each will be considered an original, but all will constitute one and the same instrument. The section headings of this Agreement are for convenience of reference only and will not affect the construction or interpretation of any of its provisions.

6.09 Notice. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally, mailed by certified or registered mail, return receipt requested and postage prepaid, or sent via a nationally recognized overnight courier, or sent via facsimile to the recipient. Such notices, demands and other communications shall be sent to the address indicated below unless the Executive or Employer notifies the other of a different address:

To Executive:

Frank C. Headington
130 Woodside Court
Neenah, Wisconsin 54956

To Employer:

Neenah Foundry Company
2121 Brooks Street
Neenah, Wisconsin 54957
Fax: (920) 729-3633
Attention: Chairman of the Board

with a copy to (which shall not constitute notice):

GILL & GILL, S.C.
128 North Durkee Street
Appleton, WI 54911
Fax: (920) 739-3027
Attention: Gregory B. Gill, Sr.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 15th day of May, 2008.


	EXECUTIVE
	/s/ Frank C. Headington
	Frank C. Headington


	NEENAH FOUNDRY COMPANY
	By:	/s/ Robert E. Ostendorf, Jr.
	Name:	Robert E. Ostendorf, Jr.
	Title:	President and Chief Executive Officer

	NEENAH ENTERPRISES, INC.
	By:	/s/ Robert E. Ostendorf, Jr.
	Name:	Robert E. Ostendorf, Jr.
	Title:	President and Chief Executive Officer

EXHIBIT A
SEVERANCE PLAN

NEENAH FOUNDRY COMPANY AMENDED AND RESTATED
2003 SEVERANCE AND CHANGE OF CONTROL PLAN

1. Purpose.

This plan shall be known as the Neenah Foundry Company Amended and Restated 2003 Severance and Change of Control Plan (the “Plan”). The purpose of the Plan shall be to set forth payments and other benefits, if any, to which an executive of Neenah Foundry Company (the “Company”) or any of its Subsidiaries will be entitled upon termination of such person’s employment. This Plan document supersedes, in all respects, the prior version of the Plan, (as previously amended) as of the Effective Date.

2. Definitions. For purposes of this Plan, except when the context clearly indicates otherwise, the following terms shall have the meanings set forth below.

“Base Salary” means, with respect to any Plan Participant, “Base Salary” as defined in such Plan Participant’s Employment Agreement.

“Board of Directors” and “Board” mean the board of directors of the Company.

“Cause” means, with respect to a Plan Participant, the occurrence of one or more of the following events: (i) such Plan Participant’s willful and material breach of, or gross negligence or malfeasance in the performance of, the Plan Participant’s duties under such Plan Participant’s Employment Agreement; (ii) any material insubordination by the Plan Participant with respect to carrying out the reasonable instructions of the Board; (iii) the conviction for, or the entering of a guilty plea or plea of nolo contendere with respect to, a felony, the equivalent thereof or other crime with respect to which imprisonment of more than one year is a possible punishment or that is expected to result in Significant Injury; (iv) a Plan Participant’s breach of a fiduciary obligation to the Company Group or breach of any confidentiality or non-competition obligation set forth herein; (v) any act of moral turpitude or willful misconduct by the Plan Participant that (1) is intended to result in personal enrichment of the Plan Participant or any related person at the expense of the Company Group or (2) is reasonably expected to result in Significant Injury; provided, however, that the Plan Participant shall have 21 days (or such longer period as is reasonable under the circumstances) after written notice by the Company of any such event constituting “Cause” hereunder in which to cure any failure or default under subsections (i) and (ii) that is curable.

“Change of Control” means the consummation of any transaction or series of related transactions, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-

5 of the Exchange Act), other than Tontine together with its Affiliates, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of NEI or the Company on a fully diluted basis; (ii) substantially all of the assets of NEI and its Subsidiaries taken as a whole are sold or NEI is merged or recapitalized and the stockholders of NEI do not own a majority of the voting stock of the surviving corporation, or (iii) after the first fully distributed public offering of voting stock of any member of the Company Group (1) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), shall own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of NEI or the Company on a fully diluted basis, having ordinary voting power in excess of 35% and in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by Tontine together with its Affiliates, or (2) a majority of the seats on the boards of directors of NEI or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) is replaced during a twelve-month period by persons who were neither (i) nominated by Tontine nor (ii) appointed by directors so nominated, in each case, whether as the result of the purchase, issuance or sale of securities of any member of the Company Group or any merger, consolidation, liquidation, dissolution, recapitalization or similar transaction involving any member of the Company Group. Notwithstanding the foregoing, no Change of Control shall have occurred unless the transaction or series of transactions results in a change in control within the meaning of Code Section 409A and the regulations thereunder. This Change of Control definition shall be interpreted in a manner which is consistent with Code Section 409A and the regulations thereunder.

“Change of Control Multiple” means, with respect to any Plan Participant, “Change of Control Multiple” as defined in such Plan Participant’s Employment Agreement.

“Change of Control Payment” has the meaning given to such term in Section 4(b) hereof.

“COBRA” means Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended and Section 4980B of the Code.

“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).

“Company” has the meaning set forth in Section 1 hereof.

“Company Group” means NEI, the Company and their respective Subsidiaries.

“Effective Date” means May 15, 2008.

“Employment Agreement” means the written agreement between any Plan Participant and the Company or any of its Subsidiaries pursuant to which such Plan Participant is entitled to the benefits under the Plan.

“Employment Period” means, with respect to a Plan Participant’s employment, the period from the effective date of the Employment Agreement until the date the Plan Participant is no longer employed with the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excise Taxes” has the meaning given to such term in Section 4(b) hereof.

“Good Reason” means with respect to any Plan Participant, the termination of such Plan Participant’s employment within a year following a material diminution in Participant’s Base Salary, a material diminution in the Participant’s authority, duties and responsibilities or a material change in the geographic location at which the Plan Participant must perform services and, solely with respect to Robert E. Ostendorf, either: (i) the failure of the Company Group to nominate Mr. Ostendorf to the Board of Directors of NEI and each of its subsidiaries; or (ii) the Board repeatedly overrides, supersedes or disregards reasonable decisions by Mr. Ostendorf or reasonable recommendations made by Mr. Ostendorf to the Board such that the Board materially interfered with Mr. Ostendorf’s ability to effectively function as President and Chief Executive Officer. A Participant may not terminate for Good Reason unless he provides the Company Group with notice of the condition constituting the Good Reason within 90 days of the existence of the condition and the Company Group fails to remedy the condition within 30 days of such notice.

“Gross-Up Amount” has the meaning given to such term in Section 4(b) hereof.

“NEI” means Neenah Enterprises, Inc. a Delaware corporation (formerly known as ACP Holding Company).

“Non-Employee Director” has the meaning given to such term in Rule 16b-3 under the Exchange Act and any successor thereto.

“Payout Period” means, with respect to any Plan Participant, “Payout Period” as defined in such Plan Participant’s Employment Agreement.

“Plan” has the meaning set forth in Section 1 hereof.

“Plan Participant” means each of Robert E. Ostendorf, Jr., Gary LaChey, Frank Headington, Timothy Koller, William Martin, Steve Shaffer, John Andrews, Robert Gitter, Dennis O’Brien, Joseph Harvey, Ronald Schmucker, Jeffrey S. Jenkins and any other employee of the Company Group selected by the Board or the Committee.”

“Severance Multiple” means, with respect to any Plan Participant, “Severance Multiple” as defined in such Plan Participant’s Employment Agreement.

“Severance Payments” has the meaning given to such term in Section 4(a) 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.

“Tontine” means Tontine Capital Partners, L.P., a Delaware limited partnership.

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, the Committee shall be authorized to: (i) select persons to participate in the Plan in addition to those entitled to participate in the Plan pursuant to Employment Agreements entered into at or prior to the Effective Date; (ii) determine the form, substance, terms and conditions of each additional grant made under the Plan; (iii) certify that the conditions and restrictions applicable to any grant have been met; (iv) modify the terms of grants made under the Plan; (v) make any adjustments necessary or desirable in connection with grants made under the Plan to eligible participants located outside the United States; (vi) 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 Employment 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 complies with the Code to the extent applicable and other applicable law; and (vii) 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, modification, adjustment, correction or supplement to the Plan pursuant to the foregoing clauses (i) through (vii) adversely 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. Severance Arrangements; Change of Control Payments.

(a) Severance Arrangement. Except as provided in Sections 4(b), 4(c) and 4(d) below, if any Plan Participant’s employment with a member of the Company Group is terminated by such Person other than for Cause, or if any Plan Participant resigns from employment with such Person for Good Reason, such Plan Participant shall receive, during the Payout Period, (x) severance payments (“Severance Payments”) equal in the aggregate to the product of (1) the Severance Multiple and (2) Base Salary of such Plan Participant and (y) the health benefits, at the Company’s cost (subject to satisfying insurability requirements), to which such Plan Participant would otherwise have been entitled pursuant to the Employment Agreement (subject to such Plan Participant’s COBRA election) and outplacement services, in each case, for the Payout Period. Severance Payments shall be made bi-weekly, in accordance with normal payroll practices for the Payout Period except that if any class of NEI common stock is publicly tradable on an established securities market, no amounts shall be paid pursuant to this Section 4(a) during the first 6 months following a Participant’s termination unless the payments satisfy the requirements for separation pay due to involuntary separation from service as provided in Treas. Reg. 1.409A-1(b)(9)(iii). The Company’s health benefits and outplacement services described above will be made available until the earlier of the end of the Payout Period or the receipt of comparable benefits on re-employment. Severance Payments shall not be reduced as a result of re-employment or otherwise.

(b) Termination upon Change of Control. If any Plan Participant’s employment with a member of the Company Group is terminated by such Person other than for Cause or if any Plan Participant resigns from employment with such Person for Good Reason, in each case, within one year after a Change of Control, such Plan Participant shall receive a lump sum cash payment in an amount equal to the product of (x) the Change of Control Multiple and (y) Base Salary (the “Change of Control Payment”). The Change of Control Payment (i) will be payable by the Company to such Plan Participant in a lump sum within 30 days of such Plan Participant’s termination pursuant to the preceding sentence, (ii) is not subject to mitigation or reduction upon re-employment or otherwise and (iii) will be increased to provide for payment of an additional amount (the “Gross-Up Amount”) such that the net amount retained by the Plan Participant, after payment of (1) any excise taxes due on the Change of Control Payment under Section 4999 of the Code or any corresponding or applicable state law provision (“Excise Taxes”) and (2) any federal, state or local income tax and any Excise Taxes due in respect of the Gross-Up Amount, shall equal the Change of Control Payment. Clauses (i) and (ii) of the immediately preceding sentence shall apply to the Gross-Up Amount. Such Plan Participant shall also be entitled to the continuation of health benefits (subject to satisfying insurability requirements) and outplacement services during the Payout Period on the same basis as provided pursuant to Section 4(a), subject to mitigation upon re-employment and receipt of comparable benefits set forth in Section 4(a). Payments made upon termination following a Change of Control are in lieu of any severance payments described in Section 4(a) above that would otherwise be payable following such termination. Notwithstanding the foregoing, if any class of NEI common stock is publicly tradable on an established securities market, no amounts shall be paid pursuant to this Section 4(b) during the first 6 months following a Participants termination unless the payments satisfy the requirements for separation pay due to involuntary separation from service as provided in Treas. Reg. 1.409A-1(b)(9)(iii).

(c) Notwithstanding any other provision of Section 4 to the contrary, to the extent that: (i) NEI common stock is publicly tradable on an established securities market and (ii) any benefits provided pursuant to Section 4 during the first six months after the Participant’s termination are not paid pursuant to a qualified plan, a bona fide sick leave or vacation plan, a disability plan, a death benefit plan or a plan providing medical expense reimbursements which are non-taxable or a separation pay plan (within the meaning of the regulations under Code Section 409A), the Participant shall pay the cost of such coverage during the first six months following termination and shall be reimbursed for the cost of such coverage six months after Participant’s termination. Notwithstanding any other provision of this Section 4 to the contrary, including the preceding sentence, if the provision of any medical benefits coverage pursuant to this Section 4 would be discriminatory within the meaning of Code Section 105(h), then, to the extent necessary to prevent such discrimination, the Participant (or his survivors, as the case may be) shall pay the cost of such coverage and Participant (or his survivors, as the case may be) shall not be reimbursed by any member of the Company Group for doing so.

(d) Notwithstanding any other provision in this Plan or in the Plan Participant’s Employment Agreement, before the Severance Payments or Change of Control Payment and benefits under Sections 4(a) or 4(b) of this Plan are paid to a Plan Participant, the Plan Participant must first execute, return to the Company in a timely manner, and not revoke, any release(s) of claims against the Company, its Subsidiaries, shareholders, officers, directors, employees, agents, and the Plan as may be required under such Plan Participant’s Employment Agreement to receive payments in connection with the termination of the Plan Participant’s employment.

5. Termination of Employment.

A Participant shall be considered terminated for purposes of the Plan if, based on all relevant facts and circumstances, the Company Group reasonably anticipates that no further services will be performed after such date for any member of the Company Group or that the level of bona fide services that the Participant will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or independent contractor) over the immediately preceding 36 month period. A Participant shall be considered to have terminated in connection with a leave of absence as provided in applicable regulations issued under Code Section 409A.

6. Amendment 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 the rights of any Plan Participant, such amendment shall be deemed to affect such Plan Participant only upon such Plan Participant’s written consent.

7. Commencement Date; Termination Date.

The date of commencement of the Plan shall be the Effective Date.

Each Plan Participant shall be paid the awards, payments, grants and incentives to which such Plan Participant is entitled pursuant to the Plan as of the Effective Date, and the Plan shall not be terminated unless and until each Plan Participant receives such awards, payments, grants and incentives. 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 any incentives theretofore granted under the Plan.

8. 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.

9. 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.

EXHIBIT B
FULL AND FINAL RELEASE OF CLAIMS

FULL AND FINAL RELEASE OF CLAIMS

NOW COMES Neenah Foundry Company, its officers, directors, administrators, trustees, employees and any and all subsidiaries or related corporate entities (hereinafter “Employer”) and (hereinafter “Executive”), enter into this full and final release of all claims and agrees as follows:

The Executive acknowledges that he has been advised by the Employer to consult with an attorney before signing this Agreement and that he has been given forty-five (45) days to review and consider this Agreement and the documents provided with it. Executive also acknowledges that he has had the opportunity to obtain all advice and information he deems necessary about matters related to this Agreement.

1. In consideration for the “Severance Payments and Benefits” and/or the “Change in Control” payments and benefits outlined in the Employment Agreement between the Employer and the Executive:

(a)		The Executive agrees that except for any claims Executive may have for worker’s compensation benefits (which are not released by this Agreement), Executive agrees to and does release and forever discharge the Employer, any related or successor corporation or other entity, its benefit plans and programs, and all of their officers, directors, executives, administrators and trustees (collectively the “Released Parties”) from any and all losses, expenses, liabilities, claims, rights and entitlements of every kind and description (collectively referred to as “Claims”), whether known or unknown, that Executive has now or may later claim to have had against any of the Parties Released by this Agreement arising out of anything that has occurred up through the date Executive signs this Agreement, including, without limitation, any Claims arising out of Executive’s employment or termination of employment with the Employer. This release includes, but is not limited to, any Claims for back pay, reinstatement, personal injuries, breach of contract (express or implied), breach of any covenant of good faith and fair dealing (express or implied), or for recovery of any losses or other damages to Executive or his property based on any alleged violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e et seq. (prohibiting discrimination on account of race, sex, color, national origin or religion); the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621 et seq. (prohibiting discrimination on account of age); the Americans With Disabilities Act of 1990, 42 U.S.C. Section 12101 et seq. (prohibiting discrimination on account of disabilities); the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001 et seq.; or any other federal, state or local statutory or common law.

		Executive acknowledges that he may have sustained or may yet sustain damages, costs or expenses that are presently unknown and that relate to Claims between Executive and the Parties Released by this Agreement. Executive expressly waives and relinquishes all rights and benefits which Executive may have under any state or federal statute or common law principle that would otherwise limit the effect of this Agreement to Claims

		known or suspected prior to the date Executive signs this Agreement, and do so understanding and acknowledging the significance and consequences of such specific waiver. Thus, for the purpose of implementing a full and complete release and discharge of the Parties Released by this Agreement, Executive expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all Claims which Executive does not know or suspect to exist in his favor at the time he signs this Agreement, and that this Agreement contemplates the extinguishment of any such Claim or Claims.

(b)		Executive agrees that, except to the extent such right may not be waived by law, he will not commence any legal action or lawsuit, or otherwise assert any Claim, in violation of the release stated above or on any Claim released above. This “covenant not to sue” does not, however, prevent Executive from seeking a judicial determination of the validity of his release of Claims under the Age Discrimination in Employment Act (ADEA).

2. Executive understands this Agreement does not limit any right he may have to make a claim for worker’s compensation benefits, nor does it limit him or the Employer’s right to enforce this Agreement. In addition, this Agreement does not waive any rights or claims that may arise after the date he signs it.

3. Should any provision of this Agreement be declared or be determined by any court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby, and the illegal or invalid part, term, or provision shall be deemed not to be a part of this Agreement.

4. Executive understands that this Agreement does not become enforceable until seven (7) days after he has signed it and submitted it to the Employer, and that he can revoke it at any time during those seven days. If Executive decides to revoke this Agreement, he will deliver a signed notice of revocation to the Employer before the end of the seven-day period. Upon delivery of a timely notice of revocation, this Agreement will be null and void and neither the Employer nor Executive will have any rights or obligations under it. Executive understands that this Agreement, when enforceable, shall be binding upon the parties hereto, including my heirs, administrators, representatives, executors, and assigns.

5. Acknowledgements/Revocation Rights. Each party acknowledges that it has entered into this Agreement knowingly, freely and voluntarily. The Executive acknowledges that:

(a)

He has been advised by the Employer to consult with legal counsel before signing this Agreement;

(b)

He has forty-five (45) days from the date of his receipt of this Agreement within which to consider it. If the Executive does not execute and return this Agreement to the Employer’s representative identified in paragraph 5d within forty-five (45) days, this Agreement shall be void and withdrawn;

(c)

He understands that this Agreement includes a final general release of the Employer, its officers, directors, agents, members, executives, affiliates, predecessors, successors,

		assigns and all persons acting by, through, under or in concert with them including but not limited to any claim he might have under the Older Workers Benefit Protection Act; and

(d)		He may, within seven (7) calendar days following the date of his execution of this agreement, revoke the Agreement by giving written notice of his intent to revoke to the Employer’s representative identified as follows:

PERSONAL & CONFIDENTIAL

GILL & GILL, S.C.
Gregory B. Gill, Sr.
128 North Durkee Street
Appleton, WI 54911
Telephone (920) 739-1107
Facsimile (920) 739-3027
E-mail: gbgillsr@new.rr.com

This Agreement shall not become effective or enforceable until this 7-day revocation period has expired. TIME IS OF THE ESSENCE WITH REGARD TO THIS PARAGRAPH.

6. This Agreement constitutes the complete agreement and understanding Executive has reached with the Employer regarding the termination of my employment. It is not, and shall not be interpreted or construed as, an admission or indication that the Employer has engaged in any wrongful or unlawful conduct of any kind.

7. EXECUTIVE HAS READ THIS AGREEMENT. EXECUTIVE UNDERSTANDS ITS TERMS AND CONDITIONS. EXECUTIVE HAS NOT BEEN COERCED INTO SIGNING THIS AGREEMENT, AND EXECUTIVE VOLUNTARILY AGREES TO ABIDE BY ITS TERMS BECAUSE THEY ARE SATISFACTORY TO HIM. NO PROMISE OR INDUCEMENT OF ANY KIND HAS BEEN MADE TO HIM BY THE EMPLOYER OR ANYONE ELSE TO CAUSE HIM TO SIGN THIS AGREEMENT, EXCEPT AS SET FORTH ABOVE. EXECUTIVE ACKNOWLEDGES THAT THE SEVERANCE BENEFITS THAT HE WILL RECEIVE AS A RESULT OF SIGNING THIS AGREEMENT ARE ADEQUATE AND THE ONLY CONSIDERATION FOR THIS AGREEMENT.

NOTE: This Agreement must be signed and returned to the Employer without any alteration. Any modification or alteration of any terms of this Agreement voids the Agreement in its entirety. The Executive must sign this Agreement to qualify for these benefits.

EX-31.1 3 c34851exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

Certification of Chief Executive Officer of Neenah Enterprises, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert E. Ostendorf, Jr., President and Chief Executive Officer of Neenah Enterprises, Inc., certify that:

	1.		I have reviewed this report on Form 10-Q of Neenah Enterprises, Inc;

	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 changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth 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

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 function):

	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: August 13, 2008



	/s/ Robert E. Ostendorf, Jr.
	Robert E. Ostendorf, Jr.
	President and Chief Executive Officer

EX-31.2 4 c34851exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

Certification of Chief Financial Officer of Neenah Enterprises, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey S. Jenkins, Corporate Vice President — Finance and Interim Chief Financial Officer of Neenah Enterprises, Inc., certify that:

	1.		I have reviewed this report on Form 10-Q of Neenah Enterprises, Inc.

	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 changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth 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

	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: August 13, 2008



	/s/ Jeffrey S. Jenkins
	Jeffrey S. Jenkins
	Corporate Vice President — Finance and Interim Chief Financial Officer

EX-31.3 5 c34851exv31w3.htm EX-31.3 exv31w3

Exhibit 31.3

Certification of Chief Executive Officer of Neenah Foundry Company pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert E. Ostendorf, Jr., President and Chief Executive Officer of Neenah Foundry Company, certify that:

	1.		I have reviewed this report on Form 10-Q 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 changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth 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

	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: August 13, 2008



	/s/ Robert E. Ostendorf, Jr.
	Robert E. Ostendorf, Jr.
	President and Chief Executive Officer

EX-31.4 6 c34851exv31w4.htm EX-31.4 exv31w4

Exhibit 31.4

Certification of Chief Financial Officer of Neenah Foundry Company pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey S. Jenkins, Corporate Vice President — Finance and Interim Chief Financial Officer of Neenah Foundry Company, certify that:

	1.		I have reviewed this report on Form 10-Q 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 changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth 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

	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: August 13, 2008



	/s/ Jeffrey S. Jenkins
	Jeffrey S. Jenkins
	Corporate Vice President — Finance and Interim Chief Financial Officer

EX-32.1 7 c34851exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer of Neenah Enterprises, Inc. 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 Interim Chief Financial Officer of Neenah Enterprises, Inc. (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008 (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: August 13, 2008



	/s/ Robert E. Ostendorf, Jr.
	Robert E. Ostendorf, Jr.
	President and Chief Executive Officer


	/s/ Jeffrey S. Jenkins
	Jeffrey S. Jenkins
	Corporate Vice President — Finance and Interim Chief Financial Officer

EX-32.2 8 c34851exv32w2.htm EX-32.2 exv32w2

Exhibit 32.2

Certification of Chief Executive Officer and Chief Financial Officer of Neenah Foundry Company 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 Interim Chief Financial Officer of Neenah Foundry Company (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2008 (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: August 13, 2008



	/s/ Robert E. Ostendorf, Jr.
	Robert E. Ostendorf, Jr.
	President and Chief Executive Officer


	/s/ Jeffrey S. Jenkins
	Jeffrey S. Jenkins
	Corporate Vice President — Finance and Interim Chief Financial Officer

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Commission
File No.

Name of Registrant, State of Incorporation, Address of
Principal Executive Offices, and Telephone No.

IRS Employer
Identification No.

Neenah Enterprises, Inc.
(a Delaware Corporation)
2121 Brooks Avenue
P.O. Box 729
Neenah, WI 54957
(920) 725-7000

Neenah Foundry Company
(a Wisconsin Corporation)
2121 Brooks Avenue
P.O. Box 729
Neenah, WI 54957
(920) 725-7000