-----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, I5mmeU2ToykhxsnBChR5y27snGpEti6ztCQHNq+S86+wgRwiEmG0GwdxO73vw4Q/ YyvqcGCM84k+x7LpQfrvXw== 0000950123-04-000978.txt : 20040128 0000950123-04-000978.hdr.sgml : 20040128 20040128171315 ACCESSION NUMBER: 0000950123-04-000978 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 42 FILED AS OF DATE: 20040128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREGG INDUSTRIES INC CENTRAL INDEX KEY: 0001272209 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-07 FILM NUMBER: 04549909 MAIL ADDRESS: STREET 1: C/O NEENAH FOUNDRY CO STREET 2: 2121 BROOKS STREET P O BOX 729 CITY: NEENAH STATE: WI ZIP: 54957 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEENAH TRANSPORT INC CENTRAL INDEX KEY: 0001040597 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 391378433 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-04 FILM NUMBER: 04549921 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVE STREET 2: PO BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 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 FOUNDRY CO CENTRAL INDEX KEY: 0001040599 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 391580331 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008 FILM NUMBER: 04549908 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: ADVANCED CAST PRODUCTS INC CENTRAL INDEX KEY: 0001077232 IRS NUMBER: 251607691 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-14 FILM NUMBER: 04549917 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELCHER CORP CENTRAL INDEX KEY: 0001077233 IRS NUMBER: 521643193 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-02 FILM NUMBER: 04549916 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEERLESS CORP CENTRAL INDEX KEY: 0001077234 IRS NUMBER: 521644462 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-01 FILM NUMBER: 04549915 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALTON CORP CENTRAL INDEX KEY: 0001077235 IRS NUMBER: 350259770 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-13 FILM NUMBER: 04549914 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALTON CORP WARSAW MANUFACTURING FACILITY CENTRAL INDEX KEY: 0001077236 IRS NUMBER: 352054775 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-12 FILM NUMBER: 04549913 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALTON CORP ASHLAND MANUFACTURING FACILITY CENTRAL INDEX KEY: 0001077237 IRS NUMBER: 341873079 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-10 FILM NUMBER: 04549912 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALTON CORP KENDALVILLE MANUFACTURING FACILITY CENTRAL INDEX KEY: 0001077238 IRS NUMBER: 352054777 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-09 FILM NUMBER: 04549911 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALTON CORP STRYKER MACHINING FACILITY CO CENTRAL INDEX KEY: 0001077239 IRS NUMBER: 340071223 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-11 FILM NUMBER: 04549910 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FORMER COMPANY: FORMER CONFORMED NAME: STRYKER MACHINING FACILITY CO DATE OF NAME CHANGE: 19990121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCER FORGE CORP CENTRAL INDEX KEY: 0001077230 IRS NUMBER: 251511711 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-06 FILM NUMBER: 04549919 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: A&M SPECIALTIES INC CENTRAL INDEX KEY: 0001077231 IRS NUMBER: 251741756 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-05 FILM NUMBER: 04549918 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAST ALLOYS INC CENTRAL INDEX KEY: 0000873843 IRS NUMBER: 330071223 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-03 FILM NUMBER: 04549922 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 FORMER COMPANY: FORMER CONFORMED NAME: NIEMIN PORTER & CO DATE OF NAME CHANGE: 19990121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEETER FOUNDRY INC CENTRAL INDEX KEY: 0001077229 IRS NUMBER: 470355148 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-111008-08 FILM NUMBER: 04549920 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 4147257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVENUE BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 S-4/A 1 y92210a1sv4za.txt AMENDMENT NO. 1 TO FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 2004 NO. 333-111008 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- NEENAH FOUNDRY COMPANY (Exact name of registrant as specified in its charter) WISCONSIN 3220 39-1580331 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
2121 BROOKS AVENUE P.O. BOX 729 NEENAH, WISCONSIN 54957 (920) 725-7000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) --------------------- WILLIAM M. BARRETT PRESIDENT AND CHIEF EXECUTIVE OFFICER 2121 BROOKS AVENUE P.O. BOX 729 NEENAH, WISCONSIN 54957 (920) 725-7000 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------------- COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO AGENT FOR SERVICE, SHOULD BE SENT TO: CHRISTIAN O. NAGLER, ESQ. KIRKLAND & ELLIS LLP CITIGROUP CENTER 153 EAST 53RD STREET NEW YORK, NEW YORK 10022-4675 --------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. --------------------- If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this Form is filed to registered additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER NOTE OFFERING PRICE(1) REGISTRATION FEE - --------------------------------------------------------------------------------------------------------------------------- 11% Senior Secured Notes due 2010..... $133,130,000 100% $133,130,000 $10,770.00(4) - --------------------------------------------------------------------------------------------------------------------------- Guarantees of 11% Senior Secured Notes due 2010(2)......................... (3) (3) (3) None - --------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee. (2) See inside facing page for table of additional Registration guarantors. (3) Pursuant to Rule 457(h), no separate filing fee is payable for the guarantees of the New Senior Secured Notes being registered. (4) Previously paid. --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ADDITIONAL REGISTRANTS ADVANCED CAST PRODUCTS, INC. (Exact name of registrant as specified in its charter) DELAWARE 3321 25-1607691 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
DALTON CORPORATION (Exact name of registrant as specified in its charter) INDIANA 3321 35-0259770 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
DALTON CORPORATION, WARSAW MANUFACTURING FACILITY (Exact name of registrant as specified in its charter) INDIANA 3321 35-2054775 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
DALTON CORPORATION, STRYKER MACHINING FACILITY CO. (Exact name of registrant as specified in its charter) OHIO 3599 34-1873080 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
DALTON CORPORATION, ASHLAND MANUFACTURING FACILITY (Exact name of registrant as specified in its charter) OHIO 3321 34-1873079 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
DALTON CORPORATION, KENDALLVILLE MANUFACTURING FACILITY (Exact name of registrant as specified in its charter) INDIANA 3321 35-2054777 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
DEETER FOUNDRY, INC. (Exact name of registrant as specified in its charter) NEBRASKA 3321 47-0355148 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
GREGG INDUSTRIES, INC. (Exact name of registrant as specified in its charter) CALIFORNIA 3321 95-1498664 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
MERCER FORGE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 3462 25-1511711 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
A&M SPECIALTIES, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 3599 25-1741756 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NEENAH TRANSPORT, INC. (Exact name of registrant as specified in its charter) WISCONSIN 4213 39-1378433 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CAST ALLOYS, INC. (Exact name of registrant as specified in its charter) CALIFORNIA 3365 33-0071223 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
BELCHER CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 3321 52-1643193 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
PEERLESS CORPORATION (Exact name of registrant as specified in its charter) OHIO 3321 52-1644462 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND THIS IS NOT AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER AND SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED JANUARY 26, 2004 PROSPECTUS NEENAH FOUNDRY COMPANY Offer for all outstanding 11% Senior Secured Notes due 2010 (which we refer to as the "Old Notes") in aggregate principal amount at maturity of $133,130,000 in exchange for up to $133,130,000 aggregate principal amount at maturity of 11% Senior Secured Notes due 2010 (which we refer to as the "New Notes") have been registered under the Securities Act of 1933, as amended. TERMS OF THE EXCHANGE OFFER - - Expires 5:00 p.m., New York City time, , 2004, unless extended. - - Not subject to any condition other than that the exchange offer not violate applicable law or any interpretation of the staff of the Securities and Exchange Commission. - - We can amend or terminate the exchange offer. - - We will exchange all Old Notes that are validly tendered and not validly withdrawn. TERMS OF THE NEW NOTES - - The terms of the New Notes are identical to our outstanding 11% Senior Secured Notes due 2010 except for transfer restrictions and registration rights. FOR A DISCUSSION OF SPECIFIC RISKS THAT YOU SHOULD CONSIDER BEFORE TENDERING YOUR OUTSTANDING 11% SENIOR SECURED NOTES DUE 2010 IN THE EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 7. There is no public market for our outstanding 11% Senior Secured Notes due 2010 or the New Notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the New Notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is [ ], 2004 YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR 11% SENIOR SECURED NOTES DUE 2010. EACH BROKER-DEALER THAT RECEIVES NEW SECURITIES FOR ITS OWN ACCOUNT PURSUANT TO THE EXCHANGE OFFER MUST ACKNOWLEDGE THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF THESE NEW SECURITIES. BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, A BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT. THIS PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A BROKER-DEALER IN CONNECTION WITH RESALES OF NEW SECURITIES RECEIVED IN EXCHANGE FOR SECURITIES WHERE THOSE SECURITIES WERE ACQUIRED BY THIS BROKER-DEALER AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES. WE HAVE AGREED THAT, STARTING ON THE EXPIRATION DATE AND ENDING ON THE CLOSE OF BUSINESS 180 DAYS AFTER THE EXPIRATION DATE, WE WILL MAKE THIS PROSPECTUS AVAILABLE TO ANY BROKER-DEALER FOR USE IN CONNECTION WITH ANY SUCH RESALE. SEE "PLAN OF DISTRIBUTION." TABLE OF CONTENTS Disclosure Regarding Forward-Looking Statements............. i Prospectus Summary.......................................... 1 Summary Description of the Exchange Offer and New Notes..... 2 Ratio of Earnings to Fixed Charges.......................... 6 Risk Factors................................................ 7 The Exchange Offer.......................................... 15 The Refinancing Transactions................................ 21 Use of Proceeds............................................. 22 Capitalization.............................................. 23 Selected Consolidated Financial Data........................ 24 Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 26 Business.................................................... 32 Management.................................................. 41 Certain Relationships and Related Transactions.............. 45 Security Ownership and Certain Beneficial Owners............ 46 Description of New Credit Facility.......................... 48 Description of the Notes.................................... 51 Book-Entry; Delivery and Form............................... 84 Certain U.S. Federal Income Tax Considerations.............. 86 Plan of Distribution........................................ 86 Legal Matters............................................... 87 Experts..................................................... 87 Available Information....................................... 87
As used in this prospectus and unless the context indicated otherwise, "Notes" refers, collectively, to our "Old Notes," and our "New Notes." DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS All statements other than statements of historical facts included in this prospectus, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "should", "could", "expect", "intend", "estimate", "anticipate", "believe" or "continue", "plan", "potential", "predicts" or the negative thereof or variations thereon or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. These risks and uncertainties include, but are not limited to, the following: - general economic and business conditions, both nationally and in those areas in which we operate; - competition; - changes in our business strategy or plans; - changes in exchange rates; - the loss of any of our management or key personnel; - changes in our policy regarding interest rate and currency movements; - the availability and cost of raw materials; and - the availability of capital and trade credit to fund our business. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Important factors that could cause actual results to differ materially from our expectations, or "cautionary statements," are disclosed under "Risk Factors" and elsewhere in this prospectus, including, without limitation, in conjunction with the forward-looking statements included in this prospectus. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We are under no duty to update any of the forward-looking statements after the date of this prospectus to conform these statements to actual results. i PROSPECTUS SUMMARY The following summary contains basic information about us and highlights selected information from the prospectus. It likely does not contain all the information that is important to you. Because it is a summary, it does not contain all the information that you should consider before tendering your Old Notes. We encourage you to read this entire document and the documents to which we have referred you. As used in this prospectus, except as the context otherwise requires, the terms "company," "we," "our," "ours," and "us" refers to Neenah Foundry Company and its subsidiaries, collectively and individually, as appropriate from the context. OUR COMPANY We manufacture and market a wide range of metal castings and forgings for the heavy municipal market and selected segments of the industrial markets. We sell our products throughout the continental United States and believe that we are one of the largest manufacturers of heavy municipal iron castings in the United States. We have two reportable segments, Castings and Forgings. The Castings segment produces iron and other metal castings for use in heavy municipal and industrial applications. This segment sells directly to original equipment manufacturers and to industrial end users. The forgings segment, operated by Mercer Forge Corporation, hereinafter referred to as Mercer, produces complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer also produces microalloy forgings. Mercer sells directly to original equipment manufacturers, as well as to industrial end users. Mercer's subsidiary, A&M Specialties, Inc., machines forgings and castings for Mercer and other industrial applications. Neenah Foundry Company, which we refer to hereafter as Neenah, a wholly-owned subsidiary of NFC Castings, Inc. and its parent company, ACP Holding Company, which we refer to hereafter respectively as NFC and ACP, is a corporation organized under the laws of the State of Wisconsin and is the operating subsidiary of NFC and ACP. The principal executive offices of Neenah are located at 2121 Brooks Avenue, Neenah, Wisconsin 54957. Our telephone number is (920) 725-7000. RECENT REORGANIZATION On August 5, 2003, ACP, NFC, Neenah and all of its domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, as amended, with the United States Bankruptcy Court for the District of Delaware. By order dated September 26, 2003, the Bankruptcy Court confirmed our Amended Prepackaged Joint Plan of Reorganization, which we refer to as the Plan of Reorganization. The Plan of Reorganization resulted in significant changes to our capital structure. Among other things, the Plan of Reorganization provided for the repayment in full of our old credit facility, the cancellation of $282.0 million in principal amount of 11 1/8% Notes, the cancellation of our PIK Note and the elimination of the interests of the former equity owners of our indirect parent company, ACP. The cash proceeds necessary to consummate the Plan of Reorganization were provided from the consummation of the New Credit Facility and the issuance of the Old Notes. 1 SUMMARY DESCRIPTION OF THE EXCHANGE OFFER AND NEW NOTES THE EXCHANGE OFFER Securities Offered............ Up to $133,130,000 aggregate principal amount at maturity of 11% Senior Notes due 2010. The terms of the New Notes and the Old Notes are identical in all material respects, except for certain transfer restrictions and registration rights relating to the Old Notes. The Exchange Offer............ We are offering to exchange the Old Notes for a like principal amount at maturity of New Notes. Old Notes may be exchanged only in multiples of $1,000. Expiration Date; Withdrawal of Tender........................ Our exchange offer will expire 5:00 p.m. New York City time, on , 2004, or a later time if we choose to extend this exchange offer. You may withdraw your tender of Old Notes at any time prior to the expiration date. All outstanding Old Notes that are validly tendered and not validly withdrawn will be exchanged. Any Old Notes not accepted by us for exchange for any reason will be returned to you at our expense promptly after the expiration or termination of the exchange offer. Resales....................... We believe that you can offer for resale, resell and otherwise transfer the New Notes without complying with the registration and prospectus delivery requirements of the Securities Act if: - you acquire the New Notes in the ordinary course of business; - you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the New Notes; and - you are not an "affiliate" of ours, as defined in Rule 405 of the Securities Act. If any of these conditions is not satisfied and you transfer any New Notes without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. We do not assume or indemnify you against this liability. Each broker-dealer acquiring New Notes issued for its own account in exchange for Old Notes, which it acquired through market-making activities or other trading activities, must acknowledge that it will deliver a proper prospectus when any New Notes issued in the exchange offer are transferred. A broker-dealer may use this prospectus for an offer to resell, a resale or other retransfer of the New Notes issued in the exchange offer. Conditions to the Exchange Offer......................... Our obligation to accept for exchange, or to issue the New Notes in exchange for, any Old Notes is subject to certain conditions as set forth under "The Exchange Offer -- Conditions to the Exchange Offer". Procedures for Tendering Old Notes......................... The Old Notes were issued as global securities and were deposited upon issuance with The Bank of New York. The Bank of New York issued certificate-less depositary interests in those 2 outstanding Old Notes, which represent a 100% interest in those Old Notes, to The Depository Trust Company. Beneficial interests in the outstanding Old Notes, which are held by direct or indirect participants in The Depository Trust Company, are shown on, and transfers of the Old Notes can only be made through, records maintained in book-entry form by The Depository Trust Company. You may tender your outstanding Old Notes by instructing your broker or bank where you keep the Old Notes to tender them for you. In some cases you may asked to submit the BLUE-colored "Letter of Election and Instructions to Brokers or Bank" that may accompany this prospectus. By tendering your old notes you will be deemed to have acknowledged and agreed to be bound by the terms set forth under "The Exchange Offer." A timely confirmation of book-entry transfer of your outstanding Old Notes into the exchange agent's account at The Depository Trust Company, under the procedure described in this prospectus under the heading "The Exchange Offer" must be received by the exchange agent on or before 5:00 pm, New York City time, on the expiration date. United States Federal Income Tax Considerations............ The exchange offer will not result in any income, gain or loss to the holders of Old Notes or to us for United States Federal Income Tax Purposes. See "Certain U.S. Federal Income Tax Considerations." Use of Proceeds............... We will not receive any proceeds from the issuance of the New Notes in the exchange offer. The proceeds from the offering of the Old Notes were used to: - help satisfy the cash distributions required by the Plan of Reorganization; and - fund our ongoing working capital needs. Exchange Agent................ [ ] is serving as the exchange agent for the exchange offer. Shelf Registration Statement..................... In limited circumstances, holders of Old Notes may require us to register their Old Notes under a shelf registration statement. SUMMARY DESCRIPTION OF THE NEW NOTES Issuer........................ Neenah Foundry Company Securities Offered............ $133,130,000 principal amount of 11% Senior Secured Notes due 2010 Maturity...................... September 30, 2010 Interest Rate................. 11% per year (calculated using a 360-day year). Interest Payment Dates........ Each January 1 and July 1, beginning on January 1, 2004. Interest began to accrue on September 30, 2003. Ranking....................... The Notes will rank pari passu in right of payment to the New Credit Facility (including amounts available pursuant to the revolving loan commitment thereunder) and the associated guarantees. The liens securing the New Notes will be junior to 3 the liens securing the New Credit Facility and guarantees thereof. As of December 31, 2003, we estimate that we and our subsidiaries had approximately $47 million of senior secured debt outstanding under the New Credit Facility excluding approximately $31 million that, subject to certain limitations, we have available to borrow under our New Credit Facility. Any amounts drawn under the New Credit Facility will rank pari passu with the Notes. See "Description of New Credit Facility." Guarantees.................... All of our domestic subsidiaries will unconditionally guarantee the Notes on a senior secured basis. If we cannot make payments required by the Notes, our guarantor subsidiaries must make them. The guarantees may be released under certain circumstances. Optional Redemption........... On or after September 30, 2007, we may redeem some or all of the Notes at the redemption prices listed in the "Description of Notes" section under the heading "Optional Redemption" plus accrued and unpaid interest. Change Of Control Offer....... If a change in control of our company occurs, we must, subject to certain conditions, give holders the opportunity to sell their notes to us at 101% of their face amount plus accrued and unpaid interest. We might not be able to pay the required price for Notes presented to us at the time of a change of control because: - we might not have enough funds at the time; or - the terms of our New Credit Facility may prevent us from paying. Asset Sale Proceeds........... If we or our subsidiaries engage in asset sales, we generally must first prepay debt under our New Credit Facility, then either invest the excess proceeds in our business or make an offer to purchase a principal amount of the Notes equal to the excess net cash proceeds. The purchase price of the Notes will be 100% of their principal amount plus accrued and unpaid interest. Certain Indenture Provisions.................... The indenture governing the Notes contains covenants that, among other things, limit our and our subsidiaries' ability to: - incur additional debt; - pay dividends or distributions on our capital stock or repurchase our capital stock; - issue preferred stock of subsidiaries; - make certain investments; - create liens on our assets to secure debt; - enter into transactions with affiliates; - merge or consolidate with another company; - enter into sale and leaseback transactions; - transfer and sell assets; and - enter into certain lines of business. 4 These covenants are subject to a number of important limitations and exceptions. See "Description of the Notes -- Certain Covenants." Risk Factors.................. See "Risk Factors" for a description of some of the risks you should consider before exchanging your Old Notes for New Notes. Delivery Requirements......... Each broker-dealer that receives new securities for its own account in exchange for securities, where those securities were acquired by this broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those new securities. See "Plan of Distribution." 5 RATIO OF EARNINGS TO FIXED CHARGES
FOR THE YEARS ENDED SEPTEMBER 30, -------------------------------------------------- 1999 2000 2001 2002 2003 ------- ------- -------- -------- -------- Earnings to fixed charge calculation(1) Income (loss) from continuing operations before income taxes........................... $ 7,029 $10,021 $(17,133) $(11,870) $(31,411) Fixed charges..................... 41,003 44,898 44,380 44,515 48,407 ------- ------- -------- -------- -------- $48,032 $54,919 $ 27,247 $ 32,645 $ 16,996 ======= ======= ======== ======== ======== Fixed charges: Interest expense.................. $40,283 $43,949 $ 43,454 $ 43,466 $ 47,445 Interest portion of rent expense......................... 720 949 926 1,049 962 ------- ------- -------- -------- -------- $41,003 $44,898 $ 44,380 $ 44,515 $ 48,407 ======= ======= ======== ======== ======== Ratio of earnings to cover fixed charges......................... 1.17 1.22 N/A(2) N/A(2) N/A(2)
- --------------- (1) For purposes of the computation, the ratio of earnings to fixed charges has been calculated by dividing (a) income from continuing operations before income taxes plus fixed charges by (b) fixed charges. Fixed charges are equal to interest expense plus the portion of the rent expense estimated to represent interest. (2) Earnings were insufficient to cover fixed charges for the years ended September 30, 2001, 2002 and 2003 by $17.1 million, $11.9 million and $31.4 million, respectively. 6 RISK FACTORS You should consider carefully all of the information in this prospectus, including the following risk factors and warnings, before deciding whether to exchange your Old Notes for the New Notes to be issued in this exchange offer. Except for the first two risk factors described below, these risk factors apply to both the Old Notes and the New Notes. RISKS RELATED TO THE OFFERING SERVICING OUR DEBT WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH, AND OUR ABILITY TO GENERATE SUFFICIENT CASH DEPENDS UPON MANY FACTORS, SOME OF WHICH ARE BEYOND OUR CONTROL. Our ability to make payments on and refinance our debt and to fund planned capital expenditures depends on our ability to generate cash flow in the future. To some extent, this is subject to general economic, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. We may be unable to continue to generate cash flow from operations at current levels. If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may have to refinance all or a portion of our existing debt or obtain additional financing. We cannot assure you that any refinancing of this kind would be possible or that any additional financing could be obtained. The inability to obtain additional financing could have a material adverse effect on our financial condition and on our ability to meet our obligations to you under the Notes. DUE TO RESALE RESTRICTIONS, IF YOU EXCHANGE YOUR OLD NOTES, YOU MAY NOT BE ABLE TO RESELL THE NEW NOTES YOU RECEIVE IN THE EXCHANGE OFFER WITHOUT REGISTERING THEM AND DELIVERING A PROSPECTUS. You may not be able to resell New Notes that you receive in the exchange offer without registering those New Notes or delivering a prospectus. Based on interpretations by the Securities and Exchange Commission, hereinafter referred to as the Commission, in no-action letters, we believe, with respect to New Notes issued in the exchange offer, that: - holders who are not "affiliates" of Neenah within the meaning of Rule 405 of the Securities Act; - holders who acquire their New Notes in the ordinary course of business; and - holders who do not engage in, intend to engage in, or have arrangements to participate in a distribution (within the meaning of the Securities Act) of the New Notes do not have to comply with the registration and prospectus delivery requirements of the Securities Act. Holders described in the preceding sentence must tell us in writing at our request that they meet these criteria. Holders that do not meet these criteria could not rely on interpretations of the Commission in no-action letters and would have to register the New Notes that they receive in the exchange offer and deliver a prospectus if they sold the New Notes. In addition, holders that are broker-dealers may be deemed "underwriters" within the meaning of the Securities Act in connection with any resale of New Notes acquired in the exchange offer. Holders that are broker-dealers must acknowledge that they acquired their outstanding New Notes in market-making activities or other trading activities and must deliver a prospectus when they resell the New Notes they acquire in the exchange offer in order not to be deemed an underwriter. You should review the more detailed discussion in "The Exchange Offer -- Procedures for Tendering Old Notes and Consequences of Exchanging Outstanding Old Notes." SINCE OUTSTANDING OLD NOTES WILL CONTINUE TO HAVE RESTRICTIONS ON TRANSFER AND CANNOT BE SOLD WITHOUT REGISTRATION UNDER SECURITIES LAWS OR EXEMPTIONS FROM REGISTRATION, YOU MAY HAVE DIFFICULTY SELLING THE OLD NOTES WHICH YOU DO NOT EXCHANGE. If a large number of outstanding Old Notes are exchanged for New Notes issued in the exchange offer, it may be difficult for holders of outstanding Old Notes that are not exchanged in the exchange offer 7 to sell their Old Notes, since those Old Notes may not be offered or sold unless they are registered or there are exemptions from registration requirements under the Securities Act of 1933, hereinafter referred to as the Securities Act, or state laws that apply to them. In addition, if there are only a small number of Old Notes outstanding, there may not be a very liquid market in those Old Notes. There may be few investors that will purchase unregistered securities in which there is not a liquid market. See "The Exchange Offer -- You May Suffer Adverse Consequences if You Fail to Exchange Outstanding Notes." In addition, if you do not tender your outstanding Old Notes or if we do not accept some outstanding Old Notes, those Old Notes will continue to be subject to the transfer and exchange provisions of the indenture and the existing transfer restrictions of the Old Notes that are described in the legend on the Old Notes and in the prospectus relating to the Old Notes. RISK FACTORS RELATED TO THE COMPANY A RELATIVELY SMALL NUMBER OF CUSTOMERS ACCOUNT FOR A SUBSTANTIAL PORTION OF OUR REVENUES, THE LOSS OF ONE OR MORE OF THEM COULD ADVERSELY AFFECT OUR NET SALES. Our industrial customer base is highly concentrated. A few large customers generate a significant amount of our net sales. - Sales to our largest customer accounted for approximately 9% of our total net sales for the fiscal year ended September 30, 2003. - Sales to our top five customers accounted for approximately 31% of our total net sales for the six months ended March 31, 2003; and 31% of our total net sales for the fiscal year ended September 30, 2003. The loss of one or more of such customers, therefore, could adversely affect our net sales. DECREASES IN DEMAND FOR HEAVY TRUCKS, HVAC EQUIPMENT, CONSTRUCTION OR FARM EQUIPMENT COULD HAVE A SIGNIFICANT IMPACT ON OUR PROFITABILITY, CASH FLOW AND ABILITY TO SERVICE OUR INDEBTEDNESS. Our company has historically experienced moderate to severe cyclicality in most of our markets, including the truck and farm equipment markets. A decrease in the demand in these markets was a factor that led to our bankruptcy filing. These major markets will likely continue to experience such fluctuations. A downturn in one or more of these markets could reduce demand for, and prices of, our products. Such a downturn in one or more of these major markets could have a significant negative impact on our profitability, cash flow and ability to service our indebtedness. Historically, our heavy municipal business has been less cyclical than our industrial markets. OUR MARKET SHARE MAY BE ADVERSELY IMPACTED AT ANY TIME BY A SIGNIFICANT NUMBER OF COMPETITORS. The markets in which we compete are highly competitive and the foundry industry has significant excess capacity. Significantly increased foreign competition was a factor that led to our bankruptcy filing. We may be unable to maintain or improve our competitive position in the markets in which we compete. Competition is based mostly on price, but also on quality of product, range of capability, level of service and reliability of delivery. We compete with numerous foreign and domestic foundries. We also compete with several large domestic manufacturers whose products are made with materials other than ductile and gray iron, such as steel or aluminum. Industry consolidation over the past 20 years has significantly reduced the number of foundries operating in the United States. While such consolidation has translated into greater market share for the remaining foundries, some of these remaining foundries have significantly greater financial resources than we do. Price competition was a factor that led to our bankruptcy filing. Furthermore, despite the reduction in the number of operating foundries, lack of demand for castings and forgings means that the industry remains plagued by overcapacity. Such overcapacity contributed to our bankruptcy filing. Any of these factors could impede our ability to remain competitive in the markets in which we operate. 8 INTERNATIONAL ECONOMIC AND POLITICAL FACTORS COULD AFFECT DEMAND FOR IMPORTS AND EXPORTS WHICH COULD IMPACT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Our operations may be affected by actions of foreign governments and global or regional economic developments. Global economic events, such as foreign import/export policy, the cost of complying with environmental regulations or currency fluctuations, could also affect the level of U.S. imports and exports, thereby affecting our sales. Foreign subsidies, foreign trade agreements and each country's adherence to the terms of such agreements can raise or lower demand for castings by us and other domestic foundries. National and international boycotts and embargoes of other countries' or U.S. imports and/or exports together with the raising or lowering of tariff rates could affect the level of competition between us and our foreign competitors. Fluctuations in the value of the U.S. dollar relative to other currencies could also raise or lower demand for U.S. exports as well as U.S. demand for foreign produced raw materials and finished good imports, thereby impacting the markets in which we operate. Such actions or developments could have a material adverse effect on our business, financial condition and results of operations. INCREASES IN THE PRICE OF RAW MATERIALS COULD REDUCE OUR GROSS PROFIT. The cost of raw materials represents a significant portion of our operating expenses. As a result of domestic and international events, the prices of raw materials fluctuate. We have single-source arrangements with many of the suppliers for the major raw materials that we use. Our inability to continue making such purchases or the failure of these single-source arrangements to result in the most highly competitive prices for raw material could increase our cost of sales and lower our gross profit. Furthermore, of all the varying prices of raw material, fluctuations in the price of scrap metal impact our business the most. Although, we have arrangements with most of our industrial customers that enable us to adjust industrial casting prices to reflect scrap price fluctuations, these adjustments lag the current price of scrap metal during periods of rapidly rising or falling scrap metal prices because these adjustments are generally based on average market prices for prior periods. Thus, our profitability could be negatively impacted if we are unable to pass along increases in the price of scrap metal to our customers effectively. THE DEPARTURE OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The success of our business depends upon our senior management closely supervising all aspects of our business. The loss of such key personnel could have a material adverse effect on our business, financial condition and results of operations if we were unable to attract and retain qualified replacements. See "Management." THE SEASONAL NATURE OF OUR BUSINESS COULD IMPACT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Our business is seasonal. Therefore, our quarterly revenues and profits historically have been lower during the first and second fiscal quarters of the year (October through March) and higher during the third and fourth fiscal quarters (April through September). In addition, our working capital requirements fluctuate throughout the year. Adverse market or operating conditions during any seasonal part of the fiscal year could have a material adverse effect on our business, financial condition and results of operations. WE FACE THE RISK OF WORK STOPPAGES OR OTHER LABOR DISRUPTIONS THAT COULD IMPACT OUR RESULTS OF OPERATIONS NEGATIVELY. While we believe that our relations with our employees and with the recognized labor unions that represent some of our employees are generally good, we could experience work stoppages or other labor disruptions. Our business, financial condition and results of operations could be adversely affected if any such event were to occur. See "Business -- Employees." 9 THE NATURE OF OUR BUSINESS EXPOSES US TO LIABILITY FOR VIOLATIONS OF ENVIRONMENTAL REGULATIONS. The risk of environmental liability is inherent in the manufacturing of casting and forging products. Changes in environmental laws and regulations or the discovery of previously unknown contamination or other liabilities relating to our properties and operations could require us to sustain significant environmental liabilities which could make it difficult to pay the interest or principal amount of these New Notes when due. In addition, we might incur significant capital and other costs to comply with increasingly stringent emission control laws and enforcement policies which could decrease our cash flow available to service our indebtedness. Costs associated with complying with environmental and other regulations was a factor in our bankruptcy filing. See "Business -- Environmental and Other Regulatory Matters." OUR ABILITY TO GENERATE CASH NECESSARY TO MAKE PAYMENTS ON THE NOTES DEPENDS ON MANY FACTORS BEYOND OUR CONTROL. Our ability to pay the principal of and interest on the New Credit Facility, the New Notes and to finance additional indebtedness when necessary depends on our financial and operating performance, each of which is subject to prevailing global and national economic conditions and to financial, business, legislative, emerging third world competitors and regulatory factors as well as other factors beyond our control. We may be unable to generate sufficient cash flow from operations or obtain sufficient funding to satisfy all of our debt obligations. If we are unable to pay our debts, we will be required to pursue one or more alternative strategies, including refinancing or restructuring indebtedness or selling additional debt or equity securities. In addition, the ability to borrow funds under the New Credit Facility in the future will depend on our meeting the financial covenants set forth under the terms of the New Credit Facility and the indentures governing the Notes and our 13% Senior Subordinated Notes due 2013 which include customary covenants and restrictions. If our business is unable to generate sufficient cash flow from operations and future borrowings are unavailable under the New Credit Facility in amounts sufficient to enable us to meet our debt obligations or fund other liquidity needs, we may need to refinance all or a portion of our debt on or before maturity. This could negatively impact our company by hindering us from growing our business or restricting our ability to make payments on the Notes. Furthermore, there can be no assurance such alternative strategies will be feasible at the time or prove adequate to satisfy our obligations. FAILURE TO RAISE NECESSARY CAPITAL COULD RESTRICT OUR ABILITY TO OPERATE AND FURTHER DEVELOP OUR BUSINESS. Our capital resources may be insufficient to enable us to maintain operating profitability. Failure to generate or raise sufficient funds may require us to delay or abandon some expansion plans or expenditures, which could harm our business and competitive position. We expect to meet funding needs through various sources, including existing cash balances, existing lines of credit, and cash flow from future operations. Excluding the future cost of complying with MACT, the maximum achievable control technology standards of the Environmental Protection Agency, estimates of our aggregate expenditure requirements include the projected costs of: - approximately $18.0 million to $24.0 million annually from 2004 through 2007 primarily for necessary maintenance capital expenditures and selected strategic capital investments required to maintain optimum operating efficiencies; and - funds required for general corporate, other expenses and additional funds for working capital fluctuations. We may choose to meet any additional financial needs by borrowing additional funds under the New Credit Facility or from other sources. As of December 31, 2003, subject to certain limitations, we had approximately $31 million available to borrow under our New Credit Facility. See "Description of New Credit Facility." There can be no assurance, however, that we will have timely access to any additional financing sources on acceptable terms. Our ability to issue debt securities, borrow funds from additional lenders and participate in vendor financing programs will be restricted under the terms of the New Credit Facility and the indentures governing the Notes and our 13% New Subordinated Notes due 2013. 10 Furthermore, we cannot be certain that the lenders will waive these restrictions if additional financing is needed beyond that which is currently permitted. If we cannot raise additional funding we may not be able to make payments on the New Notes. TERRORIST ATTACKS COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS, OUR ABILITY TO RAISE CAPITAL OR OUR FUTURE GROWTH. The impact that terrorist attacks, such as those carried out on September 11, 2001, may have on our industry in general, and on us in particular, is unknown at this time. Such attacks, and the uncertainty surrounding them, may impact our operations in unpredictable ways, including disruptions of rail lines, highways and fuel supplies and the possibility that our facilities could be direct targets of, or indirect casualties of, an act of terror. In addition, war or risk of war may also have an adverse effect on the economy. A decline in economic activity could adversely affect our revenues or restrict our future growth. Instability in the financial markets as a result of terrorism or war could also affect our ability to raise capital. Such attacks may lead to increased volatility in fuel costs and availability and could affect the results of operations. In addition, the insurance premiums charged for some or all of the coverages we currently maintain could increase dramatically, or the coverages could be unavailable in the future. BECAUSE OF THE PLAN OF REORGANIZATION, OUR FINANCIAL INFORMATION AFTER OCTOBER 1, 2003 IS NOT COMPARABLE TO OUR FINANCIAL INFORMATION PRIOR THERETO. As a result of the consummation of the Plan of Reorganization, we are operating our business under a new capital structure. In addition, we are subject to the fresh-start reporting rules. Fresh-start reporting requires that, upon our emergence from Chapter 11 proceedings, we establish a "fair value" basis for the carrying value of the assets and liabilities of our reorganized company. Although the effective date of the Plan of Reorganization was October 8, 2003, hereinafter referred to as the Effective Date, due to the immateriality of the results of operations for the period between October 1, 2003 and the Effective Date, we accounted for the consummation of the Plan of Reorganization as if it had occurred on October 1, 2003 and implemented fresh-start reporting as of that date. Accordingly, our financial condition and results of operations after October 1, 2003, the initial date of fresh-start reporting, is not comparable to the financial condition or results of operations reflected in the historical financial statements contained in this prospectus. See "Selected Consolidated Financial Data" and the financial statements and related footnotes attached hereto. RISKS RELATING TO OUR INDEBTEDNESS OUR SUBSTANTIAL INDEBTEDNESS MAY LIMIT CASH FLOW AVAILABLE TO INVEST IN THE ONGOING NEEDS OF OUR BUSINESS TO GENERATE FUTURE CASH FLOW AND MAKE PAYMENTS ON THE NEW NOTES. As a result of the Plan of Reorganization, our outstanding debt at December 31, 2003 was approximately $272.4 million. We may also incur additional debt from time to time to finance working capital, capital expenditures and other general corporate purposes. Subject to certain limitations, we had approximately $31 million available to borrow under our New Credit Facility as of December 31, 2003. See "Description of New Credit Facility." The aggregate of our annual interest payments on our outstanding debt is $30.1 million. If the interest rate of our revolving credit facility rose by 1%, our annual interest payments would increase by approximately $0.5 million. Our substantial indebtedness could have important consequences to holders of our Notes. For example, it could: - require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general corporate purposes; - increase the amount of interest expense that we have to pay, because certain of our borrowings are at variable rates of interest, which, if interest rates increase, could result in higher interest expense; 11 - limit our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate; or - place us at a competitive disadvantage compared to our competitors that have less debt. If any of these events took place, we would have less money available to make payments on the New Notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operation -- Liquidity and Capital Resources -- Contractual Obligations and Commercial Commitments." LENDERS UNDER OUR NEW CREDIT FACILITY WILL HAVE PRIORITY OVER THE HOLDERS OF THE NOTES IN AN ACTION TO COLLECT AMOUNTS DUE ON OUR DEBT. The Notes and subsidiary guarantees will be secured by our assets on a subordinated basis. Our obligations under our credit facility are secured by, and among other things, a first priority pledge of all of our capital stock, mortgages upon most of the real property that we own in the United States and by substantially all of our assets and each of our existing and subsequently acquired or organized material domestic subsidiaries. If we become insolvent or are liquidated, or if payment under our credit facility or in respect of any other secured indebtedness that is senior to the Notes is accelerated, the lenders under our credit facility or holders of other secured senior indebtedness will be entitled to exercise the remedies available to a secured lender under applicable law in addition to any remedies that may be available under documents pertaining to our credit facility or the other senior debt. Upon the occurrence of any default under the New Credit Facility, the lenders may be able to prohibit the payment of the Notes and subsidiary guarantees either by limiting our ability to access our cash flow or under the subordination provisions contained in the security documents in respect of the Notes. In addition, in the event of any distribution or payment of our assets in any bankruptcy, liquidation or distribution or similar proceeding, holders of liens securing the New Credit Agreement will be paid before the liens securing the Notes. Both the liens securing the Credit Agreement and the liens securing the Notes will be satisfied before payment is made on the Notes. If any of these events occur, we cannot assure you that there would be sufficient assets to pay amounts due on the Notes. Holders of the Notes, may therefore, receive less, ratably, than holders of our liens securing the Credit Agreement and Notes. UPON A CHANGE OF CONTROL OF OUR COMPANY, WE MAY HAVE INSUFFICIENT FUNDS AND BE UNABLE TO RAISE THE FUNDS NECESSARY TO FINANCE THE OFFER TO REPURCHASE THE NOTES AS THE INDENTURE GOVERNING THE NOTES REQUIRES. If certain specific kinds of change of control events occur, we will be required to offer to repurchase all outstanding Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase. It is possible, however, that we will not have sufficient funds at the time of the change of control to make the required repurchase of the Notes or that restrictions in our credit facility will not allow those repurchases. The source of funds for that purchase of Notes will be our available cash or cash generated from our subsidiaries' operations or other sources, including borrowing, sales of assets or sales of equity. We may have insufficient funds at the time of any change of control to make the required repurchases of Notes tendered. In addition, the terms of our New Credit Facility limit our ability to repurchase the Notes. Our future debt agreements may contain similar restrictions and provisions. If the holders of the Notes exercise their right to require us to repurchase all of the Notes upon a change of control, the financial effect of this repurchase could cause a default under our other debt, even if the change of control itself would not cause a default. Accordingly, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of Notes or that restrictions in our New Credit Facility and the indentures governing the Notes and our 13% Senior Subordinated Notes due 2013 will not allow such repurchases. See "Description of Notes -- Change of Control" and "Description of New Credit Facility" for additional information. 12 BECAUSE FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM GUARANTORS, WE MAY BE UNABLE TO MAKE PAYMENTS ON THE NEW NOTES. Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee: - received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; and - was insolvent or rendered insolvent by reason of such incurrence; or - was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or - intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature. In addition, any payment by that guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor. The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if: - the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets; or - if the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities as they become absolute and mature; or - it could not pay its debts as they become due. On the basis of historical financial information, recent operating history and other factors, we believe that each guarantor, after giving effect to its guarantee of these senior subordinated notes, will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. A court reviewing the guarantees of the Notes or any payment received by a guarantor may disagree with our conclusions in this regard. If this occurred and the court required us to return payments received from guarantors, we may have insufficient funds to make payments on the Notes. OUR FAILURE TO COMPLY WITH THE COVENANTS IN OUR NEW CREDIT FACILITY MAY IMPACT OUR ABILITY TO MAKE PAYMENTS ON THE NOTES. The terms and conditions of the indenture governing the Notes and our New Credit Facility impose restrictions that limit, among other things, our ability to: - incur additional indebtedness; - create liens on assets; - sell assets; - engage in mergers or consolidations; - make acquisitions and investments; - engage in certain transactions with affiliates; and 13 - make dividends, payments and certain other distributions. In addition, our New Credit Facility requires us to maintain specified financial ratios and satisfy certain financial condition tests that may require that we take action to reduce our debt or to act in a manner contrary to our business objectives. Events beyond our control, including changes in general economic and business conditions, may affect our ability to meet those financial ratios and financial condition tests. We cannot assure you that we will meet those tests or that the lenders under the New Credit Facility will waive any failure to meet those tests. A breach of any of these covenants would result in a default under our New Credit Facility and the indenture. If an event of default under our New Credit Facility occurs, the lenders could elect to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. In such an event, we cannot assure you that we would have sufficient assets to pay amounts due on the Notes. As a result, you may receive less than the full amount you would be otherwise entitled to receive on the Notes. See "Description of New Credit Facility" and "Description of Notes" for additional information. 14 THE EXCHANGE OFFER TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OUTSTANDING NEW NOTES Pursuant to the Plan of Reorganization, we conducted a rights offering, whereby holders of the 11 1/8% Notes were given the opportunity to provide up to $110.0 million additional financing through the purchase of up to $119.996 million face amount of Old Notes and warrants to acquire up to 34.2 million shares of common stock of ACP. In case holders of the 11 1/8% Notes failed to subscribe for the full $110.0 million, we also obtained standby commitment agreements from Mackay Shields LLC, Exis Differential Holdings Ltd., Citicorp Mezzanine III, L.P., Trust Company of the West and Metropolitan Life Insurance Company whereby these Standby Purchasers collectively agreed to provide up to $110.0 million of financing for the Plan of Reorganization by participating in the rights offering (to the extent that they were holders of the 11 1/8% Notes) as well as purchasing any and all unsubscribed securities not subscribed for by the other holders of 11 1/8% Notes. Approximately 94% of the holders of the 11 1/8% Notes participated in the rights offering and the Standby Purchasers were, therefore, only required to fund the shortfall of approximately $6.4 million. We also offered $13.134 million of Old Notes, warrants to purchase 3.8 million shares of common stock of ACP and $0.05 million to Citicorp Mezzanine III, L.P. in exchange for surrender of the PIK Note. We issued the Old Notes on October 8, 2003 and entered into a registration rights agreement with the Standby Purchasers and Citicorp Mezzanine III, L.P. The registration rights agreement requires that we register the Old Notes with the Commission and offer to exchange the registered New Notes for the outstanding Old Notes issued on October 8, 2003. We will accept any validly tendered Old Notes that you do not withdraw before 5:00 p.m., New York City time, on the expiration date. We will issue $1,000 of principal amount at maturity of New Notes in exchange for each $1,000 principal amount at maturity of your outstanding Old Notes. You may tender some or all of your Old Notes in the exchange offer. The form and terms of the New Notes are the same as the form and terms of the outstanding Old Notes except that: (1) the New Notes being issued in the exchange offer will be registered under the Securities Act and will not have legends restricting their transfer; (2) the New Notes being issued in the exchange offer will not contain the registration rights and liquidated damages provisions contained in the outstanding Old Notes; and (3) interest on the New Notes will accrue from the last interest date on which interest was paid on your Old Notes. Outstanding Old Notes that we accept for exchange will not accrue interest after we complete the exchange offer. The exchange offer will expire at 5:00 p.m., New York City time, on [ ], 2004, unless we extend it. If we extend the exchange offer, we will issue a notice by press release or other public announcement before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We reserve the right, in our sole discretion: (1) to extend the exchange offer; (2) to terminate the exchange offer and not accept any Old Notes for exchange if any of the conditions have not been satisfied; or (3) to amend the exchange offer in any manner provided, however, that if we amend the exchange offer to make a material change, including the waiver of a material condition, we will extend the exchange offer, if necessary to keep the exchange offer open for at least five business days after such amendment or waiver. 15 We will promptly give written notice of any extension, delay, non-acceptance, termination or amendment. We will also file a post-effective amendment with the Commission if we amend the terms of the exchange offer. If we extend the exchange offer, Old Notes that you have previously tendered will still be subject to the exchange offer and we may accept them. We will promptly return your Old Notes if we do not accept them for exchange for any reason without expense to you after the exchange offer expires or terminates. PROCEDURES FOR TENDERING OLD NOTES HELD THROUGH BROKERS AND BANKS Since the Old Notes are represented by global book-entry notes, DTC, as depositary, or its nominee is treated as the registered holder of the notes and will be the only entity that can tender your Old Notes for New Notes. Therefore, to tender notes subject to this exchange offer and to obtain New Notes, you must instruct the institution where you keep your old notes to tender your notes on your behalf so that they are received on or prior to the expiration of this exchange offer. The BLUE-colored "Letter of Election and Instructions to Broker or Bank" that may accompany this prospectus may be used by you to give such instructions. YOU SHOULD CONSULT YOUR ACCOUNT REPRESENTATIVE AT THE BROKER OR BANK WHERE YOU KEEP YOUR NOTES TO DETERMINE THE PREFERRED PROCEDURE. IF YOU WISH TO ACCEPT THIS EXCHANGE OFFER, PLEASE INSTRUCT YOUR BROKER OR ACCOUNT REPRESENTATIVE IN TIME FOR YOUR OLD NOTES TO BE TENDERED BEFORE THE 5:00 PM (NEW YORK CITY TIME) DEADLINE ON , 2004. You may tender some or all of your Old Notes in this exchange offer. However, notes may be tendered only in integral multiples of $1,000. When you tender your outstanding Old Notes and we accept them, the tender will be a binding agreement between you and us in accordance with the terms and conditions in this prospectus. The method of delivery of outstanding Old Notes and all other required documents to the exchange agent is at your election and risk. We will decide all questions about the validity, form, eligibility, acceptance and withdrawal of tendered Old Notes, and our determination will be final and binding on you. We reserve the absolute right to: (1) reject any and all tenders of any particular note not properly tendered; (2) refuse to accept any Old Note if, in our judgment or the judgment of our counsel, the acceptance would be unlawful; and (3) waive any defects or irregularities or conditions of the exchange offer as to any particular Old Note before the expiration of the offer. Our interpretation of the terms and conditions of the exchange offer will be final and binding on all parties. You must cure any defects or irregularities in connection with tenders of Old Notes as we will determine. Neither Neenah, the exchange agent nor any other person will incur any liability for failure to notify you of any defect or irregularity with respect to your tender of Old Notes. If we waive any terms or conditions pursuant to (3) above with respect to a noteholder, we will extend the same waiver to all Note holders with respect to that term or condition being waived. DEEMED REPRESENTATIONS To participate in the exchange offer, we require that you represent to us that: (1) you or any other person acquiring New Notes for your outstanding Old Notes in the exchange offer is acquiring them in the ordinary course of business; 16 (2) neither you nor any other person acquiring New Notes in exchange for your outstanding Old Notes is engaging in or intends to engage in a distribution of the New Notes issued in the exchange offer; (3) neither you nor any other person acquiring New Notes in exchange for your outstanding Old Notes has an arrangement or understanding with any person to participate in the distribution of New Notes issued in the exchange offer; (4) neither you nor any other person acquiring New Notes in exchange for your outstanding Old Notes is our "affiliate" as defined under Rule 405 of the Securities Act; and (5) if you or another person acquiring New Notes for your outstanding Old Notes is a broker-dealer, you will receive New Notes for your own account, you acquired New Notes as a result of market-making activities or other trading activities, and you acknowledge that you will deliver a prospectus in connection with any resale of your New Notes. BY TENDERING YOUR OLD NOTES YOU ARE DEEMED TO HAVE MADE THESE REPRESENTATIONS. Broker-dealers who cannot make the representations in item (5) of the paragraph above cannot use this exchange offer prospectus in connection with resales of the New Notes issued in the exchange offer. If you are our "affiliate," as defined under Rule 405 of the Securities Act, you are a broker-dealer who acquired your outstanding Old Notes in the initial offering and not as a result of market-making or trading activities, or if you are engaged in or intend to engage in or have an arrangement or understanding with any person to participate in a distribution of New Notes acquired in the exchange offer, you or that person: (1) may not rely on the applicable interpretations of the staff of the Commission and therefore may not participate in the exchange offer; and (2) must comply with the registration and prospectus delivery requirements of the Securities Act or an exemption therefrom when reselling the Old Notes. PROCEDURES FOR BROKERS AND CUSTODIAN BANKS; DTC ATOP ACCOUNT In order to accept this exchange offer on behalf of a holder of Old Notes you must submit or cause your DTC participant to submit an Agent's Message as described below. The exchange agent, on our behalf, will seek to establish an Automated Tender Offer Program ("ATOP") account with respect to the outstanding notes at DTC promptly after the delivery of this prospectus. Any financial institution that is a DTC participant, including your broker or bank, may make book-entry tender of outstanding old notes by causing the book-entry transfer of such notes into our ATOP account in accordance with DTC's procedures for such transfers. Concurrently with the delivery of Old Notes, an Agent's Message in connection with such book-entry transfer must be transmitted by DTC to, and received by, the exchange agent on or prior to 5:00 pm, New York City Time on the expiration date. The confirmation of a book-entry transfer into the ATOP account as described above is referred to herein as a "Book-Entry Confirmation." The term "Agent's Message" means a message transmitted by the DTC participants to DTC, and thereafter transmitted by DTC to the exchange agent, forming a part of the Book-Entry Confirmation which states that DTC has received an express acknowledgment from the participant in DTC described in such Agent's Message stating that such participant and beneficial holder agree to be bound by the terms of this exchange offer. Each Agent's Message must include the following information: 1. Name of the beneficial owner tendering such notes; 2. Account number of the beneficial owner tendering such notes; and 17 3. Principal amount of notes tendered by such beneficial owner. BY SENDING AN AGENT'S MESSAGE THE DTC PARTICIPANT IS DEEMED TO HAVE CERTIFIED THAT THE BENEFICIAL HOLDER FOR WHOM NOTES ARE BEING TENDERED HAS BEEN PROVIDED WITH A COPY OF THIS PROSPECTUS. The delivery of notes through DTC, and any transmission of an Agent's Message through ATOP, is at the election and risk of the person tendering notes. We will ask the exchange agent to instruct DTC to return those Old Notes, if any, that were tendered through ATOP but were not accepted by us, to the DTC participant that tendered such notes on behalf of holders of the notes. Neither we nor the exchange agent is responsible or liable for the return of such notes to the tendering DTC participants or to their owners, nor as to the time by which such return is completed. ACCEPTANCE OF OUTSTANDING OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES ISSUED IN THE EXCHANGE OFFER We will accept validly tendered Old Notes when the conditions to the exchange offer have been satisfied or we have waived them. We will have accepted your validly tendered Old Notes when we have given oral or written notice to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the New Notes from us. If we do not accept any tendered Old Notes for exchange because of an invalid tender or other valid reason, the exchange agent will return the certificates, without expense, to the tendering holder. If a holder has tendered Old Notes by book-entry transfer, we will credit the notes to an account maintained with The Depository Trust Company. We will credit the account at The Depository Trust Company promptly after the exchange offer terminates or expires. THE AGENT'S MESSAGE MUST BE TRANSMITTED TO EXCHANGE AGENT ON OR BEFORE 5:00 PM, NEW YORK CITY TIME, ON THE EXPIRATION DATE. WITHDRAWAL RIGHTS You may withdraw your tender of outstanding notes at any time before 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective, you should contact your bank or broker where your Old Notes are held and have them send and ATOP notice of withdrawal so that it is received by the exchange agent before 5:00 p.m., New York City time, on the expiration date. Such notice of withdrawal must: (1) specify the name of the person that tendered the Old Notes to be withdrawn; (2) identify the Old Notes to be withdrawn, including the CUSIP number and principal amount at maturity of the Old Notes; (3) specify the name and number of an account at The Depository Trust Company to which your withdrawn Old Notes can be credited. We will decide all questions as to the validity, form and eligibility of the notices and our determination will be final and binding on all parties. Any tendered Old Notes that you withdraw will be not be considered to have been validly tendered. We will return any outstanding Old Notes that have been tendered but not exchanged, or credit them to The Depository Trust Company account, as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer. You may re-tender properly withdrawn Old Notes by following one of the procedures described above before the expiration date. 18 CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provision herein, we are not required to accept for exchange, or to issue New Notes in exchange for, any outstanding Old Notes. We may terminate or amend the exchange offer, before the expiration of the exchange offer: (1) any federal law, statute, rule or regulation has been adopted or enacted which, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer; (2) if any stop order is threatened or in effect with respect to the registration statement which this prospectus is a part of or the qualification of the indenture under the Trust Indenture Act of 1939; or (3) there is a change in the current interpretation by the staff of the Commission which permits holders who have made the required representations to us to resell, offer for resale, or otherwise transfer New Notes issued in the exchange offer without registration of the New Notes and delivery of a prospectus, as discussed above. These conditions are for our sole benefit and we may assert them at any time before the expiration of the exchange offer. Our failure to exercise any of the foregoing rights will not be a waiver of our rights. EXCHANGE AGENT You should direct questions, requests for assistance, and requests for additional copies of this prospectus and the BLUE-colored "Letter of elections and Instructions to Brokers or Bank" to the exchange agent at [ ]. FEES AND EXPENSES We will not make any payment to brokers, dealers, or others soliciting acceptances of the exchange offer except for reimbursement of mailing expenses. We will pay the estimated cash expenses connected with the exchange offer. We estimate that these expenses will be approximately $[ ]. ACCOUNTING TREATMENT The New Notes will be recorded at the same carrying value as the existing Old Notes, as reflected in our accounting records on the date of exchange. Accordingly, we will recognize no gain or loss for accounting purposes. The expenses of the exchange offer will be expensed over the term of the New Notes. TRANSFER TAXES If you tender outstanding Old Notes for exchange you will not be obligated to pay any transfer taxes. However, if you instruct us to register New Notes in the name of, or request that your Old Notes not tendered or not accepted in the exchange offer be returned to, a person other than you, you will be responsible for paying any transfer tax owed. YOU MAY SUFFER ADVERSE CONSEQUENCES IF YOU FAIL TO EXCHANGE OUTSTANDING OLD NOTES If you do not tender your outstanding Old Notes, you will not have any further registration rights, except for the rights described in the registration rights agreement and described above, and your Old Notes will continue to be subject to restrictions on transfer when we complete the exchange offer. Accordingly, if you do not tender your notes in the exchange offer, your ability to sell your Old Notes could be adversely affected. Once we have completed the exchange offer, holders who have not tendered notes will not continue to be entitled to any increase in interest rate that the indenture provides for if we do not complete the exchange offer. 19 Holders of the New Notes issued in the exchange offer and Old Notes that are not tendered in the exchange offer will vote together as a single class under the indenture governing the Notes. CONSEQUENCES OF EXCHANGING OUTSTANDING OLD NOTES If you make the representations that we discuss above, we believe that you may offer, sell or otherwise transfer the New Notes to another party without registration of your notes or delivery of a prospectus. We base our belief on interpretations by the staff of the Commission in no-action letters issued to third parties. If you cannot make these representations, you cannot rely on this interpretation by the Commission's staff and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the Old Notes. A broker-dealer that receives New Notes for its own account in exchange for its outstanding Old Notes must acknowledge that it acquired as a result of market making activities or other trading activities and that it will deliver a prospectus in connection with any resale of the New Notes. Broker-dealers who can make these representations may use this exchange offer prospectus, as supplemented or amended, in connection with resales of New Notes issued in the exchange offer. However, because the Commission has not issued a no-action letter in connection with this exchange offer, we cannot be sure that the staff of the Commission would make a similar determination regarding the exchange offer as it has made in similar circumstances. SHELF REGISTRATION The registration rights agreement also requires that we file a shelf registration statement if: (1) we cannot file a registration statement for the exchange offer because the exchange offer is not permitted by law; (2) a law or Commission policy prohibits a holder from participating in the exchange offer; (3) a holder cannot resell the New Notes it acquires in the exchange offer without delivering a prospectus and this prospectus is not appropriate or available for resales by the holder; or (4) a holder is a broker-dealer and holds notes acquired directly from us or one of our affiliates. We will also register the New Notes under the securities laws of jurisdictions that holders may request before offering or selling notes in a public offering. We do not intend to register New Notes in any jurisdiction unless a holder requests that we do so. Old Notes may be subject to restrictions on transfer until: (1) a person other than a broker-dealer has exchanged the Old Notes in the exchange offer; (2) a broker-dealer has exchanged the Old Notes in the exchange offer and sells them to a purchaser that receives a prospectus from the broker, dealer on or before the sale; (3) the Old Notes are sold under an effective shelf registration statement that we have filed; or (4) the Old Notes are sold to the public under Rule 144 of the Securities Act. 20 THE REFINANCING TRANSACTIONS In connection with the Plan of Reorganization and concurrently with the issuance of the Old Notes, we consummated the following refinancing transactions: REPAYMENT OF OLD CREDIT FACILITY We paid in full our obligations under the old credit facility (including accrued interest) of $148.2 million. CANCELLATION OF SENIOR SUBORDINATED NOTES All of our outstanding 11 1/8% Notes (including accrued interest) were cancelled in exchange for (i) $30.0 million in cash, (ii) $100.0 million in aggregate principal amount of New Subordinated Notes and (iii) 38 million shares of common stock of ACP. Each of the holders of the 11 1/8% Notes was also offered the opportunity to purchase its pro rata share of Old Notes and warrants to acquire up to 34.2 million shares of the common stock of ACP. CANCELLATION OF PIK NOTE Our 14% senior secured paid-in-kind note in an original aggregate principal amount of $9.9 million (plus accrued and unpaid interest thereon), or PIK Note, was cancelled in exchange for (i) Old Notes with a principal amount equal to $13.134 million and warrants to acquire 3.8 million shares of common stock of ACP and (ii) cash in the amount of $45,400. CONSUMMATION OF NEW CREDIT FACILITY We entered into the New Credit Facility with a syndicate of financial institutions for which Fleet Capital Corporation acts as agent, Fleet Securities, Inc. acts as arranger, Congress Financial Corporation (Central) acts individually and as syndication agent and General Electric Capital Corporation acts individually and as documentation agent. The New Credit Facility is a five-year facility providing for a term loan of $22.085 million and a revolving credit facility (with a $5.0 million sublimit for the issuance of letters of credit) for borrowings of up to $70.0 million. Availability under the revolver is a function of our eligible receivables and inventory. As of December 31, 2003, we had $22.0 million of term loans outstanding and $25 million drawn on our revolver. Based on the formulas under the New Credit Facility, the maximum amount available for borrowing as of December 31, 2003 was $31.0 million. The New Credit Facility limits the amount of additional debt that we can incur. See "Description of New Credit Facility." ISSUANCE OF OLD NOTES We conducted a rights offering, whereby holders of the 11 1/8% Notes were given the opportunity to provide up to $110.0 million of financing through the purchase of up to $119.996 million face amount of Old Notes and warrants to acquire up to 34.2 million shares of common stock of ACP. In case holders of the 11 1/8% Notes failed to subscribe for the full $110.0 million, we also obtained standby commitment agreements from Mackay Shields LLC, Exis Differential Holdings Ltd., Citicorp Mezzanine III, L.P., Trust Company of the West and Metropolitan Life Insurance Company whereby these Standby Purchasers collectively agreed to provide up to the full $110.0 million of financing for the Plan of Reorganization by participating in the rights offering (to the extent that they were holders of the 11 1/8% Notes) as well as purchasing any and all unsubscribed securities not subscribed for by the other holders of 11 1/8% Notes. Approximately 94% of the holders of the 11 1/8% Notes participated in the rights offering, purchasing approximately $113.0 million face amount of Old Notes for approximately $103.6 million. The Standby Purchasers were, therefore, only required to purchase approximately $7.0 million face amount of Old Notes for approximately $6.4 million. 21 ISSUANCE OF 13% SENIOR SUBORDINATED NOTES DUE 2013 We issued $100.0 million in aggregate principal amount of 13% (of which 8% may be paid in kind) senior subordinated notes due September 30, 2013 to the holders of the 11 1/8% Notes in partial satisfaction of the claims against us. The new subordinated notes are contractually subordinated to the New Credit Facility, the Old Notes and the New Notes and the liens and guarantees thereof. ISSUANCE OF NEW ACP HOLDINGS COMMON STOCK We issued 38 million shares of common stock in ACP Holding Company to the holders of the 11 1/8% Notes and 4 million shares to certain members of our management. One million of the shares vested immediately upon issuance. One-third of the remaining unvested shares of each member of management who received shares shall vest on a cumulative basis on each anniversary of the Effective Date, if as of such date such member of management is still in our employ. ISSUANCE OF WARRANTS EXERCISABLE FOR COMMON STOCK OF ACP Our ultimate parent company, ACP, issued warrants exercisable for 38 million shares of its common stock to the holders of the 11 1/8% Notes who participated in the rights offering, the Standby Purchasers and Citicorp Mezzanine III, L.P., the holder of the PIK Note. USE OF PROCEEDS The Old Notes were issued on October 8, 2003 to holders of the 11 1/8% Notes that participated in the rights offering, certain holders of the 11 1/8% Notes who agreed to act as standby purchasers and purchase up to $110.0 million of Old Notes and Citicorp Mezzanine III, L.P., as the holder of the PIK Note. We received approximately $103.6 million from holders of the 11 1/8% Notes and approximately $6.4 million from the Standby Purchasers. The net proceeds from the offering of the Old Notes were used to repay the old credit facility, pay transaction fees and expenses and for general corporate purposes. We will not receive any cash proceeds from the issuance of the New Notes in the exchange offer. In consideration for issuing the New Notes as contemplated in this prospectus, we will receive existing Old Notes in equal principal amount at maturity, the terms of which are the same in all material respects to the New Notes. The Old Notes surrendered in exchange for the New Notes will be retired or cancelled and not reissued. Accordingly, the issuance of the New Notes will not result in any increase or decrease in our debt. 22 CAPITALIZATION The following table sets forth our consolidated cash and cash equivalents and capitalization as of September 30, 2003 on a historical basis and on a pro forma basis after giving effect to the Plan of Reorganization. The terms of our Plan of Reorganization are described below in the section captioned "Business -- Bankruptcy Proceedings." This table should be read in conjunction with our consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this prospectus. All amounts are presented in thousands.
AS OF SEPTEMBER 30, 2003 ------------------------ ACTUAL PRO FORMA ---------- ----------- (IN THOUSANDS) Cash and cash equivalents................................... $ 24,356 $ -- ======== ======== Debt: Senior Bank Facility: Revolver............................................... $ 29,314 $ 25,027 Term facilities........................................ 118,127 22,085 11% Senior Secured Notes due 2010, net of discount of $11,692................................................ -- 121,438 13% Senior Subordinated Notes due 2013.................... -- 100,000 11 1/8% Senior Subordinated Notes due 2007................ 282,000 -- PIK Note.................................................. 9,900 -- Capital lease obligations................................. 4,229 4,229 Other debt................................................ 16 -- -------- -------- Total debt................................................ 443,586 272,779 Total stockholder's equity (deficit)........................ (39,016) 5,529 -------- -------- Total capitalization........................................ $404,570 $278,308 ======== ========
23 SELECTED CONSOLIDATED FINANCIAL DATA On August 5, 2003, ACP, NFC, Neenah and their domestic wholly-owned domestic subsidiaries filed for bankruptcy protection and emerged therefrom on October 8, 2003. Although the Plan of Reorganization became effective on October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the Effective Date, for financial reporting purposes we recorded the fresh-start adjustments necessitated by the American Institute of Certified Public Accountants Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," ("SOP 90-7") on October 1, 2003. As a result of our emergence from Chapter 11 bankruptcy and the application of fresh-start reporting, our consolidated financial statements for the periods commencing on October 1, 2003 will be referred to as the "Successor Company" and will not be comparable with any periods prior to October 1, 2003, which are referred to as the "Predecessor Company" (see Notes 1, 2 and 3 to our consolidated financial statements). All references to years ending September 30, 2003, 2002, 2000, 2001 and 1999 are to the Predecessor Company. All references to the periods subsequent to October 1, 2003 are to the Successor Company. The following table presents our selected historical consolidated financial data as of and for the year ended September 30, 2003, and for each of the years in the four-year period ended September 30, 2002 for the Predecessor Company, derived from audited consolidated financial statements. The selected historical data should be read in conjunction with the financial statements and the related notes and other information contained elsewhere in this report, including the information set forth under the headings "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." All amounts are presented in thousands.
FISCAL YEAR ENDED SEPTEMBER 30, ------------------------------------------------------------------------ 1999(2)(3)(4) 2000(2)(3)(4)(5) 2001(2)(3)(4) 2002(3)(4) 2003(4) ------------- ---------------- ------------- ---------- -------- STATEMENT OF OPERATIONS DATA: Net sales.......................... $477,353 $488,195 $398,782 $387,707 $375,063 Cost of sales...................... 381,841 391,646 335,264 323,740 321,834 -------- -------- -------- -------- -------- Gross profit....................... 95,512 96,549 63,518 63,967 53,229 Selling, general and administrative expenses......................... 31,137 33,093 27,587 28,743 26,132 Amortization expense............... 10,958 10,379 10,489 3,829 3,819 Provision for impairment of assets........................... -- -- -- 74 -- Other expenses (income)(1)......... 7,518 85 (434) 544 195 -------- -------- -------- -------- -------- Operating income................... 45,899 52,992 25,876 30,777 23,083 Interest expense, net.............. 38,870 42,971 43,009 42,647 46,620 Reorganization expense............. -- -- -- -- 7,874 -------- -------- -------- -------- -------- Income (loss) from continuing operations before taxes.......... 7,029 10,021 (17,133) (11,870) (31,411) Provision (credit) for income taxes............................ 4,336 6,094 (4,004) (5,917) (8,541) -------- -------- -------- -------- -------- Income (loss) from continuing operations....................... 2,693 3,927 (13,129) (5,953) (22,870) Loss from discontinued operations, net of income taxes.............. (4,585) (9,070) (4,325) (41,750) (1,095) Gain (loss) on sale of discontinued operations, net of income taxes............................ -- -- 2,404 -- (1,596) -------- -------- -------- -------- -------- Net loss........................... $ (1,892) $ (5,143) $(15,050) $(47,703) $(25,561) ======== ======== ======== ======== ======== BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents.......... $ 17,368 $ 19,478 $ 4,346 $ 26,164 $ 24,356 Working capital.................... 83,962 86,080 72,140 65,050 103,683 Total assets....................... 641,702 666,218 626,443 569,388 536,834 Total debt......................... 428,007 449,607 434,077 451,432 439,357 Total stockholder's equity (deficit)........................ 63,750 58,518 41,939 (12,146) (39,016)
24 - --------------- (1) In 1999, other expenses includes a $6,713 charge related to the closure of Dalton Corporation's Ashland facility. (2) On October 2, 2000, we sold all of the issued and outstanding shares of common stock of Hartley Controls Corporation. The results of the operations of Hartley Controls Corporation have been reported separately as discontinued operations for all periods presented. (3) During the year ended September 30, 2002, we discontinued the operations of Cast Alloys. The results of Cast Alloys have been reported separately as discontinued operations for all periods presented. (4) During the year ended September 30, 2003, we sold substantially all of the assets of Belcher Corporation. The results of Belcher Corporation have been reported separately as discontinued operations for all periods presented. (5) The amounts include the results of Gregg Industries, Inc. subsequent to November 30, 1999. 25 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the "Selected Consolidated Financial Data" and our consolidated financial statements and the related notes included elsewhere in this prospectus. This prospectus contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. RESULTS OF OPERATIONS We derive substantially all of our revenue from manufacturing and marketing a wide range of metal castings and forgings for the heavy municipal market and selected segments of the industrial markets. We have two reportable segments, Castings and Forgings. The Castings segment produces iron castings for use in heavy municipal and industrial applications. This segment sells directly to original equipment manufacturers, hereinafter referred to as OEMs, as well as to industrial end users. The forgings segment, operated by Mercer, is a producer of complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer is also a producer of microalloy forgings. Mercer sells directly to OEMs, as well as to industrial end users. Mercer's subsidiary, A&M Specialties, Inc., machines forgings and castings for Mercer and other industrial applications. Restructuring charges and certain other expenses, such as income taxes, general corporate expenses and financing costs, are not allocated between our two operating segments. PREDECESSOR COMPANY FISCAL YEAR ENDED SEPTEMBER 30, 2003 COMPARED TO THE FISCAL YEAR ENDED SEPTEMBER 30, 2002 Net Sales. Net sales for the year ended September 30, 2003 were $375.1 million, which was $12.6 million or 3.2% lower than the year ended September 30, 2002. The decrease in net sales resulted from a decreased demand for industrial castings used for the heavy duty truck market. The demand for class 8 vehicles was artificially accelerated by the consumers' desire to buy new units prior to October 1, 2002 which was the date that new emission compliance standards for engines became effective. This phenomenon is evidenced by the fact that the North American build for class 8 trucks during the period from April 2003 through September 2003 dropped approximately 13.1% from the same period one year earlier. Both the Castings and Forgings segments were similarly impacted by the drop in demand of class 8 units since they both service this market. Gross Profit. Gross profit was $53.2 million for the year ended September 30, 2003, which was $10.8 million or 16.9% lower than the year ended September 30, 2002. Gross profit as a percentage of net sales decreased to 14.2% during the year ended September 30, 2003 from 16.5% for the fiscal year ended September 30, 2002. The decrease in gross profit resulted from a number of factors. Initially, overall industrial casting and forging shipments decreased by approximately 3%. Our major markets for industrial products have been in a three year decline with the fiscal year ended September 30, 2003 being the third year. Early indicators signal that demand for our products may be returning, but it is too early in the cycle to be any more definitive. Secondly, we have continued to experience price compression for our industrial products at the same time that overall demand has been decreasing. Prices for industrial products are approximately 1.5% lower for the 12 months ended September 30, 2003 than they were for the twelve month period ended September 30, 2002. Also, scrap metal prices have escalated during the time period that our selling prices for finished industrial products have decreased. The weighted average cost for all grades of scrap increased over 12% during the fiscal year ended September 30, 2003 compared to the same period ended September 30, 2002. The increase in scrap metal prices is generally recoverable from our industrial customers via a surcharge mechanism, but it lags actual payment of raw material invoices by as much as six months. Lastly, medical costs for both health insurance for our employees as well as the medical portion of workers compensation coverage have experienced double digit increases. Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended September 30, 2003 were $26.1 million, a decrease of $2.6 million from the $28.7 million for 26 the year ended September 30, 2002. As a percentage of net sales, selling, general and administrative expenses decreased to 7.0% for the year ended September 30, 2003 from 7.4% for the fiscal year ended September 30, 2002. The decrease was due to reductions in overall employment headcount that approximated 2.2% that were undertaken in response to the lower sales volume noted above. In addition, a reduction in overall spending driven by an overall general desire for cost savings also contributed to reduced selling, general and administrative expenses. Amortization of Intangible Assets. Amortization of intangible assets for the years ended September 30, 2003 and 2002 was $3.8 million. Other Expenses. Other expenses for the years ended September 30, 2003 and 2002 consist of losses of $0.2 million and $0.5 million, respectively, for the disposal of long-lived assets in the ordinary course of business. Operating Income. Operating income was $23.1 million for the year ended September 30, 2003, a decrease of $7.7 million or 25.0% from the year ended September 30, 2002. The decrease was caused by the reasons discussed above under gross profit and was partially offset by lower selling, general and administrative expenses. As a percentage of net sales, operating income decreased from 7.9% for the year ended September 30, 2002 to 6.2% for the year ended September 30, 2003. Net Interest Expense. Net interest expense increased to $46.6 million for the year ended September 30, 2003 from $42.6 million for the year ended September 30, 2002. The increased interest expense resulted from interest accrued on the CVC PIK Note and an interest premium on our borrowings under our credit facility in the current year. In addition, $6.3 million of payments to bondholders in connection with the reorganization were classified as interest expense. We did not record $5.0 million of contractual interest expense for interest incurred on the 11 1/8% Notes subsequent to our filing voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Reorganization Expense. We recorded $7.9 million of reorganization expenses in 2003 which related to professional fees incurred in connection with the restructuring of our company and our filing for Chapter 11 bankruptcy protection as well as the write-off of debt issuance costs and premiums related to the 11 1/8% Notes. Provision for Income Taxes. The credit for income taxes for the year ended September 30, 2003 is lower than the amount computed by applying our statutory rate of 35% to the loss before income taxes principally due to permanent differences related to the reorganization expenses incurred as noted above. Loss from Discontinued Operations. During December, 2002, we sold substantially all of the assets of Belcher. The disposition of Belcher resulted in a loss of $1,596 net of income taxes, which we recognized in the year ended September 30, 2003. In accordance with the provisions of Statement of Financial Accounting Standards No. 144, or SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the results of operations for Belcher have been reported as discontinued operations in the statement of operations for all periods presented. In January, 2002, management initiated a plan for the discontinuation of the operations of Cast Alloys, Inc., hereafter referred to as Cast Alloys, by closing its manufacturing facilities. In accordance with the provisions of SFAS 144, the results of operations for Cast Alloys have been reported as discontinued operations in the statement of operations for all periods presented. PREDECESSOR COMPANY FISCAL YEAR ENDED SEPTEMBER 30, 2002 COMPARED TO THE FISCAL YEAR ENDED SEPTEMBER 30, 2001 Net Sales. Net sales for the year ended September 30, 2002 were $387.7 million, which was $11.1 million or 2.8% lower than the year ended September 30, 2001. The decrease in net sales resulted from weakness in the demand for industrial castings used for the HVAC market and an overall slowing of demand for castings in our other major markets. Gross Profit. Gross profit was $64.0 million for the year ended September 30, 2002, an increase of $5.0 million over the year ended September 30, 2001. Gross profit as a percentage of net sales increased to 16.5% during the year ended September 30, 2002 from 15.9% for the fiscal year ended September 30, 27 2001. Gross profit percentage was positively impacted during the year ended September 30, 2002 by modest reductions in raw material costs and improved efficiency in the manufacturing process. Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended September 30, 2002 were $28.7 million, an increase of $1.1 million from the $27.6 million for the year ended September 30, 2001. As a percentage of net sales, selling, general and administrative expenses increased to 7.4% for the year ended September 30, 2002 from 6.9% for the fiscal year ended September 30, 2001. The increase was due to increased professional fees paid in conjunction with debt refinancing and other corporate projects in 2002 and a favorable escrow refund received in 2001 which did not occur in 2002. Amortization of Intangible Assets. Amortization of intangible assets for the year ended September 30, 2002 was $3.8 million, a decrease of $6.7 million from the $10.5 million for the year ended September 30, 2001. The decrease was due to the adoption of Statement of Financial Accounting Standards No. 142, or SFAS 142, as of October 1, 2001. Under SFAS 142, goodwill is no longer amortized but instead is tested for impairment. Except for the discontinued operations of Cast Alloys there was no deemed impairment of intangible assets. Provision for Impairment of Assets. We recognized an impairment charge of $0.1 million related to a building held for sale during the year ended September 30, 2002. Other Expenses (Income). Other expenses (income) for the years ended September 30, 2002 and 2001 consist of losses of $0.5 million and gains of $0.4 million, respectively, for the disposal of long-lived assets in the ordinary course of business. Operating Income. Operating income was $30.8 million for the year ended September 30, 2002, an increase of $4.9 million or 18.9% from the year ended September 30, 2001. The increase was caused by the $6.7 million decrease in amortization expense, partially offset by a $1.1 million increase in selling, general and administrative expenses. As a percentage of net sales, operating income increased to 7.9% for the year ended September 30, 2002 from 6.5% for the year ended September 30, 2001. Net Interest Expense. Net interest expense decreased to $42.6 million for the year ended September 30, 2002 from $43.0 million for the year ended September 30, 2001. The decreased interest expense resulted from our principal debt repayments and lower interest rates on our credit facility, partially offset by the interest on the higher level of borrowings outstanding on our revolving credit facility during the year ended September 30, 2002 as compared to the year ended September 30, 2001. Provision for Income Taxes. The credit for income taxes for the year ended September 30, 2002 is higher than the amount computed by applying our statutory rate of approximately 35% to the loss before income taxes primarily due to permanent differences related to the discontinuance of Cast Alloys. Discontinued Operations. On October 2, 2000, we sold the common stock of Hartley Controls Corporation. The disposition of Hartley Controls Corporation resulted in a gain of $2.4 million, net of income taxes of $1.6 million, which was recorded during the year ended September 30, 2001. LIQUIDITY AND CAPITAL RESOURCES New Credit Facility. In connection with our Chapter 11 filing and emergence therefrom, we entered into the New Credit Facility with a syndicate of financial institutions for which Fleet Capital Corporation acts as agent, Fleet Securities, Inc. acts as arranger, Congress Financial Corporation (Central) acts individually and as syndication agent and General Electric Capital Corporation acts individually and as documentation agent. The New Credit Facility has a five-year maturity and Neenah Foundry Company and all of its active domestic subsidiaries are the borrowers under the New Credit Facility. The New Credit Facility consists of a revolving credit facility of up to $70.0 million (with a $5.0 million sublimit available for letters of credit) and borrowing base term loans in the aggregate amount of $22.085 million. The New Credit Facility has a five-year maturity and bears interest at rates based on the lenders' Base Rate, as defined in the New Credit Facility or an adjusted rate based on LIBOR. Availability under the New Credit Facility is based on various advance rates against our accounts receivable and inventory. Amounts under the revolving credit facility may be borrowed, repaid and 28 reborrowed subject to the terms of the facility. At October 8, 2003, we had approximately $25.0 million outstanding under the revolving credit facility and approximately $22.1 million outstanding under the term loan facility. No portion of the term loan, once repaid, may be reborrowed. The proceeds of the loan facility on the Effective Date were utilized to repay a portion of the old credit facility pursuant to the Plan of Reorganization and other cash distributions. NFC and the inactive subsidiaries of Neenah jointly and severally guarantee Neenah's obligations under the New Credit Facility, subject to customary exceptions for transactions of this type. The borrower's and guarantors' obligations under the New Credit Facility are secured by a first priority perfected security interest, subject to customary restrictions, in substantially all of Neenah's tangible and intangible assets. The Notes, and the guarantees in respect thereof, are equal in right of payment to the New Credit Facility, and the guarantees in respect thereof. The liens in respect of the Notes are junior to the liens securing the New Credit Facility and guarantees thereof. Voluntary prepayments may be made at any time on the term loan borrowings or the revolving borrowings upon customary prior notice. Prepayments on the term loan borrowings may be made at any time without premium or penalty unless a simultaneous prepayment is being made on the revolving borrowings or if any such prepayment has been made previously. For the first three years of the New Credit Facility, prepayments on the revolving borrowings are subject to certain premiums specified in the New Credit Facility. Mandatory repayments are required under certain circumstances, including a sale of assets or the issuance of debt or equity. The New Credit Facility requires Neenah to observe certain customary conditions, affirmative covenants and negative covenants including financial covenants. The New Credit Facility also contains events of default customary for these types of facilities, including, without limitation, payment defaults, material misrepresentations, covenant defaults, bankruptcy and a change of ownership of Neenah Foundry Company, NFC or ACP. 11% Senior Secured Notes due 2010. In connection with Neenah's Chapter 11 filing and emergence therefrom, Neenah issued Senior Secured Notes due 2010 in the principal amount of $133.1 million, with a coupon rate of 11%. The obligations under the senior secured notes are pari passu in right of payment to the New Credit Facility and the associated guarantees. The liens securing the senior secured notes are junior to the liens securing the New Credit Facility and guarantees thereof. The senior secured notes are subordinate to the New Credit Facility. Interest on the senior secured notes is payable on a semi-annual basis. Neenah's obligations under the notes are guaranteed on a secured basis by each of its wholly-owned subsidiaries. Subject to the restrictions in the New Credit Facility, the notes are redeemable at our option in whole or in part at any time after the fourth anniversary of their issuance, with not less than 30 days nor more than 60 days notice for an amount to be determined pursuant to a formula set forth in the indenture governing the notes. Upon the occurrence of a "change of control" as defined in the indenture governing the notes, Neenah Foundry Company may be required to make an offer to purchase the secured notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The secured notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments, (3) liens, (4) restrictions on distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The secured notes also contain customary events of default typical to this type of financing, such as (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee. 13% Senior Subordinated Notes due 2013. In connection with Neenah's Chapter 11 filing and emergence therefrom, Neenah Foundry Company issued Senior Subordinated Notes due 2013 in the principal amount of $100.0 million, with a coupon rate of 13%. The obligations under the senior subordinated notes are senior to all of Neenah Foundry Company's subordinated unsecured indebtedness and are subordinate to the New Credit Facility and the senior secured notes. Interest on the senior subordinated notes is payable on a semi-annual basis. Five percent of the interest on the senior subordinated notes will be paid in cash and 8% interest may be paid-in-kind. Neenah Foundry Company's obligations under the notes are guaranteed on an unsecured basis by each of its wholly-owned subsidiaries. 29 Subject to the restrictions in the New Credit Facility, the notes are redeemable at our option in whole or in part at any time, with not less than 30 days nor more than 60 days notice for an amount to be determined pursuant to a formula set forth in the indenture governing the notes. Upon the occurrence of a "change of control" as defined in the indenture governing the notes, Neenah Foundry Company may be required to make an offer to purchase the subordinated notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The subordinated notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments, (3) liens, (4) restrictions on distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The subordinated notes also contain customary events of default typical to this type of financing, such as, (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee. Future Capital Needs. Despite our significant decrease in leverage as a result of the Plan of Reorganization, we are still significantly leveraged and our ability to meet our debt obligations will depend upon future operating performance which will be affected by many factors, some of which are beyond our control. Based on our current level of operations, we anticipate that our operating cash flows and available credit facilities will be sufficient to fund our anticipated operational investments, including working capital and capital expenditure needs, for at least the next twelve months. If, however, we are unable to service our debt requirements as they become due or are unable to maintain ongoing compliance with restrictive covenants, we may be forced to adopt alternative strategies that may include reducing or delaying capital expenditures, selling assets, restructuring or refinancing indebtedness or seeking additional equity capital. There can be no assurances that any of these strategies could be effected on satisfactory terms, if at all. CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Projected payment due dates for the pro forma debt outstanding as of September 30, 2003 and estimated interest expense are as shown below (in millions):
EXPECTED PAYMENTS DUE BY PERIOD -------------------------------------------------------- AFTER TOTAL 2004 2005 2006 2007 2008 2008 ------ ----- ------ ----- ----- ----- ------ Long term debt....................... $243.5 $ 3.2 $ 3.2 $ 3.2 $ 3.2 $ 3.2 $227.5 Interest on long term debt........... 235.7 28.6 28.4 28.3 28.1 28.0 94.3 Revolving credit line................ 25.0 1.2 11.1 5.8 6.9 -- -- Interest and fees on revolving credit line............................... 2.8 1.4 0.8 0.4 0.2 -- -- Operating leases..................... 4.8 1.8 1.4 0.7 0.3 0.2 0.4 Capital lease obligations............ 4.6 2.9 1.7 -- -- -- -- ------ ----- ------ ----- ----- ----- ------ Total Contractual Cash Obligations..................... $516.4 $39.1 $ 46.6 $38.4 $38.7 $31.4 $322.2 ====== ===== ====== ===== ===== ===== ======
Please see "Executive Compensation -- Equity Incentive Plans" for discussion of other obligations we have committed to as a result of the Plan of Reorganization. CRITICAL ACCOUNTING POLICIES Critical accounting policies are those that are, in management's view, both very important to the portrayal of our financial condition and results of operations and they require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Future events and their effects cannot be determined with absolute certainty. The determination of estimates, therefore, requires the exercise of judgment. Actual results may differ from those estimates, and such differences may be material to the financial statements. Our accounting policies are more fully described in Note 4 to our consolidated financial statements included herein. We believe that the most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with the evaluation of the recoverability of certain assets including 30 goodwill, other intangible assets and fixed assets as well as those estimates used in the determination of reserves related to the allowance for doubtful accounts, obsolescence, workers compensation and pensions and other post-retirement benefits. Various assumptions and other factors underlie the determination of these significant estimates. In addition to assumptions regarding general economic conditions, the process of determining significant estimates is fact-specific and accounts for such factors as historical experience, product mix and, in some cases, actuarial techniques. We constantly reevaluate these significant factors and make adjustments where facts and circumstances necessitate. Historically, our actual results have not significantly deviated from those determined using the estimates described above. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements: - Defined-Benefit Pension Plans. We account for our defined benefit pension plans in accordance with SFAS No. 87, "Employers' Accounting for Pensions" which requires that amounts recognized in financial statements be determined on an actuarial basis. The most significant element in determining our pension expense in accordance with SFAS 87 is the expected return on plan assets. We have assumed that the expected long-term rate of return on plan assets will be 7.50% to 8.50%, depending on the plan. Over the long term, our pension plan assets have earned in excess of these rates; therefore, we believe that our assumption of future returns is reasonable. The plan assets, however, have earned a rate of return substantially less than these rates in the last two years. Should this trend continue, our future pension expense would likely increase. At the end of each year, we determine the discount rate to be used to discount plan liabilities. In developing this rate, we use the Moody's Average AA Corporate Bonds index. At September 30, 2003, we determined the discount rate to be 6.25%. Changes in discount rates over the past few years have not materially affected our pension expense. The net effect of changes in this rate, as well as other changes in actuarial assumptions and experience, have been deferred as allowed by SFAS 87. This has had a significant negative effect on our reported net worth. - Other Postretirement Benefits. We provide retiree health benefits to qualified employees under an unfunded plan. We use various actuarial assumptions including the discount rate and the expected trend in health care costs and benefit obligations for our retiree health plan. Consistent with our pension plans, we used a discount rate of 6.25%. In 2003, our assumed healthcare cost trend rate was 9.0% decreasing gradually to 5.0% in 2010 and then remaining at that level thereafter. Changes in these rates could materially affect our future operating results and net worth. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to interest rate risk on our long-term variable interest rate debt. Currently, our only long-term debt obligations with variable interest rates are our obligations under the New Credit Facility. We enter into debt obligations primarily to support general corporate purposes, including capital expenditures and working capital needs. INFLATION Although we cannot accurately anticipate the effect of inflation on our operations, we believe that inflation has not had, and is not likely in the foreseeable future to have, a material impact on our results of operations. 31 BUSINESS OVERVIEW Neenah, together with its active domestic subsidiaries, manufactures and markets a wide range of iron castings and forgings for the heavy municipal market and selected segments of the industrial markets. Neenah began business in 1872 and has built a strong reputation for producing quality iron castings. Neenah is one of the largest manufacturers of heavy municipal iron castings in the United States. Neenah's broad range of heavy municipal iron castings includes manhole covers and frames, storm sewer frames and grates, heavy duty airport castings, specialized trench drain castings, specialty flood control castings and ornamental tree grates. Neenah sells these municipal castings throughout the United States to state and local government entities, utility companies, precast concrete manhole structure producers and contractors for both new construction and infrastructure replacement. In addition, Neenah also produces a wide range of complex industrial castings, including castings for the transportation industry, a broad range of castings for the farm equipment industry, and specific components for compressors used in HVAC systems. BACKGROUND On April 30, 1997, pursuant to an Agreement and Plan of Reorganization with NC Merger Company and NFC, Neenah Corporation (the predecessor company) was acquired by NFC, a holding company and a wholly owned subsidiary of ACP. Prior to July 1, 1997, Neenah Foundry Company was one of three wholly owned subsidiaries of Neenah Corporation, a holding company with no significant assets or operations other than its holdings in the common stock of its three wholly owned subsidiaries. The other two wholly owned subsidiaries were Neenah Transport, Inc. and Hartley Controls, an entity that was later sold. On July 1, 1997, Neenah Foundry Company merged with and into Neenah Corporation and the surviving company changed its name to Neenah Foundry Company. On March 30, 1998 Neenah acquired all the capital stock of Deeter Foundry, Inc. for $24.3 million. Since 1945, Deeter Foundry, Inc. has been producing gray iron castings for the heavy municipal market. The municipal casting product line of Deeter Foundry, Inc. includes manhole frames and covers, storm sewer inlet frames, grates and curbs, trench grating and tree grates. Deeter Foundry, Inc. also produces a wide variety of special application construction castings. These products are utilized in waste treatment plants, airports, telephone and electrical construction projects. On April 3, 1998, Neenah acquired all the capital stock of Mercer Forge Corporation for $47.0 million in cash. Founded in 1954, Mercer Forge Corporation produces complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer Forge Corporation is also a producer of microalloy forgings. On September 8, 1998 Neenah acquired all the capital stock of Dalton Corporation for $102.0 million in cash. Dalton Corporation manufactures and sells gray iron castings for refrigeration systems, air conditioners, heavy equipment, engines, gear boxes, stationary transmissions, heavy duty truck transmissions and other automotive parts. On September 8, 1998, the capital stock of Advanced Cast Products, an entity held by ACP prior to the time ACP acquired its interest in NFC, was contributed to Neenah by ACP. Advanced Cast Products is an independent manufacturer of ductile iron castings that are produced through both traditional casting methods and through Advanced Cast Products' Evapcast lost foam casting process. Advanced Cast Products' production capabilities also include a range of finishing operations including austempering and machining. Advanced Cast Products sells its products primarily to companies in the heavy truck, construction equipment, railroad, mining and automotive industries. On December 31, 1998, Neenah purchased Cast Alloys, Inc. a manufacturer of investment-cast titanium and stainless steel golf clubheads, for $40.1 million in cash. Neenah discontinued the operations of Cast Alloys, Inc. in January 2002. 32 On November 30, 1999, Neenah purchased Gregg Industries, Inc., a manufacturer of gray and ductile iron castings, for $22.9 million in cash. We sold all of the issued and outstanding shares of common stock of Hartley Controls Corporation on October 2, 2000. On August 8, 2002, we sold substantially all of the assets of Peerless Corporation. We sold substantially all of the assets of Belcher Corporation on December 27, 2002. BANKRUPTCY PROCEEDINGS Beginning in 2000, several trends converged to create an extremely difficult operating environment for Neenah. First, there were dramatic cyclical declines in some of Neenah's most important markets -- including trucks, railroad, construction and agriculture equipment. Second, there was a major inventory adjustment by manufacturers in the residential segment of the HVAC equipment industry, resulting in fewer orders for Dalton's HVAC castings. Third, domestic foundries have been suffering from underutilized capacity, significantly increased foreign competition, continued price reduction pressure from customers and other competitors, and increased costs associated with heightened safety and environmental regulations. These factors have caused and continue to cause a substantial number of foundries to cease operations or file for bankruptcy protection over the past several years. Beginning in May 2000, we took aggressive steps to offset the impact of the decline in sales and earnings and improve cash flow in the difficult market environment: William Barrett was appointed as the new chief executive officer of NFC; Hartley Controls was sold in September 2000 for $5.0 million in total proceeds; other excess assets were sold for $5.3 million in late 2001; the operations of Cast Alloys, Inc. were discontinued in January 2002; substantially all of the assets of Advanced Cast Product's subsidiary Peerless Corporation were sold for $0.3 million in August 2002; and the assets of Belcher Corporation, a subsidiary of Advanced Cast Products, were sold in December 2002. Furthermore, management also implemented a significant reduction in the number of employees, a significant reduction in capital expenditures and selected price increases. In January 2003, we engaged Houlihan Lokey Howard & Zukin Capital to assist in the formulation and evaluation of various options for a restructuring, reorganization, or other strategic alternatives. Our board of directors considered a broad range of out-of-court and in-court strategic alternatives potentially available to us as well as several strategic alternatives. Despite these steps, the credit rating agencies began to downgrade our outstanding debt obligations in early 2000. Our 11 1/8% Notes became highly illiquid and traded infrequently. According to data obtained from Telerate, the price of the notes fell from a trailing 12 month high of $57.50 in June 2002 to a trailing 12 month low of $30.00 in late December 2002. The trailing six month average price as of June 23, 2003 was approximately $38.60. As of May 2003, Neenah was not in compliance with the March 31, 2003 EBITDA covenant of its old credit facility and lacked sufficient liquidity to make the then-due interest payment on the 11 1/8% Notes and maintain the liquidity covenants under the old credit facility. On May 1, 2003 we launched both an exchange offer for the 11 1/8% Notes and the pre-petition solicitation of acceptances of the plan of reorganization in accordance with section 1126(b) of the Bankruptcy Code. The exchange offer, which was to be completed outside of Bankruptcy Court, did not result in the requisite percentage of 11 1/8% Notes tendered and both the exchange offer and the solicitation of acceptances for the May 1, 2003 plan of reorganization were allowed to expire. On July 1, 2003 we launched a pre-petition solicitation of acceptances with respect to an alternative joint plan of reorganization that was ultimately approved. Having received sufficient votes to approve the plan of reorganization, we together with ACP, NFC and all of our wholly-owned domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, as amended, with the United States Bankruptcy Court for the District of Delaware on August 5, 2003. On that same date we submitted to the Bankruptcy Court our Amended Prepackaged Joint Plan of Reorganization, which we refer to as the Plan of Reorganization, and the Disclosure Statement that we used to solicit votes for that plan. At the time of the Chapter 11 bankruptcy filing, we had approximately $157 million of existing senior debt under our old credit facility and $282 million of principal and accrued and unpaid interest under our 33 11 1/8% Notes. We negotiated the continued use of our own cash collateral with our senior lenders, thereby enabling us to utilize our own cash to conduct business operations during the pendency of the Chapter 11 filing. Pursuant to the Plan of Reorganization, we conducted a rights offering, whereby holders of the 11 1/8% Notes were given the opportunity to provide up to $110 million additional financing through the purchase of up to $119.996 million face amount of Old Notes and warrants to acquire up to 34.2 million shares of common stock of ACP. In case holders of the 11 1/8% Notes failed to subscribe for the full $110.0 million, we also obtained standby commitment agreements from Mackay Shields LLC, Exis Differential Holdings Ltd., Citicorp Mezzanine III, L.P., Trust Company of the West and Metropolitan Life Insurance Company whereby these Standby Purchasers collectively agreed to provide up to $110.0 million of financing for the Plan of Reorganization by participating in the rights offering (to the extent that they were holders of the 11 1/8% Notes) as well as purchasing any and all unsubscribed securities not subscribed for by the other holders of 11 1/8% Notes. Approximately 94% of the holders of the 11 1/8% Notes participated in the rights offering and the Standby Purchasers were, therefore, only required to fund the shortfall of approximately $6.4 million. By order dated September 26, 2003, the Bankruptcy Court confirmed the Plan of Reorganization and the Plan of Reorganization became effective on October 8, 2003. October 8, 2003 is hereinafter referred to as the Effective Date. The Plan of Reorganization allowed us to emerge from bankruptcy with an improved capital structure and, because we had arranged to continue paying our trade debt on a timely basis during the pendency of the Chapter 11 case, at the time of emergence, we had sufficient trade credit to continue operations in the ordinary course of business. The Plan of Reorganization resulted in significant changes to our capital structure. Among other things, the Plan of Reorganization provided for the repayment in full of our old credit facility, the cancellation of $282.0 million in principal amount of 11 1/8% Notes, the cancellation of our PIK Note and the elimination of the interests of the former equity owners of our indirect parent company, ACP. The cash proceeds necessary to consummate the Plan of Reorganization were provided from the consummation of the New Credit Facility and the issuance of the Old Notes. The claims and interests of our various creditors were satisfied as follows: - our old credit facility was repaid in cash; - our PIK Note was cancelled and Citicorp Mezzanine III, L.P., the holder of that note, received Old Notes with a principal amount equal to $13.134 million, warrants to acquire 3.8 million shares of common stock of ACP and cash in the amount of $45,400; - our outstanding 11 1/8% Notes were cancelled and each holder of 11 1/8% Notes received its pro rata share of (i) $30.0 million in cash, (ii) $100.0 million in aggregate principal amount of new 13% Senior Subordinated Notes due 2013 of the Company, (iii) 38 million shares of common stock of ACP and (iv) rights to acquire for $110 million in cash in the aggregate, units for up to $119.996 million face amount of Old Notes and warrants to acquire up to 34.2 million shares of common stock of ACP; - the following debt and equity instruments were cancelled without further consideration: 12% senior subordinated notes issued by ACP, 12% senior subordinated notes issued by NFC and all equity interests of ACP; and - the following claims and equity interests passed through our Chapter 11 bankruptcy proceedings unimpaired: all tax claims, intercompany debt, other secured debt and general unsecured debt and the equity interests of ACP Holding Company in NFC Castings, Inc., equity interests of NFC Castings, Inc. in Neenah and equity interests of Neenah in its direct and indirect subsidiaries. 34 BUSINESS SEGMENTS -- OVERVIEW 1. Castings Segment We produce iron castings for use in heavy municipal and industrial applications. This segment sells directly to tier-one suppliers, as well as to other industrial end users. (a) Products, Customers and Markets The castings segment provides a variety of products to both the heavy municipal and industrial markets. Sales to the heavy municipal market are comprised of storm and sanitary sewer castings, manhole covers and frames and storm sewer frames and grates. Sales also include heavy airport castings, specialized trench drain castings, specialty flood control castings and ornamental tree grates. Customers for these products include state and local government entities, utility companies, precast concrete structure producers and contractors. Sales to the industrial market are comprised of differential carriers and casings, transmission, gear and axle housings, yokes, planting and harvesting equipment parts and compressor components. Customers for these products include medium and heavy-duty truck, farm equipment and HVAC manufacturers. (i) Heavy Municipal Our broad heavy municipal product line consists of two general categories of castings, "standard" and "specialty" castings. Standard castings principally consist of storm and sanitary sewer castings that are consistent with pre-existing dimensional and strength specifications established by local authorities. Standard castings are generally higher volume items that are routinely used in new construction and infrastructure replacement. Specialty castings are generally lower volume products which include heavy-duty airport castings, trench drain castings, flood control castings, special manhole and inlet castings and ornamental tree grates. These specialty items are frequently selected and/or specified from our municipal product catalog and tree grate catalog, which together encompass over 4,400 standard and specialty patterns. For many of these specialty products, we believe that we are the only manufacturer with existing patterns to produce such a particular casting, although a competing manufacturer could elect to make the investment in patterns or equipment necessary to produce a similar casting. We hold a number of patents and trademarks related to their heavy municipal product line. We sell our municipal castings to state and local government entities, utility companies, pre-cast concrete manhole structure producers and contractors for both new construction and infrastructure replacement. Our active municipal customers generally make purchase decisions based on a number of criteria, including acceptability of the product per local specification, quality, service, price and the customer's relationship with the foundry. During the 70 years that we have participated in the municipal market, we have emphasized sales and marketing and believe that we have built a strong reputation for customer service. We believe that we are one of the leaders in U.S. heavy municipal casting production and that we have strong name recognition. We have one of the largest sales and marketing force of any foundry serving the heavy municipal market. Our dedicated sales force works out of regional sales offices to market municipal castings to contractors and state and local governmental entities throughout the United States. We operate a number of regional distribution and sales centers throughout the United States. We believe that this regional approach enhances our knowledge of local specifications and our position in the heavy municipal market. (ii) Industrial Industrial castings have increased in complexity and are generally produced in higher numbers than municipal castings. Complexity in the industrial market is determined by the intricacy of a casting's shape, the thinness of its walls and the amount of processing by a customer required before a part is suitable for use. OEMs and their first tier suppliers have been demanding higher complexity parts principally to reduce labor costs in their own production processes by using fewer parts to manufacture the same finished product or assembly and by using parts that require less preparation before being considered a finished product. 35 We primarily sell our industrial castings to a limited number of customers with whom we have established close working relationships. These customers base their purchasing decisions on, among other things, our technical ability, price, service, quality assurance systems, facility capabilities and reputation. Our assistance in product engineering plays an important role in winning bids for industrial castings. For the average industrial casting, 12 to 18 months typically elapse between the design phase and full production. The product life cycle of a typical industrial casting is quite long. Although the patterns for industrial castings are owned by the customer and not the foundry as is the case with the patterns for municipal castings, industrial patterns are not readily transferable to other foundries without, in most cases, significant additional investment. Foundries, including our company, generally do not design industrial castings. Nevertheless, a close working relationship between the foundry and the customer during a product launch is critical to reduce potential production problems and minimize the customer's risk of incurring lost sales or damage to its reputation due to a delayed launch. Involvement by a foundry early in the design process generally increases the likelihood that the customer will design a casting within the manufacturing capabilities of such foundry and also improves the likelihood that such foundry will be awarded the casting for full production. We estimate that we have historically retained approximately 90% of the castings that we have been awarded throughout the product life cycle, which is typical for the industry. We believe industrial customers will continue to seek out a foundry with a strong reputation for performance that is capable of providing a cost-effective combination of manufacturing technology and quality. Our strategy is to augment our relationships with existing customers by participating in the development and production of more complex industrial castings, while seeking out selected new customers who would value our performance reputation, technical ability and high level of quality and service. We employ a dedicated industrial casting sales force at all of our subsidiary locations, with the exception of Deeter. Our sales force supports ongoing customer relationships, as well as working with customers' engineers and procurement representatives and our engineers, manufacturing management and quality assurance representatives throughout all stages of the production process to ensure that the final product consistently meets or exceeds the specifications of our customers. This team approach, consisting of sales, marketing, manufacturing, engineering and quality assurance efforts is an integral part of our marketing strategy. (b) Manufacturing Process Our foundries manufacture gray and ductile iron and cast it into intricate shapes according to customer metallurgical and dimensional specifications. We continually invest in the improvement of process controls and product performance and believe that these investments and our significant experience in the industry have made us one of the most efficient manufacturers of industrial and heavy municipal casting products. The casting process involves using metal, wood or urethane patterns to make an impression of a desired shape in a mold made primarily of sand. Cores, also made primarily of sand, are used to make the internal cavities and openings in a casting. Once the casting impression is made in the mold, the cores are set into the mold and the mold is closed. Molten metal is then poured into the mold, which fills the mold cavity and takes on the shape of the desired casting. Once the iron has solidified and cooled, the mold sand is separated from the casting and the sand is recycled. The selection of the appropriate casting method, pattern, core-making equipment and sand, and other raw materials depends on the final product and its complexity, specifications and function as well as the intended production volumes. Because the casting process involves many critical variables, such as choice of raw materials, design and production of tooling, iron chemistry and metallurgy and core and molding sand properties, it is important to monitor the process parameters closely to ensure dimensional precision and metallurgical consistency. We continually seek out ways to expand the capabilities of existing technology to improve our manufacturing processes. We also achieve productivity gains by improving upon the individual steps of the casting process such as reducing the amount of time required to make a pattern change or to produce a different casting product. Such time reductions enable us to produce castings in medium volume quantities on high volume, 36 cost-effective molding equipment. Additionally, our extensive effort in real time process controls permits us to produce a consistent, dimensionally accurate casting, which saves time and effort in the final processing stages of production. This dimensional accuracy contributes significantly to our manufacturing efficiency. Continual testing and monitoring of the manufacturing process is important to maintain product quality. We, therefore, have adopted sophisticated quality assurance techniques and policies for our manufacturing operations. During and after the casting process, we perform numerous tests, including tensile, proof-load, radiography, ultrasonic, magnetic particle and chemical analysis. We utilize statistical process controls to measure and control significant process variables and casting dimensions. We document the results of this testing in metallurgical certifications that are sometimes included with each shipment to our industrial customers. We strive to maintain systems that provide for continual improvement of operations and personnel, emphasize defect prevention, safety and reduce variation and waste in all areas. (c) Raw Materials The primary raw materials used to manufacture ductile and gray iron castings are steel scrap, pig iron, metallurgical coke and silica sand. While there are multiple suppliers for each of these commodities, we have generally elected to maintain single-source arrangements with our suppliers for most of these major raw materials except pig iron. Due to long standing relationships with each of our suppliers, we believe that we will continue to be able to secure the proper amount and type of raw materials at competitive prices. Although the prices of the raw materials used vary, fluctuations in the price of scrap metal are the most significant to us. We have arrangements with most of our industrial customers that enable us to adjust industrial casting prices to reflect scrap price fluctuations. In periods of rapidly rising or falling scrap prices, these adjustments will lag the current scrap price because they are generally based on average market prices for prior periods. Such prior periods vary by customer, but are generally no longer than six months. Castings are sometimes sold to the heavy municipal market on a bid basis and after a bid is won the price for the municipal casting generally cannot be adjusted for increases in the prices of raw materials. In most cases, however, we believe that we have compensated for rises in scrap prices in prior periods by implementing higher municipal casting unit prices in subsequent bids. Rapidly fluctuating scrap prices may, however, have an adverse or positive effect on our business, financial condition and results of operations. (d) Seasonality We have historically experienced moderate cyclicality in the heavy municipal market as sales of municipal products are influenced by, among other things, public spending. There is generally not a large backlog of business in the municipal market due to the nature of the market. In the industrial market, we experience cyclicality in sales resulting from fluctuations in our markets, including the medium and heavy-duty truck and the farm equipment markets, which are subject to general economic trends. We experience seasonality in our municipal business where sales tend to be higher during the construction season, which occurs during the warmer months, generally the third and fourth quarters of our fiscal year. We attempt to maintain level production throughout the year in anticipation of such seasonality and therefore do not experience significant production volume fluctuations. We build inventory in anticipation of the construction season. This inventory build-up has a negative impact on working capital and increases our liquidity needs during the second quarter. We have not historically experienced significant seasonality in industrial casting sales. (e) Competition The markets for our products are highly competitive. Competition is based mainly on price, but also on quality of product, range of capability, level of service and reliability of delivery. We compete with numerous domestic foundries, as well as with a number of foreign iron foundries. We also compete with several large domestic manufacturers whose products are made with materials other than ductile and gray iron, such as steel or aluminum. Industry consolidation over the past 20 years has resulted in a significant 37 reduction in the number of foundries and a rise in the share of production by larger foundries, some of which have significantly greater financial resources than do we. Competition from foreign foundries has had an ongoing presence in the heavy municipal market and continues to be a factor, primarily in the western and eastern United States, due in part to costs associated with transportation. 2. Forgings Segment Our forgings segment, operated by Mercer Forge Corporation, or Mercer, producers complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer also produces of microalloy forgings. Mercer sells directly to OEMs, as well as to industrial end users. Mercer's subsidiary, A&M, machines forgings and castings for Mercer and other industrial applications. Until the mid-1980's, Mercer produced military tank parts, but successfully converted from a defense contractor to a commercial manufacturer. Mercer produces approximately 500 individually forged components and has developed specialized expertise in forgings of microalloy steel. (a) Products, Customers and Markets Mercer manufactures its products to customer specification with typical production runs of 1,000 or more units. Mercer currently operates mechanical press lines, from 1,300 tons to 4,000 tons. Key markets for Mercer include truck and automotive parts, railroad equipment and general industrial machinery. Mercer's in-house sales organization sells directly to end users and OEMs. A key element of Mercer's sales strategy is its ability to develop strong customer relationships through responsive engineering capability, dependable quality and just-in-time delivery performance. Demand for forged products closely follows the general business cycles of the various market segments and the demand level for capital goods. While there is a more consistent base level of demand for the replacement parts portion of the business, the strongest expansions in the forging industry coincide with the periods of industrial segment economic growth. Mercer's largest industry segment, the heavy truck segment, is extremely weak. Mercer's other market segments are also showing weakness following general economic slowdowns in those industrial areas. Management attributes this to normal industrial cycles in these markets and adjustments to overbuilds in inventory levels as well as high energy costs. (b) Manufacturing Process Forgings and castings (together with a third process, fabrication) are the principal commercial metal working processes. In forging, metal is pressed, pounded or squeezed under great pressure, with or without the use of heat, into parts that retain the metal's original grain flow, imparting high strength, ductility and resistance properties. Forging itself usually entails one of four principal processes: impression die; open die; cold; and seamless rolled ring forging. Impression die forging, commonly referred to as "closed die" forging, is the principal process employed by Mercer, and involves bringing two or more dies containing "impressions" of the part shape together under extreme pressure, causing the forging stock to take the desired shape. Because the metal flow is restricted by the die, this process can yield more complex shapes and closer tolerances than the "open die" forging process. Impression die forging is used to produce products such as military and off-highway track and drive train parts; automotive and truck drive train and suspension parts; railroad engine, coupling and suspension parts; military ordinance parts and other items where close tolerances are required. Once a rough forging is produced, regardless of the forging process, it must generally still be machined. This process, known as "finishing" or "conversion," smooths the component's exterior and mating surfaces and adds any required specification, such as groves, threads and bolt holes. The finishing process can contribute significantly to the value of the end product, in particular in certain custom situations where high value specialized machining is required. Machining can be performed either in-house by the forger, by a machine shop which performs this process exclusively or by the end-user. 38 An internal staff of engineers designs products to meet customer specifications incorporating computer assisted design work stations for tooling design. Because its forged products are inherently less expensive and stronger, Mercer has been successful in replacing certain cast parts previously supplied by third party foundries. Management believes that Mercer is an industry leader in forging techniques using microalloy steel which produces parts which are lighter and stronger than those forged from conventional carbon steel. (c) Raw Materials The principal raw materials used in Mercer's products are carbon and microalloy steel. Mercer purchases substantially all of its carbon steel from four principal sources. While Mercer has never suffered an interruption of materials supply, management believes that, in the event of any disruption from any individual source, adequate alternative sources of supply are available within the immediate vicinity. (d) Seasonality Mercer has experienced moderate cyclicality in sales resulting from fluctuations in the medium and heavy-duty truck market and the heavy industrial market, which are subject to general economic trends. Mercer's current backlog of industrial market business is smaller than there would be in a stronger, more typical market. (e) Competition Mercer competes primarily in a highly fragmented industry which includes several dozen other press forgers and hammer forge shops. Hammer shops cannot typically match press forgers for high volume, single component manufacturing or close tolerance production. Competition in the forging industry has also historically been determined both by product and geography, with a large number of relatively small forgers across the country carving out their own product and customer niches. In addition, most end users manufacture some forgings internally, often maintaining a critical minimum level of production in-house and contracting out the balance. The primary basis of competition in the forging industry is price, but engineering, quality and dependability are also important, particularly with respect to building and maintaining customer relationships. Some of Mercer's competitors have significantly greater resources than Mercer. There can be no assurance that Mercer will be able to maintain or improve its competitive position in the markets in which it competes. INTELLECTUAL PROPERTY We have registered, and are in the process of registering, various trademarks and service marks with the U.S. Patent and Trademark Office. EMPLOYEES As of September 30, 2003 we had approximately 2,776 full time employees, of whom 2,255 were hourly employees and 521 were salaried employees. Nearly all of the hourly employees at Neenah, Dalton, Advanced Cast Products, Inc. and Mercer are members of either the United Steelworkers of America or the Glass, Molders, Pottery, Plastics and Allied Workers International Union. We negotiate a collective bargaining agreement with these employees every three to five years. The current agreements expire as follows: Neenah, December 2006; Dalton-Warsaw, April 2005; Dalton-Kendallville, June 2004; Advanced Cast Products, Inc.-Meadville, October 2005; and Mercer, June 2004. All employees at Deeter and Gregg are non-union. We believe that we have good relationships with our employees. GOVERNMENT REGULATION Our facilities are subject to federal, state and local laws and regulations relating to the protection of the environment and worker health and safety, including those relating to discharges to air, water and land, the handling and disposal of solid and hazardous waste and the cleanup of properties affected by hazardous substances. Such laws include the Federal Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability 39 Act of 1980 and OSHA. We believe that each of our operations are currently in substantial compliance with applicable environmental laws, and that we have no liabilities arising under such environmental laws that would have a material adverse effect on our operations, financial condition or competitive position. Some risk of environmental liability and other cost, however, is inherent in each of our businesses. Any of our businesses might in the future incur significant costs to meet current or more stringent compliance, cleanup or other obligations pursuant to environmental requirements. Such costs may include expenditures related to remediation of historical releases of hazardous substances or clean-up of physical structures prior to decommissioning. Under the Federal Clean Air Act Amendments of 1990, the Environmental Protection Agency is directed to establish MACT standards for certain industrial operations that are major sources of hazardous air pollutants. The iron foundry industry will be required to implement the MACT emission limits, control technologies or work practices by October 1, 2006. Although we are not yet able to accurately estimate the costs to comply with the new MACT standard, the MACT standard, when implemented, and state laws governing the emission of toxic air pollutants may require that certain of our facilities incur significant costs for air emission control equipment, air emission monitoring equipment or process modifications. Compliance Impacts Dalton's Warsaw facility was issued a National Pollutant Discharge Elimination System ("NPDES") permit in 2000 that limits the level of chlorine and the temperature of its non-contact cooling water permitted to be discharged to a waterway by the year 2003. Although the chlorine is already in the water when purchased from the city, Dalton is responsible for eliminating the chlorine. Dalton met the chlorine discharge permit requirements at the end of 2003 and implemented a system to lower the chlorine levels of its cooling water. The cost of implementing this system has not been material. PROPERTIES We maintain the following manufacturing, machining and office facilities. We own all of the facilities except Mercer's machining facility, which we lease.
ENTITY LOCATION PURPOSE - ------ -------- ------- Neenah Foundry Company.............. Neenah, WI 2 manufacturing facilities Office facility Dalton Corporation.................. Warsaw, IN Manufacturing and office facilities Kendallville, IN Manufacturing facility Stryker, OH Machining facility Advanced Cast Products, Inc. ....... Meadville, PA Manufacturing and office facility Mercer Forge Corporation............ Mercer, PA Manufacturing and office facility Sharon, PA Machining facility Deeter Foundry, Inc. ............... Lincoln, NE Manufacturing and office facility Gregg Industries, Inc. ............. El Monte, CA Manufacturing and office facility
In addition to the facilities above, we operate thirteen distribution and sales centers. We own six of those properties and lease seven of them. The principal equipment at the facilities consists of molding machines, presses, machining equipment, welding, grinding and painting equipment. We regard our plant and equipment as well maintained and adequate for our needs. LEGAL PROCEEDINGS We are involved in routine litigation incidental to our business. Such litigation is not, in our opinion, likely to have a material adverse effect on our financial condition or results of operations. 40 MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The following sets forth certain information as of October 8, 2003, with respect to the persons who are members of the Board of Directors of ACP and our executive officers.
NAME AGE POSITION - ---- --- -------- William M. Barrett................... 56 President, Chief Executive Officer and Director Gary W. LaChey....................... 57 Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Phillip C. Zehner.................... 62 Vice President, Assistant Secretary and Assistant Treasurer of Neenah Foundry Company Joseph L. DeRita..................... 65 Division President, Dalton Corporation Joseph Varkoly....................... 41 Vice President -- Business Development, Advanced Cast Products, Inc. Benjamin C. Duster, IV, Esq. ........ 48 Director Andrew Booke Cohen................... 32 Director Michael J. Farrell................... 53 Director Jeffrey G. Marshall.................. 59 Director
Mr. Barrett has served as our President and Chief Executive Officer since May 2000. Mr. Barrett joined us in 1992 serving as General Sales Manager -- Industrial Castings until May 1, 1997. Mr. Barrett was Vice President and General Manager from May 1, 1997 to September 30, 1998 and President from October 1, 1998 to April 30, 2000. From 1985 to 1992, Mr. Barrett was the Vice President -- Sales for Harvard Industries Cast Products Group. Mr. Barrett has also been one of our directors since May 2000. Mr. LaChey has served as our Corporate Vice President -- Finance since June 2000. Mr. LaChey was appointed a director in January 2003. Mr. LaChey joined us in 1971 and has served in a variety of positions of increasing responsibility in the finance department. Mr. LaChey was most recently Vice President -- Finance, Treasurer and Secretary. Mr. Zehner has served as our Vice President, Assistant Secretary and Assistant Treasurer since June 2000. Mr. Zehner joined the Company in 1974, serving in a variety of positions of increasing responsibility in the finance department. Mr. DeRita has served as Division President of the Dalton Corporation since 1999. He joined Newnam Manufacturing in 1989 and became the Vice President -- Sales when the Dalton Corporation acquired Newnam Manufacturing in 1992. Prior to joining our company, Mr. DeRita was the Manager of Engineering and Maintenance at Erie Malleable, the same position he held previously at Zurn Industries. Mr. Varkoly has served as the Vice President -- Business Development of Advanced Cast Products, Inc. since March 2000. Prior to joining our company in 2000, he served as the Director -- Finance of Betzdearborn, Inc. Previously, he was a Manager for Performance Improvement Management Consulting with Ernst & Young LLP and the Business Development Manager of FMC Corporation. Mr. Duster has served as a director since October 2003. Mr. Duster is currently Chairman of the Board of Algoma Steel, Inc., a Toronto Stock Exchange listed integrated steel manufacturer based in Canada. Mr. Duster is also a principal in Masson & Company, a financial restructuring advisory and turn- around management firm based in New York. Mr. Cohen has served as a director since October 2003. Mr. Cohen is currently an analyst at SAC Capital Advisors, LLC. Previously, Mr. Cohen spent six years in the investment banking division of Morgan Stanley. Mr. Cohen received his BA and MBA degrees from the University of Pennsylvania. Mr. Marshall has served as a director since October 2003. Mr. Marshall is currently the Chairman of Smith Marshall, a subsidiary of the NextMedia Company Limited. Previously, he was the President and 41 Chief Executive Officer of Aluma Enterprises, Inc., a construction technology company, for six years. Prior to joining Aluma Enterprises, Inc., Mr. Marshall successively held the positions of President and Chief Executive Officer at Marshall Steel Limited, Marshall Drummond McCall Inc. and the Ontario Clean Water Agency. Mr. Farrell has served as a director since February 2003. Mr. Farrell is currently the President of Farrell & Co., a merchant banking firm specializing in heavy manufacturing companies, and the Chief Executive Officer of Standard Steel, LLC. Mr. Farrell has also served in executive capacities for MK Rail Corporation, Motor Coils Manufacturing Co. and Season-ALL Industries. Mr. Farrell currently also serves as a director of C-Cor.net Corp. and Federated Investors, Inc. Mr. Farrell is a certified public accountant. BOARD COMPOSITION The Board of Directors of ACP, the ultimate parent company of Neenah Foundry Company consists of five directors. ACP's Amended and Restated Bylaws permits the holders of a majority of the shares of common stock of ACP then entitled to vote at an election of directors, to remove any director or the entire board of directors at any time, with or without cause. Under ACP's Amended and Restated Bylaws, vacancies on the Board of Directors may be filled by the affirmative vote of a majority of the holders of ACP's outstanding stock entitled to vote thereon. DIRECTOR COMPENSATION Subject to certain limitations, each member of the Board of Directors of ACP who is not an officer of ACP shall be entitled to receive annual compensation for their services in the amount $40,000, payable in cash quarterly in four equal installments, and are entitled to receive reimbursement by ACP for all reasonable out-of-pocket expenses, including, without limitation, travel expenses, incurred by such director in connection with the performance of such director's duties. In addition, each member of the Board of Directors that is not an officer of our company shall be paid a fee of $1,000 for in person attendance at annual, regular, special and adjourned meetings of the Board of the Directors of the company or committee meetings of the Board of the Directors of the company. On the Effective Date, we issued 200,000 shares of common stock representing 0.25% of the Company's Common Stock on a fully-diluted basis as of the Effective Date to our outside directors. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The current members of the Compensation Committee of ACP's Board of Directors are Andrew Booke Cohen and Benjamin C. Duster, IV, Esq.. The current members of the Audit Committee of ACP's Board of Directors are Michael J. Farrell and Jeffrey G. Marshall. During fiscal 2003, no executive officer of ACP: - served as a member of the compensation committee or other board committee performing similar functions or, in the absence of any such committee, the board of directors, of another entity, one of whose executive officers served on ACP's Compensation Committee; - served as a director of another entity, one of whose executive officers served on ACP's Compensation Committee; or - served as a member of the compensation committee or other board committee performing similar functions or, in the absence of any such committee, the board of directors, of another entity, one of whose executive officers served as a director of ACP. LIMITATIONS ON DIRECTORS' LIABILITY AND INDEMNIFICATION The Amended and Restated Bylaws of ACP which became effective on October 8, 2003, provide that, to the extent permitted by the Delaware General Corporate Law, or DGCL, it will indemnify its current and former directors and officers against all expenses actually and reasonably incurred by them as a result 42 of their being threatened with or otherwise involved in any action, suit or proceeding by virtue of the fact that they are or were an officer or director of ACP. ACP, however, is not required to indemnify an officer or director for an action, suit or proceeding commenced by that officer or director unless it authorized that director or officer to commence the action, suit or proceeding. The Amended and Restated Bylaws of ACP also provide that ACP shall advance expenses incurred by any person it is obligated to indemnify, upon presentation of appropriate documentation. Furthermore, the Amended and Restated Bylaws of ACP provide that ACP may purchase and maintain insurance on behalf of its directors and officers against any liability, expense or loss, whether or not it would otherwise have the power to indemnify such person under its Amended and Restated Bylaws or the DGCL. Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, officers and controlling persons of ACP pursuant to the foregoing provisions, or otherwise, ACP has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. EXECUTIVE COMPENSATION Summary Compensation Table. The following summarizes, for the year indicated, the principal components of compensation for our Chief Executive Officer and our other four highest compensated executive officers (collectively, the "named executive officers"). The compensation set forth below fully reflects compensation for work performed on our behalf.
LONG-TERM ANNUAL COMPENSATION COMPENSATION AWARDS ----------------------------------- ----------------------- OTHER RESTRICTED SECURITIES FISCAL ANNUAL STOCK UNDERLYING LTIP ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS OPTIONS PAYOUTS COMPENSATION --------------------------- ------ ------- ------- --------------- ---------- ---------- ------- ------------ William M. Barrett........... 2003 342,704 59,617 38,685 -- -- -- -- President and Chief Executive 2002 306,254 -- 35,684 -- -- 35,684 -- Officer and Director 2001 275,000 -- 33,048 -- -- 33,048 -- Gary W. LaChey............... 2003 234,996 45,526 38,143 -- -- -- -- Corporate Vice President -- 2002 219,374 -- 35,110 -- -- 35,110 -- Finance, Treasurer, Secretary, 2001 208,334 -- 33,680 -- -- 33,680 -- Chief Financial Officer and Director Joe Varkoly.................. 2003 177,000 117,600 36,257 -- -- -- -- Vice President -- Business 2002 170,250 -- 25,290 -- -- -- -- Development, Advanced Cast 2001 163,331 31,318 13,349 -- -- -- -- Products, Inc. Phillip C. Zehner............ 2003 133,250 32,998 35,498 -- -- -- -- Vice President, Assistant 2002 129,000 19,124 32,701 -- -- 32,701 -- Secretary and Assistant 2001 125,800 26,312 30,902 -- -- 30,902 -- Treasurer Joseph L. DeRita............. 2003 235,000 -- 29,635 -- -- -- -- Division President, Dalton 2002 224,000 -- 18,015 -- -- 18,015 -- Corporation 2001 224,000 -- 19,182 -- -- 19,182 --
- --------------- (1) The named officers have participated in our voluntary profit sharing contributions or matching 401(k) contributions and excess benefit programs. The aggregate payments made by the Company pursuant to such employee benefits programs are listed on the above table as "Other Annual Compensation." EMPLOYMENT AGREEMENTS We have entered into employment agreements with certain members of our management. The employment agreements delineate the salary and subsequent potential annual increases, health (subject to 43 satisfying insurability requirements), 401(k) and other benefits that the named employees are entitled to receive. Non-competition and non-solicitation agreements will be signed as part of the employment agreements, which will apply during a period of three years for our chief executive officer and two years for the chief financial officer and other members of management of the Company, in each case, after termination. We have executed employment agreements with the following executives: John Andrews, William M. Barrett, Joseph L. DeRita, Frank C. Headington, Timothy Koller, Gary W. LaChey, William Martin, Steve Shaffer and Joseph Varkoly. 2003 MANAGEMENT ANNUAL INCENTIVE PLAN Under the 2003 Management Annual Incentive Plan, members of management and certain other specified employees will receive annual performance awards if the Company achieves certain EBITDA targets set by the board of director of the Company at the beginning of each fiscal year. The bonus paid will equal (i) 50% of the target bonus amount for each individual should the Company reach 85% of the EBITDA target, (ii) 100% of the target bonus on reaching 100% of the target EBITDA and (iii) 200% of the target bonus on reaching 120% of the target EBITDA. Target bonuses range from 2.0% to 35.0% of base salary depending upon job responsibility. The bonus will be payable within ten business days of the approval of the Company's audited financial statements by the board of directors. In addition, a one time aggregate incremental $450,000 emergence bonus was paid to certain members of management upon the Effective Date. For 2004 and beyond, the executives and certain other specified employees will receive annual performance awards upon achieving certain milestones, including EBITDA targets, debt reduction targets and other certain criteria as determined from time to time by the compensation committee of the board of directors of Reorganized Neenah. Target bonus as a percentage of salary for each member of management will be consistent with historical levels. Target levels, timing of payments and other terms and conditions of the annual incentive plan will be determined by the Company's compensation committee. 2003 MANAGEMENT EQUITY INCENTIVE PLAN Under the 2003 Management Equity Incentive Plan which was established on the Effective Date, certain members of management received restricted shares which represented 5% of common stock of ACP on a fully diluted basis as of the Effective Date. The 4,000,000 restricted shares issued pursuant to the 2003 Management Equity Incentive Plan were 25% vested upon grant and the balance will vest on an annual straight-line basis over the ensuing three years subject to acceleration on a Change of Control, as defined in the 2003 Management Equity Incentive Plan, termination (other than for Cause) or an event that triggers tag-along or drag-along rights described below. The 2003 Management Equity Incentive Plan also provides that a pool of options for an additional 5% of common stock of ACP be reserved for future grants as determined by the compensation committee of the new board of directors of ACP. The 2003 Management Equity Incentive Plan provides certain members of management with certain tag-along and drag-along rights with respect to any transaction involving a sale of 50% or more of the equity of the Company on a fully diluted basis, or a sale of substantially all of the assets, or a merger or other transaction having similar effect in a single transaction or a series of transactions to the same party and anti-dilution protection. 2003 SEVERANCE AND CHANGE OF CONTROL PLAN Under our 2003 Severance and Change of Control Plan, the executives with whom we have executed employment agreements, shall be entitled to receive Severance Payments, as defined in the 2003 Severance and Change of Control Plan, if the Company terminates his or her employment without cause or if he or she terminates his or her employment with cause and a Change of Control Payment if a participating executive's employment is terminated or the executive resigns from employment for Good Reason within 180 days of a Change of Control, as such terms are defined in the 2003 Severance and Change of Control Plan. 44 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS RELATIONSHIP WITH ACP HOLDINGS ACP Holdings is the parent company of NFC Castings, Inc., and thus ACP Holdings indirectly owns 100% of the Common Stock of the Company. William M. Barrett, who serves as the President and Chief Executive Officer of the Company, currently serves as President and Chief Executive Officer of ACP Holdings. RELATIONSHIP WITH THE STANDBY PURCHASERS As a result of the standby purchase agreements that we entered into with the Standby Purchasers, we gave certain of the Standby Purchasers the right to name members to our board of directors. Mackay Shields LLC may designate two members of our board of directors and Citicorp Venture Capital, Ltd. and Trust Company of the West may each designate one member of our board of directors. 45 SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS The following table sets forth information known to us with respect to the beneficial ownership of the common stock of ACP as of October 8, 2003: - each person or entity who owns of record or beneficially more than 5% or more of any class of our voting securities; - each of the named executive officers of our Company; - each director of ACP; and - all directors and named executive officers as a group.
SHARES BENEFICIALLY OWNED ------------------------- NAME OF BENEFICIAL OWNER(1)(2)(3) NUMBER PERCENTAGE - --------------------------------- ----------- ----------- Mackay Shields LLC(4)....................................... 19,834,492 24.6% Exis Differential Holdings Ltd.(5).......................... 90,644 * Citicorp Mezzanine III, L.P.(6)............................. 11,890,846 14.7% Trust Company of the West(7)................................ 6,206,107 7.7% Metropolitan Life Insurance Company(8)...................... 217,547 * William M. Barrett(9)....................................... 1,250,000 1.6 Gary W. LaChey(10).......................................... 955,882 1.2 Joseph L. DeRita(11)........................................ 404,412 * Joseph Varkoly(12).......................................... 220,587 * Benjamin C. Duster, IV, Esq.(13)............................ 200,000 * Andrew Brooke Cohen(13)..................................... 200,000 * Michael J. Farrell(13)...................................... 200,000 * Jeffrey G. Marshall(13)..................................... 200,000 * All executive officers and directors as a group (8 persons)(14).............................................. 3,630,881 4.5%
- --------------- * Less than 1% (1) Unless otherwise indicated, the business address of each person named in the table above is c/o Neenah Foundry Company, 2121 Brooks Avenue, Neenah, Wisconsin 54957. (2) As used in this table, a beneficial owner of a security includes any person who, directly or indirectly, through contract, arrangement, understanding, relationship or otherwise has or shares (1) the power to vote, or direct the voting of, such security or (2) investing power which includes the power to dispose, or to direct the disposition of, such security. In addition, a person is deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days of October 8, 2003. Except as otherwise noted, the persons and entities listed on this table have sole voting and investment power with respect to all of the shares of common stock owned by them. Calculations are based on a total of 80,800,000 shares of common stock outstanding as of October 8, 2003. See "The Refinancing Transactions." (3) Includes the following number of shares issuable upon conversion of warrants exercisable within 60 days of October 8, 2003: (1) 9,879,031 warrants by Mackay Shields LLC; (2) 90,644 warrants by Exis Differential Holdings Ltd.; 7,848,293 warrants by Citicorp Mezzanine III, L.P.; 3,113,554 warrants by Trust Company of the West and (3) 217,547 warrants by Metropolitan Life Insurance Company. (4) The address for Mackay Shields LLC is 9 West 57th Street, 33rd Floor, New York, NY 10019. (5) The address for Exis Differential Holdings Ltd. is 767 Third Avenue, New York, NY 10017. (6) Citicorp Mezzanine III, L.P. received 4,096,665 warrants for being a Standby Purchaser and 3,751,628 warrants in exchange for cancellation of the PIK Note. The address for Citicorp Mezzanine III, L.P. is 399 Park Avenue, 14th Floor, New York, NY 10043. (7) Includes shares held by TCW Shared Opportunity Fund II, L.P., Shared Opportunity Fund IIB LLC, TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., 46 AIMCO CDO, Series 2000-A, TCW High Income Partners, Ltd. and TCW High Income Partners II, Ltd. The Trust Company of the West is the ultimate beneficial holder of these shares. The address for Trust Company of the West is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025. (8) The address for Metropolitan Life Insurance Company is 10 Park Avenue, Morristown, NJ 07962. (9) Includes 937,500 unvested shares of common stock. One-third of the unvested shares shall rest on a cumulative basis on each anniversary of the Effective Date, if as of such date, Mr. Barrett is still in our employ. (10) Includes 716, 912 unvested shares of common stock. One-third of the unvested shares shall vest on a cumulative basis on each anniversary of the Effective Date, if as of such date, Mr. Lachey is still in our employ. (11) Includes 303,309 unvested shares of common stock. One-third of the unvested shares shall vest on a cumulative basis on each anniversary of the Effective Date, if as of such date, Mr. DeRita is still in our employ. (12) Includes 165,440 unvested shares of common stock. One-third of the unvested shares shall vest on a cumulative basis on each anniversary of the Effective Date, if as of such date, Mr. Varkoly is still in our employ. (13) Pursuant to the Plan of Reorganization, Messrs. Duster, Cohen, Farrell and Marshall each received 200,000 shares of common stock as of the Effective Date. (14) Excludes 1,169,119 shares beneficially owned by certain executive employees of our company and certain of our subsidiaries. Collectively, our management and directors own an aggregate of 4,800,000 shares of our common stock. 47 DESCRIPTION OF NEW CREDIT FACILITY STRUCTURE The New Credit Facility is a $92.085 million facility that has a five-year maturity and provides for a revolving credit line of up to $70 million (with a $5.0 million sublimit available for letters of credit) and a term loan of $22.085 million. Availability under the revolver is based on various advance rates compared against a borrowing base consisting of Neenah's accounts receivable, inventory and property, plant and equipment. Based on the formulas under the New Credit Facility, as of December 31, 2003 we had $22.0 million in terms loans outstanding under the New Credit Facility, $25 million outstanding in revolving loans and the maximum amount of unused commitment available was $31 million. The New Credit Facility is secured by a first priority, perfected security interest in substantially all of Neenah's tangible and intangible assets. Capitalized terms used in this section and not defined herein are defined in the credit agreement governing the New Credit Facility, that we hereinafter refer to as the Credit Agreement. INTEREST RATES AND FEES Interest on borrowings under the New Credit Facility accrues daily with reference to the base rate , hereinafter referred to as the Base Rate, plus the applicable interest margin; however the Company may elect that all or a portion of the borrowings under the facility bear interest at the Adjusted LIBOR Rate plus the applicable interest margin. The Base Rate is defined as the higher of (i) the prime rate for commercial loans announced or quoted by Fleet National Bank in effect on such day and (ii) the federal funds rate in effect on such date, plus 1/2%. The Adjusted LIBOR Rate is defined as the rate offered for deposits in U.S. dollars for a period of time comparable to the applicable interest period which appears on the Telerate page 3730. The New Credit Facility contains provisions under which commitment fees and interest rates are adjusted in increments based on the ratio, hereinafter referred to as the Fixed Charge Coverage Ratio, of consolidated EBITDA to interest expense and scheduled principal payments on our outstanding debt which are each adjusted in accordance with the Credit Agreement. Outstanding principal balances under the New Credit Facility will accrue interest at the base rate or the LIBOR rate, as applicable, plus in each case, the margin applicable to such advances shall be determined as set forth in the following table. APPLICABLE MARGIN FOR ADJUSTMENT DATES THROUGH AND INCLUDING SEPTEMBER 30, 2004:
BASE RATE BASE RATE LIBOR LIBOR REVOLVING TERM REVOLVING TERM UNUSED FIXED CHARGE COVERAGE RATIO PORTION PORTION PORTION PORTION LINE FEE - --------------------------- --------- --------- --------- ------- -------- Less than 1.15 to 1.00........................ 1.50% 2.00% 3.00% 3.50% 0.500% Greater than or equal to 1.15 to 1.00 and less than 1.40 to 1.00........................... 1.25% 1.75% 2.75% 3.25% 0.500% Greater than or equal to 1.40 to 1.00 and less than 1.65 to 1.00........................... 1.00% 1.50% 2.50% 3.00% 0.375% Greater than or equal to 1.65 to 1.00......... 0.75% 1.25% 2.25% 2.75% 0.375%
APPLICABLE MARGIN FOR ADJUSTMENT DATES ON AND AFTER DECEMBER 31, 2004:
BASE RATE BASE RATE LIBOR LIBOR REVOLVING TERM REVOLVING TERM UNUSED FIXED CHARGE COVERAGE RATIO PORTION PORTION PORTION PORTION LINE FEE - --------------------------- --------- --------- --------- ------- -------- Less than 1.20 to 1.00........................ 1.50% 2.00% 3.00% 3.50% 0.500% Greater than or equal to 1.20 to 1.00 and less than 1.40 to 1.00........................... 1.25% 1.75% 2.75% 3.25% 0.500% Greater than or equal to 1.40 to 1.00 and less than 1.65 to 1.00........................... 1.00% 1.50% 2.50% 3.00% 0.375% Greater than or equal to 1.65 to 1.00......... 0.75% 1.25% 2.25% 2.75% 0.375%
48 The initial Applicable Margin for the Base Rate Revolving Portion, the Base Rate Term Portion, the LIBOR Revolving Portion, the LIBOR Term Portion and the Unused Line Fee is 1.25%, 1.75%, 2.75%, 3.25% and 5.00% respectively. We have agreed to pay certain fees with respect to the New Credit Facility including (i) fees on the unused commitments of lenders equal to the Applicable Margin for the Unused Line Fee, (ii) letter of credit fees on the aggregate face amount of outstanding letters of credit equal to the then applicable borrowing margin for LIBOR Revolving Portions and a fronting fee of 0.125% per annum on the face amount of outstanding letters of credit and an issuing bank fee for the bank issuing a letter of credit, and (iii) agent, arrangement and other similar fees. LIMITATION ON INDEBTEDNESS The New Credit Facility prevents Neenah and its subsidiaries from creating or incurring any debt other than the obligations owed (i) under the New Credit Facility; (ii) under the 13% Senior Subordinated Notes due 2013; (iii) under the Notes, (iv) on their capitalized lease obligations; (v) prior to the execution of the New Credit Facility; (vi) that are permitted guaranties; (vii) that are permitted indebtedness including certain enumerated liens; (viii) from the ordinary course of business, subject to certain limits and restrictions and (ix) in connection with the refinancing of any indebtedness permitted under the New Credit Facility, subject to certain restrictions. FINANCIAL COVENANTS During the term of the New Credit Facility and so long as any obligations thereunder remain outstanding, Neenah and the subsidiary borrowers shall comply with certain enumerated financial covenants. The financial covenants define certain terms. Neenah and the subsidiary borrowers agree to the application of these terms to the operative sections of the New Credit Facility. The terms include EBITDA, fixed charge coverage ratio, fixed charges and interest expense. The interest expense definition delineates interest expense should be calculated, but it also sets forth the amount of the interest expense for the first three interest measurement periods. Set forth below is the interest expense for the respective measurement period.
MEASUREMENT DATE APPLICABLE PORTION OF THE MEASUREMENT PERIOD INTEREST EXPENSE - ---------------- -------------------------------------------- ---------------- December 31, 2003..................... Beginning on January 1, 2003 and ending on $16,832,000 September 30, 2003 March 31, 2004........................ Beginning on April 1, 2003 and ending on $11,222,000 September 30, 2003 Twelve (12) month period ending on Beginning on July 1, 2003 and ending on $ 5,611,000 June 30, 2004....................... September 30, 2003
Under the financial covenants, Neenah and the borrower subsidiaries must maintain their fixed charge coverage ratio for any period set forth below higher than or equal to the ratio set forth below (in each case measured as of the last day of such period):
PERIOD RATIO - ------ ----------- Twelve (12) month period ending on December 31, 2003........ 1.10 to 1.0 Twelve (12) month period ending on March 31, 2004........... 1.10 to 1.0 Twelve (12) month period ending on June 30, 2004............ 1.10 to 1.0 Twelve (12) month period ending on September 30, 2004....... 1.10 to 1.0 Twelve (12) month period ending on December 31, 2004 and each March 31, June 30, September 30 and December 31 thereafter................................................ 1.15 to 1.0
SECURITY AND GUARANTEES NFC and the inactive subsidiaries of Neenah jointly and severally guarantee Neenah's obligations under the New Credit Facility. Our obligations under the New Credit Facility are secured by a first priority security interest in all or substantially all of the assets of each borrower and each guarantor. The Notes, and the guarantees in respect thereof, are equal in right of payment to the New Credit Facility, and 49 the guarantees in respect thereof. The liens in respect of the Notes are junior to the liens securing the New Credit Facility and guarantees thereof. COVENANTS The New Credit Facility requires Neenah to observe certain customary conditions, affirmative covenants and negative covenants (including financial covenants). MATURITY AND AMORTIZATION The term loan advanced under the New Credit Facility is repayable in equal consecutive quarterly installments, based on a seven-year straight line amortization rate, and the remaining outstanding principal is repaid at maturity, which is from October 8, 2008. There is no cash flow sweep mechanism that would require additional principal repayments on the term loan. PREPAYMENTS Optional Prepayments. Optional prepayments are permitted under the New Credit Facility, including the right to reduce the commitments under the revolving loan facility, subject to (i) a 1% fee based on the amount of the underlying commitments terminated during the first year following October 8, 2003 and (ii) a 0.50% fee based on the amount of the underlying commitments terminated during the second or third year following the Effective Date. Mandatory Prepayments. Mandatory prepayments are required as follows: (i) 50% of the net proceeds from the issuance of debt or equity to non-affiliates; (ii) 100% of the net proceeds received from the sale or disposition of all or any part of the assets other than: (A) sales in the ordinary course of business, (B) permitted sales to be agreed, subject to the reinvestment of the net proceeds thereof (or the commitment to reinvest) within 180 days, (C) other sales not in the ordinary course of business not to exceed in any fiscal year an amount to be agreed and (D) assets secured by purchase money security interest; (iii) 100% of insurance proceeds not reinvested or not committed to reinvestment within 180 days with such commitment reinvestment to occur within 360 days from when the insurance proceeds are received and (iv) 100% of the proceeds from tax refunds, indemnity payments of pension plan reversions actually received. COSTS AND EXPENSES Neenah paid and shall pay all reasonable costs and expenses of the administrative agent (including all reasonable fees, expenses and disbursements of outside counsel and other professional advisors retained by the administrative agent) in connection with the preparation, execution and delivery of the definitive credit documentation and the funding of all loans in connection therewith. 50 DESCRIPTION OF THE NOTES The New Notes will be issued under an Indenture, dated October 8, 2003 (the "Indenture"), among the Company, the Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee"). The following is a summary of certain provisions of the Indenture, the Collateral Documents and the Lien Subordination Agreement. The definitions of certain capitalized terms used in this description are set forth below under "Certain Definitions." References in this "Description of the Notes" section to the "Company" mean only Neenah Foundry Company and not any of its subsidiaries. GENERAL The Notes will be issued only in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. The Company has appointed the Trustee to serve as registrar and paying agent under the Indenture at its offices in New York, New York. No service charge will be made for any registration of transfer or exchange of the Notes, except for any tax or other governmental charge that may be imposed in connection therewith. MATURITY, INTEREST AND PRINCIPAL OF THE NOTES The Notes being offered hereby are limited to $133,130,000 million aggregate principal amount and will mature on September 30, 2010. Subject to compliance with the covenant described under "-- Certain Covenants -- Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock," the Company may issue Additional Notes from time to time in the future. Any Additional Notes will be part of the same issue as the Notes being issued in this offering and will vote on all matters as one class with the Notes being issued in this offering. For purposes of this "Description of the Notes," except for the covenants described under "-- Certain Covenants -- Limitations on Indebtedness," references to the Notes include Additional Notes, if any. Cash interest on the Notes will accrue at a rate of 11% per annum and will be payable semiannually in arrears on January 1 and July 1, of each year (each, and "Interest Payment Date"), commencing January 1, 2004, to the holders of record of Notes by 10:00 a.m. New York City time on that date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. RANKING The Notes will be: - general secured obligations of the Company; - secured by second-priority Liens on and security interests in the assets of the Company that secure Obligations under the Credit Agreement and other First Priority Claims other than the exceptions described under the caption "-- Collateral" below; - equal in right of payment with all existing and future senior Indebtedness of the Company; and - senior in right of payment to any existing and future subordinated Indebtedness of the Company. Pursuant to the Collateral Documents and the Lien Subordination Agreement, the Liens securing the Notes under the Collateral Documents are second in priority to any and all Liens at any time granted to secure the Priority Lien Obligations, which include Indebtedness and other Obligations under the Credit Agreement. As of November 30, 2003 we have approximately $47 million of Indebtedness outstanding under the Credit Agreement, with approximately $45 million in additional revolving loan capacity. Such amounts are, or would be, secured by Priority Liens on the Collateral. In addition, under the Indenture, the Company also may incur additional Indebtedness secured by first-priority Liens or second-priority Liens as described below under "-- Certain Covenants -- Limitation on Additional Indebtedness" and "-- Certain Covenants -- Limitation on Liens." The Collateral securing the Notes is subject to control by creditors with first-priority Liens. If there is an Event of Default, the value of the Collateral may not be 51 sufficient to repay both the first-priority creditors and the Holders of the Notes, as described below under "-- Collateral." GUARANTEES OF THE NOTES The Indenture provides that each of the Subsidiary Guarantors will unconditionally guarantee on a joint and several basis all of the Company's Obligations under the New Notes, including its obligations to pay principal, premium, if any, and interest with respect to the New Notes. While the New Credit Facility limits the amount of indebtedness that the Subsidiary Guarantors may incur, the New Credit Facility specifically permits the Subsidiary Guarantees. Each Guarantee will be: - a general secured obligation of the Guarantor; - secured by a Note Lien on and security interest in the assets of the Guarantor that secure Obligations under the Credit Agreement and other first Priority Lien Obligations other than the exceptions described under the caption "-- Collateral" below; - equal in right of payment with all existing and future senior Indebtedness of the Subsidiary Guarantors; and - senior in right of payment to existing and future subordinated Indebtedness of the Subsidiary Guarantors. The obligations of each Subsidiary Guarantor will not be discharged except by complete performance of the Obligations contained in the Notes and Indenture. Each Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to seek contribution from each non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of Holders under the Subsidiary Guarantees. The Company shall cause each Restricted Subsidiary issuing a Subsidiary Guarantee after the date of the Indenture to execute and deliver to the Trustee a supplemental indenture and the applicable documents and certificates required by the Indenture, pursuant to which such Restricted Subsidiary shall become a party to the Indenture and thereby (1) unconditionally guarantee all of the Company's Obligations under the Notes and the Indenture on the terms set forth therein and (2) grant a security interest in the Collateral owned by such Restricted Subsidiary on the terms set forth in the Collateral Documents. Thereafter, such Restricted Subsidiary shall (unless released in accordance with the terms of the Indenture) be a Subsidiary Guarantor for all purposes of the Indenture. The Indenture provides that if the Notes thereunder are defeased in accordance with the terms of the Indenture, all of the assets of a Subsidiary Guarantee sold or disposed of in a transaction that complies with the Indenture or the Company designates a Subsidiary Guarantor to be an Unrestricted Subsidiary in a transaction that complies with the Indenture, then such Subsidiary Guarantor (in the event of a sale or other disposition of all of the Equity Interests of such Subsidiary Guarantor) or the corporation acquiring such assets (in the event of a sale or other disposition of all or substantially all of the assets of such Subsidiary Guarantor) shall be released and discharged of its Subsidiary Guarantee obligations under the Indenture and the Notes. COLLATERAL The Notes and Guarantees will be secured by Note Liens, granted by the Company and the Subsidiary Guarantors on the Collateral of the Company and each Subsidiary Guarantor (whether now owned or hereafter arising or acquired) to the extent such assets secure the Priority Lien Obligations and to the extent that a Note Lien is able to be granted or perfected therein. From and after the Issue Date, if the Company any Subsidiary Guarantor or Restricted Domestic Subsidiary creates any additional security interest in any property or asset to secure any Priority Lien Obligations or any other Obligations that are secured equally and ratably with the Notes by a Note Lien 52 upon the Collateral, it must concurrently grant a Note Lien (subject to Priority Liens and Permitted Liens) upon such property or asset as security for the Notes. The Company, the Subsidiary Guarantors and the Trustee, on its own behalf and as Trustee, entered into Collateral Documents defining the terms of the Liens securing the Note Obligations. These security interests will secure the payment and performance when due of all of the Obligations of the Company and the Subsidiary Guarantors under the Notes, the Indenture, the Subsidiary Guarantees and the Collateral Documents, as provided in the Collateral Documents. The Collateral was pledged to the Trustee, as Collateral Agent for its benefit and the benefit of the Trustee and the Holders. The Note Liens are subject and subordinate to the Priority Liens, and no payment or other distributions from (or with respect to) any realization upon the Collateral may be made on account of the Note Liens until the Priority Lien Obligations are discharged. The Priority Liens are also subject to Permitted Liens, including those granted to third parties on or prior to the Issue Date. The Persons holding such Liens may have rights and remedies with respect to the property subject to such Lien that, if exercised, could adversely affect the value of the Collateral or the ability of the Trustee to realize or foreclose on the Collateral. The Note Liens are second in priority to any and all Liens at any time granted to secure Priority Lien Obligations. Priority Lien Obligations include the Obligations under the Credit Agreement. In addition, other Indebtedness of the Company and the Restricted Subsidiaries that is secured by a Lien permitted pursuant to the covenant described under the caption "-- Certain Covenants -- Limitation on Liens" and, that is designated by the Company upon incurrence may be secured equally and ratably with the Notes by the second-priority security interests in the Collateral. The Trustee, the Credit Agent, the Company and the Subsidiary Guarantors entered into the Loan Subordination Agreement. Pursuant to the terms of the Loan Subordination Agreement, prior to the discharge of Priority Liens, the holders of Priority Liens will determine the time and method by which the Liens on the Collateral will be enforced by the Trustee. If the Notes become due and payable prior to the final stated maturity thereof for any reason or are not paid in full at the final stated maturity thereof and after any applicable grace period has expired, pursuant to the provisions of the Loan Subordination Agreement, the Trustee, on behalf of the holders of Priority Liens thereunder, will have the exclusive right to foreclose (or decline to foreclose) upon (or otherwise exercise (or decline to exercise) remedies in respect of) the Collateral. Following the discharge of the Priority Liens, the Trustee will have the right to foreclose upon the Collateral in accordance with instructions from the holders of a majority in aggregate principal amount of Note Obligations and other second-lien Obligations, if any, or, in the absence of such instructions, in such manner as the Trustee deems appropriate in its absolute discretion. The Trustee will not be permitted to enforce the Liens even if an Event of Default has occurred and the Notes have been accelerated except (a) in any insolvency or liquidation proceeding, as necessary to file a claim or statement of interest with respect to the Notes or (b) as necessary to take any action not adverse to the Priority Liens in order to preserve or protect its rights in the Note Liens. As a result, while any Priority Liens are outstanding, neither the Trustee nor the Holders will be able to force a sale of the Collateral or otherwise exercise remedies normally available to secured creditors without the concurrence of the holders of the Priority Liens or Agent under the Credit Agreement. The Lien Subordination Agreement does not require the holders of Priority Lien Obligations to marshal assets or to satisfy any obligations owed to them first from collateral pledged to them which constitutes Excluded Collateral even if the other collateral available to them would have satisfied their claims and left Collateral available to benefit the Holders. In addition, the Collateral Documents will generally provide that, so long as the Credit Agreement is in effect the lenders thereunder may change, waive, modify or vary the Collateral Documents without the consent of the Trustee or the Holders of the Notes, unless such change, waiver or modification materially adversely affects the rights of the Holders and not the other secured creditors in a like or similar manner or would result in the impairment of any second-priority Lien other than in accordance with the Indenture. After the discharge of the Priority Liens, the Trustee will distribute all cash proceeds (after payment of the costs of enforcement and collateral administration) from any realization upon the Collateral received by it under the Collateral Documents for the ratable benefit of the 53 Holders and other second-lien Obligations. Future holders of Priority Liens and of other second-lien Obligations, or their respective agents, will be required to become a party to the Lien Subordination Agreement. Whether prior to or after the discharge of the Priority Lien Obligations, the Company and the Subsidiary Guarantors will be entitled to releases of assets included in the Collateral from the Note Liens under any one or more of the following circumstances: (1) to enable us to consummate asset dispositions permitted or not prohibited under the covenant described below under the caption "-- Certain Covenants -- Limitation on Asset Sales"; (2) if all of the Equity Interests of any of our Subsidiary Guarantors that are pledged to the Trustee, as Collateral Agent, are released or if any Subsidiary Guarantor is released from its Subsidiary Guarantee, that Subsidiary Guarantor's assets will also be released; or (3) as described under "Modification and Waiver" below. The Note Lien on all Collateral also will be released upon (1) payment in full of the principal of, accrued and unpaid interest, if any, on the Notes and all other Obligations under the Indenture, the Subsidiary Guarantees and the Collateral Documents that are due and payable at or prior to the time such principal and accrued and unpaid interest, if any, are paid, (2) a satisfaction and discharge of the Indenture as described below under the caption "-- Satisfaction and Discharge" and (3) a Legal Defeasance or Covenant Defeasance as described below under the caption "-- Legal Defeasance and Covenant Defeasance." If the Company incurs obligations under the Credit Agreement or other Priority Lien Obligations which are secured by assets of the Company or its Restricted Subsidiaries of the type constituting Collateral, then the Notes will be secured at such time by a Note Lien on the collateral securing such Priority Lien Obligations, to the same extent provided by the Collateral Documents. At any time that the holders of Note Liens are entitled to direct the disposition or other actions with respect to the Collateral, the holders of a majority in aggregate principal amount of such Note Obligations shall be entitled to direct such disposition or action. The holders of the Priority Liens will receive all proceeds from any realization on the Collateral until the Priority Lien Obligations are fully discharged. Proceeds realized by the Trustee, as Collateral Agent from the Collateral will be applied: - first, to amounts owing to the holders of the Priority Liens in accordance with the terms of the Priority Lien Security Documents; - second, to amounts owing to the Trustee, as Collateral Agent, in accordance with the terms of the Collateral Documents; - third, to amounts owing to the Trustee in its capacity as such in accordance with the terms of the Indenture and to any Trustee acting on behalf of holders of second-lien Obligations in accordance with the terms of the documentation governing such Other Second Lien Obligations; - fourth, to amounts owing to the Holders in accordance with the terms of the Indenture and holders of Other Second Lien Obligations, pro rata based on the aggregate principal amount of each such holder's Obligations; and - fifth, to the Company and/or other persons entitled thereto. Subject to the terms of the Collateral Documents, the Company and each Subsidiary Guarantor will have the right to remain in possession and retain exclusive control of the Collateral securing the Notes (other than any securities constituting part of the Collateral and deposited with the Trustee in accordance with the provisions of the Collateral Documents and other than as set forth in the Collateral Documents), to freely operate the Collateral and to collect, invest and dispose of any income therefrom. 54 To the extent that third parties enjoy Liens permitted by the Collateral Documents and the Indenture, such third parties will have rights and remedies with respect to the Collateral subject to such Liens that, if exercised could adversely affect the value of the Collateral or the ability of the Trustee to realize or foreclose on the Collateral on behalf of holders of Note Obligations. Further, no appraisals of any of the Collateral have been prepared by or on behalf of the Company in connection with the issuance of the Notes. There can be no assurance that the proceeds from the sale of the Collateral remaining after the satisfaction of all Obligations owed to the holders of the Priority Lien Obligations or the holders of other Liens which have priority over or rank pari passu with the Note Liens would be sufficient to satisfy the Obligations owed to the Holders. By its nature, some or all of the Collateral will be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the Collateral can be sold in a short period of time, if salable. OPTIONAL REDEMPTION The Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after September 30, 2007, at the Redemption Prices (expressed as a percentage of principal amount) set forth below, with respect to the indicated Redemption Date plus accrued and unpaid interest thereon, if any, to, but excluding the Redemption Date, if redeemed during the 12-month period beginning on September 30, of the years indicated below:
REDEMPTION YEAR PRICE - ---- ---------- 2007........................................................ 105.500% 2008........................................................ 104.125% 2009 and thereafter......................................... 102.750%
The Company may acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture. In the event that less than all of the Notes are to be redeemed at any time pursuant to an optional redemption, selection of such Notes for redemption will be made by the Trustee in compliance with the requirements of any applicable depository, legal and national securities exchange or automated quotation system, if any, on which the Notes are listed or, if the Notes are not then listed on a national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that no Notes of a principal amount of $1,000 or less shall be redeemed in part. Notice of redemption shall be mailed by first class mail at least 30 but not more than 60 days before a Redemption Date to the Trustee and each Holder of Notes to be redeemed at its registered address. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the Redemption Date, interest will cease to accrue on Notes or portions thereof called for redemption as long as the Company has deposited with the paying agent for the Notes funds in satisfaction of the applicable redemption price pursuant to the Indenture. Factors that may influence the Company's decision to redeem the Notes include the ability to refinance the Notes at a lower interest rate and the desire to release the Company from the Liens on the Notes. OFFER TO PURCHASE UPON CHANGE OF CONTROL In the event that a Change of Control occurs, each Holder shall have the right, at such Holder's option, subject to the terms and conditions of the Indenture, to require the Company to repurchase all or any part of such Holder's Notes (provided, that the principal amount of such Notes must be $1,000 or an integral multiple thereof) on a date to be established by the Company (the "Change of Control Payment Date") after the occurrence of such Change of Control, at a cash price (the "Change of Control 55 Repurchase Price") equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to, but excluding, the Change of Control Payment Date. If a Change of Control were to occur and all holders subsequently caused the Company to redeem their Notes at 101% of the face amount together with accrued and unpaid interest thereon, we may not have all funds necessary at that time to satisfy our obligations. In the event that, pursuant to the terms of the Indenture, the Company shall be required to commence an offer to purchase Notes (the "Change of Control Offer"), the Company will comply with the terms of the Indenture and all applicable tender offer laws and regulations and any violation of the provisions of the Indenture relating to such Change of Control Offer occurring as a result of such compliance shall not be deemed an Event of Default or an event that, with the passing of time or giving of notice, or both, would constitute an Event of Default. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the Company repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. CERTAIN COVENANTS Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and, correlatively, "incurred" and "incurrence") any Indebtedness (including, without limitation, Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any preferred stock; provided, however, that the Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) if after giving effect to the incurrence of such Indebtedness and the application of the proceeds thereof, the Consolidated Coverage Ratio of the Company and its Restricted Subsidiaries (on a consolidated basis) would not exceed 2.00 to 1.00. The foregoing limitations shall not apply to: (i) Indebtedness incurred by the Company and its Restricted Subsidiaries under the Credit Agreement in an aggregate principal amount at the time incurred equal to the greater of (i) $102 million and (ii) the Borrowing Base Amount; (ii) Indebtedness represented by the Senior Subordinated Notes; (iii) additional Indebtedness incurred by the Company in respect of Capital Lease Obligations or Purchase Money Obligations in an aggregate principal amount not to exceed $10,000,000 at any time outstanding; (iv) Indebtedness represented by the Notes and the Indenture; (v) Hedging Obligations incurred by the Company pursuant to agreements or other arrangements designed to protect the Company against fluctuations in interest rates and/or currency exchange rates resulting from its borrowings under the Credit Agreement; (vi) additional unsecured Indebtedness which is subordinate in right of payment to the Notes, not to exceed $5,000,000 at any time outstanding; (vii) Indebtedness of the Company to any of its Wholly Owned Subsidiaries that is a Restricted Subsidiary, and Indebtedness of any Wholly Owned Subsidiary of the Company that is a Restricted Subsidiary to the Company or any of its Wholly Owned Subsidiaries that is a Restricted Subsidiary (the Indebtedness incurred pursuant to this clause (vii) being hereinafter referred to as "Intercompany Indebtedness"); provided that in the case of Intercompany Indebtedness of the Company (other than Intercompany Indebtedness pursuant to the Credit Agreement) such obligations shall be unsecured and subordinated in all respects to the Company's obligations pursuant to the Notes; provided, further, that an incurrence of Indebtedness shall be deemed to have occurred upon (a) any sale or other disposition of Intercompany Indebtedness to a Person other than the Company 56 or any of its Restricted Subsidiaries, (b) any sale or other disposition of Equity Interests of any Restricted Subsidiary of the Company which holds Intercompany Indebtedness such that such Restricted Subsidiary ceases to be a Restricted Subsidiary after such sale or other disposition or (c) designation of a Restricted Subsidiary as an Unrestricted Subsidiary; (viii) the incurrence by the Company of Indebtedness issued in exchange for, or the proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness incurred pursuant to the Consolidated Coverage Ratio test set forth in the first paragraph of this covenant or pursuant to clauses (i), (ii) or (iv) of this covenant in whole or in part (the "Refinancing Indebtedness"); provided, however, that (A) (i) the aggregate principal amount of any Refinancing Indebtedness (other than a Credit Agreement Refinancing Indebtedness) shall not exceed the aggregate principal amount of Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded, and (ii) the aggregate principal amount of any Credit Agreement Refinancing Indebtedness may exceed the aggregate principal amount of the Indebtedness incurred under the Credit Agreement so extended, refinanced, renewed, replaced, defeased or refunded only to the extent permitted under Clause (i) of this caption "-- Certain Covenants -- Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock"; (B) the Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (C) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu with or subordinated in right of payment to the Notes, the Refinancing Indebtedness shall be pari passu with or subordinated, as the case may be, in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded (any such extension, refinancing, renewal, replacement, defeasance or refunding being referred to as a "Permitted Refinancing"); (ix) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities, or obligations in respect of purchase price adjustments, in connection with the acquisition or disposition of any business, assets or Subsidiary of the Company permitted under the Indenture; (x) Indebtedness of the Company or a Restricted Subsidiary owed to any Person in connection with liability insurance provided by such Person to the Company or such Restricted Subsidiary, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business; (xi) Guarantees of Indebtedness permitted to be incurred under the Indenture; (xii) Indebtedness in respect of performance bonds; and (xiii) Indebtedness not included in paragraphs (i) through (xii) above which does not exceed at any time, in the aggregate, $2,000,000. Limitation on Restricted Payments. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly: (a) (i) declare or pay any dividend or make any distribution on account of Equity Interests, other than (A) dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company; or (B) dividends or distributions payable to the Company or a Wholly Owned Subsidiary of the Company that is a Restricted Subsidiary; (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company (other than any such Equity Interests owned by the Company or a Wholly Owned Subsidiary of the Company that is a Restricted Subsidiary); 57 (iii) purchase, redeem, repay, defease or otherwise acquire or retire for value any Indebtedness that is subordinated in right of payment to the Notes except (i) for regularly scheduled payments of interest when due or payment of principal at maturity thereof, (ii) as permitted under "-- Certain Covenants -- Asset Sales" below, and (iii) as permitted or required under the Senior Subordinated Notes Indenture; (iv) make any Investment (other than a Permitted Investment); (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"); unless, at the time of and after giving effect to such Restricted Payment: (A) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Coverage Ratio test set forth under "-- Certain Covenants -- Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock"; and (C) such Restricted Payment (the amount of any such payment, if other than cash, to be determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a resolution in an Officers' Certificate delivered to the Trustee), together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of the Indenture (including Restricted Payments permitted by the next succeeding paragraph, except as set forth therein), shall not exceed the sum of (w) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) commencing on the first day of the Company's first fiscal quarter beginning after the initial issuance of the Notes and ending on the last day of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, 100% of such deficit as a negative number), plus (x) 100% of the aggregate net cash proceeds received by the Company from the issuance or sale since the date of initial issuance of the Notes of Equity Interests of the Company or of debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), plus (y) the aggregate cash received by the Company as capital contributions to the Company after the date of initial issuance of the Notes (other than from a Subsidiary), plus (z) any cash received by the Company after the date of initial issuance of the Notes as a dividend or distribution from any of its Unrestricted Subsidiaries or from the sale of any of its Unrestricted Subsidiaries less the cost of disposition and taxes, if any (but in each case excluding any such amounts included in Consolidated Net Income). (b) The foregoing provisions shall not prohibit: (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; (ii) the redemption, repurchase, retirement or other acquisition of any Equity Interests of the Company, or the defeasance, redemption or repurchase of subordinated Indebtedness in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of Equity Interests of the Company (other than any Disqualified Stock) or out of the net proceeds of a substantially concurrent cash capital contribution received by the Company; provided that the amount of any such proceeds that are utilized for any such redemption, repurchase, 58 retirement, defeasance or other acquisition shall be excluded from Clause (C)(x) above this section "-- Certain Covenants -- Limitation on Restricted Payments"; (iii) the repayment, defeasance, redemption or repurchase of subordinated Indebtedness with the net proceeds from an incurrence of Refinancing Indebtedness in a Permitted Refinancing; (iv) the repayment, defeasance, redemption or repurchase of Senior Subordinated Notes for an aggregate purchase price of $15,000,000 or less; (v) any Investment made with the proceeds of a substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of Capital Stock of the Company (other than Disqualified Stock); provided, however, the proceeds of such sale shall not be (and have not been) included in Clause (C) above this section "-- Certain Covenants -- Limitation on Restricted Payments"; (vi) other restricted payments of up to $5,000,000 in the aggregate; or (vii) the payment of a dividend or distribution by the Company and its Subsidiaries, directly or indirectly, to ACP Holding in an amount sufficient to permit ACP Holding to pay its consolidated, combined or unitary United States federal, state and local tax liabilities relating to the business of the Company and its Subsidiaries, provided that ACP Holding applies the amount of such dividend or distribution for such purpose at such time; (viii) upon the occurrence of a Change of Control within 60 days of the completion of the offer to repurchase the Notes pursuant to "-- Offer to Purchase upon Change to Control, any purchase, retirement, redemption or other acquisition of subordinated Obligations permitted to be incurred pursuant to the Indenture (including the Senior Subordinated Notes) and only to the extent necessary to comply with the covenants and other provisions of such subordinated Obligations; (ix) payments by the Company to NFC Castings or ACP Holding not to exceed an amount necessary to permit NFC Castings or ACP Holding to (A) make payments in respect to its indemnification obligations owing to directors, officers, or other Persons under NFC Castings' or ACP Holding's charter or by-laws or pursuant to written agreements with any such Person, (B) make payments in respect of its other operational expenses (other than taxes) incurred in the ordinary course of business, or (C) make payments in respect of indemnification obligations and costs and expenses incurred by ACP Holding in connection with any offering of common stock of ACP Holding; or (x) distributions by the Company and the Restricted Subsidiaries in amounts necessary to permit such Person to repurchase securities of such Person from employees of such Person upon the termination of their employment, so long as the aggregate cash amount of all such Distributions by all such Persons, measured at the time when made, does not exceed $250,000 in any fiscal year of the Company. provided, further, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (i), (ii), (iii), (vi), (viii) and (x) above no Default or Event of Default shall have occurred and be continuing; provided, further, that the Restricted Payments described in clauses (vii) and (ix), shall not be counted in computing the aggregate amount of all Restricted Payments made pursuant to the Indenture. For purposes of the foregoing calculations, the amount of any Investment that constitutes a Restricted Payment shall be equal to the greater of (i) the net book value of such Investment and (ii) the fair market value of such Investment (in each case as certified by a resolution of the independent directors of the Company if the book value or fair market value of such investment exceeds $1,000,000). Limitation on Liens. The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Liens on any asset now owned or acquired after the date of the Indenture or any income or profits therefrom or assign or convey any right to receive income therefrom, except Permitted Liens; provided, that, in the case of Permitted 59 Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the Notes or a Subsidiary Guarantee, the Notes or such Subsidiary Guarantee is secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens, and further provided, that in the case of Permitted Liens securing Indebtedness under the Credit Agreement a Note Lien is created in favor of the Holders of the Notes. Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries. The Company shall not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: (i) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (a) on its Capital Stock or (b) with respect to any other interest or participation in, or measured by, its profits; (ii) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries; (iii) make loans or advances to the Company or any of its Restricted Subsidiaries; or (iv) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries; except for such encumbrances or restrictions existing under or by reason of (a) the agreements evidencing the Senior Indebtedness and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of those agreements; provided that they are not materially more restrictive than the similar restrictions contained in those agreements on the date of the Indenture, (b) the Indenture, the Notes, the Senior Subordinated Notes Indenture, the Senior Subordinated Notes and the Collateral Documents, (c) applicable law, (d) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, (e) customary nonassignment provisions in leases entered into in the ordinary course of business and consistent with past practices, (f) Purchase Money Obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (iv) above on the property so acquired, (g) Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Refinancing Indebtedness are no more restrictive with respect to the provisions set forth in clauses (i), (ii), (iii) and (iv) above than those contained in the agreements governing the Indebtedness being refinanced; (h) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition; or (i) restrictions on cash or other deposits or net worth imposed by customers or suppliers under contracts entered into in the ordinary course of business. Limitation on Transactions with Affiliates. The Company shall not, and shall not permit, cause, or suffer any Restricted Subsidiary of the Company to, directly or indirectly, sell, lease, license, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless: (i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable arms' length transaction by the Company or such Restricted Subsidiary with an unrelated Person; and (ii) the Company delivers to the Trustee (a) with respect to any Affiliate Transaction involving aggregate payments in excess of $500,000, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (i) above and such Affiliate Transaction is approved by a majority of the disinterested members, if any, of the Board of Directors and (b) with respect to any Affiliate Transaction involving aggregate payments in excess of 60 $20,000,000, an opinion as to the fairness to the Company or such Restricted Subsidiary from a financial point of view issued by a nationally recognized independent financial advisor; provided, however, that the foregoing limitations shall not apply to (i) any reasonable fees, advances and compensation (including incentive compensation) provided to, and indemnity provided on behalf of, officers, directors and employees of NFC Castings, ACP Holding, the Company and its Restricted Subsidiaries as determined in good faith by the Board of Directors of the Company, (ii) transactions between or among the Company and its Wholly Owned Subsidiaries that are Restricted Subsidiaries, (iii) Restricted Payments permitted under "Limitation on Restricted Payments", (iv) payment of principal of, and interest on, the Notes or the Senior Subordinated Notes held by Affiliates, (v) payment of the Commitment Fee, (vi) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors; (vii) transactions pursuant to agreements entered into or in effect on the date of the Indenture, including amendments thereto entered into after the date of the Indenture, provided that (A) the terms of any such amendment are not, in the aggregate, less favorable to the Company or such Restricted Subsidiary than the terms of such agreement prior to such amendment and (B) the transactions contemplated by such amendment are otherwise permitted by the Indenture (viii) Intercompany Indebtedness permitted to be incurred under "-- Certain Covenants -- Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock" or (ix) non-exclusive licenses of intellectual property among the Company and the Restricted Subsidiaries or among the Restricted Subsidiaries. Limitation on Lines of Business. The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than a Related Business. Sale and Leaseback Transactions. The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any sale and leaseback transaction; provided, however, that the Company or any Restricted Subsidiary may enter into a sale and leaseback transaction if: (a) the Company or that Restricted Subsidiary, as applicable, could have (i) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Consolidated Coverage Ratio test set forth in "-- Certain Covenants -- Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock" and (ii) created a Lien on such property securing Attributable Debt pursuant to the provisions set forth in "Limitation on Liens"; (b) the net cash proceeds of such sale and leaseback transaction are at least equal to the fair market value, as determined in good faith by the Board of Directors and set forth in an Officers' Certificate delivered to the Trustee, of the property that is the subject of that sale and leaseback transaction; provided that no Officers' Certificate need be provided if the fair market value of such sale and leaseback transaction, is determined in good faith by the Board of Directors to be less than $1,000,000; and (c) the transfer of assets in such sale and leaseback transaction is permitted by, and the Company or such Restricted Subsidiary applies the proceeds of such transaction in compliance with, the provisions of "-- Certain Covenants -- Asset Sales". Future Guarantors. The Company shall cause each Person that (a) becomes a Domestic Restricted Subsidiary following the date of the Indenture and (b) guarantees any Indebtedness of the Company or any Subsidiary thereof to execute and deliver to the Trustee a Subsidiary Guarantee at the time such Person becomes obligated under any such Guarantee. Payments for Consent. Neither the Company, nor any of the Company's Subsidiaries, shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid or agreed to be 61 paid to all holders of the Notes which so consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Asset Sales. Neither the Company nor any of its Restricted Subsidiaries shall engage in any Asset Sale, unless: (i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) of the assets sold or otherwise disposed of; and (ii) at least 20% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of Cash or Cash Equivalents; provided, however, that if the Fair Market Value of the assets sold or otherwise disposed of exceeds $10,000,000, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiaries is in the form of Cash or Cash Equivalents; provided, further, however, that the amount of (a) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet or in the notes thereto) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms subordinated in right of payment to the Notes) that are assumed by the transferee of any such assets and (b) any notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted within 60 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash so received), shall be deemed to be cash for purposes of clause (ii) above. Within 180 days after the receipt of the Net Proceeds from an Asset Sale, the Company shall apply the Net Proceeds from such Asset Sale first, to repay or reduce the Term Loan, and to the extent such Indebtedness is paid in full, to repay the Revolver (but shall not permanently reduce the commitment thereunder). Pending the final application of any such Net Proceeds, the Company may invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from the Asset Sale that are not applied as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." When the aggregate cumulative amount of Excess Proceeds exceeds $5,000,000, the Company shall make an offer to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased with the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of purchase, in accordance with the procedures set forth in this section "-- Certain Covenants -- Asset Sales" (an "Asset Sale Offer"). To the extent that the aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use such deficiency (i) for general corporate purposes in any manner not prohibited by the Indenture (including the repayment, redemption or repurchase of Senior Subordinated Notes to the extent permitted under Clause b(iv) of "-- Certain Covenants -- Limitation on Restricted Payments" or (ii) within 60 days of the completion of an Asset Sale Offer, to purchase, retire, redeem or otherwise acquire subordinated Obligations permitted to be incurred pursuant to the Indenture (including the Senior Subordinated Notes) and only to the extent necessary to comply with the covenants and other provisions of such subordinated Obligations. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. In the event that the Company shall be required to commence an Asset Sale Offer to all Holders to purchase Notes pursuant to this section "-- Certain Covenants -- Asset Sales", it shall follow the procedures specified below. The Asset Sale Offer shall be commenced within 30 days following the first date on which the Company has cumulative Excess Proceeds of at least $5,000,000 and remain open for a period of at least 62 30 and not more than 40 days, except to the extent that a longer period is required by applicable law (the "Repurchase Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Repurchase Date"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to this section "-- Certain Covenants -- Asset Sales" hereof (the "Repurchase Price") or, if Notes having an aggregate principal amount less than the amount of Excess Proceeds subject to such Asset Sale Offer have been tendered, all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Repurchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer. Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee or to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state: (a) that the Asset Sale Offer is being made pursuant to this section "-- Certain Covenants -- Asset Sales" and the length of time the Asset Sale Offer shall remain open; (b) the Asset Sale Offer, the Repurchase Price and the Repurchase Date; (c) that any Note not tendered or accepted for payment shall continue to accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Repurchase Date; (e) that Holders electing to have a Note purchased pursuant to a Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased; (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Asset Sale Purchase Date; (g) that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Repurchase Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Repurchase Price, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Repurchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written order from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount 63 equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Repurchase Date. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws, rules and regulations thereunder to the extent such laws, rules and regulations are applicable in connection with the repurchase of Notes pursuant to Asset Sale Offer. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on Outstanding Notes as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Code from time to time. EVENTS OF DEFAULT Under the Indenture, an "Event of Default," means any one of the following events (whatever the reason for such Event of Default and whether it shall be caused voluntarily or involuntarily or effected, without limitation, by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) failure to pay any installment of interest on any of the Notes as and when the same becomes due and payable, and the continuance of such failure for a period of 30 days, whether or not such payment is prohibited by the Indenture; (b) failure to pay all or any part of the principal of the Notes when and as the same become due and payable at maturity, redemption, repurchase or otherwise, whether or not such payment is prohibited by the Indenture; (c) failure by the Company to comply with the provisions set forth in "-- Certain Covenants -- Asset Sales" or "Limitation on Merger, Consolidation or Sale of Assets"; (d) failure by the Company or any Restricted Subsidiary to observe or perform any covenant or agreement contained in the Notes, the Indenture (other than a default in the performance of any covenant or agreement which is specifically dealt with elsewhere in this section "Events of Default") or the Collateral Documents, and continuance of such failure for a period of 30 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by Holders of at least 25% in aggregate principal amount of the then outstanding Notes, a written notice specifying such failure, requesting it to be remedied and stating that such notice is a "Notice of Default"; (e) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of such Indebtedness when due and prior to the expiration of the grace period provided in such Indebtedness (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case described in clauses (a) and (b) of this subsection (e), the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5,000,000 or more; (f) failure of the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $5,000,000, which judgments have not been paid, stayed, bonded or discharged for a period (during which execution shall not be effectively stayed) of 60 days (or, in the 64 case of any such final judgment which provides for payment over time, which shall so remain unstayed, unbonded or undischarged beyond any applicable payment date provided therein); (g) a decree, judgment, or order by a court of competent jurisdiction shall have been entered adjudging the Company or any of its Restricted Subsidiaries as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of the Company or any of its Restricted Subsidiaries under any bankruptcy or similar law, and such decree, judgment, or order shall have continued undischarged and unstayed for a period of 60 days; or a decree or order of a court of competent jurisdiction over the appointment of a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of the Company, any of its Restricted Subsidiaries, or of the property of any such Person, or for the winding up or liquidation of the affairs of any such Person, shall have been entered, and such decree, judgment, or order shall have remained in force undischarged and unstayed for a period of 60 days; or (h) the Company or any of its Restricted Subsidiaries shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under any bankruptcy or similar law or similar statute, or shall consent to the filing of any such petition, or shall consent to the appointment of a Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of it or any of its assets or property, or shall make a general assignment for the benefit of creditors; or take any corporate action in furtherance of or to facilitate, conditionally or otherwise, any of the foregoing; (i) any Subsidiary Guaranty relating to the Notes ceases to be in full force and effect (other than in accordance with the terms of such Subsidiary Guaranty), or any Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty relating to the Notes; or (j) the security interest under the Collateral Documents shall, at any time, cease to be in full force and effect for any reason other than the satisfaction in full of all Obligations under the Indenture and discharge of the Indenture or any security interest created under the Indenture or under the Collateral Documents shall be declared invalid or unenforceable or the Company or any Restricted Subsidiary shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. Notwithstanding the 30-day period and notice requirement contained in Section 6.1(d) above, with respect to a default under "Offer to Purchase Upon Change of Control", the 30-day period referred to above shall be deemed to have begun as of the date the Change of Control notice is required to be sent in the event that the Company has not complied with the provisions of "Offer to Purchase Upon Change of Control" and the Trustee or Holders of at least 25% in principal amount of the outstanding Notes thereafter give the Notice of Default referred to above to the Company and, if applicable, the Trustee; provided, however, that if the breach or default is a result of a default in the payment when due of the Repurchase Price on the Repurchase Date, such Event of Default shall be deemed, for purposes of this section "Events of Default" to arise no later than on the last Repurchase Date. The occurrence of any of the following is as an "Event of Default" under the Indenture: (a) failure to pay principal of (or premium, if any, on) any Note when due at stated maturity, upon acceleration, redemption, optional redemption, required repurchase or otherwise; (b) failure to pay any interest on any Note when due, continued for 30 days or more; (c) failure to perform or comply with any of the provisions described under "-- Certain Covenants -- Certain Covenants -- Asset Sales" and "Offer to Purchase upon Change of Control" above; (d) failure to perform any other covenant, warranty or agreement of the Company under the Indenture, the Collateral Documents or the Notes or of the Subsidiary Guarantors under the Indenture, the Collateral Documents or the Guarantees continued for 30 days or more after written 65 notice to the Company by the Trustee or Holders of at least 25% in aggregate principal amount of the outstanding Notes; (e) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of such Indebtedness when due and prior to the expiration of the grace period provided in such Indebtedness (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case described in clauses (a) and (b) of this subsection (e), the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5,000,000 or more; (f) failure of the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $5,000,000, which judgments have not been paid, stayed, bonded or discharged for a period (during which execution shall not be effectively stayed) of 60 days (or, in the case of any such final judgment which provides for payment over time, which shall so remain unstayed, unbonded or undischarged beyond any applicable payment date provided therein); (g) a decree, judgment, or order by a court of competent jurisdiction shall have been entered adjudging the Company or any of its Restricted Subsidiaries as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of the Company or any of its Restricted Subsidiaries under any bankruptcy or similar law, and such decree, judgment, or order shall have continued undischarged and unstayed for a period of 60 days; or a decree or order of a court of competent jurisdiction over the appointment of a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of the Company, any of its Restricted Subsidiaries, or of the property of any such Person, or for the winding up or liquidation of the affairs of any such Person, shall have been entered, and such decree, judgment, or order shall have remained in force undischarged and unstayed for a period of 60 days; or (h) the Company or any of its Restricted Subsidiaries shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under any bankruptcy or similar law or similar statute, or shall consent to the filing of any such petition, or shall consent to the appointment of a Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of it or any of its assets or property, or shall make a general assignment for the benefit of creditors; or take any corporate action in furtherance of or to facilitate, conditionally or otherwise, any of the foregoing; (i) any Subsidiary Guaranty relating to the Notes ceases to be in full force and effect (other than in accordance with the terms of such Subsidiary Guaranty), or any Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty relating to the Notes; or (j) the security interest under the Collateral Documents shall, at any time, cease to be in full force and effect for any reason other than the satisfaction in full of all Obligations under the Indenture and discharge of the Indenture or any security interest created hereunder or under the Collateral Documents shall be declared invalid or unenforceable or the Company or any Restricted Subsidiary shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. Notwithstanding the 30-day period and notice requirement above, with respect to a default under "Offer to Purchase Upon Change of Control", the 30-day period shall be deemed to have begun as of the date the Change of Control notice is required to be sent in the event that the Company has not complied with the provisions of "Offer to Purchase Upon Change of Control" and the Trustee or Holders of at least 25% in principal amount of the outstanding Notes thereafter give the Notice of Default to the Company 66 and, if applicable, the Trustee; provided, however, that if the breach or default is a result of a default in the payment when due of the Repurchase Price on the Repurchase Date, such Event of Default shall be deemed, to arise no later than on the last Repurchase Date. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATOR AND STOCKHOLDERS No director, officer, employee, incorporator or stockholder of the Company or any of its Affiliates, as such, shall have any liability for any obligations of the Company or any of its Affiliates under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. SATISFACTION AND DISCHARGE The Indenture will be discharged and will cease to be of further effect, except as to surviving rights of registration of transfer or exchange of the Notes, as to all Notes issued when: (a) either: (i) the Company delivers to the Trustee all outstanding Notes for cancellation; or (ii) all outstanding Notes have become due and payable, whether at maturity or on a specified redemption date as a result of the mailing of a notice of redemption pursuant to the section "-- Optional Redemption," (b) the Company irrevocably deposits with the Trustee money sufficient to pay at maturity or upon redemption all outstanding Notes, including interest and premium thereon to maturity or such redemption date, and if in either case the Company pays all other sums payable under the Indenture by the Company, and (c) if the Notes have been called for redemption and the redemption date has not occurred, the Company delivers to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such actions and will be subject to federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such actions had not occurred, then this Indenture shall cease to be of further effect except for, (i) the Company's claim to deposits unclaimed after two years, certain reporting obligations, and amounts owed to the Trustee, and (ii) if the Notes have been called for redemption and the redemption date has not occurred, the Company's obligation to pay the redemption price on such redemption date. LEGAL DEFEASANCE AND COVENANT DEFEASANCE The Company may, provided that no Default or Event of Default has occurred and is continuing or would arise therefrom (or, with respect to a Default or Event of Default from bankruptcy or insolvency events, occurs at any time on or prior to the 91st calendar day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 91st day)) under the Indenture, terminate its and the Subsidiary Guarantors' substantive obligations in respect of the Notes (except for its obligations to pay the principal of (and premium, if any, on) and the interest on the Notes and the Subsidiary Guarantors' Guarantee thereof) ("Covenant Defeasance") by: (1) depositing with the Trustee, under the terms of an irrevocable trust agreement, cash in United States dollars, non-callable government securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent certified public accountants, to pay all remaining principal of (and premium, if any, on) and interest on such Notes; 67 (2) delivering to the Trustee either an Opinion of Counsel from nationally recognized tax counsel reasonably acceptable to the Trustee confirming that the Holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and termination of obligations; and (3) complying with certain other requirements set forth in the Indenture. In addition, the Company may, provided that no Default or Event of Default has occurred and is continuing or would arise therefrom (or, with respect to a Default or Event of Default from bankruptcy or insolvency events, occurs at any time on or prior to the 91st calendar day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 91st day)) under the Indenture, terminate all of its and the Subsidiary Guarantors' substantive obligations in respect of the Notes (including its obligations to pay the principal of (and premium, if any, on) and interest on the Notes and the Subsidiary Guarantors' Guarantee thereof) ("Legal Defeasance") by: (1) depositing with the Trustee, under the terms of an irrevocable trust agreement, cash in United States dollars, non-callable government securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent certified public accountants, to pay all remaining principal of (and premium, if any, on) and interest on such Notes; (2) delivering to the Trustee either an Opinion of Counsel from nationally recognized tax counsel reasonably acceptable to the Trustee confirming that the Holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and termination of obligations; and (3) complying with certain other requirements set forth in the Indenture.] GOVERNING LAW The Indenture, the Collateral Documents (other than certain Collateral Documents relating to Foreign Restricted Subsidiaries), the Notes and the Guarantees will be governed by the laws of the State of New York without regard to principles of conflicts of laws. MODIFICATION AND WAIVER Supplements and amendments of the Indenture and the Notes (and, subject to the terms of the Intercreditor Agreement, the Collateral Documents) may be made by the Company, the Subsidiary Guarantors, and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Notes); provided, however, that: (1) no such modification or amendment to the Indenture, the Collateral Documents or the Notes may, without the consent of the Holder of each Note affected thereby: (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Note or alter the optional or mandatory redemption provisions (other than provisions relating to the covenants described in "-- Certain Covenants -- Asset Sales" and "Offer to Purchase Upon Change of Control" above) or reduce the prices at which the Company shall offer to purchase such Notes pursuant to such sections; (c) reduce the rate of or change the time for payment of interest, including default interest, on any Note; (d) waive a Default or Event of Default in the payment of principal of or interest on, or redemption payment with respect to, any Note (other than a Default in the payment of an 68 amount due as a result of an acceleration if the Holders of Notes rescind such acceleration pursuant to Section 6.2); (e) make any Note payable in money other than that stated in the Note; (f) make any change in the provisions of the Indenture relating to waiver of past defaults or to the rights of Holders to receive payments of principal of, or interest on the Notes or to this clause (f); (g) waive a redemption payment with respect to any Note; (h) release all or substantially all of the Collateral from the Lien of the Indenture or the Collateral Documents (except in accordance with the provisions hereof or thereof); or (i) make any change in the foregoing amendment and waiver provisions. Without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture, the Collateral Documents and the Notes to: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated Notes in addition to or in place of certificated Notes; (3) to provide for the assumption of the Company's or a Subsidiary Guarantor's Obligations to Holders in the case of a merger or consolidation; (4) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights of any Holder of the Notes; (5) to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA; (6) to make, complete or confirm any grant of Collateral permitted or required by the Indenture or any release of Collateral that becomes effective as set forth in the Indenture; (7) to enter into additional or supplemental Collateral Documents; (8) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of October 8, 2003; or (9) to allow any Subsidiary Guarantor to execute a supplemental indenture and/or a Subsidiary Guarantee with respect to the Notes. The Holders of a majority in aggregate principal amount of the outstanding Notes, on behalf of all Holders of Notes, may waive compliance by the Company and the Subsidiary Guarantors with certain restrictive provisions of the Indenture and, subject to the terms of the Intercreditor Agreement and the Collateral Documents. Subject to certain rights of the Trustee, as provided in the Indenture, the Holders of a majority in aggregate principal amount of the Notes, on behalf of all Holders, may waive any past default under the Indenture (including any such waiver obtained in connection with a tender offer or exchange offer for the Notes), except a default in the payment of principal, premium or interest or a default arising from failure to purchase any Notes tendered pursuant to a Change of Control Offer, or a default in respect of a provision that under the Indenture cannot be modified or amended without the consent of the Holder of each Note that is affected. THE TRUSTEE Except during the continuance of a Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of a Default, the Trustee will exercise such rights and powers vested in it under the Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. The Indenture and provisions of the Trust Indenture Act incorporated by reference therein contain limitations on the rights of the Trustee, should it become a creditor of the Company, any Guarantor or any other obligor upon the Notes, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions with the Company or an Affiliate of the Company; provided, however, that if it acquires any conflicting interest (as defined in the Indenture or in the Trust Indenture Act), it must eliminate such conflict or resign. 69 CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full definition of all such terms, as well as any other capitalized terms used herein for which no definition is provided. "ACP Holding" means ACP Holding Company, a Delaware corporation. "Acquired Debt" means, with respect to any specified Person: (i) Indebtedness of any other Person existing at the time such other Person merged with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Additional Notes" means any Notes (other than Initial Notes and Exchange Notes and Notes issued under certain sections of the Indenture) issued under the Indenture in accordance with the terms of the Indenture, as part of the same series as the Initial Notes or as an additional series. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided, however, that beneficial ownership of 10% or more of the voting securities (or the equivalents) of a Person shall be deemed to be control. "Applicable Procedures" means, with respect to any transfer, redemption or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer, redemption or exchange. "Asset Sale" means any sale, transfer or other disposition (including, without limitation, by merger, consolidation or sale-and-leaseback transaction) of (i) shares of Capital Stock of a Subsidiary of the Company (other than directors' qualifying shares), including any issuance of such Capital Stock, or (ii) property or assets of the Company or any Restricted Subsidiary of the Company other than in the ordinary course of business; provided, however, that an Asset Sale shall not include (a) any sale, transfer or other disposition of shares of Capital Stock, property or assets by a Restricted Subsidiary of the Company to the Company or to any Restricted Subsidiary that is a Wholly Owned Subsidiary of the Company, (b) any sale, transfer or other disposition of defaulted receivables for collection, (c) any sales, transfers or other dispositions that do not involve aggregate consideration in excess of $2,500,000 in any fiscal year, (d) the grant in the ordinary course of business of any license of patents, trademarks, registrations therefor and other similar intellectual property, (e) any Lien (or foreclosure thereon) securing Indebtedness to the extent that such Lien is granted in compliance with the Indenture, (f) any Restricted Payment or Permitted Investment permitted by the Indenture, (g) any disposition of assets or property to the extent such assets are obsolete, worn-out or no longer useful in the Company's or any Restricted Subsidiary's business, (h) the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company as permitted by Article V of the Indenture, (i) any disposition that constitutes a Change of Control, (j) any transaction or series of transactions pertaining to sales, transfers or other dispositions of properties or assets of the Company or any Restricted Subsidiary in connection with closures of plants for a purchase price not exceeding 10% of the total consolidated assets of the Company as reflected on its consolidated balance sheet as of the Company's fiscal year end immediately preceding the first sale of such property or assets, (k) the disposition of any Investment in Cash Equivalents, (l) sales, leases and other dispositions of the Non-Core Fixed Assets; or (m) so long as no Event of Default exists, sales, leases and other dispositions of fixed assets that are worn, scrap, excess, damaged or obsolete, the net proceeds of which are used to prepay the outstanding principal amount of the Term Loan 70 or the Revolver (regardless of whether the corresponding revolving commitment thereunder is reduced in connection therewith). "Asset Sale Offer" means an offer made by the Company when the aggregate cumulative amount of Excess Proceeds exceeds $5.0 million to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased with the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of purchase in accordance with the terms of the Indenture. "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded annually) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. "Bankruptcy Law" means title 11, U.S. Code, or any similar federal, state or foreign law for the relief of debtors. "Board of Directors" means, with respect to any Person, the board of directors of such Person or any committee of the board of directors of such Person authorized, with respect to any particular matter, to exercise the power of the board of directors of such Person. "Borrowing Base Amount" means, as to the Company and its Restricted Subsidiaries, the sum of (x) 65% of the gross value of Inventory plus (y) 85% of the gross value of Receivables, in each case, determined on a consolidated basis in accordance with GAAP, as reflected in the most recent quarterly consolidated financial statements delivered pursuant to Section 4.7 of the Indenture. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be so required to be capitalized on the balance sheet in accordance with GAAP. "Capital Stock" means (i) any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (ii) in the case of a partnership, partnership interests (whether general or limited) and (iii) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash" means such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than twelve months from the date of acquisition, (iii) certificates of deposit and Eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers' acceptances with maturities not exceeding twelve months and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $500,000,000, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each case maturing within nine months after the date of acquisition and (vi) shares of any money market mutual fund, or similar fund, in each case having assets in excess of $500,000,000, which invests solely in investments of the types described in clauses (i) through (v) above. 71 "Change of Control" means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of ACP Holding, NFC Castings or the Company and the Restricted Subsidiaries, taken as a whole, to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act); (2) the adoption of a plan relating to the liquidation or dissolution of NFC Castings or ACP Holding (or any other direct or indirect parent of the Company) or the Company; (3) the consummation of any transaction, as a result of which any "person" (as referenced in clause (2) above), other than the Permitted Holders, becomes the Beneficial Owner, directly or indirectly, of, in the aggregate, more than 50% of the total voting power of the Voting Stock of the Company, NFC Castings or ACP Holding, whether as a result of issuance of securities of NFC Castings or ACP Holding (or any other direct or indirect parent of the Company) or the Company, any merger, consolidation, liquidation or dissolution of NFC Castings or ACP Holding (or any other direct or indirect parent of the Company) or the Company or otherwise, provided, however, that the Permitted Holders Beneficially Own, directly or indirectly, less than such "person"; or (4) the first day on which a majority of the members of the Board of Directors of any of the Company, NFC Castings or ACP Holding are not Continuing Directors; provided, however, for purposes of clause (3), the Permitted Holders shall be deemed to Beneficially Own any Voting Stock of a Person held by any other Person (the "parent entity") so long as the Permitted Holders Beneficially Own, directly or indirectly, in the aggregate a majority of the voting power of the Voting Stock of the parent entity. "Change of Control Offer" shall have the meaning specified above in "-- Offer to Purchase upon Change of Control." "Change of Control Payment Date" shall have the meaning specified above in "-- Offer to Purchase upon Change of Control." "Change of Control Put Date" shall have the meaning specified above in "-- Offer to Purchase upon Change of Control." "Change of Control Repurchase Price" shall have the meaning specified above in "-- Offer to Purchase upon Change of Control." "Clearstream" means Clearstream Banking S.A. and any successor thereto. "Code" means the Internal Revenue Code of 1986, as amended. "Collateral" means all of the property in which the Company or any Restricted Subsidiary now or hereafter has rights or the power to pledge or transfer a security interest to secure all Obligations under the Notes, pursuant to the Collateral Documents, including all of the assets that are subject to Priority Liens. "Collateral Documents" means each security agreement among the Trustee (on behalf of the Noteholders), and each of the Company, the Restricted Subsidiaries and each stock pledge, deed of trust and mortgage executed by the Company or any Restricted Subsidiary creating a lien that secures the Notes and the Subsidiary Guarantees and each collateral assignment of any other documents creating a Lien that, after giving effect to such collateral assignment, secures the Notes or any Subsidiary Guarantee each, as may be amended, supplemented or otherwise modified from time to time. "Commitment Fee" means the Commitment Fee payable to the Permitted Holders pursuant to the Standby Funding Commitment Letters, dated June 30, 2003, between the Company and each of the Permitted Holders. 72 "Commodity Agreement" means any commodity futures contract, commodity option or other similar agreement or arrangement entered into by the Company or any of its Restricted Subsidiaries designed to protect the Company or any of its Restricted Subsidiaries against fluctuations in the price of commodities actually used in the ordinary course of business of the Company and its Restricted Subsidiaries each, as may be amended, supplemented or otherwise modified from time to time. "Common Stock" means, with respect to any Person, Capital Stock of such Person that does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "Company" means Neenah Foundry Company until a successor replaces it pursuant to the Indenture, and thereafter means such successor. "Consolidated Coverage Ratio" as of any date of determination means the ratio of (i) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending at least 45 days prior to the date of such determination to (ii) Consolidated Interest Expense for such four fiscal quarters; provided, however, that (1) if the Company or any Restricted Subsidiary has incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an incurrence of Indebtedness, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness and the application of the proceeds thereof as if such Indebtedness had been incurred on the first day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period (except that in the case of Indebtedness to finance seasonal fluctuations in working capital needs incurred under a revolving credit or similar arrangement, the amount thereof shall be deemed to be the average daily balance of such Indebtedness during such four quarter period); (2) if since the beginning of such period the Company or any Restricted Subsidiary shall have disposed of any assets constituting all or substantially all of the assets of an operating unit of a business (a "Disposal"), (x) the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets which are the subject of such Disposal for such period or increased by an amount equal to the EBITDA (if negative) directly attributable thereto for such period and (y) Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Disposal for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale); (3) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made under the Indenture, which constitutes all or substantially all of the assets of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the incurrence of any Indebtedness in connection therewith) as if such Investment or acquisition occurred on the first day of such period; and (4) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning 73 of such period) shall have made any Disposal or any Investment or acquisition of assets that would have required an adjustment pursuant to clause (2) or (3) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Disposal, Investment or acquisition of assets occurred on the first day of such period. For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness incurred in connection therewith, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term as at the date of determination in excess of 12 months). If any Indebtedness bears, at the option of the Company or a Restricted Subsidiary, a fixed or floating rate of interest and is being given pro forma effect, then (i) if any interest had accrued on such Indebtedness prior to the date of determination, the interest expense on such Indebtedness shall be computed by applying a fixed or floating rate of interest as selected by the Company or such Restricted Subsidiary for the interest period immediately preceding such determination or (ii) if no interest accrued on such Indebtedness prior to the date of determination, the interest expense on such Indebtedness shall be computed by applying, at the option of the Company or such Restricted Subsidiary, either a fixed or floating rate. If any Indebtedness which is being given pro forma effect was incurred under a revolving credit facility that was in effect throughout the applicable period, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period. "Consolidated Interest Expense" means, with respect to any Person for any period, the aggregate consolidated interest, whether expensed or capitalized, paid, accrued or scheduled to be paid or accrued, of such Person and its Restricted Subsidiaries for such period (including (i) amortization of original issue discount and deferred financing costs and non-cash interest payments and accruals, (ii) the interest portion of all deferred payment obligations, calculated in accordance with the effective interest method, and (iii) the interest component of any payments associated with Capital Lease Obligations and net payments (if any) pursuant to Hedging Obligations, in each case, to the extent attributable to such period, but excluding (x) commissions, discounts and other fees and charges incurred with respect to letters of credit and bankers' acceptances financing and (y) any interest expense on Indebtedness of another Person that is Guaranteed by such Person or secured by a Lien on assets of such Person) determined in accordance with GAAP. Consolidated Interest Expense of the Company shall not include any prepayment premiums or amortization of original issue discount or deferred financing costs, to the extent such amounts are incurred as a result of the prepayment on the date of the Indenture of any Indebtedness of the Company with the proceeds of the Notes. "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP, adjusted to exclude (only to the extent included and without duplication): (i) all gains which are extraordinary or are non-recurring (including any gain from the sale or other disposition of assets outside the ordinary course of business or from the issuance or sale of Capital Stock); (ii) all gains resulting from currency or hedging transactions; (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition; (iv) depreciation, amortization or other expenses recorded as a result of the application of purchase accounting in accordance with Statements of Financial Accounting Standards Nos. 141 and 142; and (v) the cumulative effect of a change in accounting principles; provided that (a) the Net Income of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of cash dividends or cash distributions actually paid to the referent Person or a Wholly Owned Subsidiary thereof that is a Restricted Subsidiary and (b) the Net 74 Income of any Person that is an Unrestricted Subsidiary shall be included only to the extent of the amount of cash dividends or cash distributions paid to the referent Person or a Restricted Subsidiary thereof. "Covenant Defeasance" shall have the meaning specified above in "Legal Defeasance and Covenant Defeasance". "Credit Agreement" means the Credit Agreement, dated October 8, 2003, among the Company, certain of the Subsidiary Guarantors party thereto, the lenders from time to time party to such agreement, Fleet Capital Corporation, as Agent and Fleet Securities, Inc., as Arranger, including any related notes, collateral documents, letters of credit and documentation and guarantees and any appendices, exhibits or schedules to any of the foregoing, as well as any and all of such agreements (and any other agreements that refinance any and all such agreements in accordance with the provisions of clause (viii) under "Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock", as may be amended, restated, modified or supplemented from time to time, or renewed, refunded, refinanced, restructured, replaced, repaid or extended from time to time (including increases in principal amount) in accordance with the provisions of whether with the original agents and lenders or with other agents or lenders. "Credit Agreement Refinancing Indebtedness" means Indebtedness issued in exchange for, or the proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness incurred pursuant to the Credit Agreement. "Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any of its Restricted Subsidiaries in the ordinary course of business against fluctuation in the values of the currencies of the countries (other than the United States) in which the Company or its Restricted Subsidiaries conduct business each, as may be amended, supplemented or otherwise modified from time to time. "Default" means any event or condition that is, or with the passage of time or the giving of notice, or both, would be, an Event of Default. "Disqualified Stock" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable or is convertible or exchangeable for Indebtedness at the option of the holder thereof, in whole or in part, on or prior to 90 days after the Stated Maturity of the Notes; provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the Stated Maturity of the Notes shall not constitute Disqualified Stock if (i) the "asset sale" or "change of control" provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions in favor of Holders of Notes set forth under "-- Certain Covenants -- Asset Sales" and "Offer to Purchase Upon Change of Control", as the case may be, (ii) such Capital Stock specifically provides that such Person will not repurchase or redeem any such stock pursuant to such provision prior to the Company's repurchase of such Notes as are required to be repurchased pursuant to "-- Certain Covenants -- Asset Sales" and "Offer to Purchase Upon Change of Control" and (iii) such Capital Stock is redeemable within 90 days of the "asset sale" or "change of control" events applicable to such Capital Stock. "Domestic Restricted Subsidiary" means any Restricted Subsidiary other than (a) a Foreign Restricted Subsidiary or (b) a Subsidiary of a Foreign Restricted Subsidiary. 75 "EBITDA" means, for any period, an amount equal to, for the Company and its consolidated Restricted Subsidiaries: (a) the sum of Consolidated Net Income for such period, plus the following to the extent reducing Consolidated Net Income for such period: (1) the provision for taxes based on income or profits or utilized in computing net loss, (2) Consolidated Interest Expense, (3) depreciation, (4) amortization of intangibles, and (5) any other non-cash items (other than any such non-cash item to the extent that it represents an accrual of, or reserve for, cash expenditures in any future period), minus (b) all non-cash items increasing Consolidated Net Income for such period (other than any such non-cash item to the extent that it will result in the receipt of cash payments in any future period). Notwithstanding the foregoing clause (a), the provision for taxes and the depreciation, amortization and non-cash items of a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its shareholders. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Event of Default" shall have the meaning specified above in "-- Events of Default." "Excess Proceeds" shall have the meaning specified above in "-- Certain Covenants -- Asset Sales." "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder. "Exchange Notes" means Notes registered under the Securities Act to be exchanged for Notes not so registered, pursuant to and as set forth in the Registration Rights Agreement. "Fair Market Value" means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction; provided, that, the Fair Market Value of any such asset or assets shall be determined by the Board of Directors of the Company, acting in good faith and by unanimous resolution, and which determination shall be evidenced by an Officers' Certificate delivered to the Trustee. "Foreign Restricted Subsidiary" means any Restricted Subsidiary which is not organized under the laws of the United States of America or any State thereof or the District of Columbia. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect in the United States on the date of the Indenture. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters 76 of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness as may be amended, supplemented or otherwise modified from time to time. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under (i) Interest Rate Agreements, (ii) Currency Agreements and (iii) Commodity Agreements. "Holder" or "Noteholder" means the person in whose name a Note is registered on the Registrar's books. "Indebtedness" means, with respect to any Person, without duplication, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or bankers' acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and, to the extent not otherwise included, the Guarantee of any Indebtedness of such Person or any other Person. "Indenture" means the Indenture governing the Company's 11% Senior Secured Notes due 2010, as amended or supplemented from time to time in accordance with its terms. "Intercompany Indebtedness" shall have the meaning specified above in "-- Certain Covenants -- Limitations on the Incurrence of Indebtedness and Issuance of Disqualified Stock. "Interest Payment Date" means the stated due date of an installment of interest on the Notes. "Interest Rate Agreement" means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement entered into by the Company or any of its Restricted Subsidiaries designed to protect the Company or any of its Restricted Subsidiaries in the ordinary course of business against fluctuations in interest rates each, as may be amended, supplemented or otherwise modified from time to time. "Inventory" means, with respect to the Company and its Restricted Subsidiaries, the consolidated inventory of the Company, determined at the lower of cost or market in accordance with GAAP. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including Guarantees), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. "Issue Date" means October 8, 2003. "Legal Defeasance" shall have the meaning specified above in "Legal Defeasance and Covenant Defeasance." "Lenders" means, at any time, the parties to the Credit Agreement then holding (or committed to provide) loans, letters of credit or other extensions of credit that constitute (or when provided will constitute) Indebtedness secured by a Priority Lien outstanding under the Credit Agreement. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.) 77 "Lien Subordination Agreement" means that certain Lien Subordination Agreement, dated October 8, 2003, by and among the Company, the Restricted Subsidiaries, the Trustee (on behalf of the Noteholders) and the Agent under the Credit Agreement, as amended (including any amendments and restatements thereof), supplemented or otherwise modified from time to time. "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (i) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any sale of assets (including, without limitation, dispositions pursuant to sale/leaseback transactions) or (b) the disposition of any securities or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries, and (ii) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "Net Proceeds" means the aggregate amount of consideration received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale in the form of cash or Cash Equivalents (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof, amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets (including Equity Interests) the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets. "NFC Castings" means NFC Castings, Inc., a Delaware corporation. "Non-Core Fixed Assets" shall have the meaning specified in the Credit Agreement as in effect on October 8, 2003. "Non-Recourse Debt" means Indebtedness (i) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable (as guarantor or otherwise), or (c) constitutes the lender; (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (iii) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. "Note Lien" means a Lien granted pursuant to the Collateral Documents as security for the Note Obligations and subordinated and subject to the rights and remedies of the holders of the Priority Liens in accordance with the terms of the Collateral Documents and the Lien Subordination Agreement. "Note Obligations" means the Obligations under the Notes (including, without limitation, any Additional Notes), the Subsidiary Guarantees and all other Obligations of the Company or any Restricted Subsidiary under the Indenture, the Notes (including without limitation, any Additional Notes), the Subsidiary Guarantees and the Collateral Documents. "Notice of Default" shall have the meaning specified above in "-- Events of Default." "Obligations" means with respect to any Indebtedness, the principal of, and interest on (such interest on such Indebtedness, wherever referred to in the Indenture, is deemed to include interest accruing after the filing of a petition initiating any proceeding pursuant to any bankruptcy law in accordance with and at the rate (including any rate applicable upon any default or event of default, to the extent lawful) specified in any document evidencing such Indebtedness, whether or not the claim for such interest is allowed as a claim after such filing in any proceeding under such bankruptcy law) and other amounts, including, but 78 not limited to, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Officers' Certificate" means, with respect to any Person, a certificate signed by (i) the Chief Executive Officer or President and (ii) the Chief Financial Officer or chief accounting officer of such Person. "Opinion of Counsel" means a written opinion from legal counsel which complies with the requirements of the Indenture. "Original Issue Date" of any Note (or portion thereof) means the earlier of (a) the date of such Note or (b) the date of any Note (or portion thereof) for which such Note was issued (directly or indirectly) on registration of transfer, exchange or substitution. "Payment Default" shall have the meaning specified above in "-- Events of Default." "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd., TCW Shared Opportunity Fund II, L.P., Shared Opportunity Fund IIB LLC, TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., AIMCO CDO, Series 2000-A, TCW High Income Partners, Ltd. and TCW High Income Partners II, Ltd. and its Related Persons and Affiliates. "Permitted Investments" means (i) any Investment in the Company or in a Restricted Subsidiary; (ii) any Investment in Cash Equivalents; (iii) Investments by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (a) such Person becomes a Wholly Owned Subsidiary of the Company that is a Restricted Subsidiary or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Wholly Owned Subsidiary of the Company that is a Restricted Subsidiary; (iv) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made in compliance with Section 4.20; (v) any Investment solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; (vi) any Investments received in compromise of obligations of such persons incurred in the ordinary course of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; and (vii) Investments existing on October 8, 2003. "Permitted Liens" means (i) Liens in favor of the Company or a Restricted Subsidiary; (ii) Liens securing Senior Indebtedness of the Company or a Restricted Subsidiary that was permitted to be incurred pursuant to the Indenture (i) at the time incurred; (iii) Liens on property of a Person existing at the time such Person is merged into, consolidated with or otherwise acquired by the Company or any Restricted Subsidiary of the Company, provided that such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend to any assets other than those of the Person merged into or consolidated with Company or such Restricted Subsidiary; (iv) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company; provided that such Liens were not created in contemplation of such acquisition and do not extend to any other assets of the Company or any Restricted Subsidiary of the Company; (v) Liens on the property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like nature and incurred in a manner consistent with industry practice, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate impair in any material respect the use of property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole; (vi) Liens existing on the date of the Indenture; (vii) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have 79 been made therefor; (viii) Liens in good faith in the ordinary course of business with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings if a reserve or other appropriate provisions, if any, shall be required by GAAP shall have been made therefor; (ix) zoning restrictions, easements, licenses, covenants, reservations, restrictions on the use of real property or minor irregularities of title incident thereto that do not, in the aggregate, materially detract from the value of the property or the assets of the Company or of any Restricted Subsidiary or impair the use of such property in the operation of the Company's or any Restricted Subsidiary's business; (x) judgment Liens to the extent that such judgments do not cause or constitute an Event of Default; (xi) Liens to secure the payment of all or a part of the purchase price of property or assets acquired or constructed in the ordinary course of business on or after the date of the Indenture, provided that (a) such property or assets are used in the same or a similar line of business as the Company or the applicable Restricted Subsidiary was engaged in on the date of the Indenture, (b) at the time of incurrence of any such Lien, the aggregate principal amount of the obligations secured by such Lien shall not exceed the cost of the assets or property (or portions thereof) so acquired or constructed, (c) each such Lien shall encumber only the assets or property (or portions thereof) so acquired or constructed and shall attach to such property within 120 days of the purchase or construction thereof and (d) any Indebtedness secured by such Lien shall have been permitted to be incurred under Section 4.11; (xii) precautionary filings of any financial statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction made in connection with Capital Lease Obligations permitted to be incurred under the terms of the Indenture; and (xiii) Note Liens; (xiv) Liens permitted by the Collateral Documents, including, without limitation, Priority Liens; (xv) Liens incurred in the ordinary course of business securing assets having a fair market value not in excess of $500,000 in the aggregate; (xvi) Liens to secure permitted Refinancing Indebtedness incurred to refinance existing Indebtedness or permitted Refinancing Indebtedness which is secured by Liens permitted by this clause (xvi); provided, that such Liens do not extend to any categories of assets other than the categories of assets securing existing Indebtedness as of the date of the Indenture; (xvii) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof; (xviii) Liens incurred in the ordinary course of business in connection with (a) worker's compensation, social security, unemployment insurance and other like laws or (b) sales contracts, leases, statutory obligations, work in progress advances and other similar obligations not incurred in connection with the borrowing of money or the payment of the deferred purchase price of property; (xix) Liens in favor of customs and revenues authorities which secure payment of customs duties in connection with the importation of inventory; (xx) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto; (xxi) Liens consisting of rights of set-off of a customary nature or banker's liens on amounts on deposit in accounts, whether arising by contract or operation of law, incurred in the ordinary course of business; and (xxii) leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries. "Permitted Refinancing" shall have the meaning specified above in "-- Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock." "Person" or "person" means an individual, limited or general partnership, corporation, limited liability company, association, unincorporated organization, trust, joint stock company or joint venture, or a government or any agency or political subdivision thereof. "Priority Lien Documents" means the Credit Agreement, the Priority Lien Collateral Documents and, in connection with or pursuant to any of the foregoing, all other agreements, certificates or documents executed by the Company or any Restricted Subsidiary and delivered to the trustee, agent or representative acting for the lenders party to the Credit Agreement each, as may be amended, supplemented or otherwise modified from time to time. "Priority Lien Obligations" means the Indebtedness evidenced by the Credit Agreement and all other Obligations of the Company or any Restricted Subsidiary thereunder or under the Priority Lien Documents in respect of the Credit Agreement. 80 "Priority Lien Collateral Documents" means one or more security agreements, pledge agreements, collateral assignments, mortgages, deed of trust or other grants or transfers for security executed and delivered by the Company or any Restricted Subsidiary creating a Lien upon property owned or to be acquired by the Company or such Restricted Subsidiary in favor of any lenders party to the Credit Agreement, or any trustee, agent or representative acting for any such holders, as security for any Priority Lien Obligations each, as may be amended, supplemented or otherwise modified from time to time. "Priority Liens" means the first priority Liens granted with respect to the Collateral by the Company and the Restricted Subsidiaries pursuant to the Credit Agreement securing the Priority Lien Obligations of the Company and the Restricted Subsidiaries under such Credit Agreement. "principal" of any Indebtedness means the principal of such Indebtedness plus, without duplication, any applicable premium, if any, on such Indebtedness. "property" means any right or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "Purchase Money Obligations" of any Person means any obligations of such Person or any of its Restricted Subsidiaries to any seller or any other Person incurred or assumed in connection with the purchase of real or personal property or in the Capital Stock of a Person owning such real or personal property to be used in the business of such Person or any of its subsidiaries within 180 days of such incurrence or assumption. "Qualified Stock" means any Capital Stock of the Company that is not Disqualified Stock. "Receivables" means the consolidated trade receivables of the Company, net of allowance for doubtful accounts, as determined in accordance with GAAP. "Record Date" means a Record Date specified in the Notes whether or not such Record Date is a Business Day. "Redemption Date" means, when used with respect to any Note to be redeemed, the date fixed for such redemption pursuant to the terms of the Indenture and the Note. "Redemption Price" means, when used with respect to any Note to be redeemed, the redemption price for such redemption pursuant to the terms of the Note, which shall include, without duplication, in each case, accrued and unpaid interest, if any, to and including the Redemption Date. "Refinancing Indebtedness" shall have the meaning specified above in "-- Certain Covenants -- Limitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock." "Registration Rights Agreement" means that certain Registration Rights Agreement, dated as of the date of the Indenture, between the Company and the other parties thereto, as such agreement may be amended, modified or supplemented from time to time in accordance with the terms thereof. "Related Business" means any business which is the same as or related, ancillary or complementary to any of the businesses of the Company and its Restricted Subsidiaries on October 8, 2003. "Related Person" of any Person means any other Person directly or indirectly owning (a) 5% or more of the outstanding Common Stock of such Person (or, in the case of a Person that is not a corporation, 5% or more of the equity interests in such Person) or (b) 5% or more of the combined voting power of the Voting Stock of such Person. "Representative" means any trustee, agent to representative (if any) for Senior Indebtedness. "Repurchase Date" shall have the meaning specified above in "-- Certain Covenants--Asset Sales." "Repurchase Offer Period" shall have the meaning specified above in "-- Certain Covenants -- Asset Sales." "Repurchase Price" shall have the meaning specified above in "-- Certain Covenants -- Asset Sales." 81 "Restricted Investment" means an Investment other than a Permitted Investment. With respect to Unrestricted Subsidiaries or Restricted Subsidiaries, the amount of Restricted Investments shall be calculated as the greater of (i) the book value of assets contributed by the Company or a Restricted Subsidiary or (ii) the Fair Market Value of the assets contributed by the Company or a Restricted Subsidiary (as certified by a resolution of independent directors of the Company. "Restricted Payment" shall have the meaning specified above in "Certain Covenants -- Limitation on Restricted Payments." "Restricted Subsidiary" means (i) any Subsidiary of the Company (other than a Subsidiary that is also a Subsidiary of an Unrestricted Subsidiary) organized or acquired after the date of the Indenture, unless such Subsidiary shall have been designated as an Unrestricted Subsidiary by resolution of the Board of Directors as provided in and in compliance with the definition of "Unrestricted Subsidiary" and (ii) any Unrestricted Subsidiary which is designated as a Restricted Subsidiary by the Board of Directors of the Company; provided that immediately after giving effect to the designation referred to in clause (ii), no Default or Event of Default shall have occurred and be continuing and the Company could incur at least $1.00 of additional Indebtedness under the terms of the Indenture. The Company shall evidence any such designation to the Trustee by promptly filing with the Trustee an Officers' Certificate certifying that such designation has been made and stating that such designation complies with the requirements of the immediately preceding sentence. "Revolver" means the revolving credit facility extended to the Company as part of the New Credit Facility under the Credit Agreement. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Senior Indebtedness" means, with respect to the Company and Restricted Subsidiaries, the Obligations of the Company and the Restricted Subsidiaries under the Credit Agreement. "Senior Subordinated Notes" means the Company's 13% Senior Subordinated Notes due 2013, issued pursuant to the Senior Subordinated Notes Indenture, and any securities issued in exchange or in substitution therefor. "Senior Subordinated Notes Indenture" means an Indenture, dated October 8, 2003, among the Company, the Subsidiary Guarantors party thereto and The Bank of New York, as trustee, relating to the Senior Subordinated Notes, as may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. "Stated Maturity," when used with respect to any Note, means September 30, 2010. "Subsidiary" means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof and (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Persons or one or more Subsidiaries of such Person or any combination thereof. "Subsidiary Guarantee" means a guarantee on the terms set forth in the Indenture by a Subsidiary Guarantor of the Company's obligations with respect to the Notes. "Subsidiary Guarantor" means each Domestic Restricted Subsidiary and any other Person that becomes a Subsidiary Guarantor pursuant to the provisions of the Indenture or who otherwise exercises and delivers supplemental indenture to the Trustee providing for a Subsidiary Guarantee. "Term Loan" means the term loan made to the Company and certain of the Restricted Subsidiaries as part of the New Credit Facility under the Credit Agreement. 82 "TIA" means the Trust Indenture Act of 1939, as amended and in effect on the date of the execution of the Indenture unless otherwise specified herein. "Trustee" means the party named as such in the Indenture until a successor replaces it in accordance with the provisions of the Indenture and thereafter means such successor. At the Issue Date, the Trustee was The Bank of New York, a New York corporation. "Unrestricted Subsidiary" means, until such time as any of the following shall be designated as a Restricted Subsidiary of the Company by the Board of Directors of the Company as provided in and in compliance with the definition of "Restricted Subsidiary," (i) any Subsidiary of the Company or of a Restricted Subsidiary of the Company organized or acquired after the date of the Indenture that is designated concurrently with its organization or acquisition as an Unrestricted Subsidiary by resolution of the Board of Directors of the Company, (ii) any Subsidiary of any Unrestricted Subsidiary and (iii) any Restricted Subsidiary of the Company that is designated as an Unrestricted Subsidiary by resolution of the Board of Directors of the Company, provided that (a) immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing, (b) any such designation shall be deemed, at the election of the Company at the time of such designation, to be either (but not both) (x) the making of a Restricted Payment at the time of such designation in an amount equal to the Investment in such Subsidiary subject to the restrictions contained in the Indenture or (y) the making of an Asset Sale at the time of such designation in an amount equal to the Investment in such Subsidiary subject to the restrictions contained in the Indenture, and (c) such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of, or own or hold any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated. A Person may be designated as an Unrestricted Subsidiary only if and for so long as such Person (i) has no Indebtedness other than Non-Recourse Debt; (ii) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to make any payment to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; and (iii) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries. The Company shall evidence any designation pursuant to clause (i) or (iii) of the first sentence hereof to the Trustee by filing with the Trustee within 45 days of such designation an Officers' Certificate certifying that such designation has been made and, in the case of clause (iii) of the first sentence hereof, the related election of the Company in respect thereof. "Voting Stock" means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers, general partners or trustees of any Person (irrespective of whether or not, at the time, Capital Stock of any other class or classes shall have, or might have, voting power by reasons of the happening of any contingency) or, with respect to a partnership (whether general or limited), any general partner interest in such partnership. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness. "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall be at the time be beneficially owned by such Person either directly or indirectly through Wholly Owned Subsidiaries. 83 BOOK-ENTRY; DELIVERY AND FORM THE GLOBAL NOTES The certificates representing the new notes will be issued in fully registered form. Except as described below, the new notes will be initially represented by one or more global notes in fully registered form without interest coupons. The global notes will be deposited with, or on behalf of DTC and registered in the name of Cede & Co., as nominee of DTC, or will remain in the custody of the trustee pursuant to the FAST Balance Certificate Agreement between DTC and the trustee. Ownership of beneficial interests in each global note will be limited to persons who have accounts with DTC, which we refer to as DTC participants, or persons who hold interests through DTC participants. We expect that under procedures established by DTC, ownership of beneficial interests in each global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC, with respect to interests of DTC participants, and the records of DTC participants, with respect to other owners of beneficial interests in the global note. BOOK-ENTRY PROCEDURES FOR THE GLOBAL NOTES The descriptions of the operations and procedures of DTC set forth below are controlled by that settlement system and may be changed at any time. We undertake no obligation to update you regarding changes in these operations and procedures and urge investors to contact DTC or its participants directly to discuss these matters. DTC has advised us that it is: - a limited purpose trust company organized under the laws of the State of New York; - a banking organization within the meaning of the New York State Banking Law; - a member of the Federal Reserve System; - a clearing corporation within the meaning of the Uniform Commercial Code; and - a clearing agency registered under Section 17A of the Exchange Act. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants, thereby eliminating the need for physical transfer and delivery of certificates. DTC's participants include securities brokers and dealers, including the initial purchasers; banks and trust companies; clearing corporations and other organizations. Indirect access to DTC's system is also available to others such as banks, brokers, dealers and trust companies; these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who are not DTC participants may beneficially own (securities held by or on behalf of DTC only through DTC participants or indirect participants in DTC We expect that pursuant to procedures established by DTC: - Upon issuance of the global notes, DTC we will credit the respective principal amounts of the new notes represented by the global notes to the accounts of persons who have accounts with DTC. Ownership of beneficial interest in the global notes will be limited to persons who have accounts with DTC, who are referred to as participants, or persons who hold interests through participants. - Ownership of the beneficial interests in the new notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC, with respect to the interests of participants, and the records of participants and the indirect participants, with respect to the interests of persons other than participants. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of those securities in definitive form. Accordingly, the ability to transfer interests in the new notes 84 represented by a global note to these persons may be limited. In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of persons who hold interests though participants, the ability of a person having an interest in new notes represented by a global note to pledge or transfer that interest to persons or entities that do not participate in DTC's system, or to otherwise take actions in respect of that interest, may be affected by the lack of a physical definitive security in respect of that interest. So long as DTC's nominee is the registered owner of a global note, that nominee will be considered the sole owner or holder of the new notes represented by that global note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global note: - will not be entitled to have notes represented by the global note registered in their names; - will not receive or be entitled to receive physical, certificated new notes and - will not be considered the owners or holders of the new notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indenture. As a result, each investor who owns a beneficial interest in a global note must rely on the procedures of DTC to exercise any rights of a holder of new notes under the indenture, and, if the investor is not a participant or an indirect participant in DTC, on the procedures of the DTC participant through which the investor owns its interest. We understand that under existing industry practice, in the event that we request any action of holders of new notes, or a holder of the notes that is an owner of a beneficial interest in a global note desires to take any action that DTC, as the holder of the global note, is entitled to take, DTC would authorize the participants to take action and the participants would authorize holders of the notes owning through the participants to take action or would otherwise act upon the instruction of those holders of the new notes. Neither we nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of notes by DTC, or for maintaining, supervising or reviewing any records of DTC relating to those new notes. Payments of principal, premium and interest with respect to the notes represented by a global note will be made by the trustee to DTC's nominee as the registered holder of the global note. Neither we nor the trustee will have any responsibility or liability for the payment of amounts to owners of beneficial interests in a global note, for any aspect of the records relating to or payments made on account of those interests by DTC, or for maintaining, supervising or reviewing any records of DTC relating to those interests. Payments by participants and indirect participants in DTC to the owners of beneficial interests in a global note will be governed by standing instructions and customary industry practice and will be the responsibility of those participants or indirect participants and DTC. Transfers between participants in DTC will be effected under DTC's procedures and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream will be effected in the ordinary way under the rules and operating procedures of those systems. CERTIFICATED NEW NOTES New notes in physical, certificated form will be issued and delivered to each person that DTC identifies as a beneficial owner of the related new notes only if: - DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days, - DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days, 85 - we, at our option, notify the trustee that we elect to cause the issuance of certificated new notes; or - certain other events provided in the indenture should occur. Neither we nor the trustee will be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related new notes and each such person may conclusively rely on, and will be protected in relying on, instructions from DTC for all purposes, inducting with respect to the registration and delivery, and the respective principal amounts, of the new notes to be issued. CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS The following discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended, applicable Treasury regulations, judicial authority and administrative rulings and practice as of the date hereof. The Internal Revenue Service may take a contrary view, and no ruling from the Service has been or will be sought. Legislative, judicial or administrative changes or interpretations may be forthcoming that could alter or modify the following statements and conditions. Any such changes or interpretations may or may not be retroactive and could affect the tax consequences to holders, whose tax consequences could be different from the following statements and conditions. Some holders, including insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign corporations and persons who are not citizens or residents of the United States, may be subject to special rules not discussed below. We recommend that each holder consult his own tax advisor as to the particular tax consequences of exchanging such holder's Old Notes for New Notes, including the applicability and effect of any state, local or non-U.S. tax law. The exchange of the Old Notes for New Notes pursuant to the exchange offer should not be treated as an "exchange" for federal income tax purposes because the New Notes should not be considered to differ materially in kind or extent from the Old Notes. Rather, the New Notes received by a holder should be treated as a continuation of the Old Notes in the hands of such holder. As a result, there should be no federal income tax consequences to holders exchanging Old Notes for New Notes pursuant to the exchange offer. PLAN OF DISTRIBUTION Each broker-dealer that receives new securities for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of these new securities. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new securities received in exchange for securities where those securities were acquired as a result of market-making activities or other trading activities. We and the subsidiary guarantors have agreed that, starting on the expiration date and ending on the close of business 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 2004, all dealers effecting transactions in the new securities may be required to deliver a prospectus. We will not receive any proceeds from any sale of new securities by broker-dealers. New securities received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such new securities. Any broker-dealer that resells new securities that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any such resale of new securities and any commissions or concessions 86 received by any such persons may be deemed to be underwriting compensation under the Securities Act. By acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration date, we and the Subsidiary Guarantors will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. LEGAL MATTERS Certain matters relating to Wisconsin law will be passed upon for us by Foley & Lardner, Milwaukee, Wisconsin. Certain matters relating to New York law will be passed upon for us by Kirkland & Ellis LLP, New York, New York. EXPERTS Ernst & Young LLP, independent auditors, have audited the consolidated financial statements and schedule of our Predecessor Company, Neenah Foundry Company, at September 30, 2002 and 2003, and for each of the three years in the period ended September 30, 2003, as set forth in their reports. We have included our financial statements and schedule in this prospectus and elsewhere in this registration statement in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. AVAILABLE INFORMATION Under the terms of the indenture, we agree that, whether or not required by the rules and regulations of the Commission, so long as any Notes are outstanding, we will furnish to the trustee and the holders of Notes (i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K, if we were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes our financial condition and results of operations and our consolidated subsidiaries and, with respect to the annual information only, a report thereon by our certified independent accountants and (ii) all current reports that would be required to be filed with the Commission on Form 8-K if we were required to file such reports. In addition, whether or not required by the rules and regulations of the Commission, we will file a copy of all such information and reports with the Commission for public availability (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. Information filed with the Commission may be read and copied by the public at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. In addition, we have agreed that, for so long as any Notes remain outstanding, we will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Under the indenture governing the Notes we are required to file with the trustee annual, quarterly and other reports after we file these reports with the Securities and Exchange Commission. Annual reports delivered to the trustee and the holders of New Notes will contain financial information that has been examined and reported upon, with an opinion expressed by an independent public accountant. We will also furnish such other reports as may be required by law. 87 Information contained in this prospectus contains "forward-looking statements" which can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other similar terminology, or by discussions of strategy. Our actual results could differ materially from those anticipated by such forward-looking statements as a result of factors described in the "Risk Factors" beginning on page 9 and elsewhere in this prospectus. The market and industry data presented in this prospectus are based upon third-party data. While we believe that such estimates are reasonable and reliable, estimates cannot always be verified by information available from independent sources. Accordingly, readers are cautioned not to place undue reliance on such market share data. 88 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Ernst & Young LLP, Independent Auditors........... F-2 Consolidated Balance Sheets as of September 30, 2003 and 2002...................................................... F-3 Consolidated Statements of Operations for the years ended September 30, 2003, 2002 and 2001......................... F-5 Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the years ended September 30, 2003, 2002 and 2001...................................................... F-6 Consolidated Statements of Cash Flows for the years ended September 30, 2003, 2002 and 2001......................... F-7 Notes to Consolidated Financial Statements.................. F-8
F-1 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Board of Directors Neenah Foundry Company We have audited the accompanying consolidated balance sheets of Neenah Foundry Company (the Company) as of September 30, 2003 and 2002, and the related consolidated statements of operations, changes in stockholder's equity (deficit) and cash flows for each of the three years in the period ended September 30, 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at September 30, 2003 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, 2003, in conformity with accounting principles generally accepted in the United States. As discussed in Note 1 to the consolidated financial statements, effective October 8, 2003, the Company was reorganized under a plan of reorganization confirmed by the United States Bankruptcy Court, District of Delaware. In connection with its reorganization, the Company will apply fresh start accounting in the first quarter of fiscal 2004. As discussed in Note 7 to the consolidated financial statements, effective October 1, 2001, the Company changed its method of accounting for goodwill. ERNST & YOUNG LLP Milwaukee, Wisconsin November 10, 2003 F-2 NEENAH FOUNDRY COMPANY CONSOLIDATED BALANCE SHEETS
PRO FORMA UNAUDITED REORGANIZED COMPANY SEPTEMBER 30 SEPTEMBER 30, ------------------- 2003(A) 2003 2002 ------------- -------- -------- (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) ASSETS Current assets: Cash and cash equivalents................................ $ -- $ 24,356 $ 26,164 Accounts receivable, less allowance for doubtful accounts of $2,375 in 2003 and $1,062 in 2002.................. 56,333 56,333 56,453 Inventories.............................................. 59,459 56,555 51,267 Refundable income taxes.................................. -- -- 14,850 Deferred income taxes.................................... 2,497 4,059 2,659 Other current assets..................................... 8,113 8,113 5,769 Current assets of discontinued operations................ 423 423 4,423 -------- -------- -------- Total current assets....................................... 126,825 149,839 161,585 Property, plant and equipment: Land..................................................... 6,271 6,036 6,076 Buildings and improvements............................... 15,286 27,854 27,530 Machinery and equipment.................................. 52,025 222,778 210,457 Patterns................................................. 9,978 29,928 28,881 Construction in progress................................. 2,394 3,200 5,811 -------- -------- -------- 85,954 289,796 278,755 Less accumulated depreciation............................ -- 126,827 105,190 -------- -------- -------- 85,954 162,969 173,565 Deferred financing costs, net of accumulated amortization of $4,761 in 2003 and $8,340 in 2002..................... 2,980 1,393 6,656 Identifiable intangible assets, net of accumulated amortization of $21,935 in 2003 and $18,116 in 2002...... 83,436 33,354 37,173 Goodwill, net.............................................. 78,573 180,214 180,214 Other assets............................................... 6,532 9,065 6,365 Non-current assets of discontinued operations.............. -- -- 3,830 -------- -------- -------- 171,521 224,026 234,238 -------- -------- -------- $384,300 $536,834 $569,388 ======== ======== ========
F-3
PRO FORMA UNAUDITED REORGANIZED COMPANY SEPTEMBER 30 SEPTEMBER 30, ------------------- 2003(A) 2003 2002 ------------- -------- -------- (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities not subject to compromise: Accounts payable......................................... $ 31,585 $ 26,285 $ 22,591 Accrued wages and employee benefits...................... 11,307 11,307 12,658 Accrued interest......................................... -- -- 13,733 Other accrued liabilities................................ 5,918 5,918 2,880 Current portion of long-term debt........................ -- -- 40,917 Current portion of capital lease obligations............. 2,646 2,646 2,353 Current liabilities of discontinued operations........... -- -- 1,403 -------- -------- -------- Total current liabilities not subject to compromise........ 51,456 46,156 96,535 Long-term liabilities subject to compromise................ -- 465,540 -- Long-term debt............................................. 268,550 -- 410,515 Capital lease obligations.................................. 1,583 1,583 4,816 Deferred income taxes...................................... 25,275 33,804 43,886 Postretirement benefit obligations......................... 10,319 7,271 6,696 Other liabilities.......................................... 21,588 21,496 18,654 Non-current liabilities of discontinued operations......... -- -- 432 -------- -------- -------- Total liabilities.......................................... 378,771 575,850 581,534 Commitments and contingencies Stockholder's equity (deficit): Preferred stock, par value $100 per share; 3,000 shares authorized; no shares issued or outstanding........... -- -- -- Common stock, Class A (voting), par value $100 per share; 1,000 shares authorized, issued and outstanding....... 100 100 100 Common stock, Class B (nonvoting), par value $100 per share; 10,000 shares authorized; no shares issued or outstanding........................................... -- -- -- Additional paid-in capital -- warrants................... 602 -- -- Capital in excess of par value........................... 4,827 51,317 51,317 Accumulated deficit...................................... -- (81,124) (55,563) Accumulated other comprehensive loss..................... -- (9,309) (8,000) -------- -------- -------- Total stockholder's equity (deficit)....................... 5,529 (39,016) (12,146) -------- -------- -------- $384,300 $536,834 $569,388 ======== ======== ========
- --------------- (a) As discussed in Note 3, the Company emerged from bankruptcy on October 8, 2003 and will be required to adopt the fresh start accounting provisions of SOP 90-7 in the first quarter of fiscal 2004. The pro forma balances reflect what the September 30, 2003 balances would have been had the Company applied fresh start accounting as of September 30, 2003. See accompanying notes. F-4 NEENAH FOUNDRY COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED SEPTEMBER 30 ------------------------------ 2003 2002 2001 -------- -------- -------- (IN THOUSANDS) Net sales................................................... $375,063 $387,707 $398,782 Cost of sales............................................... 321,834 323,740 335,264 -------- -------- -------- Gross profit................................................ 53,229 63,967 63,518 Selling, general and administrative expenses................ 26,132 28,743 27,587 Amortization expense........................................ 3,819 3,829 10,489 Provision for impairment of assets.......................... -- 74 -- (Gain) loss on disposal of property, plant and equipment.... 195 544 (434) -------- -------- -------- Operating income............................................ 23,083 30,777 25,876 Other income (expense): Interest expense (contractual interest expense was $52,460 in 2003)............................................... (47,445) (43,466) (43,454) Interest income........................................... 825 819 445 Reorganization expense.................................... (7,874) -- -- -------- -------- -------- Loss from continuing operations before income taxes......... (31,411) (11,870) (17,133) Credit for income taxes..................................... (8,541) (5,917) (4,004) -------- -------- -------- Loss from continuing operations............................. (22,870) (5,953) (13,129) Discontinued operations: Loss from discontinued operations, net of income taxes of $(590) in 2003, $(22,947) in 2002 and $(2,463) in 2001................................................... (1,095) (41,750) (4,325) Gain (loss) on sale of discontinued operations, net of income taxes of $(860) in 2003 and $1,603 in 2001...... (1,596) -- 2,404 -------- -------- -------- Net loss.................................................... $(25,561) $(47,703) $(15,050) ======== ======== ========
See accompanying notes. F-5 NEENAH FOUNDRY COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)
RETAINED ACCUMULATED COMMON STOCK CAPITAL IN EARNINGS OTHER PREFERRED ----------------- EXCESS OF (ACCUMULATED COMPREHENSIVE STOCK CLASS A CLASS B PAR VALUE DEFICIT) LOSS TOTAL --------- ------- ------- ---------- ------------ ------------- -------- (IN THOUSANDS) Balance at September 30, 2000.................... $ -- $100 $ -- $51,317 $ 7,190 $ (89) $ 58,518 Components of comprehensive loss: Net loss.............. -- -- -- -- (15,050) -- (15,050) Pension liability adjustment, net of tax effect of $1,018.............. -- -- -- -- -- (1,529) (1,529) -------- Total comprehensive loss.................. (16,579) ----- ---- ----- ------- -------- ------- -------- Balance at September 30, 2001.................... -- 100 -- 51,317 (7,860) (1,618) 41,939 Components of comprehensive loss: Net loss.............. -- -- -- -- (47,703) -- (47,703) Pension liability adjustment, net of tax effect of $4,255.............. -- -- -- -- -- (6,382) (6,382) -------- Total comprehensive loss.................. (54,085) ----- ---- ----- ------- -------- ------- -------- Balance at September 30, 2002.................... -- 100 -- 51,317 (55,563) (8,000) (12,146) Components of comprehensive loss: Net loss.............. -- -- -- -- (25,561) -- (25,561) Pension liability adjustment, net of tax effect of $952................ -- -- -- -- -- (1,309) (1,309) -------- Total comprehensive loss.................. (26,870) ----- ---- ----- ------- -------- ------- -------- Balance at September 30, 2003.................... $ -- $100 $ -- $51,317 $(81,124) $(9,309) $(39,016) ===== ==== ===== ======= ======== ======= ========
See accompanying notes. F-6 NEENAH FOUNDRY COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED SEPTEMBER 30 ------------------------------ 2003 2002 2001 -------- -------- -------- (IN THOUSANDS) OPERATING ACTIVITIES Net loss.................................................... $(25,561) $(47,703) $(15,050) Adjustments to reconcile net loss to net cash provided by operating activities: Noncash reorganization expenses........................ 1,464 -- -- Provision for obsolete inventories..................... 424 240 248 Lower of cost or market inventory adjustment........... 1,228 -- -- Provision for impairment of assets..................... -- 36,533 -- Depreciation........................................... 22,530 25,532 29,636 Amortization of identifiable intangible assets and goodwill............................................. 3,819 3,947 11,638 Amortization of deferred financing costs and premium on notes................................................ 2,242 1,392 1,222 (Gain) loss on sale of discontinued operations......... 2,456 -- (4,007) (Gain) loss on disposal of property, plant and equipment............................................ 195 559 (337) Deferred income taxes.................................. (10,337) (10,650) (1,630) Changes in operating assets and liabilities: Accounts receivable.................................. 966 10,275 2,145 Inventories.......................................... (6,995) 19,559 (7,405) Other current assets................................. (3,047) 1,043 45 Accounts payable..................................... 3,184 (7,118) (474) Accrued liabilities.................................. 11,856 (2,983) (3,911) Income taxes......................................... 18,122 (14,104) (2,152) Postretirement benefit obligations................... 575 351 379 Other liabilities.................................... (119) (437) (1,060) -------- -------- -------- Net cash provided by operating activities................... 23,002 16,436 9,287 INVESTING ACTIVITIES Proceeds from disposition of business, net of fees.......... 648 -- 5,190 Purchase of property, plant and equipment................... (11,900) (9,055) (16,882) Proceeds from sale of property, plant and equipment......... 40 323 2,859 Other....................................................... (105) (621) 2,373 -------- -------- -------- Net cash used in investing activities....................... (11,317) (9,353) (6,460) FINANCING ACTIVITIES Proceeds from long-term debt................................ $ 815 $ 33,400 $ 5,000 Payments on long-term debt and capital lease obligations.... (13,017) (17,807) (22,053) Debt issuance costs......................................... (1,291) (858) (906) -------- -------- -------- Net cash provided by (used in) financing activities......... (13,493) 14,735 (17,959) -------- -------- -------- Increase (decrease) in cash and cash equivalents............ (1,808) 21,818 (15,132) Cash and cash equivalents at beginning of year.............. 26,164 4,346 19,478 -------- -------- -------- Cash and cash equivalents at end of year.................... $ 24,356 $ 26,164 $ 4,346 ======== ======== ======== Supplemental disclosures of cash flows information: Interest paid............................................. $ 34,995 $ 44,340 $ 47,428 Income taxes refunded..................................... (18,032) (4,080) (1,253)
F-7 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2003 (In Thousands) 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Neenah Foundry Company (Neenah), together with its subsidiaries (the Company), manufactures gray and ductile iron castings and forged components for sale to industrial and municipal customers. Industrial castings are custom-engineered and are produced for customers in several industries, including the medium and heavy-duty truck components, farm equipment, heating, ventilation and air-conditioning industries. Municipal castings include manhole covers and frames, storm sewer frames and grates, tree grates and specialty castings for a variety of applications and are sold principally to state and local government entities, utilities and contractors. The Company's sales generally are unsecured. The Company is a wholly owned subsidiary of NFC Castings, Inc., which is a wholly owned subsidiary of ACP Holding Company. Neenah has the following subsidiaries, all of which are wholly owned: Deeter Foundry, Inc. (Deeter); Mercer Forge Corporation and subsidiaries (Mercer); Dalton Corporation and subsidiaries (Dalton); Advanced Cast Products, Inc. and subsidiaries (ACP); Gregg Industries, Inc. (Gregg); Neenah Transport, Inc. (Transport) and Cast Alloys, Inc. (Cast Alloys), which is inactive. Deeter manufactures gray iron castings for the municipal market and special application construction castings. Mercer manufactures forged components for use in transportation, railroad, mining and heavy industrial applications and microalloy forgings for use by original equipment manufacturers and industrial end users. Dalton manufactures gray iron castings for refrigeration systems, air conditioners, heavy equipment, engines, gear boxes, stationary transmissions, heavy-duty truck transmissions and other automotive parts. ACP manufactures ductile and malleable iron castings for use in various industrial segments, including heavy truck, construction equipment, railroad, mining and automotive. Gregg manufactures gray and ductile iron castings for industrial and commercial use. Transport is a common and contract carrier licensed to operate in the continental United States. The majority of Transport's revenues are derived from transport services provided to the Company. As further discussed in Note 2, on August 5, 2003 (the Petition Date), the Company filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the Bankruptcy Code) with the United States Bankruptcy Court, District of Delaware (the Bankruptcy Court). Accordingly, the accompanying consolidated financial statements have been prepared in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," (SOP 90-7) and on a going concern basis which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. In accordance with SOP 90-7, the financial statements for the periods presented distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the Company. On October 8, 2003 (the Effective Date), the Company emerged from the Bankruptcy Court proceedings pursuant to the terms of its plan of reorganization (the Plan of Reorganization). As discussed in Note 3, the Company will implement fresh start accounting under the provisions of SOP 90-7 in the first quarter of fiscal 2004. Under the fresh start accounting provisions of SOP 90-7, the fair value of the reorganized Company will be allocated to its assets and liabilities, and its accumulated deficit will be eliminated. As discussed in the Pro Forma column on the accompanying balance sheet and in Note 3, the implementation of fresh start accounting will result in a substantial reduction in the carrying value of the Company's long-lived assets, including property, plant and equipment and intangible assets, and long-term liabilities. As a result, the historical financial statements will not be comparable to financial statements of the Company published for periods following the implementation of fresh start accounting. F-8 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 2. REORGANIZATION THE CHAPTER 11 PETITION AND PLAN OF REORGANIZATION On August 5, 2003, the Company filed for protection under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. On September 26, 2003, the Bankruptcy Court confirmed the Company's Plan of Reorganization, and, on October 8, 2003, the Company consummated the Plan of Reorganization and emerged from its Chapter 11 reorganization proceedings with a significantly restructured balance sheet. During the period immediately preceding and after the filing of the Company's Chapter 11 petition, the Company met with a committee of lenders under the secured credit facility (the Pre-Petition Credit Facility), an informal committee of unsecured creditors that represented holders of the senior subordinated notes and potential investors to discuss potential restructuring transactions that could be implemented to reorganize the Company's capital structure. These discussions led to an agreement with the lenders under the Pre-Petition Credit Facility regarding the terms of a Plan of Reorganization. The Plan of Reorganization was filed on August 5, 2003, encompassing information that had been previously distributed to and approved by creditors of the Company eligible to vote in the reorganization. The consummation of the Plan of Reorganization resulted in the $147,441 of loans under the Pre-Petition Credit Facility being terminated through payment in full with cash using proceeds from the Second Secured Notes and the New Credit Facility. The Plan of Reorganization also resulted in the cancellation of all of the Company's Pre-Petition Senior Subordinated Notes in exchange for the following: - $30,000 in cash; - $100,000 in aggregate principal amount of New Senior Subordinated Notes; - Shares representing 47.5% of the issued and outstanding shares of New Common Stock in ACP Holding Company on a fully diluted basis as of October 8, 2003, other than shares of restricted stock granted pursuant to the Management Equity Incentive Plan of ACP Holding Company; and - Rights to acquire, for $110,000 in cash in the aggregate, units for up to $119,996 face amount of Second Secured Notes and warrants to acquire up to 42.81% of the new ACP Holding Company Common Stock on a fully diluted basis as of October 8, 2003. The warrants have an exercise price of $0.01 per share and will expire 10 years from the date of issuance. In addition, under the Plan of Reorganization, the PIK Note was cancelled and the holder received Second Secured Notes with a principal amount equal to $13,134 and warrants to acquire up to 4.69% of the new ACP Holding Company Common Stock on a fully diluted basis as of October 8, 2003 and cash of $45. ACCOUNTING IMPACT OF CHAPTER 11 FILING In accordance with SOP 90-7, liabilities subject to compromise reflected in the accompanying consolidated balance sheet were recorded at the amount allowed on pre-petition claims in the Chapter 11 proceedings. Other obligations that are not subject to compromise have retained their historical balance sheet classifications and amounts. F-9 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Liabilities subject to compromise consist of the following as of September 30, 2003: Senior Subordinated Notes................................... $282,000 Credit Facility............................................. 147,441 PIK Note.................................................... 9,900 Accrued interest............................................ 26,183 Other debt.................................................. 16 -------- $465,540 ========
In order to record its debt instruments at the amount allowed by the Bankruptcy Court in accordance with SOP 90-7, as of the Petition Date, the Company wrote off all of its debt issuance costs and premiums related to the Pre-Petition Senior Subordinated Notes (collectively the Deferred Financing Fees) as a component of reorganization expense in the accompanying consolidated statement of operations. Reorganization expense also includes professional fees incurred in connection with the Chapter 11 proceedings. Reorganization expenses for the year ended September 30, 2003 consist of the following: Deferred Financing Fees..................................... $1,464 Professional fees........................................... 6,410 ------ Total reorganization expense................................ $7,874 ======
Under SOP 90-7, the Company was required to accrue interest expense during the Chapter 11 proceedings only to the extent that such interest was expected to be paid pursuant to the proceedings. Under the Plan of Reorganization, there were no cash payments of interest on the outstanding Senior Subordinated Notes. Therefore, the Company ceased accruing interest on the Senior Subordinated Notes as of the Petition Date. The contractual interest amount parenthetically disclosed on the accompanying consolidated statement of operations represents the interest expense that would have been accrued under the Senior Subordinated Notes had the Company not ceased accruing interest as described above. 3. FRESH START ACCOUNTING The Company will adopt the fresh start accounting provisions (fresh start) of SOP 90-7 during the first quarter of fiscal 2004. Under SOP 90-7, the implementation of fresh start reporting is triggered, in part, by the emergence of the Company from its Chapter 11 proceedings. Although the effective date of the Plan of Reorganization was October 8, 2003, the Company plans to account for the consummation of the Plan of Reorganization as if it had occurred on October 1, 2003 and implement fresh start reporting as of that date. Fresh start requires that the Company adjust the historical cost of its assets and liabilities to their fair value. The fair value of the reorganized Company, or the reorganization value, of approximately $290,000 was determined by an independent party based on multiples of earnings before interest, income taxes, depreciation and amortization (EBITDA) and discounted future cash flows under the Company's financial projections. F-10 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Fresh start requires that the reorganization value be allocated to the entity's net assets in conformity with procedures specified by Statement of Financial Accounting Standards No. 141, "Business Combinations" (SFAS No. 141). The Company engaged an independent appraiser to assist in the allocation of the reorganization value to the reorganized Company's assets and liabilities by determining the fair market value of its property, plant and equipment and intangible assets. This valuation is preliminary and adjustments may be required once the final valuation is complete. A reconciliation of the adjustments to be recorded in connection with the debt restructuring and the adoption of fresh start accounting are as follows:
PREDECESSOR REORGANIZED NEENAH NEENAH FOUNDRY FOUNDRY COMPANY COMPANY SEPTEMBER 30, DEBT FRESH START SEPTEMBER 30, 2003 RESTRUCTURING ADJUSTMENTS(D) 2003 ------------- ------------- -------------- ------------- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents.............. $ 24,356 $ (24,356) $ $ -- Accounts receivable, net............... 56,333 -- -- 56,333 Inventories............................ 56,555 -- 2,904 59,459 Deferred income taxes.................. 4,059 -- (1,562) 2,497 Other current assets................... 8,113 -- -- 8,113 Current assets of discontinued operations.......................... 423 -- -- 423 -------- --------- --------- -------- Total current assets..................... 149,839 (24,356) 1,342 126,825 Property, plant and equipment: Land................................... 6,036 -- 235 6,271 Buildings and improvements............. 27,854 -- (12,568) 15,286 Machinery and equipment................ 222,778 -- (170,753) 52,025 Patterns............................... 29,928 -- (19,950) 9,978 Construction in progress............... 3,200 -- (806) 2,394 -------- --------- --------- -------- 289,796 -- (203,842) 85,954 Less accumulated depreciation.......... 126,827 -- (126,827) -- -------- --------- --------- -------- 162,969 -- (77,015) 85,954 Deferred financing costs, net............ 1,393 1,587 -- 2,980 Identifiable intangible assets, net...... 33,354 -- 50,082 83,436 Goodwill, net............................ 180,214 (101,641) 78,573 Other assets............................. 9,065 -- (2,533) 6,532 -------- --------- --------- -------- 224,026 1,587 (54,092) 171,521 -------- --------- --------- -------- $536,834 $ (22,769) $(129,765) $384,300 ======== ========= ========= ========
F-11 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
PREDECESSOR REORGANIZED NEENAH NEENAH FOUNDRY FOUNDRY COMPANY COMPANY SEPTEMBER 30, DEBT FRESH START SEPTEMBER 30, 2003 RESTRUCTURING ADJUSTMENTS(D) 2003 ------------- ------------- -------------- ------------- (UNAUDITED) LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities not subject to compromise: Accounts payable.................... $ 26,285 $ 5,300 $ -- $ 31,585 Accrued wages and employee benefits.......................... 11,307 -- -- 11,307 Other accrued liabilities........... 5,918 -- -- 5,918 Current portion of capital lease obligations....................... 2,646 -- -- 2,646 -------- --------- --------- -------- Total current liabilities not subject to compromise............................. 46,156 5,300 -- 51,456 Long-term liabilities subject to compromise............................. 465,540 (465,540)(a) -- -- Long-term debt........................... -- 268,550(b) -- 268,550 Capital lease obligations................ 1,583 -- -- 1,583 Deferred income taxes.................... 33,804 -- (8,529) 25,275 Postretirement benefit obligations....... 7,271 -- 3,048 10,319 Other liabilities........................ 21,496 -- 92 21,588 -------- --------- --------- -------- Total liabilities........................ 575,850 (191,690) (5,389) 378,771 Commitments and contingencies Stockholder's equity (deficit): Preferred stock........................ -- -- -- -- Predecessor Neenah common stock........ 100 (100)(a) -- -- Reorganized Neenah common stock........ -- 100(c) -- 100 Additional paid-in capital -- warrants............................ -- 602(c) -- 602 Capital in excess of par value......... 51,317 -- (46,490) 4,827 Accumulated deficit.................... (81,124) -- 81,124 -- Accumulated other comprehensive loss... (9,309) -- 9,309 -- -------- --------- --------- -------- Total stockholder's equity (deficit)..... (39,016) 602 43,943 5,529 -------- --------- --------- -------- $536,834 $(191,088) $ 38,554 $384,300 ======== ========= ========= ========
- --------------- a. To record the discharge of pre-petition indebtedness, including $26,183 of accrued interest and the elimination of Predecessor Neenah's common stock. b. Record borrowings of $47,112 on the New Credit Facility, the issuance of $100,000 New Senior Subordinated Notes and the issuance of $121,438 (net of discount of $11,692) of Second Secured Notes. c. To record the issuance of common stock in Reorganized Neenah and detachable warrants issued with the Second Secured Notes. d. To adjust the carrying value of assets, liabilities and stockholder's equity to fair value, in accordance with fresh start accounting. F-12 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Neenah and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying value, which approximates fair value, of cash equivalents, which consist entirely of repurchase agreements, totaled $21,850 and $25,500 at September 30, 2003 and 2002, respectively. ACCOUNTS RECEIVABLE The Company evaluates the collectibility of its accounts and notes receivable based on a number of factors. For larger accounts, an allowance for doubtful accounts is recorded based on the applicable parties' ability and likelihood to pay based on management's review of the facts. For all other accounts, the Company recognizes an allowance based on length of time the receivable is past due based on historical experience. INVENTORIES Inventories are stated at the lower of cost or market. The cost of inventories for Neenah and Dalton is determined on the last-in, first-out (LIFO) method for substantially all inventories except supplies, for which cost is determined on the first-in, first-out (FIFO) method. The cost of inventories for Deeter, Mercer, ACP and Gregg is determined on the FIFO method. LIFO inventories comprise 49% and 47% of total inventories at September 30, 2003 and 2002, respectively. If the FIFO method of inventory valuation had been used by all companies, inventories would have been approximately $2,623 and $1,458 higher than reported at September 30, 2003 and 2002, respectively. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Depreciation for financial reporting purposes is provided over the estimated useful lives (7 to 40 years) of the respective assets using the straight-line method. DEFERRED FINANCING COSTS Costs incurred to obtain long-term financing are amortized using the effective interest method over the term of the related debt. IDENTIFIABLE INTANGIBLE ASSETS Identifiable intangible assets are amortized on a straight-line basis over the estimated useful lives of 10 to 40 years. F-13 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) GOODWILL Effective October 1, 2001, goodwill is no longer amortized but is subject to an annual test for impairment. Prior to October 1, 2001, goodwill was amortized on a straight-line basis over 15 to 40 years. IMPAIRMENT OF LONG-LIVED ASSETS Property, plant and equipment and identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. Such analyses necessarily involve significant judgment. REVENUE RECOGNITION Revenues are recognized upon shipment of product, which generally corresponds with the transfer of title. SHIPPING AND HANDLING COSTS Shipping and handling costs are included in cost of sales. ADVERTISING COSTS Advertising costs are expensed as incurred. Advertising costs for continuing operations amounted to $445, $587 and $615 for the years ended September 30, 2003, 2002 and 2001, respectively. INCOME TAXES Deferred income taxes are provided for temporary differences between the financial reporting and income tax basis of the Company's assets and liabilities and are measured using currently enacted tax rates and laws. FINANCIAL INSTRUMENTS The carrying value of the Company's financial instruments, including cash and cash equivalents, accounts receivable, notes receivable and investment in preferred stock (see Note 5), accounts payable and capital lease obligations approximate fair value. At September 30, 2003, long-term debt is included in the accompanying consolidated balance sheet as a liability subject to compromise. At September 30, 2002, the fair value of the Company's $451,432 of long-term debt was $285,052. The fair value of the Senior Subordinated Notes at September 30, 2002 with a face value of $282,000 was based on quoted market prices. RECLASSIFICATIONS Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. NEW ACCOUNTING PRONOUNCEMENTS In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51," which expands upon and strengthens existing accounting guidance concerning when a company should include in its financial statements the assets, liabilities and activities of another entity. A Variable Interest Entity F-14 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ("VIE") does not share economic risk and reward through typical equity ownership arrangements. Instead, contractual or other relationships re-distribute economic risks and rewards among equity holders and other parties. Once an entity is determined to be a VIE, the party with the controlling financial interest, the primary beneficiary, is required to consolidate it. FIN 46 also requires disclosures about VIEs that a company is not required to consolidate but in which it has a significant variable interest. The adoption of applicable provisions of FIN 46 in 2003 did not have a material impact on the Company's results of operations or financial position. The Company does not expect the adoption of the remaining provisions related to FIN 46 to have a material impact on the Company's results of operations or financial position. 5. DISCONTINUED OPERATIONS In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." The Company adopted SFAS No. 144 as of October 1, 2001. During the year ended September 30, 2002, the Company identified indicators of impairment at its Belcher Corporation (Belcher) foundry, which was held for use at that date. Belcher is a wholly-owned subsidiary of Advanced Cast Products, Inc. In accordance with SFAS No. 144, because the net book value of the foundry's long-lived assets exceeded the sum of the undiscounted cash flows expected to be realized from the respective assets, the Company recognized an impairment charge of $5,379 to adjust the carrying value of the foundry's long-lived assets to fair value. On December 27, 2002, the Company sold substantially all of the assets of Belcher for cash of $648 (net of fees and escrow deposits), a $1,500 note receivable and $1,000 of preferred stock of the buyer. The cost method is used to account for the Company's investment in preferred stock as the Company does not have the ability to exercise significant influence over the investee's operations and financial policies. At September 30, 2003, the cost of the preferred stock approximates fair value. The disposition of Belcher resulted in a loss of $1,596, net of taxes of $860. Included in the loss on disposal is a curtailment loss on Belcher's defined benefit pension plan of $367, net of taxes of $198, which was retained by the Company. In accordance with the provisions of SFAS No. 144, the results of operations of Belcher have been reported as discontinued operations in the consolidated statements of operations for all periods presented. Revenues for Belcher, which was previously included in the Castings segment, for the years ended September 30, 2003, 2002 and 2001 were $3,186, $17,511 and $18,125, respectively. Interest allocated to Belcher of $139, $485 and $533 for the years ended September 30, 2003, 2002 and 2001, respectively, was based on the purchase price of Belcher in relation to the purchase price of all other acquisitions funded by additional Company borrowings. Customer actions and the significant deterioration of the U.S. economy during the quarter ended December 31, 2001, had a dramatic effect on the operations of Cast Alloys. This resulted in a significant reduction in sales, operating profits and cash flows of Cast Alloys for the three months ended December 31, 2001. Based on these factors, a goodwill impairment charge of $10,668 was recognized during the three months ended December 31, 2001, related to the decline in fair value of the Cast Alloys reporting unit, which was included in the Castings segment. These events also had a significant impact on the value of Cast Alloys' property, plant and equipment and long-lived assets with finite lives. Due to the existing impairment indicators, management assessed the recoverability of these fixed assets and long-lived assets. As the expected undiscounted cash flows were less than the carrying value of the related assets, an impairment charge of $20,412 was recognized for the difference between the fair value and carrying value of such assets during the year ended September 30, 2002. In January 2002, management initiated a plan for discontinuing the operations of Cast Alloys by closing its manufacturing facilities. Severance costs of approximately $2,200 associated with this plan were F-15 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) recognized during the three months ended March 31, 2002. All employees of Cast Alloys were terminated by April 2002. In accordance with the provisions of SFAS No. 144, the results of operations of Cast Alloys have been reported as discontinued operations in the consolidated statements of operations for all periods presented. Previously, Cast Alloys was included in the Castings segment. Revenues for Cast Alloys for the years ended September 30, 2002 and 2001 were $8,641 and $53,130, respectively. Interest expense allocated to Cast Alloys of $1,954 and $4,309 for the years ended September 30, 2002 and 2001, respectively, was based on the purchase price of Cast Alloys in relation to the purchase price of all other acquisitions funded by additional Company borrowings. On October 2, 2000, the Company sold all of the issued and outstanding shares of common stock of Hartley Controls Corporation (Hartley) for cash of $5,190, net of fees of $129. The disposition of Hartley resulted in a gain of $2,404, net of income taxes of $1,603. Proceeds from the sale were used to reduce outstanding debt. Hartley designed and manufactured customized sand control systems. In accordance with the provisions of APB Opinion No. 30, "Reporting the Results of Operations -- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions," which has been amended by SFAS No. 144, the results of operations of Hartley have been reported as discontinued operations in the consolidated statements of operations. 6. INVENTORIES Inventories consist of the following as of September 30:
2003 2002 ------- ------- Raw materials............................................... $ 3,709 $ 3,961 Work in process and finished goods.......................... 38,731 35,034 Supplies.................................................... 14,115 12,272 ------- ------- $56,555 $51,267 ======= =======
7. INTANGIBLE ASSETS The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets," as of October 1, 2001. Under SFAS No. 142, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with the statement. Other intangible assets continue to be amortized over their estimated useful lives. Upon adoption of SFAS No. 141, the Company reclassified the identifiable intangible assets related to the assembled workforce and facilities in place with an unamortized balance of $4,660 and $3,469, respectively, net of related deferred income taxes of $1,864 and $1,388, respectively, to goodwill. The Company performed the transitional impairment test of goodwill as of October 1, 2001, and concluded that no impairment existed at the time of adoption of SFAS No. 142. As discussed in Note 5, subsequent to the adoption of SFAS No. 142, a goodwill impairment charge of $10,668 related to Cast Alloys, a discontinued operation, was recognized. The Company performed the annual impairment test of goodwill as of July 1, 2002, and concluded that no additional goodwill impairment existed. The impairment tests were performed based on the expected present value of future cash flows for each of the Company's reporting units. As further discussed in Notes 2 and 3, on August 5, 2003, the Company filed for protection under Chapter 11 of the Bankruptcy Code and on October 8, 2003 emerged from the Chapter 11 reorganization proceedings with a significantly restructured balance sheet, including a substantial reduction in the carrying value of the Company's intangible assets. F-16 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Identifiable intangible assets consist of the following as of September 30:
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002 ----------------------- ----------------------- GROSS GROSS CARRYING ACCUMULATED CARRYING ACCUMULATED AMOUNT AMORTIZATION AMOUNT AMORTIZATION -------- ------------ -------- ------------ Amortizable intangible assets: Customer lists.......................... $31,441 $17,945 $31,441 $14,814 Tradenames.............................. 22,553 3,217 22,553 2,649 Other................................... 1,295 773 1,295 653 ------- ------- ------- ------- $55,289 $21,935 $55,289 $18,116 ======= ======= ======= =======
The Company does not have any intangible assets deemed to have indefinite lives. Amortization expense expected to be recognized during fiscal years subsequent to September 30, 2003, is as follows: 2004........................................................ $3,832 2005........................................................ 3,832 2006........................................................ 3,832 2007........................................................ 3,195 2008........................................................ 2,002
Changes in the carrying amount of goodwill during the year ended September 30, 2002, consist of the following:
CASTINGS FORGINGS SEGMENT SEGMENT TOTAL -------- -------- -------- Balance as of September 30, 2001...................... $168,709 $17,296 $186,005 Reclassification of assembled workforce and facilities in place net of deferred income tax liability of $3,064, $188 and $3,252, respectively............... 4,595 282 4,877 Impairment charge related to discontinued operations -- See Note 5............................ (10,668) -- (10,668) -------- ------- -------- Balance as of September 30, 2002...................... $162,636 $17,578 $180,214 ======== ======= ========
As required by SFAS No. 142, the results of operations of the Company for periods prior to its adoption have not been restated. The following table reconciles reported net loss to pro forma net loss that would have resulted for the year ending September 30, 2001 if SFAS No. 142 had been adopted effective October 1, 2000: Reported net loss........................................... $(15,050) Amortization of goodwill.................................... 5,552 Amortization of assembled workforce, net of tax............. 1,025 Amortization of facilities in place, net of tax............. 45 -------- Pro forma net loss.......................................... $ (8,428) ========
F-17 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 8. LONG-TERM DEBT Long-term debt consists of the following as of September 30:
2003 2002 -------- -------- 11 1/8% Series B Senior Subordinated Notes.................. $150,000 $150,000 11 1/8% Series D Senior Subordinated Notes, including unamortized premium of $1,206 in 2002..................... 45,000 46,206 11 1/8% Series F Senior Subordinated Notes, including unamortized premium of $1,642 in 2002..................... 87,000 88,642 Term Loan Facilities........................................ 112,792 117,292 Acquisition Loan Facility................................... 5,335 10,794 Revolving Credit Facility................................... 29,314 28,500 PIK Note.................................................... 9,900 9,900 Other....................................................... 16 98 -------- -------- $439,357 $451,432 ======== ========
The Company had a Credit Facility, as amended, with a group of banks, which provided Term Loan Facilities, an Acquisition Loan Facility and a Revolving Credit Facility. Borrowings under this Pre-Petition Credit Facility were secured by substantially all assets of the Company. Covenants in the Pre-Petition Credit Facility restricted the payment of dividends, capital expenditures and certain other transactions and required the Company to maintain leverage, net worth and interest coverage ratios. The Pre-Petition Credit Facility bore interest at LIBOR (1.125% at September 30, 2003) plus 4.5% or LIBOR plus 4.75%. Effective December 31, 2001, the Credit Agreement was amended to provide relief from the above financial ratio covenants through December 31, 2003, reduce the amount of the Revolving Credit Facility to $29,565 and establish minimum EBITDA and liquidity covenants. At March 31, 2003, the Company was in default of the minimum EBITDA covenant on the Pre-Petition Credit Facility. In addition, the Company did not make the scheduled May 1, 2003 interest payment on the Pre-Petition Senior Subordinated Notes which was an event of default under the Indenture Agreement covering the Pre-Petition Senior Subordinated Notes. As of September 30, 2003, as a result of the Chapter 11 filing, the carrying value of the Company's debt is classified as long-term liabilities subject to compromise. As discussed in Note 2, in order to record the debt instruments at the amount allowed by the Bankruptcy Court, in accordance with SOP 90-7, unamortized premiums of $2,226 related to the Pre-Petition Senior Subordinated Notes were written off as a component of reorganization expense in 2003. As further discussed in Note 2, upon the Company's consummation of the Plan of Reorganization, all of the Company's Pre-Petition Senior Subordinated Notes and Pre-Petition Credit Facility and PIK Note were cancelled or repaid. The New Credit Facility has a 5-year maturity, provides for a revolving credit line of up to $70,000 (with a $5,000 sublimit available for letters of credit), a term loan in the aggregate amount of up to $22,085, contains various financial and non-financial covenants and is secured by substantially all of the Company's tangible and intangible assets. The interest rate on the New Credit Facility is based on LIBOR plus an applicable margin, based upon the Company meeting certain financial statistics. The Company, including its wholly-owned subsidiaries, jointly and severally guarantee the Company's obligation under the New Credit Facility. The Second Secured Notes are due in 2010 and bear interest at 11%. The New Senior Subordinated Notes bear interest at 13% and are due in 2013. F-18 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 9. COMMITMENTS AND CONTINGENCIES The Company leases certain plants, warehouse space, machinery and equipment, office equipment and vehicles under operating leases. Rent expense for continuing operations under these operating leases for the years ended September 30, 2003, 2002 and 2001 totaled $2,885, $3,147 and $2,777, respectively. The Company did not enter into any capital leases during the years ended September 30, 2003 or 2002. Property, plant and equipment under leases accounted for as capital leases as of September 30 are as follows:
2003 2002 ------- ------- Machinery and equipment..................................... $20,867 $21,471 Less accumulated depreciation............................... (4,978) (3,983) ------- ------- $15,889 $17,488 ======= =======
Minimum rental payments due under operating and capital leases for fiscal years subsequent to September 30, 2003, are as follows:
OPERATING CAPITAL LEASES LEASES --------- ------- 2004........................................................ $1,813 $2,951 2005........................................................ 1,344 1,656 2006........................................................ 743 -- 2007........................................................ 293 -- 2008........................................................ 244 -- Thereafter.................................................. 347 -- ------ ------ Total minimum lease payments................................ $4,784 4,607 ====== Less amount representing interest........................... 378 ------ Present value of minimum lease payments..................... 4,229 Less current portion........................................ 2,646 ------ Capital lease obligations................................... $1,583 ======
The Company is partially self-insured for workers' compensation claims. An accrued liability is recorded for claims incurred but not yet paid or reported and is based on current and historical claim information. The accrued liability may ultimately be settled for an amount different than the recorded amount. Adjustments of the accrued liability are recorded in the period in which they become known. Approximately 63% of the Company's work force is covered by collective bargaining agreements. The collective bargaining agreements for Mercer and the Kendallville location of Dalton are scheduled to expire during fiscal 2004. F-19 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 10. INCOME TAXES The credit for income taxes consists of the following:
YEAR ENDED SEPTEMBER 30 ----------------------------- 2003 2002 2001 -------- -------- ------- Current: Federal............................................. $ -- $(18,522) $(2,902) State............................................... 346 308 (1,218) Foreign............................................. -- -- 886 -------- -------- ------- 346 (18,214) (3,234) Deferred.............................................. (10,337) (10,650) (1,630) -------- -------- ------- $ (9,991) $(28,864) $(4,864) ======== ======== =======
The credit for income taxes is included in the consolidated statements of operations as follows:
YEAR ENDED SEPTEMBER 30 ---------------------------- 2003 2002 2001 ------- -------- ------- Continuing operations.................................. $(8,541) $ (5,917) $(4,004) Discontinued operations................................ (1,450) (22,947) (860) ------- -------- ------- $(9,991) $(28,864) $(4,864) ======= ======== =======
The credit for income taxes differs from the amount computed by applying the federal statutory rate of 35% to loss before income taxes as follows:
YEAR ENDED SEPTEMBER 30 ----------------------------- 2003 2002 2001 -------- -------- ------- Credit at statutory rate.............................. $(12,443) $(26,798) $(6,970) State income taxes (benefit), net of federal taxes.... 225 74 (535) Amortization of goodwill.............................. -- -- 1,943 Additional provision recorded in connection with tax examinations........................................ -- 932 417 Reorganization expenses............................... 2,244 -- -- Permanent difference related to the discontinuance of Cast Alloys......................................... -- (2,734) -- Other................................................. (17) (338) 281 -------- -------- ------- Credit for income taxes............................... $ (9,991) $(28,864) $(4,864) ======== ======== =======
F-20 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Deferred income tax assets and liabilities consist of the following as of September 30:
2003 2002 -------- -------- Deferred income tax liabilities: Inventories............................................... $ (2,244) $ (3,023) Property, plant and equipment............................. (35,939) (37,277) Identifiable intangible assets............................ (13,362) (14,890) Other..................................................... (2,093) (1,781) -------- -------- (53,638) (56,971) Deferred income tax assets: Employee benefit plans.................................... 11,604 10,062 Accrued vacation.......................................... 2,101 2,185 Other accrued liabilities................................. 3,136 1,743 Net operating loss carryforwards.......................... 5,986 1,754 Other..................................................... 1,066 -- -------- -------- 23,893 15,744 -------- -------- Net deferred income tax liability........................... $(29,745) $(41,227) ======== ======== Included in the consolidated balance sheets as: Current deferred income tax asset......................... $ 4,059 $ 2,659 Noncurrent deferred income tax liability.................. (33,804) (43,886) -------- -------- $(29,745) $(41,227) ======== ========
As of September 30, 2003, the Company has federal and state net operating loss carryforwards for income tax purposes of approximately $13,000 and $24,000, respectively, which expire through 2023. 11. EMPLOYEE BENEFIT PLANS DEFINED-BENEFIT PENSION PLANS AND POSTRETIREMENT BENEFITS The Company sponsors five defined-benefit pension plans covering the majority of its hourly employees. Retirement benefits under the pension plans are based on years of service and defined-benefit rates. The Company funds the pension plans based on actuarially determined cost methods allowable under Internal Revenue Service regulations. Plan assets consist primarily of mutual funds. The measurement date for three of the defined-benefit pension plans is September 30. The remaining two plans use a measurement date of June 30. The Company also sponsors unfunded defined-benefit postretirement health care plans covering substantially all salaried and hourly employees at Neenah and their dependents. For salaried employees at Neenah, benefits are provided from the date of retirement for the duration of the employee's life, while benefits for hourly employees at Neenah are provided from retirement to age 65. Retirees' contributions to the plans are based on years of service and age at retirement. The Company funds benefits as incurred. These plans use a measurement date of September 30. F-21 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table summarizes the funded status of the pension plans and postretirement benefit plans and the amounts recognized in the consolidated balance sheets at September 30, 2003 and 2002:
PENSION BENEFITS POSTRETIREMENT BENEFITS ------------------- ------------------------ 2003 2002 2003 2002 -------- -------- ----------- ---------- Change in benefit obligation: Benefit obligation, October 1............. $ 51,911 $ 44,166 $ 8,373 $ 7,024 Service cost........................... 1,798 1,512 319 198 Interest cost.......................... 3,433 3,269 592 476 Plan amendments........................ 496 -- -- -- Curtailment............................ 565 -- -- -- Actuarial losses....................... 3,940 5,077 1,462 1,037 Benefits paid.......................... (2,094) (2,113) (427) (362) -------- -------- -------- ------- Benefit obligation, September 30.......... $ 60,049 $ 51,911 $ 10,319 $ 8,373 ======== ======== ======== ======= Change in plan assets: Fair value of plan assets, October 1...... $ 38,200 $ 40,020 $ -- $ -- Actual return (loss) on plan assets.... 4,375 (1,769) -- -- Company contributions.................. 8,008 2,062 427 362 Benefits paid.......................... (2,094) (2,113) (427) (362) -------- -------- -------- ------- Fair value of plan assets, September 30... $ 43,489 $ 38,200 $ -- $ -- ======== ======== ======== ======= Funded status of the plans: Benefit obligation in excess of plan assets................................. $(16,560) $(13,711) $(10,319) $(8,373) Unrecognized prior service cost........... 2,532 2,184 536 581 Unrecognized net losses................... 15,592 13,279 2,512 1,096 -------- -------- -------- ------- $ 1,564 $ 1,752 $ (7,271) $(6,696) ======== ======== ======== ======= Amounts recognized in the consolidated balance sheets at September 30: Accrued pension liability.............. $(16,562) $(13,765) $ (7,271) $(6,696) Intangible asset....................... 2,532 2,184 -- -- Deferred income tax asset.............. 6,285 5,333 -- -- Accumulated other comprehensive loss... 9,309 8,000 -- -- -------- -------- -------- ------- $ 1,564 $ 1,752 $ (7,271) $(6,696) ======== ======== ======== =======
Amounts applicable to the Company's pension plans with accumulated benefit obligations and projected benefit obligations in excess of plan assets:
2003 2002 ------- ------- Projected benefit obligation................................ $60,049 $51,911 Accumulated benefit obligation.............................. 60,049 51,911 Fair value of plan assets................................... 43,489 38,200
F-22 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Components of net periodic benefit cost for the years ended September 30, 2003, 2002 and 2001, respectively, are as follows:
PENSION BENEFITS POSTRETIREMENT BENEFITS --------------------------------------- ------------------------- 2003 2002 2001 2003 2002 2001 -------------- --------- ---------- ------- ----- ------- Service cost.................. $ 1,798 $ 1,512 $ 1,543 $ 319 $198 $ 204 Interest cost................. 3,433 3,269 3,036 592 476 493 Expected return on plan assets...................... (3,265) (3,486) (3,580) -- -- -- Amortization of prior service cost........................ 146 146 123 45 45 45 Recognized net actuarial (gain) loss................. 515 26 2 47 (5) 2 -------------- --------- ---------- ------ ---- ------ Net periodic benefit cost..... $ 2,627 $ 1,467 $ 1,124 $1,003 $714 $ 744 ============== ========= ========== ====== ==== ====== Net periodic benefit cost included in the consolidated statements of operations as: Continuing operations.... $ 2,432 $ 1,373 $ 1,029 $1,003 $714 $ 744 Discontinued operations............. 195 94 95 -- -- -- -------------- --------- ---------- ------ ---- ------ $ 2,627 $ 1,467 $ 1,124 $1,003 $714 $ 744 ============== ========= ========== ====== ==== ====== Assumptions as of September 30: Discount rate............... 6.25% to 6.75% 7.25% to 6.25% 6.75% 7.625% 6.75% 7.625% Expected long-term rate of return................... 7.50% to 6.75% to 7.50% to -- -- -- 8.50% 9.00% 9.00%
For measurement purposes, the healthcare cost trend rate was assumed to be 9.0% decreasing gradually to 5.0% in 2010 and then remaining at that level thereafter. The healthcare cost trend rate assumption has a significant effect on the amounts reported. A one percentage point change in the healthcare cost trend rate would have the following effect:
1% INCREASE 1% DECREASE ----------- ----------- Effect on total of service cost and interest cost........... $ 189 $ (147) Effect on postretirement benefit obligation................. 1,858 (1,470)
DEFINED-CONTRIBUTION RETIREMENT PLANS The Company sponsors various defined-contribution retirement plans (the Plans) covering substantially all salaried and certain hourly employees. The Plans allow participants to make 401(k) contributions in amounts ranging from 1% to 15% of their compensation. The Company matches between 35% and 50% of the participants' contributions up to a maximum of 6% of the employee's compensation, as defined. The Company may make additional voluntary contributions to the Plans as determined annually by the Board of Directors. Total Company contributions for continuing operations amounted to $1,694, $1,456 and $1,840 for the years ended September 30, 2003, 2002 and 2001, respectively. OTHER EMPLOYEE BENEFITS The Company provides unfunded supplemental retirement benefits to certain active and retired employees at Dalton. At September 30, 2003, the present value of the current and long-term portion of F-23 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) these supplemental retirement obligations totaled $201 and $2,846, respectively. At September 30, 2002, the present value of the current and long-term portion of these supplemental retirement obligations totaled $334 and $2,955, respectively. Certain of Dalton's hourly employees are covered by a multi-employer, defined-benefit pension plan pursuant to a collective bargaining agreement. The Company's expense for the years ended September 30, 2003, 2002 and 2001, was $417, $397 and $470, respectively. Substantially all of Mercer's union employees are covered by a multiemployer, defined-benefit pension plan pursuant to a collective bargaining agreement. The Company's expense for the years ended September 30, 2003, 2002 and 2001, was $102, $119 and $135, respectively. 12. PROVISION FOR IMPAIRMENT OF ASSETS In accordance with SFAS No. 144, the Company recognized an impairment charge of $74 during the year ended September 30, 2002, related to a building held for sale to adjust the carrying value of the building to fair value less costs to sell. 13. SEGMENT INFORMATION The Company has two reportable segments, Castings and Forgings. The Castings segment manufactures and sells gray and ductile iron castings for the industrial and municipal markets, while the Forgings segment manufactures forged components for the industrial market. The Other segment includes machining operations and freight hauling. The Company evaluates performance and allocates resources based on the operating income before depreciation and amortization charges of each segment. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are recorded at cost plus a share of operating profit. The following segment information is presented for continuing operations:
YEAR ENDED SEPTEMBER 30 --------------------------------- 2003 2002 2001 --------- --------- --------- Revenues from external customers: Castings........................................ $ 349,410 $ 361,914 $ 363,833 Forgings........................................ 20,681 21,893 28,109 Other........................................... 19,185 20,498 19,460 Elimination of intersegment revenues............ (14,213) (16,598) (12,620) --------- --------- --------- $ 375,063 $ 387,707 $ 398,782 ========= ========= ========= Loss from continuing operations: Castings........................................ $ (22,870) $ (5,953) $ (13,129) Forgings........................................ (6,819) (4,135) (5,112) Other........................................... (150) (764) (711) Elimination of intersegment loss................ 6,969 4,899 5,823 --------- --------- --------- $ (22,870) $ (5,953) $ (13,129)
F-24 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEAR ENDED SEPTEMBER 30 --------------------------------- 2003 2002 2001 --------- --------- --------- ========= ========= ========= Total assets: Castings........................................ $ 641,870 $ 668,669 $ 770,044 Forgings........................................ 38,454 41,584 51,148 Other........................................... 10,971 16,494 16,149 Elimination of intersegment assets.............. (154,461) (157,359) (210,898) --------- --------- --------- $ 536,834 $ 569,388 $ 626,443 ========= ========= =========
CASTINGS FORGINGS OTHER TOTAL -------- -------- ------ ------- Year ended September 30, 2003: Interest expense.............................. $41,907 $ 4,803 $ 735 $47,445 Interest income............................... 825 -- -- 825 Provision (credit) for income taxes........... (8,331) (622) 412 (8,541) Depreciation and amortization expense......... 22,522 2,277 1,296 26,095 Expenditures for long-lived assets............ 11,112 217 571 11,900 Year ended September 30, 2002: Interest expense.............................. $38,196 $ 4,439 $ 831 $43,466 Interest income............................... 819 -- -- 819 Credit for income taxes....................... (3,005) (2,790) (122) (5,917) Depreciation and amortization expense......... 23,251 2,627 1,669 27,547 Expenditures for long-lived assets............ 8,558 415 82 9,055 Year ended September 30, 2001: Interest expense.............................. $37,518 $ 4,953 $ 983 $43,454 Interest income............................... 445 -- -- 445 Provision (credit) for income taxes........... (813) (3,273) 82 (4,004) Depreciation and amortization expense......... 29,878 3,884 1,505 35,267 Expenditures for long-lived assets............ 16,219 228 435 16,882
F-25 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) GEOGRAPHIC INFORMATION
LONG-LIVED NET SALES ASSETS(1) --------- ---------- Year ended September 30, 2003: United States............................................. $364,318 $162,969 Foreign countries......................................... 10,745 -- -------- -------- $375,063 $162,969 ======== ======== Year ended September 30, 2002: United States............................................. $378,968 $173,565 Foreign countries......................................... 8,739 -- -------- -------- $387,707 $173,565 ======== ======== Year ended September 30, 2001: United States............................................. $390,656 $189,726 Foreign countries......................................... 8,126 -- -------- -------- $398,782 $189,726 ======== ========
- --------------- (1) Represents tangible long-lived assets only. F-26 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 14. GUARANTOR SUBSIDIARIES The following tables present condensed consolidating financial information for fiscal 2003, 2002 and 2001 for: (a) the Company, and (b) on a combined basis, the guarantors of the Senior Subordinated Notes, which include all of the wholly owned subsidiaries of the Company (Subsidiary Guarantors). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are jointly, severally and unconditionally liable under the guarantees, and the Company believes separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2003
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ ASSETS Current assets: Cash and cash equivalents..................... $ 24,432 $ (76) $ -- $ 24,356 Accounts receivable, net...................... 30,069 26,264 -- 56,333 Inventories................................... 21,029 35,526 -- 56,555 Deferred income taxes......................... (400) 4,459 -- 4,059 Other current assets.......................... 4,924 3,612 -- 8,536 -------- -------- --------- -------- Total current assets............................ 80,054 69,785 -- 149,839 Investments in and advances to subsidiaries..... 196,184 -- (196,184) -- Property, plant and equipment, net.............. 79,514 83,455 -- 162,969 Deferred financing costs, identifiable intangible assets and goodwill, net........... 122,592 92,369 -- 214,961 Other assets.................................... 3,970 5,095 -- 9,065 -------- -------- --------- -------- $482,314 $250,704 $(196,184) $536,834 ======== ======== ========= ======== LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities not subject to compromise: Accounts payable.............................. $ 9,439 $ 16,846 $ -- $ 26,285 Accrued wages and employee benefits........... 4,481 6,826 -- 11,307 Other accrued liabilities..................... 3,933 1,985 -- 5,918 Current portion of capital lease obligations................................ -- 2,646 -- 2,646 -------- -------- --------- -------- Total current liabilities....................... 17,853 28,303 -- 46,156 Long-term liabilities subject to compromise..... 465,540 -- -- 465,540 Capital lease obligations....................... -- 1,583 -- 1,583 Deferred income taxes........................... 18,076 15,728 -- 33,804 Postretirement benefit obligations.............. 7,271 -- -- 7,271 Other liabilities............................... 12,590 8,906 -- 21,496 Stockholder's equity (deficit).................. (39,016) 196,184 (196,184) (39,016) -------- -------- --------- -------- $482,314 $250,704 $(196,184) $536,834 ======== ======== ========= ========
F-27 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2002
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ ASSETS Current assets: Cash and cash equivalents..................... $ 29,290 $ (3,126) $ -- $ 26,164 Accounts receivable, net...................... 30,829 25,624 -- 56,453 Inventories................................... 20,535 30,732 -- 51,267 Refundable income taxes....................... 14,850 -- -- 14,850 Deferred income taxes......................... (1,773) 4,432 -- 2,659 Other current assets.......................... 3,372 6,820 -- 10,192 -------- -------- --------- -------- Total current assets............................ 97,103 64,482 -- 161,585 Investments in and advances to subsidiaries..... 198,460 (23,829) (174,631) -- Property, plant and equipment, net.............. 83,523 90,042 -- 173,565 Deferred financing costs, identifiable intangible assets and goodwill, net........... 129,687 94,356 -- 224,043 Other assets.................................... 4,191 6,004 -- 10,195 -------- -------- --------- -------- $512,964 $231,055 $(174,631) $569,388 ======== ======== ========= ======== LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities: Accounts payable.............................. $ 7,740 $ 14,851 $ -- $ 22,591 Accrued wages and employee benefits........... 6,151 6,507 -- 12,658 Accrued interest.............................. 13,733 -- -- 13,733 Other current liabilities..................... 1,151 3,132 -- 4,283 Current portion of long-term debt............. 40,917 -- -- 40,917 Current portion of capital lease obligations................................ -- 2,353 -- 2,353 -------- -------- --------- -------- Total current liabilities....................... 69,692 26,843 -- 96,535 Long-term debt.................................. 410,515 -- -- 410,515 Capital lease obligations....................... -- 4,816 -- 4,816 Deferred income taxes........................... 26,110 17,776 -- 43,886 Postretirement benefit obligations.............. 6,696 -- -- 6,696 Other liabilities............................... 12,097 6,989 -- 19,086 Stockholder's equity (deficit).................. (12,146) 174,631 (174,631) (12,146) -------- -------- --------- -------- $512,964 $231,055 $(174,631) $569,388 ======== ======== ========= ========
F-28 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 2003
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ Net sales....................................... $160,529 $220,102 $(5,568) $375,063 Cost of sales................................... 117,301 210,101 (5,568) 321,834 -------- -------- ------- -------- Gross profit.................................... 43,228 10,001 -- 53,229 Selling, general and administrative expenses.... 11,766 14,366 -- 26,132 Amortization expense............................ 1,832 1,987 -- 3,819 Loss on disposal of equipment................... 214 (19) -- 195 -------- -------- ------- -------- Operating income................................ 29,416 (6,333) -- 23,083 Other income (expense): Interest expense.............................. (25,589) (21,856) -- (47,445) Interest income............................... 822 3 -- 825 Reorganization expense........................ (7,874) -- -- (7,874) -------- -------- ------- -------- (32,641) (21,853) -- (54,494) -------- -------- ------- -------- Loss from continuing operations before income taxes and equity in earnings of subsidiaries.................................. (3,225) (28,186) -- (31,411) Provision (credit) for income taxes............. (8,846) 305 -- (8,541) -------- -------- ------- -------- 5,621 (28,491) -- (22,870) Equity in losses of subsidiaries................ (31,182) -- 31,182 -- -------- -------- ------- -------- Loss from continuing operations................. (25,561) (28,491) 31,182 (22,870) Loss from discontinued operations, net of income taxes......................................... -- (1,095) -- (1,095) Loss on sale of discontinued operations, net of income tax.................................... -- (1,596) -- (1,596) -------- -------- ------- -------- Net loss........................................ $(25,561) $(31,182) $31,182 $(25,561) ======== ======== ======= ========
F-29 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 2002
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ Net sales....................................... $168,519 $227,300 $(8,112) $387,707 Cost of sales................................... 119,442 212,410 (8,112) 323,740 -------- -------- ------- -------- Gross profit.................................... 49,077 14,890 -- 63,967 Selling, general and administrative expenses.... 13,357 15,386 -- 28,743 Amortization expense............................ 1,833 1,996 -- 3,829 Provision for impairment of assets.............. -- 74 -- 74 Loss on disposal of equipment................... 98 446 -- 544 -------- -------- ------- -------- Operating income................................ 33,789 (3,012) -- 30,777 Other income (expense): Interest expense.............................. (22,568) (20,898) -- (43,466) Interest income............................... 805 14 -- 819 -------- -------- ------- -------- (21,763) (20,884) -- (42,647) -------- -------- ------- -------- Income (loss) from continuing operations before income taxes and equity in earnings of subsidiaries.................................. 12,026 (23,896) -- (11,870) Provision (credit) for income taxes............. 1,293 (7,210) -- (5,917) -------- -------- ------- -------- 10,733 (16,686) -- (5,953) Equity in losses of subsidiaries................ (58,436) -- 58,436 -- -------- -------- ------- -------- Loss from continuing operations................. (47,703) (16,686) 58,436 (5,953) Loss from discontinued operations, net of income taxes......................................... -- (41,750) -- (41,750) -------- -------- ------- -------- Net loss........................................ $(47,703) $(58,436) $58,436 $(47,703) ======== ======== ======= ========
F-30 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 2001
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ Net sales....................................... $160,735 $244,175 $(6,128) $398,782 Cost of sales................................... 113,550 227,842 (6,128) 335,264 -------- -------- ------- -------- Gross profit.................................... 47,185 16,333 -- 63,518 Selling, general and administrative expenses.... 11,857 15,730 -- 27,587 Amortization expense............................ 4,919 5,570 -- 10,489 Gain on disposal of equipment................... (11) (423) -- (434) -------- -------- ------- -------- Operating income................................ 30,420 (4,544) -- 25,876 Other income (expense): Interest expense.............................. (19,828) (23,626) -- (43,454) Interest income............................... 411 34 -- 445 -------- -------- ------- -------- (19,417) (23,592) -- (43,009) -------- -------- ------- -------- Income (loss) from continuing operations before income taxes and equity in earnings of subsidiaries.................................. 11,003 (28,136) -- (17,133) Provision (credit) for income taxes............. 6,361 (10,365) -- (4,004) -------- -------- ------- -------- 4,642 (17,771) -- (13,129) Equity in losses of subsidiaries................ (22,096) -- 22,096 -- -------- -------- ------- -------- Loss from continuing operations................. (17,454) (17,771) 22,096 (13,129) Loss from discontinued operations, net of income taxes......................................... -- (4,325) -- (4,325) Gain on sale of discontinued operations, net of income taxes.................................. 2,404 -- -- 2,404 -------- -------- ------- -------- Net loss........................................ $(15,050) $(22,096) $22,096 $(15,050) ======== ======== ======= ========
F-31 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 2003
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net loss........................................ $(25,561) $(31,182) $ 31,182 $(25,561) Noncash adjustments............................. 5,548 18,473 -- 24,021 Changes in operating assets and liabilities..... 29,427 (4,885) -- 24,542 -------- -------- -------- -------- Net cash provided by (used in) operating activities.................................... 9,414 (17,594) 31,182 23,002 INVESTING ACTIVITIES Investments in and advances to subsidiaries..... 1,086 30,096 (31,182) -- Purchase of property, plant and equipment....... (4,930) (6,970) -- (11,900) Other........................................... 89 494 -- 583 -------- -------- -------- -------- Net cash provided by (used in) investing activities.................................... (3,755) 23,620 (31,182) (11,317) FINANCING ACTIVITIES Proceeds from long-term debt.................... 815 -- -- 815 Payments on long-term debt and capital lease obligations................................... (10,041) (2,976) -- (13,017) Debt issuance costs............................. (1,291) -- -- (1,291) -------- -------- -------- -------- Net cash used in financing activities........... (10,517) (2,976) -- (13,493) -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents................................... (4,858) 3,050 -- (1,808) Cash (overdraft) and cash equivalents at beginning of year............................. 29,290 (3,126) -- 26,164 -------- -------- -------- -------- Cash (overdraft) and cash equivalents at end of year.......................................... $ 24,432 $ (76) $ -- $ 24,356 ======== ======== ======== ========
F-32 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 2002
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net loss........................................ $(47,703) $(58,436) $ 58,436 $(47,703) Noncash adjustments............................. 10,773 46,780 -- 57,553 Changes in operating assets and liabilities..... (13,173) 19,759 -- 6,586 -------- -------- -------- -------- Net cash provided by (used in) operating activities.................................... (50,103) 8,103 58,436 16,436 INVESTING ACTIVITIES Investments in and advances to subsidiaries..... 62,066 (3,630) (58,436) -- Purchase of property, plant and equipment....... (4,510) (4,545) -- (9,055) Other........................................... 37 (335) -- (298) -------- -------- -------- -------- Net cash provided by (used in) investing activities.................................... 57,593 (8,510) (58,436) (9,353) FINANCING ACTIVITIES Proceeds from long-term debt.................... 33,400 -- -- 33,400 Payments on long-term debt and capital lease obligations................................... (15,424) (2,383) -- (17,807) Debt issuance costs............................. (858) -- -- (858) -------- -------- -------- -------- Net cash provided by (used in) financing activities.................................... 17,118 (2,383) -- 14,735 -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents................................... 24,608 (2,790) -- 21,818 Cash (overdraft) and cash equivalents at beginning of year............................. 4,682 (336) -- 4,346 -------- -------- -------- -------- Cash (overdraft) and cash equivalents at end of year.......................................... $ 29,290 $ (3,126) $ -- $ 26,164 ======== ======== ======== ========
F-33 NEENAH FOUNDRY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 2001
SUBSIDIARY COMPANY GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net loss........................................ $(15,050) $(22,096) $ 22,096 $(15,050) Noncash adjustments............................. 7,614 29,156 -- 36,770 Changes in operating assets and liabilities..... (4,849) (7,584) -- (12,433) -------- -------- -------- -------- Net cash provided by (used in) operating activities.................................... (12,285) (524) 22,096 9,287 INVESTING ACTIVITIES Investments in and advances to subsidiaries..... 14,650 7,446 (22,096) -- Proceeds from disposition of business, net of fees.......................................... 5,190 -- -- 5,190 Purchase of property, plant and equipment....... (4,371) (12,511) -- (16,882) Other........................................... 99 5,133 -- 5,232 -------- -------- -------- -------- Net cash provided by (used in) investing activities.................................... 15,568 68 (22,096) (6,460) FINANCING ACTIVITIES Proceeds from long-term debt.................... 5,000 -- -- 5,000 Payments on long-term debt and capital lease obligations................................... (19,677) (2,376) -- (22,053) Debt issuance costs............................. (906) -- -- (906) -------- -------- -------- -------- Net cash used in financing activities........... (15,583) (2,376) -- (17,959) -------- -------- -------- -------- Decrease in cash and cash equivalents........... (12,300) (2,832) -- (15,132) Cash and cash equivalents at beginning of year.......................................... 16,982 2,496 -- 19,478 -------- -------- -------- -------- Cash (overdraft) and cash equivalents at end of year.......................................... $ 4,682 $ (336) $ -- $ 4,346 ======== ======== ======== ========
15. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
YEAR ENDED SEPTEMBER 30, 2003 ----------------------------------------------------- 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER ----------- ----------- ----------- ----------- Net sales............................... $84,334 $86,959 $102,835 $100,935 Gross profit............................ 12,165 9,218 17,689 14,157 Net loss................................ (4,619) (8,105) (3,851) (8,986)
YEAR ENDED SEPTEMBER 30, 2002 ----------------------------------------------------- 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER ----------- ----------- ----------- ----------- Net sales............................... $ 84,105 $88,461 $110,949 $104,192 Gross profit............................ 10,414 10,898 21,837 20,818 Net income (loss)....................... (41,074) (9,167) (2,209) 4,747
F-34 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNTIL [ ], 2004, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. $133,130,000 NEENAH FOUNDRY COMPANY 11% SENIOR SECURED NOTES DUE 2010 ------------------------- PROSPECTUS ------------------------- EACH BROKER-DEALER THAT RECEIVES NEW SECURITIES FOR ITS OWN ACCOUNT PURSUANT TO THE EXCHANGE OFFER MUST ACKNOWLEDGE THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF THESE NEW SECURITIES. BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, A BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT. THIS PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A BROKER-DEALER IN CONNECTION WITH RESALES OF NEW SECURITIES RECEIVED IN EXCHANGE FOR SECURITIES WHERE THOSE SECURITIES WERE ACQUIRED BY THIS BROKER-DEALER AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES. WE HAVE AGREED THAT, STARTING ON THE EXPIRATION DATE AND ENDING ON THE CLOSE OF BUSINESS 180 DAYS AFTER THE EXPIRATION DATE, WE WILL MAKE THIS PROSPECTUS AVAILABLE TO ANY BROKER-DEALER FOR USE IN CONNECTION WITH ANY SUCH RESALE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) Advanced Cast Products, Inc is a corporation organized under the laws of the State of Delaware. Article Seven of the Certificate of Incorporation of Advanced Cast Products, Inc. provides that: To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a Director of this corporations shall not be liable to the corporation or its stockholder for monetary damages for breach of fiduciary duty as a Director. Article Thirteen of the By-Laws of Advanced Cast Products, Inc. provides that: The corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or serves or served any other enterprise at the request of the corporation, against any and all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with such action, suit or proceeding, in any circumstances, and to the full extent, permitted by Section 145 of the Delaware Corporation Law, any amendment thereto, or any law of similar import. (b) Mercer Forge Corporation is a corporation organized under the laws of the State of Delaware. Article Four of the By-Laws of Mercer Forge Corporation provides that: Every person now or hereafter serving as a director or officer of the corporation and every such director or officer serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified by the corporation in accordance with and to the fullest extent permitted by law for the defense of, or in connection with, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of such director of officer to repay such amount unless it shall be ultimately determined that he is entitled to be indemnified by the corporation as authorized in Article Four of the By-Laws. The right of indemnification provided shall not be deemed exclusive of any other rights to which any such director or officer may now or hereafter be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. The Certificate of Incorporation of Mercer Forge Corporations contains no provision relating to indemnification. (c) Neenah Foundry Company is a corporation organized under the laws of the State of Wisconsin. Article Six of the Amended and Restated Certificate of Incorporation of Neenah Foundry provides that: To the fullest extent permitted by the Business Corporation Law of the State of Wisconsin as the same exists or may hereafter be amended, a director of this Corporation shall not be liable II-1 to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this provision shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. Under Section 180.0851(1) of the Wisconsin Business Corporation Law (the "WBCL"), a corporation shall indemnify a director or officer, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation, and that, to the extent a director or officer has not been successful on the merits or otherwise in the defense of a proceeding, the corporation shall indemnify the director or officer unless liability was incurred because the director or officer breached or failed to perform a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following (1) a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; (2) a violation of the criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was unlawful; (3) a transaction from which the director or officer derived an improper personal profit; or (4) willful misconduct. Section 180.0858(1) of the WBCL provides that, subject to certain limitations, the mandatory indemnification provisions do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under a Wisconsin corporation's articles of incorporation, bylaws, any written agreement or a resolution of the board of directors or shareholders. Section 180.0859 of the WBCL provides that it is the public policy of the State of Wisconsin to require or permit indemnification, allowance of expenses and insurance to the extent required or permitted under Sections 180.0850 to 180.0858 of the WBCL, for any liability incurred in connection with a proceeding involving a federal or state statute, rule or regulation regulating the offer, sale or purchase of securities. Section 180.0828 of the WBCL provides that, with certain exceptions, a director is not liable to a corporation, its shareholders, or any person asserting rights on behalf of the corporation or its shareholders, for damages, settlements, fees, fines, penalties or other monetary liabilities arising from a breach of, or failure to perform, any duty resulting solely from his or her status as a director, unless the person asserting liability proves that the breach or failure to perform constitutes any of the four exceptions to mandatory indemnification under Section 180.0851(2) referred to above. Under Section 180.0833 of the WBCL, directors of a Wisconsin corporation against whom claims are asserted with respect to the declaration of improper dividends or distributions to shareholders or certain other improper acts which they approved are entitled to contribution from other directors who approved such actions and from shareholders who knowingly accepted an improper dividend or distribution, as provided therein. Article Eight of the By-Laws of Neenah Foundry Company provides that for indemnification of the corporation's officers and directors in accordance with the WBCL. (d) Neenah Transport, Inc. is a corporation organized under the laws of the State of Wisconsin. Under Section 180.0851(1) of the Wisconsin Business Corporation Law (the "WBCL"), a corporation shall indemnify a director or officer, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation, and that, to the extent a director or officer has not been successful on the merits or otherwise in the defense of a proceeding, the corporation shall indemnify the director or officer unless liability was incurred because the director or officer breached or failed to perform a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following (1) a II-2 willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; (2) a violation of the criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was unlawful; (3) a transaction from which the director or officer derived an improper personal profit; or (4) willful misconduct. Section 180.0858(1) of the WBCL provides that, subject to certain limitations, the mandatory indemnification provisions do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under a Wisconsin corporation's articles of incorporation, bylaws, any written agreement or a resolution of the board of directors or shareholders. Section 180.0859 of the WBCL provides that it is the public policy of the State of Wisconsin to require or permit indemnification, allowance of expenses and insurance to the extent required or permitted under Sections 180.0850 to 180.0858 of the WBCL, for any liability incurred in connection with a proceeding involving a federal or state statute, rule or regulation regulating the offer, sale or purchase of securities. Section 180.0828 of the WBCL provides that, with certain exceptions, a director is not liable to a corporation, its shareholders, or any person asserting rights on behalf of the corporation or its shareholders, for damages, settlements, fees, fines, penalties or other monetary liabilities arising from a breach of, or failure to perform, any duty resulting solely from his or her status as a director, unless the person asserting liability proves that the breach or failure to perform constitutes any of the four exceptions to mandatory indemnification under Section 180.0851(2) referred to above. Under Section 180.0833 of the WBCL, directors of a Wisconsin corporation against whom claims are asserted with respect to the declaration of improper dividends or distributions to shareholders or certain other improper acts which they approved are entitled to contribution from other directors who approved such actions and from shareholders who knowingly accepted an improper dividend or distribution, as provided therein. Neither the Amended nor the Restated Certificate of Incorporation or the By-Laws of Neenah Transport, Inc. contain provisions relating to indemnification. (e) Cast Alloys, Inc. is a corporation organized under the laws of the State of California. Articles Five of the Restated Articles of Incorporation of Cast Alloys, Inc. provides that: To the fullest extent permitted by the General Corporation Law of the State of California as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this provision shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. Section 317 of the California General Corporation Law empowers California corporations to indemnify any person who was or is a director, officer, employee or other agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or who was a director, officer, employee or agent of a foreign or domestic corporation that was a predecessor corporation of the corporation or of another enterprise at the request of the predecessor corporation, (other than an action by or in right of the corporation), against expenses (including attorneys' fees), judgments, fines, settlements and other amounts actually and reasonably incurred by such person in connection with any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative. To be indemnified, such person must have acted (i) in good faith and (ii) in a manner that he or she reasonably believed to be in the best interests of the corporation; and, in the case of a criminal proceeding, such person must have acted without reasonable cause to believe that his or her conduct was unlawful. In respect of any action by or in right of the corporation, a corporation II-3 may indemnify any person who was or is an agent of the corporation against expenses actually and reasonably incurred by such person in connection with the defense or settlement of the action if he or she acted (i) in good faith and (ii) in a manner he or she believed to be in the best interests of the corporation and its shareholders. The By-Laws of Cast Alloys, Inc. contain no provision relating to indemnification. (f) Gregg Industries, Inc. is a corporation organized under the laws of the State of California. Section 317 of the California General Corporation Law empowers California corporations to indemnify any person who was or is a director, officer, employee or other agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or who was a director, officer, employee or agent of a foreign or domestic corporation that was a predecessor corporation of the corporation or of another enterprise at the request of the predecessor corporation, (other than an action by or in right of the corporation), against expenses (including attorneys' fees), judgments, fines, settlements and other amounts actually and reasonably incurred by such person in connection with any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative. To be indemnified, such person must have acted (i) in good faith and (ii) in a manner that he or she reasonably believed to be in the best interests of the corporation; and, in the case of a criminal proceeding, such person must have acted without reasonable cause to believe that his or her conduct was unlawful. In respect of any action by or in right of the corporation, a corporation may indemnify any person who was or is an agent of the corporation against expenses actually and reasonably incurred by such person in connection with the defense or settlement of the action if he or she acted (i) in good faith and (ii) in a manner he or she believed to be in the best interests of the corporation and its shareholders. The Amended and Restated Articles of Incorporation of Gregg Industries, Inc. contain no provision relating to indemnification. Section Six of the By-Laws of Gregg Industries, Inc. provides for indemnification (including expenses) consistent with Section 317 of the California General Corporation Law. (g) A & M Specialties, Inc. is a corporation organized under the laws of the State of Pennsylvania. Article Three of the Articles of Incorporation of A & M Specialties, Inc. provides that the corporation is incorporated under the Business Corporation Law of the State of Pennsylvania. Under the Pennsylvania Business Corporation Law of 1988, as amended (the "PBCL"), Pennsylvania corporations have the power to indemnify any person acting as a representative of the corporation against liabilities incurred in such capacity provided certain standards are met, including good faith and the belief that the particular action or failure to take action is in the best interests of the corporation. In general, this power to indemnify does not exist in the case of actions against any person by or in the right of the corporation if the person otherwise entitled to indemnification shall have been adjudged to be liable to the corporation unless a court determines that despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses that the court deems proper. A corporation is required to indemnify representatives of the corporation against expenses they may incur in defending actions against them in such capacities if they are successful on the merits or otherwise in the defense of such actions. In all other cases, if a representative of the corporation acted, or failed to act, in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, indemnification is discretionary, except as may be otherwise provided by a corporation's bylaws, agreement, vote of shareholders or disinterested directors or otherwise. Indemnification so otherwise provided may not, however, be made if the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness. Expenses (including attorneys' fees) incurred in defending any such action may be paid by the corporation in advance of the final disposition of the action upon receipt of an undertaking II-4 by or on behalf of the representative to repay the amount if it is ultimately determined that he or she is not entitled to be indemnified by the corporation. In addition, a director of a Pennsylvania Corporation does not have personal liability for monetary damages to the Corporation and its stockholders for breaches of fiduciary duty as a director, except in circumstances involving a breach of a director's duty of loyalty to the Corporation or its stockholders, acts or omissions not in good faith or which involve intentional misconduct or knowing violations of the law, the unlawful payment of dividends or repurchase of stock or self-dealing. Article IV of the By-Laws of A & M Specialties, Inc. provides that: A director shall not be personally liable, as such, for monetary damages for any action taken, or any failure to take any action, unless: (a) the director has breached or failed to perform the duties of his or her office under this section; and (b) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The preceding provisions shall not apply to the responsibility or liability of a director pursuant to any criminal statute or the liability of a director for the payment of taxes pursuant to local, State or Federal law. (h) Peerless Corporation is a corporation organized under the laws of the State of Ohio. Article Three of the Articles of Incorporation of Peerless Corporation, provides that the corporation is incorporated under the General Corporation Laws of the State of Ohio. Under Ohio law, Ohio corporations are authorized to indemnify directors, officers, employees and agents within prescribed limits and must indemnify them under certain circumstances. Ohio law does not provide statutory authorization for a corporation to indemnify directors, officers, employees and agents for settlements, fines or judgments in the context of derivative suits. However, it provides that directors (but not officers, employees or agents) are entitled to mandatory advancement of expenses, including attorneys' fees, incurred in defending any action, including derivative actions, brought against the director, provided that the director agrees to cooperate with the corporation concerning the matter and to repay the amount advanced if it is proved by clear and convincing evidence that the director's act or failure to act was done with deliberate intent to cause injury to the corporation or with reckless disregard for the corporation's best interests. Ohio law does not authorize payment of judgments to a director, officer, employee or agent after a finding of negligence or misconduct in a derivative suit absent a court order. Indemnification is permitted, however, to the extent such person succeeds on the merits. In all other cases, if a director, officer, employee or agent acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, indemnification is discretionary except as otherwise provided by a corporation's articles, code of regulations or by contract except with respect to the advancement of expenses of directors. Under Ohio law, a director is not liable for monetary damages unless it is proved by clear and convincing evidence that his action or failure to act was undertaken with deliberate intent to cause injury to the corporation or with reckless disregard for the best interests of the corporation. There is, however, no comparable provision limiting the liability of officers, employees or agents of a corporation. The statutory right to indemnification is not exclusive in Ohio and Ohio corporations may, among other things, procure insurance for such persons. Article IV of the Code of Regulations of Peerless Corporation provides that: The Corporation shall indemnify any Director or officer to the fullest extent provided by, or permissible under, Section 17.01.13(E), Ohio Revised Code; and the Corporation is hereby specifically authorized to take any and all further action to effectuate any indemnification of any Director or officer which any Ohio corporation may have power to take, by any vote of the Shareholders, vote of disinterested Directors, by any Agreement, or otherwise. This Section of the Code of Regulations of the Corporation shall be interpreted in all respects to expand such power to indemnify to the maximum extent permissible to any Ohio Corporation with regard to the II-5 particular facts of each case, and not in any way to limit any statutory or other power to indemnify, or right of any individual indemnification. The Corporation may purchase and maintain insurance for protection of the Corporation and for protection of any Director, officer, employee and/or any other person for whose protection, and to the fullest extent, such insurance may be purchased and maintained under Section 1701.13(E)(7), Ohio Revised Code or otherwise. Such policy or policies of insurance may provide such coverage and be upon such terms and conditions as shall be authorized or approved from time to time by the Board of Directors or the Shareholders of the Corporation. (i) Dalton Corporation, Ashland Manufacturing Facility and Dalton Corporation, Stryker Manufacturing Facility are corporations organized under the laws of the State of Ohio. Article Three of the Articles of Incorporation of Dalton Corporation, Ashland Manufacturing Facility and Dalton Corporation, Stryker Manufacturing Facility provides that the corporation is incorporated under the General Corporation Laws of the State of Ohio. Under Ohio law, Ohio corporations are authorized to indemnify directors, officers, employees and agents within prescribed limits and must indemnify them under certain circumstances. Ohio law does not provide statutory authorization for a corporation to indemnify directors, officers, employees and agents for settlements, fines or judgments in the context of derivative suits. However, it provides that directors (but not officers, employees or agents) are entitled to mandatory advancement of expenses, including attorneys' fees, incurred in defending any action, including derivative actions, brought against the director, provided that the director agrees to cooperate with the corporation concerning the matter and to repay the amount advanced if it is proved by clear and convincing evidence that the director's act or failure to act was done with deliberate intent to cause injury to the corporation or with reckless disregard for the corporation's best interests. Ohio law does not authorize payment of judgments to a director, officer, employee or agent after a finding of negligence or misconduct in a derivative suit absent a court order. Indemnification is permitted, however, to the extent such person succeeds on the merits. In all other cases, if a director, officer, employee or agent acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, indemnification is discretionary except as otherwise provided by a corporation's articles, code of regulations or by contract except with respect to the advancement of expenses of directors. Under Ohio law, a director is not liable for monetary damages unless it is proved by clear and convincing evidence that his action or failure to act was undertaken with deliberate intent to cause injury to the corporation or with reckless disregard for the best interests of the corporation. There is, however, no comparable provision limiting the liability of officers, employees or agents of a corporation. The statutory right to indemnification is not exclusive in Ohio and Ohio corporations may, among other things, procure insurance for such persons. Article Seven of the Articles of Incorporation of Dalton Corporation, Ashland Manufacturing Facility and Dalton Corporation, Stryker Manufacturing Facility provides that: The Corporation shall indemnify the officers, directors, employees and agents of the Corporation (including expenses) asserted or incurred in the defense of any proceeding to which the individual was made a party or a witness because of his status with the Corporation and in which the individual was (a) wholly successful on the merits or otherwise or (b) in which the Corporation and in (acting in accordance with this provision) determines that the individual's conduct and beliefs met the standard of conduct prescribed by the Code, although the individual is entitled to indemnification. However, in a proceeding brought by or in the right of the Corporation, if an individual was adjudged liable to the Corporation, indemnification shall be made only upon order of a court acting upon the individual's application for court-ordered indemnification. II-6 (j) Deeter Foundry, Inc. is a corporation organized under the laws of the State of Nebraska. Sections 21-20, 103 through 21-20, 111 of the Nebraska Business Corporation Act ("NBCA") provide, in part, that the directors and officers of a corporation may, under certain circumstances, be indemnified by the corporation against all liability expenses incurred by or imposed upon them as a result of actions, suits or proceedings brought against them as such directors and officers, or as directors or officers of any other organization at the request of the corporation, if they act in good faith and in a manner they reasonably believe to be in, or not opposed to, the best interests of the corporation, and with respect to any criminal action or proceeding, have no reasonable cause to believe their conduct was unlawful, except that no indemnification shall be made against expenses in respect of any claim, issue or matter as to which they shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, they are fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. With certain limitations, Sections 721 through 726 of the NCBL permit a corporation to indemnify a director or officer made a party to an action (a) by a corporation or in its right in order to procure a judgment in its favor unless he or she shall have breached his or her duties, or (b) other than an action by or in the right of the corporation in order to procure a judgment in its favor, if such director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to such corporation's interest, and, in criminal actions, had no reasonable cause to believe his or her conduct was unlawful. Article VII of the By-Laws of Deeter Foundry, Inc. provides that for compliance with the terms of the NBCA described above. (k) Dalton Corporation, Dalton Corporation, Warsaw Manufacturing Facility and Dalton Corporation, Kendallville Manufacturing Facility are corporations organized under the laws of the State of Indiana. Subdivision E of the Articles of Acceptance of Dalton Corporation, Dalton Corporation, Warsaw Manufacturing Facility and Dalton Corporation, Kendallville Manufacturing Facility provides that: The corporation accepts all of the terms and provisions of The Indiana General Corporation Act. The Indiana Business Corporation Law ("IBCL") empowers an Indiana corporation to indemnify present and former directors, officers, employers or agents or any person who may have served at the request of the corporation as a director, officer, employee, or agent of another corporation ("Eligible Persons") against liability incurred in any proceeding, civil or criminal, in which the Eligible Person is made a party by reason of being or having been in any such capacity, or arising out of his status as such, if the individual acted in good faith and reasonably believed that (a) the individual was acting in the best interests of the corporation, or (b) if the challenged action was taken other than in the individual's official capacity as an officer, director, employee or agent, the individual's conduct was at least not opposed to the corporation's best interests, or (c) if in a criminal proceeding, either the individual had reasonable cause to believe his conduct was lawful or no reasonable cause to believe his conduct was unlawful. The IBCL further empowers a corporation to payor reimburse the reasonable expenses incurred by an Eligible Person in connection with the defense of any such claim, including counsel fees; and, unless limited by its articles of incorporation, the corporation is required to indemnify an Eligible Person against reasonable expenses if he is wholly successful in any such proceeding, on the merits or otherwise. Directors and officers qualify as Eligible Persons under the IBCL. Under certain circumstances, a corporation may pay or reimburse an Eligible Person for reasonable expenses prior to final disposition of the matter. Unless a corporation's articles of incorporation otherwise provide, an Eligible Person may apply for indemnification to a court which may order indemnification upon a determination that the Eligible Person is entitled to II-7 mandatory indemnification for reasonable expenses or that the Eligible Person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances without regard to whether his actions satisfied the appropriate standard of conduct. Before a corporation may indemnify any Eligible Person against liability or reasonable expenses under the IBCL, a quorum consisting of directors who are not parties to the proceeding must: (a) determine that indemnification is permissible in the specific circumstances because the Eligible Person met the requisite standard of conduct; (b) authorize the corporation to indemnify the Eligible Person; and (c) if appropriate, evaluate the reasonableness of expenses for which indemnification is sought. If it is not possible to obtain a quorum of uninvolved directors, the foregoing action may be taken by a committee of two or more directors who are not parties to the proceeding, special legal counsel selected by the Board or such a committee, or by the stockholders of the corporation. In addition to the foregoing, the IBCL states that the indemnification it provides shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any provisions of the articles of incorporation or bylaws, resolution of the board of directors or stockholders, or any other authorization adopted after notice by a majority vote of all the voting shares then issued and outstanding. The IBCL also empowers an Indiana corporation to purchase and maintain insurance on behalf of any Eligible Person against any liability asserted against or incurred by him in any capacity as such, or arising out of his status as such, whether or not the corporation would have had the power to indemnify him against such liability. Article VII of the Code of By-Laws of Dalton Corporation provides that: The Corporation shall, to the fullest extent permitted by law, indemnify and hold harmless each person who shall serve at any time as a director, officer or employee of the Corporation against any judgments, fines, amounts paid in settlement and reasonable expenses, including attorney's fees, actually and necessarily incurred as a result of any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, arising out of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, including pending or completed claims, actions, suits or proceedings arising out of any actual or alleged act or failure to act on the part of such person in connection with the administration (including establishment, operation and termination) of any pension plan, profit-sharing plan or other employee benefit plan or plans maintained by the Corporation, provided that such person acted in good faith and for a purpose which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such person did not act in good faith or for a purpose which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The Code of By-Laws of Dalton Corporation, Warsaw Manufacturing Facility and Dalton Corporation, Kendallville Manufacturing Facility contain no provision relating to indemnification. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. Exhibits. See Exhibit Index. (b) Financial Statement Schedule. II-8 SCHEDULE II NEENAH FOUNDRY COMPANY VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED SEPTEMBER 30, 2001, 2002, AND 2003
BALANCE AT ADDITIONS BALANCE AT BEGINNING CHARGED TO END OF DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS PERIOD - ----------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS) Allowance for doubtful accounts receivable: 2001........................................... $1,001 $ 761 $ 325(A) $1,437 ====== ====== ====== ====== 2002........................................... $1,437 $ 533 $ 908(A) $1,062 ====== ====== ====== ====== 2003........................................... $1,062 $1,760 $ 447(A) $2,375 ====== ====== ====== ====== Reserve for obsolete inventory: 2001........................................... $3,023 $ 248 $2,749(B) $ 522 ====== ====== ====== ====== 2002........................................... 522 $ 240 $ 9(B) $ 753 ====== ====== ====== ====== 2003........................................... $ 753 $ 468 $ 27(B) $1,194 ====== ====== ====== ======
- --------------- (A) Uncollectible accounts written off, net of recoveries. (B) Reduction for disposition of inventory. II-9 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We have audited the consolidated financial statements of Neenah Foundry Company as of September 30, 2003 and 2002, and for each of the three years in the period ended September 30, 2003, and have issued our report thereon dated November 10, 2003 (included elsewhere in this Registration Statement). Our audits also included the financial statement schedule listed in Item 16(b) of this Registration Statement. This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Milwaukee, Wisconsin November 10, 2003 II-10 All other schedules have been omitted because they are not applicable or because the required information is shown in the financial statements or notes thereto. ITEM 22. UNDERTAKINGS. The undersigned registrants hereby undertake: To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; To include any prospectus required by Section 10 (a)(3) of the Securities Act of 1933; To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which individually or in the aggregate, represent a fundamental change in the information in the registration statement; To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (i) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Securities Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 20 or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (d) The undersigned registrants hereby undertake: (i) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (ii) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-11 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. NEENAH FOUNDRY COMPANY By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-12 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. ADVANCED CAST PRODUCTS, INC. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. DALTON CORPORATION By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-14 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. DALTON CORPORATION, WARSAW MANUFACTURING FACILITY By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. DALTON CORPORATION, STRYKER MACHINING FACILITY CO. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. DALTON CORPORATION, ASHLAND MANUFACTURING FACILITY By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. DALTON CORPORATION, KENDALLVILLE MANUFACTURING FACILITY By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-18 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. DEETER FOUNDRY, INC. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-19 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. GREGG INDUSTRIES, INC. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett - -------------------------------------- President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. - -------------------------------------- Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. MERCER FORGE CORPORATION By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M Barrett - -------------------------------------- President, Chief Executive Officer and Director William M Barrett (Principal Executive Officer) * Gary W. LaChey - -------------------------------------- Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq - -------------------------------------- Director Benjamin C. Duster, IV, Esq * Andrew Booke Cohen - -------------------------------------- Director Andrew Booke Cohen * Michael J. Farrell - -------------------------------------- Director Michael J. Farrell * Jeffrey G. Marshall - -------------------------------------- Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-21 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. A & M SPECIALTIES, INC. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett ------------------------------------------------ President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey ------------------------------------------------ Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. ------------------------------------------------ Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen ------------------------------------------------ Director Andrew Booke Cohen * Michael J. Farrell ------------------------------------------------ Director Michael J. Farrell * Jeffrey G. Marshall ------------------------------------------------ Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-22 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. NEENAH TRANSPORT, INC. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett ------------------------------------------------ President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey ------------------------------------------------ Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. ------------------------------------------------ Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen ------------------------------------------------ Director Andrew Booke Cohen * Michael J. Farrell ------------------------------------------------ Director Michael J. Farrell * Jeffrey G. Marshall ------------------------------------------------ Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-23 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. CAST ALLOYS, INC. By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett ------------------------------------------------ President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey ------------------------------------------------ Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. ------------------------------------------------ Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen ------------------------------------------------ Director Andrew Booke Cohen * Michael J. Farrell ------------------------------------------------ Director Michael J. Farrell * Jeffrey G. Marshall ------------------------------------------------ Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-24 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. BELCHER CORPORATION By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett ------------------------------------------------ President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey ------------------------------------------------ Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. ------------------------------------------------ Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen ------------------------------------------------ Director Andrew Booke Cohen * Michael J. Farrell ------------------------------------------------ Director Michael J. Farrell * Jeffrey G. Marshall ------------------------------------------------ Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-25 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York on January 27, 2004. PEERLESS CORPORATION By: /s/ GARY W. LACHEY ------------------------------------ Name: Gary W. LaChey Title: Corporate Vice President -- Finance, Treasurer, Secretary, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated on January 27, 2004.
SIGNATURE CAPACITY --------- -------- * William M. Barrett ------------------------------------------------ President, Chief Executive Officer and Director William M. Barrett (Principal Executive Officer) * Gary W. LaChey ------------------------------------------------ Corporate Vice President -- Finance, Treasurer, Gary W. LaChey Secretary, Chief Financial Officer and Director (Principal Financial and Accounting Officer) * Benjamin C. Duster, IV, Esq. ------------------------------------------------ Director Benjamin C. Duster, IV, Esq. * Andrew Booke Cohen ------------------------------------------------ Director Andrew Booke Cohen * Michael J. Farrell ------------------------------------------------ Director Michael J. Farrell * Jeffrey G. Marshall ------------------------------------------------ Director Jeffrey G. Marshall
- --------------- * Gary W. LaChey, by signing his name hereto, does hereby sign this Registration Statement on behalf of the directors and officers of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and officers and filed with the Securities and Exchange Commission. II-26 EXHIBIT INDEX 2.1 Disclosure Statement for Pre-Petition Solicitation of Votes with respect to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc. and Neenah Foundry Company (incorporated by reference to Exhibit T3E-1 to application for qualification of indenture on Form T-3 (File No. 022-28687)). 2.2 Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and Certain of its Subsidiaries under Chapter 11 of the United States Bankruptcy Code(incorporated by reference to Exhibit T3E-2 to application for qualification of indenture on Form T-3 (File No. 022-28687)). 3.1 Amended and Restated Certificate of Incorporation of Neenah Foundry Company.+ 3.2 Amended and Restated Certificate of Incorporation of Advanced Cast Products, Inc.+ 3.3 Amended and Restated Articles of Incorporation of Dalton Corporation.+ 3.4 Certificate of Incorporation of Dalton Corporation, Warsaw Manufacturing Facility.+ 3.5 Articles of Incorporation of Dalton Corporation, Stryker Manufacturing Facility.+ 3.6 Articles of Incorporation of Dalton Corporation, Ashland Manufacturing Facility.+ 3.7 Amended and Restated Articles of Incorporation of Dalton Corporation, Kendallville Manufacturing Facility.+ 3.8 Amended and Restated Certificate of Incorporation of Deeter Foundry, Inc.+ 3.9 Amended Articles of Incorporation of Gregg Industries, Inc.+ 3.10 Articles of Incorporation of A&M Specialties, Inc.+ 3.11 Restated Articles of Incorporation of Neenah Transport, Inc.+ 3.12 Restated Articles of Incorporation of Cast Alloys, Inc.+ 3.13 Certificate of Incorporation of Belcher Corporation.+ 3.14 Articles of Incorporation of Peerless Corporation.+ 3.15 Amended Bylaws of Neenah Foundry Company.+ 3.16 Bylaws of Advanced Cast Products, Inc.+ 3.17 Amended Code of Regulations of Dalton Corporation.+ 3.18 Amended Code of Bylaws of Dalton Corporation, Warsaw Manufacturing Facility.+ 3.19 Code of Regulations of Dalton Corporation, Stryker Manufacturing Facility.+ 3.20 Amended and Restated Code of Regulations Dalton Corporation, Ashland Manufacturing Facility.+ 3.21 Amended and Restated Code of Bylaws of Dalton Corporation, Kendallville Manufacturing Facility.+ 3.22 Bylaws of Deeter Foundry, Inc.+ 3.23 Bylaws of Gregg Industries, Inc.+ 3.24 Amended and Restated Bylaws of A&M Specialties, Inc.+ 3.25 Amended and Restated Bylaws of Neenah Transport, Inc.+ 3.26 Bylaws of Cast Alloys, Inc.++ 3.27 Bylaws of Belcher Corporation.+ 3.28 Code of Regulations of Peerless Corporation.+ 4.1 Indenture by and among Neenah Foundry Company, the guarantors named therein and The Bank of New York, as Trustee, dated October 8, 2003, for the 11% Senior Secured Notes due 2010.* 4.2 Form of Note (included in Exhibit 4.1).*
4.3 Lien Subordination Agreement, dated October 8, 2003, by and among Fleet Capital Corporation, Neenah Foundry Company, the subsidiaries named therein, NFC Castings, Inc. and The Bank of New York as Trustee on behalf of the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.4 Registration Rights Agreement, dated October 8, 2003, by and among Neenah Foundry Company, the guarantors named therein and The Bank of New York as Trustee for the 11% Senior Secured Notes due 2010.* 4.5 Subordinated Security Agreement, dated October 8, 2003, by Neenah Foundry Company and the guarantors named therein in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.6 Subordinated Pledge Agreement, dated October 8, 2003, by Dalton Corporation in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.7 Subordinated Pledge Agreement, dated October 8, 2003, by Mercer Forge Corporation in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.8 Subordinated Copyright, Patent, Trademark and License Mortgage, dated October 8, 2003, by Neenah Foundry Company in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.9 Subordinated Copyright, Patent, Trademark and License Mortgage, dated October 8, 2003, by Advanced Cast Products, Inc. in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.10 Subordinated Copyright, Patent, Trademark and License Mortgage, dated October 8, 2003, by Peerless Corporation in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.11 Subordinated Pledge Agreement, dated October 8, 2003, by Neenah Foundry Company in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 4.12 Subordinated Pledge Agreement, dated October 8, 2003, by Advanced Cast Products, Inc. in favor of The Bank of New York as Trustee for the Noteholders under the Indenture governing the 11% Senior Secured Notes due 2010.* 5.1 Opinion of Foley & Lardner.* 5.2 Opinion of Kirkland & Ellis LLP.* 10.1 Credit Agreement by and among Neenah Foundry Company, the subsidiaries named therein, the various lenders party thereto and Fleet Capital Corporation, as agent, dated October 8, 2003.+ 10.2 Subscription Agreement, dated as of October 7, 2003, by and among ACP Holding Company, Neenah Foundry Company, the subsidiary guarantors named therein and the Standby Purchasers as defined therein.* 10.3 Warrant Agreement, dated October 8, 2003, by and between ACP Holding Company and The Bank of New York as warrant agent.* 10.4 Warrant Registration Rights Agreement, dated October 8, 2003, by and between ACP Holding Company and the initial holders of the warrants.+ 10.5 Stockholders' Agreement, dated October 8, 2003, by and among ACP Holding Company, the Standby Purchasers, the Executives and the Directors (as such terms are defined therein).* 10.6 Indenture by and among Neenah Foundry Company, the guarantors named therein, and The Bank of New York, as Trustee, dated October 8, 2003, for the 13% Senior Subordinated Notes due 2013.* 10.7 Form of Note (included in Exhibit 10.7)* 10.8 Registration Rights Agreement, dated October 8, 2003, by and among Neenah Foundry Company, the guarantors named therein and The Bank of New York as Trustee for the Noteholders under the Indenture governing the 13% Senior Subordinated Notes due 2013.* 10.9 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and John Andrews.+
10.10 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and William M. Barrett.+ 10.11 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and Joseph L. DeRita.+ 10.12 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and Frank C. Headington.+ 10.13 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and Timothy Koller.+ 10.14 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and Gary W. LaChey.+ 10.15 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and William Martin.+ 10.16 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and Steve Shaffer.+ 10.17 Form of Employment Agreement by and among Neenah Foundry Company, ACP Holding Company and Joseph Varkoly.+ 10.18 Neenah Foundry Company 2003 Management Annual Incentive Plan.* 10.19 Neenah Foundry Company 2003 Severance and Change of Control Plan.* 12.1 Statement re computation of ratio of earnings to fixed charges.++ 21.1 Subsidiaries of the registrant.* 23.1 Consent of Ernst & Young LLP.+ 23.2 Consent of Foley & Lardner (included in Exhibit 5.1 ).* 23.3 Consent of Kirkland & Ellis LLP (included in Exhibit 5.2 ).* 24.1 Power of Attorney executed by William M. Barrett.* 24.2 Power of Attorney executed by Gary W. LaChey.* 24.3 Power of Attorney executed by Andrew Booke Cohen.* 24.4 Power of Attorney executed by Benjamin C. Duster, IV, Esq.* 24.5 Power of Attorney executed by Michael J. Farrell.* 24.6 Power of Attorney executed by Jeffrey G. Marshall.* 25.1 Statement re Eligibility of Trustee.* 99.1 Letter of Election and Instructions to Broker or Bank.+ 99.2 Form of Exchange Agent Agreement.++
- --------------- * Filed previously. + Filed herewith. ++ To be filed by amendment. EX-3.1 3 y92210a1exv3w1.txt AMENDED AND RESTATED CERTIFICATE OF INCORPORATION Exhibit 3.1 Ss. 178.50, 180.0124, State of Wisconsin 181.0124 & DEPARTMENT OF FINANCIAL INSTITUTIONS [SEAL] 183.0122 Division of Corporate & Consumer Services Wis. Stats. ARTICLES OF CORRECTION 1. Neenah Foundry Company ----------------------------------------------------------------------------- (Name of the corporation, limited liability company, or limited liability partnership BEFORE any correction that may be affected by these articles of correction) 2. Amended and Restated Cert. of Incorporation filed with the Department of --------------------------------------------- (Describe the document) Financial Institutions on October 8, 2003 (date) was ------------------ [X] Incorrect at the time of filing (Complete items 1, { 2, 3, 4 & 6) { { [ ] Defectively executed (Complete items 1, 2, 3 & 5) {(x) Check any that apply { [ ] Defective in attestation, seal, verification or { acknowledgment (Complete items 1, 2, 3 & 6) { 3. Describe the defect(s): (Specify the incorrect statement and the reason why it is incorrect, or the manner in which the execution is defective.) Article Six refers to the laws of the State of Delaware, which is incorrect since Neenah Foundry Company is a Wisconsin corporation. [STAMP: [STAMP: RECEIVED - DEPT OF STATE OF WISCONSIN FINANCIAL INSTITUTIONS FILED STATE OF WISCONSIN DEC 11 2003 DEPARTMENT OF 03 DEC 10 PM 2:22] FINANCIAL INSTITUTIONS] 4. Enter the statement in its corrected condition: The first sentence in Article Six should read as follows: "To the fullest extent permitted by the Business Corporation Law of the State of Wisconsin as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty at a director." - -------------------------------------------------------------------------------- FILING FEE - Business corporation, limited liability company or limited liability partnership - $40.00; Nonstock (including non-profit) corporation - $10.00. See instructions, suggestions and procedures on following pages. DFI/CORP/53(R02-10-03) Use of this form is voluntary. 1 of 4 4. Enter the statement in its corrected condition (cont'd): 5. Make the corrected execution: Executed on __/__/________ _______________________ (Date) (Signature) Select and mark (X) below the appropriate title _______________________ of the person executing the document. (Printed name) For a corporation For a limited liability company Title: [ ] President [ ] Secretary Title: [ ] Member OR or other officer title _______________ [ ] Manager For a limited liability partnership Title: [ ] Partner 6. Executed on 12/05/03 /s/ Gary LaChey ________ ________________________ (Date) (Signature) Select and mark (X) below the appropriate title Gary LaChey of the person executing the document. ________________________ (Printed name) For a corporation For a limited liability company Title: [ ] President [ ] Secretary Title: [ ] Member OR or other officer title Corporate V.P. Finance [ ] Manager ______________________ For a limited liability partnership Title: [ ] Partner This document was drafted by Cindy R. Reilly ___________________________________________________ (Name the individual who drafted the document) DFI/CORP/53(R02-10-03) 2 of 4 AMENDED AND RESTATED STATE OF WISCONSIN FINANCIAL INSTITUTIONS FILED STATE OF WISCONSIN CERTIFICATE OF INCORPORATION OCTOBER 9, 2003 03 OCT 8 PM 3:14 OF DEPARTMENT OF NEENAH FOUNDRY COMPANY FINANCIAL INSTITUTIONS (Under Section 180.1008 of the Business Corporation Law of the State of Wisconsin) The undersigned, being a duly elected officer of Neenah Foundry Company, a corporation organized and existing under and by virtue of the Business Corporation Law of the State of Wisconsin (the "Corporation"), does hereby certify as follows: 1. That the Corporation filed its original Articles of Incorporation with the Wisconsin Secretary of State on February 23, 1987 (the "Certificate"). 2. That the Corporation filed a voluntary petition under chapter 11 of title 11 of the United States Code, as amended with the Bankruptcy Court of Delaware on August 5, 2003, and that this Certificate is being filed pursuant to Section 180.1008 of the Business Corporation Law of the State of Wisconsin and shall become effective pursuant to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries filed with the Delaware Bankruptcy Court on August 5, 2003, and amended on September 17, 2003, without further action by the board of directors or shareholders of the Corporation pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. The Corporation's Certificate is restated in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the "Restated Certificate"). 3. That the Bankruptcy Court of Delaware has jurisdiction of the bankruptcy proceedings under chapter 11 of title 11 of the United States Code, as amended. STATE OF WISCONSIN FILED ---------------------- OCT-9 2003 ---------------------- DEPARTMENT OF FINANCIAL INSTITUTIONS AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NEENAH FOUNDRY COMPANY The following Amended and Restated Articles of Incorporation duly adopted pursuant to the authority and provisions of the Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes ("WBCL"), supersede and take the place of the existing articles of incorporation and any amendments thereto. ARTICLE ONE The name of the corporation is Neenah Foundry Company (hereinafter called the "Corporation"). ARTICLE TWO The purpose for which the Corporation is organized are to engage in any lawful activity within the purposes for which a corporation may be organized under the WBCL, chapter 180 of the Wisconsin Statutes. ARTICLE THREE The total number of shares which the Corporation shall have the authority to issue is One Thousand (1,000) shares, all of which shall be shares of Class A Common Stock, with a par value of $100.00(One Hundred) per share. ARTICLE FOUR The number of the board of directors shall be fixed by or in the manner provided in the Bylaws. ARTICLE FIVE The address of the Corporation's registered office in the state of Wisconsin is 25 West Main Street, Madison, Wisconsin 53703. The name of its registered agent at such address is CSC-Lawyers Incorporating Service Company. ARTICLE SIX To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE SIX shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE SEVEN The Corporation shall not issue nonvoting equity securities. ARTICLE EIGHT The Corporation reserves the right to amend or repeal any provisions contained in this Certificate of Incorporation from time to time and at any time in the manner now or hereafter prescribed by the laws of the State of Wisconsin, and all rights conferred upon stockholders and directors are granted subject to such reservation. * * * * 2 IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Articles of Incorporation of the Corporation pursuant to the Business Corporation Law of the State of Wisconsin, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate this 8th day of October, 2003. By: /s/ Gary W. LaChey ------------------------------------- Gary W. LaChey Chief Financial Officer, Vice President - Finance, Treasurer and Secretary STATE OF WISCONSIN FILED OCT 9 2003 DEPARTMENT OF FINANCIAL INSTITUTIONS RECEIVED - DEPT OF CERTIFIED: FINANCIAL INSTITUTIONS AS A TRUE COPY: STATE OF WISCONSIN ATTEST: 9/26/03 DAVID D. BIRD, CLERK 03 OCT - 8 PM 3:14 U.S. BANKRUPTCY COURT BY: /s/ Lillie Lewis --------------------- Deputy Clerk IN THE UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: ) Chapter 11 ) ACP Holding Company, et. al.,(1) ) Case No. 03-12414 (PJW) ) (Jointly Administered) ) Debtors. ) RELATED DOCKET NO. 137 ORDER CONFIRMING AMENDED PREPACKAGED JOINT PLAN OF REORGANIZATION OF ACP HOLDING COMPANY, NFC CASTINGS, INC., NEENAH FOUNDRY COMPANY AND CERTAIN OF ITS SUBSIDIARIES UNDER CHAPTER 11 OF THE BANKRUPTCY CODE --------------------------------------- The above-captioned debtors and debtors in possession (collectively, the "Debtors") having filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (as amended, the "Bankruptcy Code") on August 5, 2003 (the "Petition Date"); the Debtors having filed on the Petition Date the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and Certain of its Subsidiaries Under Chapter 11 of the Bankruptcy Code (the "Original Plan") and the Disclosure Statement dated as of July 1, 2003(2); the Debtors having distributed the Original Plan and the Disclosure Statement to all Holders of Impaired Claims against the Debtors, together with a solicitation of votes to accept or reject the Plan, beginning on or about July 2, 2003; the Affidavit - ---------------------- (1) The Debtors consist of the following entities: ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company, Cast Alloys, Inc., Neenah Transport, Inc., Advanced Cast Products, Inc., Gregg Industries, Inc., Mercer Forge Corporation, Deeter Foundry, Inc., Dalton Corporation, Belcher Corporation, Peerless Corporation, A&M Specialties, Inc., Dalton Corporation, Warsaw Manufacturing Facility, Dalton Corporation, Ashland Manufacturing Facility, Dalton Corporation, Kendallville Manufacturing Facility, Dalton Corporation, Stryker Machining Facility. (2) Unless otherwise specified, capitalized terms and phrases used herein have the meanings assigned to them in the Plan. The rules of interpretation set forth in Article I.A of the Plan shall apply to these Findings of Fact, Conclusions of Law and Order (this "Confirmation Order"). In accordance with Section III.B of this Confirmation Order, if there is any direct conflict between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order shall control. of Diane Streany of Bankruptcy Services, L.L.C. ("BSI"), the Certification of Jane Sullivan of Innisfree M&A, Inc. ("Innisfree") certifying (i) procedures for distribution of solicitation materials and (ii) tabulation of the Ballots received for the Plan, and the Supplemental Affidavit of Diane Streany relating to the Class 11 Mutual Release (collectively, the "Voting Affidavits") having been filed with this Court on August 5, 2003 and September 15, 2003; the Debtors' Amended Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and Certain of its Subsidiaries Under Chapter 11 of the Bankruptcy Code (the "Plan") having been filed with this Court on September 17, 2003; the Plan Supplement (the "Plan Supplement") having been filed with this Court on September 17, 2003; the Debtors' Notice of Disclosure of Identities and Affiliations of Officers and Directors of the Reorganized Debtors having been filed with this Court on September 16, 2003 and the Debtors' Amended Notice of Disclosure of Identities and Affiliations of Officers and Directors of the Reorganized Debtors having been filed with this Court on September 22, 2003 (collectively, the "Notice"); this Court, upon motion of the Debtors, having entered an order (the "Scheduling Order") setting September 19, 2003 at 3:00 p.m. prevailing Eastern Time and the hearing having been continued to September 25, 2003 at 4:30 p.m. prevailing Eastern Time by the Court as the date and time of a hearing pursuant to Rules 3017 and 3018 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and sections 1126 and 1128 of the Bankruptcy Code to consider the adequacy of the Disclosure Statement and Confirmation of the Plan (the "Confirmation Hearing"); this Court having reviewed the Plan, the Disclosure Statement, the documents comprising the Plan Supplement, the Debtors' Memorandum in Support of Confirmation of Amended Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and Certain of its Subsidiaries Under Chapter 11 2 of the United States Bankruptcy Code filed on September 17, 2003 (the "Confirmation Memorandum"), and the Declaration of William M. Barrett in Support of the Amended Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and Certain of its Subsidiaries Under Chapter 11 of the Bankruptcy Code filed on September 17, 2003; this Court having heard the statements of counsel in support of and in opposition to Confirmation at the Confirmation Hearing; this Court having considered all testimony presented and evidence admitted by affidavits or otherwise at the Confirmation Hearing; this Court having taken judicial notice of the papers and pleadings on file in the above-captioned Chapter 11 Cases; and it appearing to this Court that (a) notice of the Confirmation Hearing and the opportunity of any party in interest to object to Confirmation were adequate and appropriate as to all parties to be affected by the Plan and the transactions contemplated thereby, and (b) the legal and factual bases set forth in the Confirmation Memorandum and presented at the Confirmation Hearing establish just cause for the relief granted herein; this Court hereby makes and issues the following Findings of Fact, Conclusions of Law and Orders:(3) 1. FINDINGS OF FACT A. Jurisdiction And Venue. On the Petition Date, the Debtors commenced the Chapter 11 Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors were and are qualified to be debtors under section 109 of the Bankruptcy Code. Venue in the District of Delaware was proper as of the Petition Date and continues to be proper. - ----------------------- (3) This Confirmation Order constitutes this Court's findings of fact and conclusions of law under Fed. R. Civ. P. 52, as made applicable by Bankruptcy Rules 7052 and 9014. Any and all findings of fact shall constitute findings of fact even if they are stated as conclusions of law, and any and all conclusions of law shall constitute conclusions of law even if they are stated as findings of fact. 3 B. Compliance With The Requirements Of Section 1129 Of The Bankruptcy Code. 1. Section 1129(a)(1) -- Compliance of the Plan with Applicable Provisions of the Bankruptcy Code. The Plan complies with all applicable provisions of the Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code, including, without limitation, sections 1122 and 1123. Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, Article III of the Plan designates Classes of Claims and Interests, other than Administrative Claims and Priority Tax Claims. As required by section 1122(a) of the Bankruptcy Code, each Class of Claims and Interests contains only Claims or Interests that are substantially similar to the other Claims or Interests within that Class. Pursuant to sections 1123(a)(2) and (3) of the Bankruptcy Code, Article III of the Plan identifies all Claims and Interests that are not Impaired and specifies the treatment of all Claims and Interests that are Impaired. Pursuant to section 1123(a)(4) of the Bankruptcy Code, Article III of the Plan also provides the same treatment for each Claim or Interest within a particular Class. Pursuant to section 1123(a)(5) of the Bankruptcy Code, the Plan provides adequate means for the Plan's implementation. The Debtors will have, immediately upon the effectiveness of the Plan, sufficient Cash available to make all payments required to be made on the Effective Date pursuant to the terms of the Plan. Moreover, Article IV and various other provisions of the Plan specifically provide adequate means for the Plan's implementation, including, without limitation: (a) the revesting of the Debtors' property in the Reorganized Debtors; (b) an adequate amount of Cash on hand or available as a condition to the occurrence of the Effective Date; (c) the advance of borrowings under the New Credit Facility; (d) the issuance 4 of the Second Secured Notes, Rights, New Subordinated Notes, New ACP Common Stock and Warrants; and (e) the amendment of the Debtors' certificates of incorporation. Article IV.B of the Plan provides that the Reorganized Debtors will amend their respective certificates of incorporation to, among other things: (i) prohibit the issuance of nonvoting equity securities; (ii) authorize the issuance of New ACP Common Stock, in an amount not less than the amounts necessary to permit the Distribution thereof required or contemplated by the Plan and the issuance thereof upon exercise to the Warrants distributed pursuant to the Plan; and (iii) provide, as to the classes of securities possessing voting power, an appropriate distribution of such power among such classes all in compliance with section 1123 of the Bankruptcy Code. Pursuant to Article IV.B(2) of the Plan, the existing officers of the Debtors (as identified on pp. 25 and 26 of the Disclosure Statement) will continue to serve in such capacity for the Reorganized Debtors after the Effective Date. Article IV.B(3) of the Plan further provides the manner in which the directors of the Reorganized Debtors were selected in compliance with section 1123(a)(7) of the Bankruptcy Code. Pursuant to Article IV.B(2) of the Plan, the Debtors have disclosed in the Notice filed with the Court the individuals selected as the initial directors of the Reorganized Debtors. The Debtors' disclosures in the Plan, the Disclosure Statement, and the Notice concerning the selection of officers and directors for the Reorganized Debtors satisfy sections 1123(a)(7) and 1129(a)(5) of the Bankruptcy Code. 2. Section 1129(a)(2) -- Compliance Of The Debtors With Applicable Provision Of The Bankruptcy Code. The Debtors, as proponents of the Plan, have complied with all applicable provisions of the Bankruptcy Code as required by section 1129(a)(2) of the Bankruptcy Code, 5 including without limitation, sections 1125 and 1126 of the Bankruptcy Code and Bankruptcy Rules 3017, 3018 and 3019. The Debtors solicited acceptances pursuant to section 1126(b) of the Bankruptcy Code. On July 2, 2003, BSI and Innisfree, on behalf of the Debtors, distributed copies of the Plan and Disclosure Statement, and an appropriate ballot with which to vote, to all Holders of Impaired Claims other than those deemed to reject the Plan. The Disclosure Statement provides extensive information regarding, among other things, (i) the Plan, (ii) events preceding the commencement of these Chapter 11 Cases, (iii) Claims asserted against the Debtors' estates, (iv) securities to be issued under the Plan, (v) risk factors affecting the Plan, (vi) a liquidation analysis setting forth the estimated return that creditors would receive in a chapter 7 proceeding, (vii) financial information and valuations that would be relevant to creditors' determinations of whether to accept or reject the Plan, (viii) securities law, and (ix) federal tax law consequences of the Plan. Thus, the solicitation of acceptance or rejection of Plan was, (i) in compliance with all applicable nonbankruptcy laws, rules, and regulations governing the adequacy of disclosure in connection with such solicitation, and (ii) solicited after disclosure to Holders of Claims and Interests of adequate information as defined in section 1125(a) of the Bankruptcy Code. The Debtors, their directors, officers, employees, agents, affiliates and Professionals (acting in such capacity) have acted in "good faith," within the meaning of section 1125(c) of the Bankruptcy Code. 3. Section 1129(a)(3) -- Proposal Of Plan In Good Faith. The Debtors proposed the Plan in good faith and not by any means forbidden by law. Consistent with the overriding purpose of chapter 11 of the Bankruptcy Code, the Plan is designed to allow the Debtors to reorganize by providing them with a capital structure that will 6 enable them to satisfy their obligations with sufficient liquidity and capital resources to conduct their business. Moreover, the Plan itself, and the process leading to its formulation, provide independent evidence of the Debtors' good faith. 4. Section 1129(a)(4) -- Bankruptcy Court Approval Of Certain Payments As Reasonable. Pursuant to section 1129(a)(4) of the Bankruptcy Code, any payment made or promised by the Debtors or by any person issuing securities or acquiring property under the Plan, for services or for costs and expenses in, or in connection with, the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases, has been, or will be before payment, disclosed to this Court. Any such payment made before Confirmation is reasonable. Any such payment to be fixed after Confirmation is subject to the approval of this Court as reasonable. 5. Section 1129(a)(5) -- Disclosure Of Identity And Affiliations Of Proposed Management, Compensation Of Insiders And Consistency Of Management Proposals With The Interest Of Creditors And Public Policy. Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors have disclosed, in the Notice, the identity and affiliations of the proposed directors and officers of the Reorganized Debtors, as well as compensation of insiders, if any, who will be employed or retained by the Reorganized Debtors. The appointment or continuance of the proposed directors and officers is consistent with the interests of the Holders of Claims and Interests and public policy. 6. Section 1129(a)(6) -- Approval of Rate Changes. The Debtors' current business does not involve the establishment of rates over which any regulatory commission has or will have jurisdiction after Confirmation. 7 7. Section 1129(a)(7) -- Best Interests Of Creditors And Equity Interest Holders. With respect to each Impaired Class of Claims or Interests of the Debtors, each Holder of a Claim or Interest in such Class has accepted the Plan or will receive or retain under the Plan on account of such Claim or Interest property of a value, as of the Effective Date, that is not less than the amount such Holder would receive or retain if the Debtors were liquidated on the Effective Date under chapter 7 of the Bankruptcy Code. 8. Section 1129(a)(8) -- Acceptance Of The Plan By Each Impaired Class. Pursuant to sections 1126 and 1129(a)(8) of the Bankruptcy Code, (a) as indicated in Article III of the Plan Classes 1, 2, 5, 9 and 10 are unimpaired, and (b) as indicated in the Voting Affidavits, every Impaired Class that was entitled to vote voted overwhelmingly in favor of the Plan (Classes 3, 4 and 6). Because the Plan provides that the Holders of Claims in Classes 7, 8 and 11 will not receive or retain any property on account of such Claims, Classes 7 and 8 and 11 are deemed not to have accepted the Plan pursuant to section 1126(g) of the Bankruptcy Code. Notwithstanding the deemed rejection of the Plan by Classes 7, 8 and 11, the Plan is confirmable because it satisfies section 1129(b)(1) of the Bankruptcy Code with respect to those Classes. The Plan does not discriminate unfairly and is fair and equitable with respect to Classes 7, 8 and 11. There is no Holder of a Claim or Interest junior to Classes 7, 8 and 11 who will receive or retain any property under the Plan on account of such junior Claim or Interest. 9. Section 1129(a)(9) -- Treatment Of Claims Entitled To Priority Pursuant To Section 507(a) Of The Bankruptcy Code. The Plan provides for treatment of Administrative Claims, Priority Tax Claims and Claims entitled to priority pursuant to sections 507(a)(3)-(6) of the Bankruptcy Code in the manner required by section 1129(a)(9) of the Bankruptcy Code. 8 10. Section 1129(a)(10) -- Acceptance By At Least One Impaired Class. As required by section 1129(a)(10) of the Bankruptcy Code and as indicated in the Voting Affidavits, at least one Class of Claims or Interests that is Impaired under the Plan for each Debtor has accepted the Plan, excluding votes cast by insiders. 11. Section 1129(a)(11) -- Feasibility Of The Plan. Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtors, the Reorganized Debtors or any successor to the Reorganized Debtors under the Plan, and the Plan complies with section 1129(a)(11) of the Bankruptcy Code. 12. Section 1129(a)(12) -- Payment Of Bankruptcy Fees. In accordance with section 1129(a)(12) of the Bankruptcy Code, Article X.E of the Plan provides for the payment of all fees payable under 28 U.S.C. Section 1930 on or before the Effective Date. The Debtors or Reorganized Debtors have adequate means to pay all such fees. 13. Section 1129(a)(13) -- Retiree Benefits. In accordance with section 1129(a)(13) of the Bankruptcy Code, Article VII.D of the Plan provides for the continuation after the Effective Date of all retiree benefits, as that term is defined in section 1114 of the Bankruptcy Code, at the level established pursuant to section 1114(e)(1)(B) or 1114(g) of the Bankruptcy Code, at any time prior to Confirmation, for the duration of the period the Debtors have obligated themselves to provide such benefits. Provided, however, that the treatment of retirement benefits relating to plans under Title IV of ERISA are addressed exclusively in Section III.C(2) of this Confirmation Order. 9 14. Treatment of Unimpaired Claims. The provisions of the Plan with respect to the Holders of unimpaired Claims are fair and appropriate, and the Plan does not require the Holders of unimpaired Claims to file proofs of claim with this Court. 15. Satisfaction Of Conditions To Confirmation. Except as otherwise provided herein, each of the conditions precedent to the entry of this Confirmation Order, as set forth in Article VIII of the Plan, has been satisfied or waived in accordance with the Plan. II. CONCLUSIONS OF LAW A. Jurisdiction And Venue. This Court has jurisdiction over this matter pursuant to 28 U.S.C. Sections 157(a) and 1334. This is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2). The Debtors were and are qualified to be debtors under section 109 of the Bankruptcy Code. Venue in the District of Delaware was proper as of the Petition Date and continues to be proper under 28 U.S.C. Section 1408. B. Exemptions From Taxation. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under section 1129 of the Bankruptcy Code, may not be taxed under any law imposing a stamp tax or similar tax. C. Compliance With Section 1129 Of The Bankruptcy Code. As set forth in Section 1.B of this Confirmation Order, the Plan complies in all respects with the applicable requirements of section 1129 of the Bankruptcy Code. 10 D. Solicitation Procedures and Disclosure Statement. In their solicitation of votes confirming or rejecting the Plan, the Debtors complied in every respect with section 1126(b) of the Bankruptcy Code. The Disclosure Statement contains "adequate Information" as required under section 1125 of the Bankruptcy Code. E. Releases. Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a):(1) the settlements, compromises, releases, discharges, exculpations, and injunctions set forth in the Plan and implemented by this Confirmation Order shall be, and hereby are, approved as fair, equitable, reasonable and in the best interests of the Debtors, the Reorganized Debtors and their Estates, and the Holders of Claims and Interests; (2) the settlement or compromise of all claims or controversies set forth in the Plan relating to the termination of all contractual, legal and equitable subordination rights that any Holder of a Claim or Interest (with the exception of the Holders of Pass-Through Claims and Interests, which shall not be discharged) may have with respect to any Allowed Claim or Interest, or any Distribution to be made pursuant to the Plan on account of such Allowed Claim or Interest, is in the best interests of the Debtors, their Estates, and the Holders of Claims and Interests, and shall be, and hereby is, approved as fair, equitable and reasonable All settlements and compromises of claims and Causes of Action against non-Debtor entities embodied in the Plan are approved herein as fair, equitable, reasonable and in the best interests of the Debtors, the Reorganized Debtors and their Estates, and the Holders of Claims and Interests, and shall be and hereby are, effective and binding on each Holder of an Existing Credit Facility Claim, a PIK Note Claim, or an Existing Subordinated Note Claim that voted to accept the Plan and did not affirmatively reject the Mutual Releases on its Ballot and 11 each Holder of ACP interests that has affirmatively agreed to participate in the Mutual Releases. See St. Paul Fire & Marine Ins. Co. v. Pepsico, Inc., 884 F.2d 688, 700-01 (2d Cir. 1989). F. Agreements And Other Documents. The Debtors have disclosed all material facts regarding: (i) the amendment of the certificates of incorporation, or similar constituent documents; (ii) the selection of directors and officers for the Reorganized Debtors; (iii) the New Credit Facility; (iv) the Distribution of Cash; (v) the Distribution of New Subordinated Notes; (vi) the Distribution of New ACP Common Stock; (vii) the issuance of the Second Secured Notes and Warrants; New Subordinated Notes, New ACP Common Stock and Warrants; (viii) the adoption, execution and implementation of employment, retirement and indemnification agreements, incentive compensation programs, incentive equity plans, severance and change of control plans, retirement income plans, welfare benefit plans and other employee plans and related agreements; (ix) the adoption, execution and implementation of the other matters provided for under the Plan involving corporate action to be taken by or required of the Reorganized Debtors; and (x) the adoption, execution and delivery of all contracts, leases, instruments, releases, indentures and other agreements related to any of the foregoing. Pursuant to section 303 of the Delaware General Corporation Law and any comparable provision of the business corporation laws of any other state, as applicable, no action of the directors or stockholders of the Reorganized Debtors will be required to authorize them to engage in any of the activities set forth in the preceding sentence or as otherwise contemplated by the Plan or in furtherance thereof and such activities shall be, and hereby are, deemed to have occurred and be effective as provided in the Plan and such activities shall be, and hereby are, authorized and approved in all respects. 12 III. ORDER A. Approval of Disclosure Statement and Solicitation Procedures. The Disclosure Statement contains adequate information as defined in section 1125(a) of the Bankruptcy Code and is hereby approved. The Debtors' solicitation of acceptances pursuant to section 1126(b) of the Bankruptcy Code is hereby approved. B. Confirmation Of The Plan. The Plan and each of its provisions shall be, and hereby are, confirmed in each and every respect pursuant to section 1129 of the Bankruptcy Code; provided, however, that if there is any direct conflict between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order shall control. All objectives and responses to, and statements and comments regarding, the Plan, to the extent not already withdrawn, shall be, and hereby are, overruled. C. Effects Of Confirmation. 1. Executory Contracts and Unexpired Leases. Article VII of the Plan is hereby approved. Except as otherwise provided in the Plan or the Management Compensation Plans, all employment and severance policies, and all compensation and benefit plans, policies, and programs of the Debtors applicable to their employees, retirees, and non-employee directors or members of the boards of directors, including, without limitation, all savings plans, retirement plans (other than Title IV Plans, as defined herein), healthcare plans, disability plans, severance benefit plans, incentive plans, and life, accidental death and dismemberment insurance plans are treated as executory contracts under the Plan and on the Effective Date will be assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code. Provided, however, that Title IV Plans are not, and shall not be treated as, executory contracts. Notwithstanding anything 13 in the Plan or in this Confirmation Order, Title IV Plans shall be dealt with exclusively in the manner described in section III.C(2) of this Confirmation Order. All directors' and officers' liability insurance policies maintained by the Debtors are assumed, and such assumptions are hereby approved pursuant to section 365(a) of the Bankruptcy Code. The Reorganized Debtors shall maintain for a period of not less than six years from the Effective Date coverage for the individuals concerned, as of the Commencement Date, by such policies at levels and on terms no less favorable to such individuals than the terms and levels provided for under the policies assumed pursuant to the Plan. 2. Treatment of Title IV Plans The Debtors are contributing sponsors (as defined in 29 U.S.C. section 1301(a)(13)) or controlled group members (as defined in 29 U.S.C. section 1301(a)(14)(A)) of contributing sponsors of defined benefit pension plans covered by the pension plan termination insurance program established by Title IV of ERISA ("Title IV Plans"). Notwithstanding any provisions of the Plan or Disclosure Statement or in this Confirmation Order, or in any proceeding within the Chapter 11 Cases, after the Effective Date, one or more of the Reorganized Debtors will continue to be a contributing sponsor or a controlled group member of a contributing sponsor of all Title IV Plans. The Reorganized Debtors shall fund the Title IV Plans in accordance with the minimum financing standards under ERISA, 29 U.S.C. section 1082, pay all required insurance premiums to the Pension Benefit Guaranty Corporation ("PBGC"), 29 U.S.C. 1307, and comply with all other applicable statutory and regulatory requirements with respect to the Title IV Plans. Notwithstanding any provisions of the Disclosure Statement, the Plan (including Section 111(A)(2)), this Confirmation Order, or any proceeding within the Chapter 11 Cases, no liability to or claim against the Debtors regarding any of the Title IV Plans, including any 14 liability to or claim of the Title IV Plans, PBGC or any other entity, shall be deemed consolidated for any purpose. Notwithstanding any provisions of the Plan or Disclosure Statement, this Confirmation Order, or any proceeding within the Chapter 11 Cases, nothing shall discharge, release, enjoin, or exculpate the Debtors, Reorganized Debtors, or any other party in any capacity, from any liability to, claim of, or cause of action by any of the Title IV Plans, PBGC, or any other entity with respect to the Title IV Plans. 3. Federal Government Rights and Claims. Notwithstanding this bankruptcy proceeding, including any provisions of the Plan or this Confirmation Order, all rights and Claims of the United States shall not be discharged, impaired or adversely affected by these Chapter 11 Cases. The liabilities due to the United States shall be calculated and paid and/or determined and compiled with as if these Chapter 11 Cases had not been commenced. The Claims of the United States shall be calculated and determined administratively or in judicial forums in the manner in which such liabilities would have been resolved had these Chapter 11 Cases not been commenced. D. Matters Relating To Implementation Of The Plan. 1. Immediate Effectiveness; Successors And Assigns. Immediately upon the entry of this Confirmation Order, the terms of the Plan shall be, and hereby are, deemed binding upon the Debtors, the Reorganized Debtors, any and all Holders of Claims or Interests (irrespective of whether such Claims or Interests are impaired under the Plan or whether the Holders of such Claims or Interests accepted or are deemed to have accepted the Plan), and the respective heirs, executors, administrators, successors or assigns, if any, of any of the foregoing. 15 2. Continued Corporate Existence; Vesting Of Assets. After the Effective Date, the Reorganized Debtors shall continue to exist in accordance with the applicable laws in the respective jurisdictions in which they are incorporated or were otherwise organized and pursuant to their respective certificate of incorporation, and bylaws in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws are amended under the Plan. Except as otherwise provided in the Plan, on or after the Effective Date, all property of the Estates, including all claims, rights and Causes of Action and any property acquired by the Debtors or the Reorganized Debtors under or in connection with the Plan, shall vest in the Reorganized Debtors free and clear of all claims, liens, charges, other encumbrances, and interests except with respect to any Claims, liens, charges, or other encumbrances and Interests held by Holders of Pass-Through Claims and Interests under the Plan. On and after the Effective Date, the Reorganized Debtors may operate their businesses and may use, acquire, and dispose of property and compromise or settle any claims or Causes of Action without Supervision of or approval by this Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by the Plan or by this Confirmation Order. Without limiting the foregoing, the Reorganized Debtors may pay the charges that they incur on or after the Effective Date for Professionals' fees, disbursements, expenses or related support services without application to this Court. 3. Cancellation of Notes and Interests. On the Effective Date, subject to treatment of such Claims in accordance with the Plan(a) all notes, instruments, certificates, and other documents of the Debtors evidencing the Existing Credit Facility Claims, PIK Note Claims, Existing Subordinated Note Claims, NFC Note Claims and ACP Note Claims, (b) the Existing Subordinated Notes, (c) the PIK Note, (d) the ACP Notes, (e) the NFC Note and (f) all ACP Interests shall be cancelled, and the obligations 16 of the Debtors thereunder shall be discharged. On the Effective Date, except to the extent provided otherwise in the Plan, any Indenture relating to any of the foregoing, including, without limitation, the Existing Subordinated Notes Indentures, shall be deemed to be cancelled, and the obligations of the Debtors thereunder shall be discharged; provided, however, that the Existing Subordinated Notes Indentures shall continue in effect solely for the purpose of allowing the Disbursing Agent, the Note Trustee, its agent, or its servicer to make Distributions on account of the Existing Subordinated Note Claims pursuant to the Plan. 4. Issuance Of New Securities And Execution Of Documents. The Reorganized Debtors are hereby authorized and directed to issue and deliver all securities to be issued in accordance with the Plan on or prior to the Effective Date, including, but not limited to, the Second Secured Notes, Rights, New Subordinated Notes, the New ACP Common Stock and Warrants, each of which shall be issued or Distributed as referenced in the Plan. The Reorganized Debtors are hereby authorized and directed to cause the New ACP Common Stock and Warrants that Neenah will Distribute (i) pursuant to the Plan in exchange for the Existing Subordinated Notes, (ii) pursuant to the Rights Offering, or (iii) to Management under the Management Equity Incentive Plan, as applicable, to be contributed by ACP to NFC, and by NFC to Neenah, immediately before such Distributions. The Reorganized Debtors are hereby authorized and directed to execute and deliver such other agreements, documents and instruments as are required to be executed in accordance with the terms of the Plan or as may otherwise be necessary to give effect to the transactions, including the Distributions contemplated by the Plan. The Reorganized Debtors are hereby authorized and directed to execute and deliver and perform their respective obligations under the agreements, documents, and instruments necessary to give effect to the New Credit Facility contemplated by the Plan and the 17 commitment letter dated June 1, 2003 from Fleet Capital (the "Fleet Capital Commitment Letter") filed with the Plan Supplement. The Reorganized Debtors shall implement as of the Effective Date and are hereby authorized and directed to execute and deliver and perform their respective obligations under the agreements, documents and instruments necessary to give effect to the Management Compensation Plans, including the employment agreements (as described in Article IV.L(1) of the Plan), Severance Plans, Change of Control Agreements, Annual Incentive Plan, Management Equity Incentive Plan, compensation review (as described in Article IV.L(6) of the Plan), and additional management compensation plans (as described in Article IV.L(7) of the Plan), forms of which were filed with the Plan Supplement and each of which are hereby approved in all respects. 5. Transactions Required by the Plan The Reorganized Debtors are hereby authorized and directed to take any and all actions necessary or appropriate to implement the transactions required by the Plan, each of which shall be implemented in accordance with Article IV of the Plan and with the section of the Disclosure Statement title "Transactions Required by the Plan." The Reorganized Debtors are hereby authorized and directed to enter into all agreements and other instruments contemplated by or to be entered into pursuant to the Plan without need for further action by the Reorganized Debtors' directors or shareholders or otherwise. In accordance with Section 1142 of the Bankruptcy Code, the Reorganized Debtors are authorized, empowered and directed to execute, deliver, acknowledge, adopt, ratify, certify, file and record any document and to take any other action necessary or appropriate to implement, consummate and otherwise give effect to the Plan in accordance with its terms in all 18 material respects, whereupon such documents, agreements and instruments shall be legal, valid and binding obligations of the parties thereto and enforceable in accordance with their terms except as enforceability may be affected by bankruptcy, insolvency, or other laws of general application affecting the rights of creditors generally. 6. CORPORATE GOVERNANCE, CORPORATE ACTION AND DIRECTORS AND OFFICERS. a. CERTIFICATES OF INCORPORATION. The certificates of incorporation of the Debtors shall be amended as soon as practicable and as necessary to satisfy the provisions of the Plan and the Bankruptcy Code, and shall, among other things: (a) authorize the issuance of the New ACP Common Stock, in an amount not less than the amounts necessary to permit the Distributions thereof required or contemplated by the Plan and the issuance thereof upon exercise of the Warrants distributed pursuant to the Plan and (b) provide for the inclusion of a provision prohibiting the issuance of non-voting equity securities, and providing, as to the classes of securities possessing voting power, an appropriate distribution of such power among such classes. After the Effective Date, the Reorganized Debtors may amend and restate their respective certificates of incorporation and bylaws as permitted by applicable law. b. CORPORATE ACTION. The adoption of any required New Certificates of Incorporation, the selection of members of the boards of directors and corporate officers for the Reorganized Debtors, the New Credit Facility, the Rights Offering, the issuance of Plan Securities, the Management Compensation Plans and all other actions contemplated by the Plan, to take effect on the Effective Date, are hereby approved. All matters provided for in the Plan involving the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with the Plan, shall be deemed to have 19 occurred and shall be in effect without any requirement of further action by the security holders or the boards of directors of the Debtors or the Reorganized Debtors. On the Effective Date, the appropriate officers and boards of directors of the Reorganized Debtors are authorized to issue, execute and deliver the agreements, documents, securities and instruments contemplated by the Plan in the name of or on behalf of the Reorganized Debtors. c. DIRECTORS AND OFFICERS OF THE REORGANIZED DEBTORS. The classification, selection, and composition of the boards of directors are and shall be consistent with each Reorganized Debtor's amended certificate of incorporation. Each director or officer shall serve from the after the Effective Date pursuant to the terms of each Reorganized Debtor's certificate of incorporation, other constituent documents, the applicable state corporation law and in accordance with the terms of the Shareholders Agreement. d. AUTHORIZATION. The Debtors and the Reorganized Debtors and their respective directors, officers, members, agents, and attorneys, are authorized and empowered to issue, execute, deliver, file, or record any agreement, document, or security, including, without limitation, the documents contained in the Plan Supplement, as modified, amended, and supplemented, in substantially the form included therein, and to take any action necessary or appropriate to implement, effectuate, and consummate the Plan in accordance with its terms, or take any or all corporate actions authorized to be taken pursuant to the Plan, including any release, amendment, or restatement of any bylaws, certificates of incorporation, or other organization documents of the Debtors, whether or not specifically referred to in the Plan or the Plan Supplement, without further order of the Court, and any or all such documents shall be accepted by each of the respective state filing offices and recorded in accordance with applicable state law and shall become effective in accordance with their terms and the provisions of state law. 20 e. PLAN SUPPLEMENT. The documents contained in the Plan Supplement and any amendments, modifications, and supplements thereto, and all documents and agreements introduced into evidence by the Debtors at the Confirmation Hearing (including all exhibits and attachments thereto and documents referred to therein), and the execution, delivery, and performance thereof by the Reorganized Debtors, is authorized and approved. Without need for further order or authorization of the Bankruptcy Court, the Debtors and Reorganized Debtors are authorized and empowered to make any and all modifications to any and all documents included as part of the Plan Supplement that do not materially modify the terms of such documents and are consistent with the Plan. 7. SOURCES OF CASH FOR PLAN DISTRIBUTION. (a) Except as otherwise provided by the Plan or the Confirmation order, all Cash necessary for the Reorganized Debtors to make payments pursuant to the Plan shall be obtained from existing Cash balances, borrowings under the New Credit Facility and the issuance by Neenah of the Second Secured Notes. (b) The Fleet Capital Commitment Letter is hereby approved substantially in the form as contained in the Plan Supplement. 8. DISTRIBUTIONS. Article V of the Plan is hereby approved. The Existing Credit Facility Claims, PIK Note Claims and the Existing Subordinated Note Claims are deemed Allowed. The Reorganized Debtors or the Disbursing Agent shall make all Distributions required to be distributed under the Plan. However, Distributions on account of Existing Subordinated Note Claims shall be made to the Notes Trustee acting as agent for Neenah. The 21 Reorganized Debtors may employ or contract with other Entities to assist in or make the Distributions required by the Plan. Unless otherwise specifically provided for in the Plan or in this Confirmation Order, or required by applicable bankruptcy law, post-petition interest shall not accrue or be paid on any Claims other than Priority Tax Claims, Non-Tax Priority Claims, Existing Credit Facility Claims, and PIK Note Claims, and no Holder of any other Claim shall be entitled to interest accruing on or after the Commencement Date on any such Claim. As a condition precedent to receiving any Distribution pursuant to the Plan on account of an Allowed Existing Subordinated Note Claim or PIK Note Claim, each Holder of a certificated note or instrument representing such Claim shall tender the Existing Subordinated Notes of PIK Note, as applicable, to the Notes Trustee or the Reorganized Debtors, as applicable, unless waived in writing by the Notes Trustee or the Reorganized Debtors, pursuant to the notice provisions contained in Article X.G of the Plan. Distributions will be made to Holders of Allowed Existing Subordinated Note Claims and PIK Note Claims who surrender such instruments or securities, irrespective of the fact that such Holders may be different from the Holders on the Record Date entitled to vote to accept or reject the Plan. It is a condition precedent to the Holders of Existing Subordinated Note Claims receiving any Distribution pursuant to the Plan that the Existing Subordinated Notes shall have been received by the Notes Trustee as agent of Neemah or irrevocably electronically tendered. Any Plan Securities, including any New Subordinated Notes, New ACP Common Stock, Rights, Second Secured Notes or Warrants to be distributed pursuant to the Plan on account of any such Claims shall, pending such surrender, be treated as a undeliverable Distribution pursuant to Article V.F of the Plan. 22 Any Holder of a certificated note or instrument evidencing an Existing Subordinated Note Claims or PIK Note Claims that fails to surrender or is deemed to have failed to surrender the applicable Existing Subordinated Notes or PIK Note required to be tendered hereunder within one (1) year after the Effective Date shall have its Claim and its Distribution pursuant to the Plan on account of such Existing Subordinated Notes or PIK Note discharged and shall be forever barred from asserting any such Claim against the Reorganized Debtors or their property. In such cases, Cash or Plan Securities held for Distribution on account of such Claim shall be disposed of pursuant to Article V.F of the Plan. 9. EXEMPTIONS FROM TRANSFER TAXES. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under the Plan may not be taxed under any law imposing a stamp tax or similar tax. 10. RESOLUTION OF DISPUTED CLAIMS AND INTEREST. Article VI of the Plan is hereby approved. Except as otherwise provided in the Plan, Holders of Claims and Interests shall not be required to File a proof of claim or proof of interest, and no parties shall File a proof of claim or proof of interest. Instead, except as otherwise provided in the Plan, the Debtors shall make Distributions in accordance with the books and records of the Debtors. The Notes Trustee is hereby deemed to File a proof of claim on behalf of Holders of Existing Subordinated Note Claims and such Claim is deemed Allowed. Accordingly, any proof of claim Filed by the direct, indirect, or beneficial Holder of an Existing Subordinated Note is disallowed as duplicative of the Claim of the Note Trustee. 23 11. RELEASE, INJUNCTIVE AND RELATED PROVISIONS. a. INJUNCTION. Except as otherwise provided in the Plan, all Entities or persons that have held, hold or may hold Claims against or Interests in the Debtors, other than Pass-Through Claims and Interests, are as of the Effective Date, permanently enjoined from taking any of the following actions against any of the Debtors, their Estates, the Reorganized Debtors or any of their property on account of any Claims or causes of action arising from events occurring prior to the Effective Date; (i) commencing or continuing, in any manner or in any place, any action or other proceeding; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or other; (iii) creating, perfecting, or enforcing any lien or encumbrance; (iv) asserting a set-off of any kind against any debt, liability or obligation due to the Debtors; and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan; provided, however, that nothing contained herein shall preclude such Persons from exercising their rights pursuant to and consistent with the terms of the Plan. Except for the Pass-Through Claims and Interests, by accepting Distributions pursuant to the Plan, each Holder of an Allowed Claim or Interest will be deemed to have specifically consented to the Injunction set forth in Article IX.B of the Plan. b. RELEASES. (i) RELEASES BY THE DEBTORS. As of the Effective Date, for good and valuable consideration, the adequacy of which is hereby confirmed, the Debtors and the Reorganized Debtors in their individual capacities and as Debtors-in-Possession, shall forever release, waive and discharge all claims, interests, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities (other than the rights of the Debtors or the Reorganized 24 Debtors to enforce the Plan and the contracts, instruments, releases, indentures and other agreements or documents delivered thereunder) whether direct or derivative, liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to (i) the Debtors, (ii) the Reorganized Debtors, (iii) the parties released pursuant to Article IX.C of the Plan, (iv) the Offering Memorandum, (v) any act taken or omitted to be taken on or after the Commencement Date, (vi) the Disclosure Statement, the Plan, and the documents necessary to effectuate the Plan, (vii) the solicitation of acceptances and rejections of the Plan, (viii) the solicitation of the Mutual Releases, (ix) the Chapter 11 Cases, (x) the Rights Offering, (xi) the exercise of rights or fulfillment of obligations under the Standby Commitment Agreements, (xii) the administration of the Plan, (xiii) the property to be Distributed under the Plan, or (xiv) any contract, instrument, release or other agreement or document created or entered into in connection with the Plan or the Chapter 11 Cases, and that could have been asserted by or on behalf of the Debtors, their Estates or the Reorganized Debtors, against each of (i) the current directors, officers and employees of the Debtors (other than for money borrowed from or owed to the Debtors or their Subsidiaries by any such directors, officers or employees as set forth in the Debtors' books and records) and the Debtors' agents, and Professionals; (ii) the Senior Secured Lenders other than any such party that has affirmatively rejected the Mutual Releases on its Ballot; (iii) CVC and each other Holder of PIK Note other than any such party that has affirmatively rejected the Mutual Releases on its Ballot; (iv) the Noteholders other than any such party that has affirmatively rejected the Mutual Releases on its Ballot; (v) the ACP Interest Holders other than any party who has not affirmatively agreed 25 to participate in the Mutual Releases; (vi) the Standby Purchasers who are not Noteholders and who have agreed in writing to mutual releases, the terms and conditions of which mirror those of the Mutual Releases; and (vii) the respective affiliates and current officers, directors, representatives, employees, agents, members, direct and indirect shareholders, advisors, and professionals of the foregoing; provided, that nothing herein shall release any obligation of the Debtors or Reorganized Debtors to indemnify their current and former directors, officers employees, agents or representatives under their organizational documents, bylaws, employee-indemnification policies, state law, or any other agreement. This release in no way applies to any Causes of Action possessed by the Debtors or Reorganized Debtors against Holders of Pass-Through Claims or Interests. With regard to the releases granted in this section, nothing herein shall apply to any act, omission, transaction, event or other occurrence determined to be the result of gross negligence or willful misconduct as determined by this Court or any other court of competent jurisdiction. (ii) Mutual Releases by Holders of Claims and Interests. As of the Effective Date, in exchange for accepting consideration pursuant to the Plan, each Holder of an Existing Credit Facility Claim, a PIK Note Claim or an Existing Subordinated Note Claim that votes to accept the Plan and has not affirmatively rejected the Mutual Releases on its Ballot and each Holder of ACP Interests that has affirmatively agreed to participate in the Mutual Releases shall forever release, waive and discharge all claims, interest, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities whether direct or derivative, liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to 26 the Effective Date in any way relating to (i) the Debtors, (ii) the Reorganized Debtors, (iii) the parties released pursuant to ARTICLE IX C of the Plan, (iv) the Offering Memorandum, (v) any act taken or omitted to be taken on or after the Commencement Date, (vi) the Disclosure Statement, the Plan, and the documents necessary to effectuate the Plan, (vii) the solicitation of acceptances and rejections of the Plan, (viii) the solicitation of the Mutual Releases, (ix) the Chapter 11 Cases, (x) the Rights Offering, (xi) the exercise of rights or fulfillment of obligations under the Standby Commitment Agreements, (xii) the administration of the Plan, (xiii) the property to be Distributed under the Plan, or (xiv) any contract, instrument, release or other agreement or document created or entered into in connection with the Plan or the Chapter 11 Cases, against each of (i) the Debtors, their Estates and Reorganized Debtors, (ii) the current directors, officers and employees of the Debtors (other than Claims or Interests unrelated to the Debtors) and the Debtors' agents and Professionals; (iii) the Senior Secured Lenders other than any such party who has affirmatively rejected the Mutual Releases on its Ballot; (iv) CVC and each Holder of PIK Note other than any such party that has affirmatively rejected the Mutual Releases on its Ballot; (v) the Noteholders other than any such party that has affirmatively rejected the Mutual Releases on its Ballot; (vi) the ACP Interest Holders other than any party who has not affirmatively agreed to participate in the Mutual Releases; (vii) the Standby Purchasers who are not Noteholders and who have agreed in writing to mutual releases, the terms and conditions of which mirror those of the Mutual Releases; and (viii) the respective affiliates and current officers, directors, representatives, employees, agents, members, direct and indirect shareholders, advisors, and professionals of the foregoing; provided, that nothing herein shall release: (1) any obligation of the Debtors or Reorganized Debtors to indemnify their current and former directors or officers employees, agents or representatives under their organizational documents, bylaws. 27 employee-indemnification policies, state law, or any other agreement; or (2) Holders of any Pass-Through Claims or Interests. With regard to the Mutual Releases granted in this section, the Mutual Releases shall not apply to any act, omission, transaction, event or other occurrence determined to be the result of gross negligence or willful misconduct as determined by this Court or any other court of competent jurisdiction. c. EXCULPATION AND LIMITATION OF LIABILITY. Neither the Debtors, their Estates, the Reorganized Debtors, the Noteholders, the Standby Purchasers nor any of their respective current officers, directors, shareholders, employees, advisors, attorneys or agents acting in such capacity or their respective affiliates, shall have or incur any liabilities to, or be subject to any right of action by, the Debtors or any Holder of a Claim or an Interest, or any other party in interest, or any of their respective agents, shareholders, employees, representatives, financial advisors, attorneys or affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of, (a) the Offering Memorandum, (b) any act taken or omitted to be taken on or after the Commencement Date, (c) the Disclosure Statement, the Plan, and the documents necessary to effectuate the Plan, (d) the solicitation of acceptances and rejections of the Plan, (e) the solicitation of the Mutual Releases, (f) the Chapter 11 Cases, (g) the Rights Offering, (h) the exercise of rights or fulfillment of obligations under the Standby Commitment Agreements, (i) the administration of the Plan, (j) the property to be Distributed under the Plan, (k) or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan or the Chapter 11 Cases, and in all respects shall be entitled to rely reasonably upon the advice of counsel with respect to their duties and responsibilities under the Plan; provided, that nothing herein shall exculpate the Debtors or the Reorganized Debtors from any obligation to indemnify its current and former directors, officers, employees, agents or 28 representatives under its organizational documents, bylaws, employee-indemnification policies, state law, or any other agreement. With regard to the exculpation and limitation of liability granted in this section, nothing herein shall apply to any act, omission, transaction, event or other occurrence determined to be the result of gross negligence or willful misconduct as determined by this Court or any other court of competent jurisdiction. d. Injunction Related to Releases and Exculpation. All Persons and Entities are permanently enjoined from commencing or prosecuting, whether directly, derivatively or otherwise, any Claims, Interests, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities released pursuant to the Plan. e. Preservation of Causes of Action. The Reorganized Debtors retain all rights on behalf of the Debtors and the Post-Confirmation Estates to commence and pursue any and all Causes of Action (under any theory of law, including, without limitation, the Bankruptcy Code, and in any court or other tribunal including, without limitation, in an adversary proceeding filed in the Debtors' Chapter 11 Cases), to the extent the Reorganized Debtors deem appropriate, other than any Causes of Action against the Released Parties, as all such Causes of Action have been released by the Debtors. Such Causes of Action may include, without limitation, (i) the potential Claims and Causes of Action set forth in the section of the Disclosure Statement titled "Preservation of Causes of Action; Settlement of Causes of Action," (ii) Preference Actions, and (iii) other Causes of Action, including Unknown Causes of Action, as described in Article IX.F of the Plan. On the Effective Date, and to the extent not otherwise modified pursuant to the Plan, each Reorganized Debtor shall retain all rights and obligations relating to Intercompany Claims that it may have against any other Reorganized Debtor. 29 f. Termination of Subordination Rights. The classification and manner of satisfying all Claims and Interest and the respective Distribution and treatments under the Plan take into account and/or conform to the relative priority and rights of the Claims and Interest in each Class in connection with any contractual, legal and equitable subordination right relating thereto whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code or otherwise, and any and all such rights are settled, compromised and released pursuant to the Plan. All Persons and Entities are permanently enjoined from enforcing or attempting to enforce any such contractual, legal and equitable subordination right satisfied, compromised and settled in this manner. 12. Retention of Jurisdiction Notwithstanding the entry of this Confirmation Order and the occurrence of the Effective Date, this Court shall retain such jurisdiction over the Chapter 11 Cases after the Effective Date as is legally permissible and described in Article XI of the Plan. E. Payment of Statutory Fees. All fees payable pursuant to 28 U.S.C. ss. 1930, as determined by this Court at the hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid on or before the Effective Date. F. Discharge of Debtors. Pursuant to section 1141(d) of the Bankruptcy Code, the rights afforded under the Plan and the treatment of Claims and Interests under the Plan shall be in exchange for and in complete satisfaction, settlement, discharge, and release of all Claims and termination of all Interests. Except for the Pass-Through Claims and Interests, this Court hereby (i) discharges the Debtors from all Claims and other debts that arose before the Confirmation Date and all debts of 30 the kind specified in sections 502(g), 502(h), or 502(f) of the Bankruptcy Code, whether or not (A) a Claim based on such debt is allowed pursuant to section 502 of the Bankruptcy Code or (B) the Holder of a Claim based on such debt has accepted the Plan; and (ii) terminates all Interests and other rights of equity security holders in the Debtors. As of the Confirmation Date, except for the Pass-Through Claims and Interests or as provided in this Confirmation Order, all Persons and Entities shall be precluded from asserting against the Debtors, the Reorganized Debtors, their successors or their property, any other or further claims, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction, or other activity of any nature that occurred prior to the Confirmation Date. In accordance with the foregoing, except as otherwise provided in this Confirmation Order, this Confirmation Order constitutes a judicial determination of discharge of all such Claims and other debts and liabilities and rights of equity security holders in the Debtors, pursuant to sections 534 and 1141 of the Bankruptcy Code, and such discharge shall void any judgement obtained against the Debtors at any time to the extent that such judgement related to a discharged Claim or Interest, provided however that Pass-Through Claims or Interests, and any judgement obtained pursuant to such Pass-Through Claims or Interests, shall not be discharged pursuant to sections 524 or 1141 of the Bankruptcy Code. G. Substantial Consummation The substantial consummation of the Plan, within the meaning of section 1127 of the Bankruptcy Code, shall be, and hereby is, deemed to have occurred on the Effective Date. H. Order Effective Upon Entry This Confirmation Order shall be effective and enforceable upon entry, and shall not be stayed, under Bankruptcy Rule 3020(e) or otherwise, unless otherwise expressly ordered by this Court. 31 I. Nonoccurrence of Effective Date In the event that the Effective Date does not occur, then (i) the Plan, (ii) assumption or rejection of executory contracts or unexpired leases pursuant to the Plan, (iii) any document or agreement executed pursuant to the Plan, and (iv) any actions, releases, waivers, or injunctions authorized by this Confirmation Order or any order in aid of consummation of the Plan shall be deemed null and void. In such event, nothing contained in this Confirmation Order, any order in aid of consummation of the Plan, or the Plan, and no acts taken in preparation for consummation of the Plan, (a) shall be deemed to constitute a waiver or release of any Claims or Equity Interests by or against the Debtors or any other persons or entities, to prejudice in any manner the rights of the Debtors or any person or entity in any further proceedings involving the Debtors or otherwise, or to constitute an admission of any sort by the Debtors or any other persons or entities as to any issue, or (b) shall be construed as a finding of fact or conclusion of law in respect thereof. J. Nonseverability The provisions of this Confirmation Order are nonseverable and mutually dependent. K. Section 1145 Exemption The exemption under section 1145 of the Bankruptcy Code shall apply to the New Subordinated Notes, New ACP Common Stock, Rights, Second Secured Notes and Warrants except to the extent that any Holders of such Plan Securities are "underwriters" as that term is defined in section 1145 of the Bankruptcy Code. 32 L. Post-Confirmation Notices And Reports. 1. Notice of Entry of Effective Date. The Debtors shall be, and hereby are, directed to serve a Notice of Plan Effective Date substantially in the form attached hereto as Exhibit A on (i) the Indenture trustee for the Existing Subordinated Notes; (ii) the Holders of Existing Credit Facility Claims; (iii) the Holders of PIK Note Claims; (iv) the Holders of ACP Note Claims; (v) the Holders of NFC Note Claims; (vi) the Holders of ACP Equity Interests; (vii) the Internal Revenue Service; (viii) the Securities and Exchange Commission; (ix) the taxing authorities in any jurisdiction where the Debtors transact business; and (x) all parties having requested papers pursuant to Bankruptcy Rule 2002; within three business days of the Effective Date. No other or further notice regarding Confirmation or the Effective Date shall be required. 2. Fee Applications. All applications for final allowances of compensation and reimbursement of expenses pursuant to sections 330 and 503(b) of the Bankruptcy Code in connection with the Chapter 11 Cases for the period from the Filing Date through and including the Confirmation date shall be filed with this Court and served upon (i) Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., counsel to the Debtors, 919 North Market Street, 16th Floor, P.O. Box 8705, Wilmington, DE 19899-8705, Attn: Laura Davis Jones, Esq.; (ii) Kirkland & Ellis LLP, counsel to the Debtors, 200 East Randolph Drive, Chicago, IL 60601, Attn: James W. Kapp III, Esq.; (iii) the Office of the United States Trustee, 844 North King Street, Wilmington, DE, 19801, Attn: David Buchbinder, Esq.; (iv) Weil, Gotshal & Manges LLP, counsel to the Ad Hoc Committee of Bondholders, 767 Fifth Avenue, New York, NY 10153, Attn: Eric L. Schondorf, Esq. and Michael F. Walsh, Esq.; (v) Richards Layton & Finger, counsel to the Ad Hoc Committee of Bondholders, One Rodney Square, P.O. Box 551, Wilmington, DE 19899-0551, 33 Attn: Mark D. Collins, Esq.; (vi) Morgan, Lewis & Bockius LLP, counsel to the Lenders, 101 Park Avenue, New York, NY 10178-0060, Attn: Kristin C. Wigness, Esq.; and (vii) Klett Rooney Lieber & Schorfing, counsel to the Lenders, 1000 West Street, Suite 1410, P.O. Box 1397, Wilmington, DE, 19899-1397, Attn: Teresa K.D. Currier, Esq. (collectively, the "Notice Parties"), by no later than 4:00 p.m., prevailing Eastern Time, on October 27, 2003. Objections, if any, to such final applications shall be filed with this Court and served upon the parties to whom such objection is directed and the Notice Parties, by no later than 4:00 p.m., prevailing Eastern Time, on or before twenty (20) days from the filing and service of the final fee application. A hearing on all such final applications shall be held on November 25, 2003 at 3:00 p.m. prevailing Eastern Time. 34 IT IS SO ORDERED. Wilmington, Delaware Dated: September 25, 2003 /s/ Peter J. Walsh ------------------------------ Peter J. Walsh United States Bankruptcy Judge 35 EXHIBIT A EXHIBIT A IN THE UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: ) Chapter 11 ) ACP Holding Company, et al.,(1) ) Case No. 03-12414 (PJW) ) (Jointly Administered) Debtors. ) NOTICE OF PLAN EFFECTIVE DATE ____________, 2003 The above-captioned debtors and debtors-in-possession (the "Debtors") hereby submit this Notice of Plan Effective Date (the "Notice"). 1. On August 5, 2003 (the "Petition Date"), the Debtors commenced this action by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors continue to operate their businesses and have continued in possession of their property pursuant to ss. 1107(a) and 1108 of the Bankruptcy Code. 2. No trustee or examiner has been appointed in any of these cases. 3. On September __, 2003, this Court entered its Order Confirming Amended Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., ____________________ (1) The Debtors consist of the following entities: ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company, Cast Alloys, Inc., Neenah Transport, Inc., Advanced Cast Products, Inc., Gregg Industries, Inc., Mercer Forge Corporation, Doster Foundry, Inc., Dalton Corporation, Belcher Corporation, Peerless Corporation, A&M Specialties, Inc., Dalton Corporation, Warsaw Manufacturing Facility, Dalton Corporation, Ashland Manufacturing Facility, Dalton Corporation, Kendallville Manufacturing Facility, Dalton Corporation, Stryker Machining Facility. Neenah Foundry Company and Certain of its Subsidiaries Under Chapter 11 of the Bankruptcy Code (Docket No. _______) (the "Plan"). NOTICE 4. The Debtors hereby notify all creditors and parties in interest that ____________, 2003 shall be the Effective Date for the Debtors' Plan. Dated: __________, 2003 KIRKLAND & ELLIS LLP James H.M. Sprayrogon, P.C. James W. Kapp III 200 East Randolph Drive Chicago, IL 60601 Telephone: (312) 861-2000 Facsimile: (312) 861-2200 and PACHULSKI, STANG, ZIEHL, YOUNG, JONES & WEINTRAUB P.C. ---------------------------------------- Laura Davis Jones (Bar No. 2436) James E. O'Neill (Bar No. 4042) Rachel Lowy Werkheiser (Bar No. 3753) 919 North Market Street, 16th Floor P.O. Box 8705 Wilmington, DE 19899-8705 (Courier 19801) Telephone: (302) 652-4100 Facsimile: (302) 652-4400 Co-Counsel to the Debtors and Debtors in Possession 2 EX-3.2 4 y92210a1exv3w2.txt AMENDED AND RESTATED CERTIFICATE OF INCORPORATION Exhibit 3.2 PAGE 1 DELAWARE The First State I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF "ADVANCED CAST PRODUCTS, INC.", FILED IN THIS OFFICE ON THE EIGHTH DAY OF OCTOBER, A.D. 2003, AT 4:24 O'CLOCK P.M. A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS. [SECRETARY'S OFFICE SEAL] -s- Harriet Smith Windsor ------------------------------------ Harriet Smith Windsor, Secretary of State 2202982 8100 AUTHENTICATION: 2680188 030648896 DATE: 10-08-03 State of Delaware Secretary of State Division of Corporations Delivered 04:24 PM 10/08/2003 FILED 04:24 PM 10/08/2003 SRV 030648896 - 2202982 FILE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ADVANCED CAST PRODUCTS, INC. (Under Section 303 of the General Corporation Law of the State of Delaware) The undersigned, being a duly elected officer of Advanced Cast Products, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows: 1. That the Corporation filed its original Certificate of Incorporation with the Delaware Secretary of State on July 24,1989 (the "Certificate"). 2. That the Corporation filed a voluntary petition under chapter 11 of title 11 of the United States Code, as amended with the Bankruptcy Court of Delaware on August 5, 2003, and that this Certificate is being filed pursuant to Section 303 of the General Corporation Law of the State of Delaware and shall become effective pursuant to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries filed with the Delaware Bankruptcy Court on August 5, 2003, and amended on September 17,2003, without further action by the board of directors or shareholders of the Corporation pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. The Corporation's Certificate is restated in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the "Restated Certificate"). IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Certificate of Incorporation of the Corporation pursuant to the General Corporation Law of the State of Delaware, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate of Restated Certificate of Incorporation this 8th day of October, 2003. By: /s/ Gary W. LaChey ---------------------- Gary W. LaChey Chief Financial Officer, Vice President - Finance, Treasurer and Secretary EXHIBIT A AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ADVANCED CAST PRODUCTS, INC. ARTICLE ONE The name of the corporation is Advanced Cast Products, Inc. (hereinafter called the "Corporation"). ARTICLE TWO The address of the Corporation's registered office in the state of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The name of its registered agent at such address is Corporation Service Company. ARTICLE THREE The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE FOUR The total number of shares which the Corporation shall have the authority to issue is One Hundred (100) shares, all of which shall be shares of Common Stock, no par value per share. ARTICLE FIVE The Corporation is to have perpetual existence. ARTICLE SIX The directors shall have the power to adopt, amend or repeal By-Laws, except as may be otherwise be provided in the By-Laws. ARTICLE SEVEN The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware. ARTICLE EIGHT To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE EIGHT shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE NINE The Corporation shall not issue nonvoting equity securities. ARTICLE TEN The Corporation reserves the right to amend or repeal any provisions contained in this Certificate of Incorporation from time to time and at any time in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights conferred upon stockholders and directors are granted subject to such reservation. * * * * 2 EX-3.3 5 y92210a1exv3w3.txt AMENDED AND RESTATED ARTICLES OF INCORPORATION Exhibit 3.3 ARTICLES OF INCORPORATION OF DALTON MALLEABLE CASTINGS COMPANY. We the undersigned subscribers by virtue of and pursuant to the manufacturing and mining laws of the State of Indiana and the several amendments thereof, have and do hereby associate ourselves together to form and thereafter by our successors, associates and assigns to be and perform the duties of a corporation and to that end we have made and acknowledged the following written articles of incorporation: ARTICLE 1. The names and addresses of the incorporators are as follows: Donald J. Walton, Warsaw, Indiana, Theodore C. Frazer, Warsaw, Indiana, William D. Frazer, Warsaw, Indiana, Jessie S. Dalton, Warsaw, Indiana and J. Edward Headley, Warsaw, Indiana. ARTICLE II. The name of this corporation shall be DALTON MALLEABLE CASTINGS COMPANY. ARTICLE III. The business to be done by this corporation shall consist of producing, manufacturing, buying and selling any kind of metal, wood or other material or combinations of material, any and all kinds of castings, implements, tools, fixtures, machinery and other articles of commerce ordinarily made in a foundry, machine shop or factory producing engineering and hardware specialities, tools and automobile accessories. ARTICLE IV. The amount of the capital stock of this corporation shall be three hundred fifty thousand dollars ($350,000.00) which shall be divided into three thousand five hundred (3500)shares of one hundred dollars ($100.00) each of which two thousand five hundred (2500) shares shall be designated as common stock and the remaining one thousand (1000) shares shall be designated as preferred stock and shall be issued at such times and in such amounts and shall bear such rate of dividends and be redeemable at such times as the Board of Directors may by resolution from time to time prescribe. The price per share at which the common stock is to be sold is one hundred dollars ($100.00) per share, and the price at which two hundred fifty shares of the preferred stock are to be sold is ninety-five dollars ($95.00) per share and the remaining shares of said preferred stock are to be sold at par value. ARTICLE V. The principal office and place of business of this corporation shall be located in Kosciusko County, Indiana and the post office address shall be Warsaw, Indiana. ARTICLE VI. The number of directors of this corporation shall be five (5) and the names of the directors who shall manage its affairs until its first annual meeting are as follows: Donald J. Dalton, Theodore C. Frazer, William D. Frazer, Jessie S. Dalton and J. Edward Headley. ARTICLE VII. The term of existence of this corporation shall be fifty (50) years. ARTICLE VIII. The annual meeting of the stockholders of this corporation shall be held at the principal office or place of business at Warsaw, Kosciusko County, Indiana on the 4th Monday of the month of July, 1923 at the hour of 1:30 o'clock P.M. ARTICLE IX. The seal of this corporation shall be a plain circular disk having engraved thereon near the outer edge the words "DALTON MALLEABLE CASTINGS COMPANY" and the word "SEAL" across the center of said disk. IN WITNESS WHEREOF, we the undersigned subscribers and incorporators have hereunto this 21st day of February, 1923 set our hands and seals. /s/ Donald J. Dalton (SEAL) /s/ William D. Frazer (SEAL) - -------------------- (SEAL) /s/ Jessie S. Dalton (SEAL) /s/ Theodore C. Frazer /s/ J. Edward Headley (SEAL) State of Indiana, Kosciusko County, ss: Before me, the undersigned, a Notary Public in and for said County and state this 21st day of February, 1923, personally appeared Donald J. Dalton, Theodore C. Frazer, William D. Frazer, Jessie S. Dalton and J. Edward Headley and each acknowledged the execution in triplicate the foregoing articles of incorporation of the Dalton Malleable Castings Company, as their free act and deed. Witness my hand and notarial seal. /s/ Georgia Easterday ------------------------------------ Notary Public My Commission Expires September 22, 1924 STATE OF INDIANA, ) ) SS: AFFIDAVIT FOR CHANGE OF NAME. KOSCIUSKO COUNTY. ) Donald J. Dalton and Theodore C. Frazer, respectively President and Secretary of The Dalton Foundries, Inc., certify and upon their oath swear that pursuant to a resolution unanimously adopted by the stockholders and directors of the Dalton Malleable Castings Company, providing for the change of the corporate name from the Dalton Malleable Castings Company to The Dalton Foundries, Inc., a petition was filed in the Kosciusko Circuit Court on the 3rd day of September, 1924, for change of the corporate name, and notice of the filing of the petition for change of the corporate name was published in the Warsaw Daily Times, a newspaper of general circulation, on September 4th, September 11th and September 18th, 1924, and that in accordance with said petition and notice, a decree was rendered in the Kosciusko Circuit Court on said petition, which decree is as follows, to-wit: "Comes now the Dalton Malleable Castings Company, a corporation organized under the laws of the State of Indiana, and presents its petition for change of the name of said corporation to The Dalton Foundries, Incorporated. And it appearing to the Court that notice of said application had been given by three weekly publications in the Warsaw Daily Times, a newspaper of general circulation, printed and published at Warsaw, in the County of Kosciusko, the last of which publications was made more than thirty days before the day set for hearing on said petition, and that good reason exists for changing the name of said corporation, as prayed for in said petition. It is, therefore, ordered and decreed by the Court that the name of said corporation be, and it hereby is, changed to The Dalton Foundries, Incorporated. It is further ordered that the petition pay the costs of this proceeding." /s/ Donald J. Dalton ------------------------------------ /s/ Theodore C. Frazer ------------------------------------ Subscribed and sworn to before me this 24th day of November, 1924. My Commission expires /s/ Gertrude Norris ------------------------------ Pleas and proceedings before the Honorable Lemuel W. Royse, Judge of the 54th Judicial Circuit Court of the State of Indiana and Ex-officio Judge of the Kosciusko Circuit Court at a regular term of said court begun, held and continued in the Court House in the City of Warsaw, commencing on Monday, September l, 1924. Be it remembered that on the 19th day of November,1924, the following proceedings were had to wit: Petition of the Dalton Malleable ) Casting Company to change its ) NO. 16077 name. ) Comes now the Dalton Malleable Casting Company, a corporation organized under the laws of the State of Indiana, and presents its petition for a change of the name of said corporation to The Dalton Foundries, Incorporated. And it appearing to the Court that notice of said application has been given by three weekly publications in the Warsaw Daily Times, a newspaper of general circulation, printed and published at Warsaw, in the County of Kosciusko, the last of which was made more than thirty days before the day set for hearing on said petition, and that good reason exists for changing the name of said corporation, as prayed for in said petition. It is, therefore, ordered and decreed by the court that the name of said Corporation be, and it is hereby changed to The Dalton Foundries, Incorporated. It is further ordered that the petitioner pay the costs of this proceeding. State of Indiana, Kosciusko County, SS: I, Russell H. Butler, Clerk of the Kosciusko Circuit Court within and for the county and State aforesaid, do hereby certify the above to be a full, true and complete copy of the original decree entered in said cause as the same appears of record in Orcer Book 75 at page 415 thereof, the same being the records of the Kosciusko Circuit Court of which I am the legal custodian. Witness my hand and the seal of said court at Warsaw, Indiana this 6th day of December, 1924. /s/ Russell A. Butler, Clerk ---------------------------- Kosciusko Circuit Court. STATE OF INDIANA, ) ) SS: KOSCIUSKO COUNTY. ) Donald J. Dalton and Theodore C. Frazer, being duly sworn upon their oath depose and say that they are respectively President and Secretary of the Board of Directors of the Dalton Malleable Castings Company, at Warsaw, Kosciusko County, Indiana, and that a special meeting of the Stockholders of the Dalton Malleable Castings Company was held at the office of the Company at Warsaw, Indiana, at two o'clock, P.M., on the 12th day of December, 1923, pursuant to notice that all of the holders of the common stock of the corporation were present, and executed waiver of notice of said meeting, and on motion duly made and seconded, the following resolution was unanimously carried and adopted: "Whereas, the volume of business of the Dalton Malleable Castings Company has since its organization been steadily increasing each month, and, Whereas , the prospects for the further increase in the volume of business for this company appears to be imminent, and, Whereas, the facilities, equipment, and building of said Dalton Malleable Castings Company are insufficient to manufacture sufficient goods to execute and fill all orders on its books and in prospect, and, Whereas, it is considered desirable to increase the facilities of the Dalton Malleable Castings Company for taking care of the volume of business that is offered to it by its patrons, and, Whereas, it is deemed expedient and desirable for the Dalton Malleable Castings Company to also manufacture gray iron castings, and produce metal novelties and specialties which it is not producing at the present time, and, Whereas, there is not sufficient funds in the Treasury of the Dalton Malleable Castings Company to facilitate increasing its equipment and buildings for producing additional malleable iron castings, gray iron castings and metal specialties, and, Whereas, it does not have sufficient unissued common stock to provide funds to increase its business as proposed, Therefore, be it resolved: That the common stock of the Dalton Malleable Castings Company be increased from Two Hundred Fifty Thousand Dollars ($250,000.00) to Three Hundred Fifty Thousand Dollars ($350,000.00), and that the President and Secretary of this corporation be authorized and directed to take such steps as may be necessary to comply with the Statutes of the State of Indiana, for the increase of said capital stock." that following the meeting of said stockholders, a meeting of the Board of Directors of said corporation was held at the office of the Company, at Warsaw, Kosciusko County, Indiana, at 3:30 o'clock P.M., and all of the Directors of the Board of Directors were present, and each signed a waiver of the notice of said meeting; that said Directors were informed by the President of the corporation of the resolution that had been passed at the stockholders meeting, and upon motion duly made and seconded, the following resolution was unanimously carried and adopted: "Whereas, the volume of business of the Dalton Malleable Castings Company has since its organization been steadily increasing each month, and, Whereas , the prospects for the further increase in the volume of business for this company appears to be imminent, and, Whereas, the facilities, equipment, and building of said Dalton Malleable Castings Company are insufficient to manufacture sufficient goods to execute and fill all orders on its books and in prospect, and, Whereas, it is considered desirable to increase the facilities of the Dalton Malleable Castings Company for taking care of the volume of business that is offered to it by its patrons, and, Whereas, it is deemed expedient and desirable for the Dalton Malleable Castings Company to also manufacture gray iron castings, and produce metal novelties and specialties which it is not producing at the present time, and, Whereas, there is not sufficient funds in the Treasury of the Dalton Malleable Castings Company to facilitate increasing its equipment and buildings for producing additional malleable iron castings, gray iron castings and metal specialties, and, Whereas, it does not have sufficient unissued common stock to provide funds to increase its business as proposed, Therefore, be it resolved: That the common stock of the Dalton Malleable Castings Company be increased from Two Hundred Fifty Thousand Dollars, ($250,000.00) to Three Hundred Fifty Thousand Dollars, ($350,000.00) and that the President and Secretary of this corporation be authorized and directed to take such steps as may be necessary to comply with the Statutes of the State of Indiana, for the increase of said capital stock." /s/ Donald J. Dalton ------------------------------------ /s/ Theodore C. Frazer ------------------------------------ Subscribed and sworn to before me this 22nd day of December, 1923. /s/ Georgia Easterday ------------------------------------ Notary Public My Commission expires Sept. 22, 1924 STATE OF INDIANA DEPARTMENT OF STATE FRANK A. LENNING, Secretary of State ----------- To All To Whom These Presents Shall Come, Greeting: ----------- Frank A. Lenning, Secretary of State of the State of Indiana, hereby certify that the THE DALTON FOUNDRIES, INCORPORATED a corporation duly organized and existing under the laws of the State of Indiana, has this day filed in the office of the Secretary of State, a certificate in duplicate, showing an amendment to the articles of incorporation of said company. AMENDING ARTICLE IV: THE TOTAL NUMBER OF SHARES INTO WHICH THE AUTHORIZED CAPITAL STOCK OF THE CORPORATION IS DIVIDED IS 175,000 SHARES CONSISTING OF 175,000 SHARES WITH PAR VALUE OF TWO DOLLARS ($2) PER SHARE AND NO SHARES WITHOUT PAR VALUE AND ALL OR PART OF THE SHARES HEREAFTER SOLD BY THIS CORPORATION MAY BE SUBJECTED TO SUCH RESTRAINTS ON THE ALIENATION OF SUCH SHARES AS SHALL BE DETERMINED BY THE BOARD OF DIRECTORS. ALSO AMENDING ARTICLE VI. And I further certify that said certificate is now of record and on file in this office. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, the 30th day of August, 19__. --------------------------------------- FRANK A. LENNING, Secretary of State By ------------------------------------- , Deputy "ARTICLE VI Section 1. The number of the directors of this corporation shall be seven (7). Section 2. Directors need not be shareholders of the corporation. A majority of the directors at any time shall be citizens of the United States." SUBDIVISION B MANNER OF ADOPTION AND VOTE 1. ACTION BY DIRECTORS The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on July 22, 1957, at which a quorum of such Board of Directors was present, duly adopted a resolution proposing to the Shareholders of the Corporation entitled to vote in respect of The Amendments that the provisions and terms of Articles IV and VI of its Articles of Incorporation be amended so as to read as set forth in The Amendments; and called a meeting of such Shareholders, to be held August 21, 1957, to adopt or reject The Amendments. 2. ACTION BY SHAREHOLDERS The Shareholders of the Corporation entitled to vote in respect of The Amendments, at a meeting thereof, duly called, constituted and held on August 21, 1957, at which 2525 shares out of a total 2535 outstanding shares were present in person or by proxy, adopted The Amendments. The number of shares entitled to vote in respect of The Amendments, the number of shares voted in favor of the adoption of The Amendments, and the number of shares voted against such adoption are as follows: Total entitled to vote was 2525, of which 2525 voted in favor of the adoption of the Amendment and no shares voted against. 3. COMPLIANCE WITH LEGAL REQUIREMENTS The manner of the adoption of The Amendments, and the vote by which they were adopted, constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. SUBDIVISION C STATEMENT OF CHANGES MADE WITH RESPECT TO THE SHARES HERETOFORE AUTHORIZED Number of common shares authorized increased from 3500 to 175,000 with par value reduced from $100 per shares to $2 per share, thereby maintaining the same aggregate dollar capitalization of common shares of $350,000. IN WITNESS WHEREOF, the undersigned officers execute these Articles of Amendment of the Articles of Incorporation of the Corporation, and certify to the truth of the facts herein stated, this -26 day of August, 1957. /s/ Charles H. Ker ---------------------------------- (Written Signature) Charles H. Ker ---------------------------------- (Printed Signature) The Dalton Foundries, Incorporated ---------------------------------- (Name of Corporation) /s/ A.D. Bruce ---------------------------------- (Written Signature) /s/ A.D. Bruce ---------------------------------- (Printed Signature) The Dalton Foundries, Incorporated ---------------------------------- (Name of Corporation) STATE OF INDIANA ) ) SS: COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that Charles H. Ker, the President, and A.D. Bruce, the Secretary of The Dalton Foundries, Incorporated, the officers executing the foregoing Articles of Amendment of Articles of Incorporation, personally appeared before me; acknowledged the execution thereof; and swore to the truth of the facts therein stated. WITNESS my hand and Notarial Seal this 26th day of August, 1957. /s/ Jesse E. Eschbach ---------------------------------- (Written Signature) Jesse E. Eschbach ---------------------------------- (Printed Signature) Notary Public My commission expires September 22, 1957 IN WITNESS WHEREOF, the undersigned officers execute these Articles of Amendment of the Articles of Incorporation of the Corporation, and certify to the truth of the facts herein stated, this _________ day of May, 1968. /s/ E.E. Paul ---------------------------------- (Written Signature) E.E. Paul ---------------------------------- (Printed Signature) The Dalton Foundries, Incorporated ---------------------------------- (Name of Corporation) /s/ Robert L. Rasor ---------------------------------- (Written Signature) /s/ Robert L. Rasor ---------------------------------- (Printed Signature) The Dalton Foundries, Incorporated ---------------------------------- (Name of Corporation) STATE OF INDIANA ) ) SS: COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that E.E. Paul, the President, and Robert L. Rasor, the Secretary of The Dalton Foundries, Incorporated, the officers executing the foregoing Articles of Amendment of Articles of Incorporation, personally appeared before me; acknowledged the execution thereof; and swore to the truth of the facts therein stated. WITNESS my hand and Notarial Seal this 15th day of May, 1968. /s/ John J. Bruner ---------------------------------- (Written Signature) John J. Bruner ---------------------------------- (Printed Signature) Notary Public My commission expires September 29, 1972 This instrument was prepared by Robert L. Rasor. STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE FRANK A. LENNING, Secretary of State To Whom These Presents Come, Greeting: Whereas, there has been presented to me at this office Articles of Acceptance in triplicate of THE DALTON FOUNDRIES, INCORPORATED under the reorganized corporate name of THE DALTON FOUNDRIES, INCORPORATED showing capital stock as follows: THE TOTAL NUMBER OF SHARES INTO WHICH THE AUTHORIZED CAPITAL STOCK OF THE CORPORATION IS DIVIDED IS 175,000 SHARES CONSISTING OF 175,000 SHARES WITH PAR VALUE OF TWO DOLLARS ($2) PER SHARE AND NO SHARES WITHOUT PAR VALUE AND ALL OR PART OF THE SHARES HEREAFTER SOLD BY THIS CORPORATION MAY BE SUBJECTED TO SUCH RESTRAINTS ON THE ALIENATION OF SUCH SHARES AS SHALL BE DETERMINED BY THE BOARD OF DIRECTORS. Said Articles of Acceptance having been prepared and signed in accordance with "An Act concerning domestic and foreign corporations for profit, providing penalties for the violation hereof, and repealing all laws or parts of laws in conflict herewith," approved March 16, 1929, and Acts supplemented thereto. Whereas, upon due examination, I find that they conform to law: Now, therefore, I hereby certify that I have this day endorsed my approval upon the triplicate copies of Articles so presented, and having received the fees required by law, in the sum of $13.00 have filed one copy of the Articles in this office and returned two copies bearing the endorsement of my approval to the Corporation. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, the 13th day of February , 1958. ---------------- ---------------------------------------------- FRANK A. LENNING, Secretary of State By -------------------------------------------- , Deputy ARTICLES OF ACCEPTANCE OF THE DALTON FOUNDRIES, INCORPORATED The undersigned officers of The Dalton Foundries, Incorporated (hereinafter referred to as the "Corporation"), desiring to give notice of corporate action effectuating acceptance by the Corporation of the provisions of The Indiana General Corporation Act, as amended (hereinafter referred to as the" Act"), certify the following facts: SUBDIVISION A NAME The name of the Corporation is The Dalton Foundries, Incorporated. SUBDIVISION B PRINCIPAL OFFICE AND RESIDENT AGENT The post-office address of the principal office of the Corporation is corner of Lincoln and Jefferson Streets in the City of Warsaw, Indiana, and the name and post-office address of its Resident Agent in charge of such office are Charles H. Ker, 1202 E. Main Street, Warsaw, Indiana. SUBDIVISION C DATE OF INCORPORATION The date of the incorporation of the Corporation is February 27, 1923. SUBDIVISION D STATUTE UNDER WHICH ORGANIZED The Statute, under which the Corporation was organized, is Indiana Manufacturing and Mining Companies Act, 1 Revised Statutes of 1852 p 358, approved by the General Assembly of the State of Indiana effective May 3,1853, and various statutes amendatory thereof and supplementary thereto. SUBDIVISION E ACCEPTANCE OF ACT The Corporation hereby accepts all of the terms and provisions of the Act. SUBDIVISION F RESTATEMENT OF ARTICLES The Corporation hereby restates the provisions of its Articles of Incorporation as follows: ARTICLE I The names and addresses of the incorporators were as follows: Donald J. Dalton, Warsaw, Indiana; Theodore C. Frazer, Warsaw, Indiana; William D. Frazer, Warsaw, Indiana; Jessie S. Dalton, Warsaw, Indiana; and J. Edward Headly, Warsaw, Indiana. At the time of the incorporation of the corporation all of the incorporators were citizens of the United States. ARTICLE II Name The name of the corporation is The Dalton Foundries, Incorporated. ARTICLE III Purposes In furtherance and not in limitation of the powers conferred by law to engage in the production, manufacture, purchase and sale of any kind of article made of metal, wood or other material or combination of materials and to engage in and conduct the business of casting, manufacturing, machining and dealing in goods, wares and merchandise of every class and description and in furtherance of the purposes hereinbefore set out to do the same either alone or in association with other corporations, firms, partnerships or individuals including the right to be a partner in a general or limited partnership and to do every other act or acts and things necessary, convenient or expedient in carrying out the above purposes; provided that nothing herein contained shall be construed so as to authorize this corporation-to sell life insurance. ARTICLE IV Amount of Capital Stock The total-number of shares into which the authorized capital stock of the corporation is divided is 175,000 shares consisting of 175,000 shares with par value of Two dollars ($2) per share and no shares without par value and all or part of the shares hereafter sold by this corporation may be subjected to such restraints on the alienation of such shares as shall be determined by the Board of Directors. ARTICLE V Principal Office and Resident Agent The post office address of the principal office of the corporation is corner of Lincoln and Jefferson Streets, Warsaw, Indiana; and the name and post office address of its Resident Agent in charge of such office is Charles H. Ker, 1202 E. Main Street; Warsaw, Indiana. ARTICLE VI Data Respecting Directors Section 1. The number of the directors of this corporation shall be seven (7). Section 2. Directors need not be shareholders of the corporation. A majority of the directors at any time shall be citizens of the United States. ARTICLE VII Term of Existence The period during which the corporation shall continue is perpetual. ARTICLE VIII The annual meeting of the shareholders of this corporation shall be held at the time and place as may be specified from time to time in the By-Laws of this corporation. ARTICLE IX The seal of this corporation shall be designated by the By-Laws of this corporation. ARTICLE X The Board of Directors of this corporation shall have full power to adopt a code of By-Laws for the regulation of the conduct of the affairs of this corporation not inconsistent with the provisions of these Articles and from time to time revoke, amend, repeal or otherwise alter such By-Laws in whole or in part without reference to the shareholders of the corporation. SUBDIVISION G MANNER OF ADOPTION AND VOTE 1. Action by Directors The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on January 31, 1958, at which a quorum of such Board of Directors was present, duly adopted a resolution proposing to the Shareholders of the Corporation entitled to vote in respect thereof that the Articles of Acceptance of the Act, set forth in the foregoing subdivisions A to F, both inclusive, be adopted; and called a meeting of such Shareholders, to be held January 31, 1958, to adopt or reject such Articles of Acceptance. 2. Action. by Shareholders The Shareholders of the Corporation entitled to vote in respect of such Articles of Acceptance, at a meeting thereof, duly called, constituted and held on January 31,1958, at which One hundred twenty-six thousand seven hundred fifty (126,750) shares were present in person or by proxy, adopted such Articles of Acceptance. The number of shares entitled to vote in respect of such Articles of Acceptance, the number of shares voted in favor of the adoption of such Articles of Acceptance, and the number of shares voted against such adoption, are as follows: One hundred twenty-six thousand seven hundred fifty (126,750) shares were entitled to vote; 126,750 voted in favor of the adoption of such Articles and no shares voted against such adoption. 3. Compliance with Legal Requirements The manner of the adoption of such Articles of Acceptance, and the vote by which they were adopted, constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. SUBDIVISION H STATEMENT OF CHANGES MADE WITH RESPECT TO THE SHARES HERETOFORE AUTHORIZED No changes are made with respect to shares heretofore authorized. IN WITNESS WHEREOF, the undersigned officers execute these Articles of Acceptance, and certify to the truth of the facts herein stated, this 31st day of January, 1958. /s/ Charles H. Ker ----------------------------------- (Written Signature) Charles H. Ker ----------------------------------- (Printed Signature) The Dalton Foundries, Incorporated ----------------------------------- (Name of Corporation) /s/ R.M. McDowell ----------------------------------- (Written Signature) R.M. McDowell ----------------------------------- (Printed Signature) The Dalton Foundries, Incorporated ----------------------------------- (Name of Corporation) STATE OF INDIANA ) ) SS: COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that Charles H. Ker, the President, and R.M. McDowell, the Assistant Secretary, of The Dalton Foundries, Incorporated, the officers executing the foregoing Articles of Amendment of Articles of Incorporation, personally appeared before me; acknowledged the execution thereof; and swore to the truth of the facts therein stated. WITNESS my hand and Notarial Seal this 31st day of January, 1958. /s/ Jesse H. Eschbach ----------------------------------- (Written Signature) Jesse H. Eschbach ----------------------------------- (Printed Signature) Notary Public My commission expires September 22, 1961 ARTICLES OF AMENDMENT (Amending Individual Articles Only) Prescribed by the Secretary of State of Indiana Filing Requirements -- Present 3 Executed Copies to Secretary of State Recording Requirements -- Before Exercising any Authority under Amendment, Record 1 of such 3 Executed Copies, as Approved and Returned by Secretary of State, with Recorder of County where Principal Office is Located. ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INCORPORATED The undersigned officers of The Dalton Foundries, Incorporated (hereinafter referred to as the "Corporation"), existing pursuant to the provisions of The 1921 Indiana Corporation Act, as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating amendment of certain individual Articles of Incorporation, certify the following facts: SUBDIVISION A THE AMENDMENTS The exact text of Articles IV and VI of the Articles of Incorporation of the Corporation, as amended (hereinafter referred to as "The Amendments"), now is as follows: "ARTICLE IV The total number of shares into which the authorized capital stock of the corporation is divided is 175,000 shares consisting of 175,000 shares with par value of Two dollars ($2) per share and no shares without par value and all or part of the shares hereafter sold by this corporation may be subjected to such restraints on the alienation of such shares as shall be determined by the Board of Directors." STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE INDIANAPOLIS, INDIANA To Whom These Presents Come, Greeting: Whereas, there has been presented to me at this office Articles of Amendment in triplicate of THE DALTON FOUNDRIES, INCORPORATED THE AMENDMENTS The exact text of Article XI Said Articles of Acceptance having been prepared and signed in accordance with "An Act concerning domestic and foreign corporations for profit, providing penalties for the violation hereof, and repealing all laws or parts of laws in conflict herewith," approved March 16, 1929, and Acts supplemented thereto. Whereas, upon due examination, I find that they conform to law: Now, therefore, I hereby certify that I have this day endorsed my approval upon the triplicate copies of Articles so presented, and having received the fees required by law, in the sum of $13.00 have filed one copy of the Articles in this office and returned two copies bearing the endorsement of my approval to the Corporation. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 17th day of May , 1968. --------- ----------------------------------------------- Secretary of State By -------------------------------------------- , Deputy ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES INCORPORATED The undersigned officers of The Dalton Foundries, Incorporated (hereinafter referred to as the "Corporation"), existing pursuant to the provisions of The Indiana General Corporation Act, as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating amendment of certain individual Articles of its Articles of Incorporation, certify the following facts: SUBDIVISION A THE AMENDMENTS The exact text of Article XI of the Articles of Incorporation of the Corporation, as amended (hereinafter referred to as "The Amendments"), now is as follows: ARTICLE XI Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if prior to such action a written consent thereto is signed by all members of the Board or . committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or committee. SUBDIVISION B MANNER OF ADOPTION AND VOTE 1. Action by Directors The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on October 30, 1967, at which a quorum of such Board of Directors was present, duly adopted a resolution proposing to the Shareholders of the Corporation entitled to vote in respect of The Amendments that the provisions and terms of Article XI of its Articles of Incorporation be amended so as to read as set forth in The Amendments; and called a meeting of such Shareholders, to be held March 15, 1968, to adopt or reject The Amendments. 2. Action by Shareholders The Shareholders of the Corporation entitled to vote in respect of The Amendments, at a meeting thereof, duly called, constituted and held on March 15,1968, at which 117,653 shares were present in person or by proxy, adopted The Amendments. The number of shares entitled to vote in respect of The Amendments, the number of shares voted in favor of the adoption of The Amendments, and the number of shares voted against such adoption are as follows: Number of shares entitled to vote 117,653 Number of shares voting for the amendments 117,653 Number of shares voting against the amendments - 0 -
3. Compliance With Legal Requirements The manner of the adoption of The Amendments, and the vote by which they were adopted, constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. SUBDIVISION C Statement of changes made with respect to the shares heretofore authorized. For Increase of capital stock: NONE 1) The number and classes of stock authorized before this amendment consists of: A) Number B) Par Value 2) This amendment provides for the increase of: A) Number of shares B) Classes of shares 3) The total authorized stock of the corporation by virtue of this amendment now consists of ______________ shares consisting of ___________shares with the par value of $__________ per share and _____________ shares without par value. For Decrease of capital stock: NONE 1) The number and classes of stock authorized before this amendment consists of: A) Number B) Par Value 2) This amendment decreases the total authorized stock to: A) Number of shares B) Classes of shares 3) The total authorized stock of the corporation now consists of _______ shares consisting of ___________ shares with the par value of $_______ per share and _________ shares without par value. 4) The manner in which the reduction shall be effected is: STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE SECRETARY OF STATE To Whom These Presents Come, Greeting: CERTIFICATE OF AMENDMENT OF THE DALTON FOUNDRIES, INCORPORATED I, LARRY A. CONRAD, Secretary of state of the State of Indiana, hereby certify that Articles of Amendment for the above Corporation, in the form prescribed by my office, prepared and signed in duplicate in accordance with "An Act concerning domestic and foreign corporations for profit, providing penalties for the violation hereof, and repealing all laws or parts of laws in conflict herewith," approved March 16, 1929, and Acts supplemental thereto. THE AMENDMENT: THE EXACT TEXT OF ARTICLE VI, SECTION I: Whereas, upon due examination, I find that-the Articles of Amendment conform to law, and have endorsed my approval upon the duplicate copies of such Articles; that all fees have been paid as required by law; that one copy of such Articles has been filed in my office; and that the remaining copy of such Articles bearing the endorsement of my approval and filing has been returned by me to the Corporation. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 18th day of May , 1972. ________________________________________________________ Secretary of State LARRY A. CONRAD By _____________________________________________________ , Deputy ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INCORPORATED The undersigned officers of The Dalton Foundries, Incorporated (hereinafter referred to as the "Corporation") existing pursuant to the provisions of the Indiana General Corporation Act, as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certify the following facts: ARTICLE I TEXT OF THE AMENDMENT The exact text of Article VI, Section 1, of the Articles of Incorporation of the Corporation, as amended (hereinafter referred to as the "Amendments"), now is as follows: Section 1. The number of directors may be fixed from time to time by the Bylaws of the corporation at any number not less than 5 nor more than 9. In the absence of a Bylaw fixing the number of directors, the number shall be 5. ARTICLE II MANNER OF ADOPTION AND VOTE Section 1. Action by Directors (select appropriate paragraph). (a) The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on January 14, 1972, at which a quorum of such Board of Directors was present, duly adopted a resolution proposing to the Shareholders of the Corporation entitled to vote in respect the Amendments that the provisions and terms of Article VI of its Articles of Incorporation be amended so as to read as set forth in the Amendments; and called a meeting of such shareholders, to be held March 17, 1972, to adopt or reject the Amendments, unless the same were so approved prior to such date by unanimous written consent. (b) By written consent executed on ______________, 19__, signed by all of the members of the Board of Directors of the Corporation, a resolution was adopted proposing to the Shareholders of the Corporation entitled to vote in respect of the Amendments, that the provisions and terms of Articles of its Articles of -Incorporation be amended so as to read as set forth in the Amendments, and a meeting of such shareholders was called to be held ____________, 19__, to adopt or reject the Amendments, unless the same were so approved prior to such date by unanimous written consent. Section 2. Action by Shareholders (select appropriate paragraph). (a) The Shareholders of the Corporation entitled to vote in respect of the Amendments, at a meeting thereof, duly called, constituted and held on March 17, 1972, at which 119,136 shares were present in person or by proxy, adopted the Amendments. The holders of the following classes of shares were entitled to vote as a class in respect of the Amendments: (1) 119,263 shares of common stock with par value of $2.00 per share (2) none (3) none The number of shares entitled to vote in respect of the Amendments, the number of shares voted in favor of the adoption of the Amendments, and the number of shares voted against such adoption are as follows:
Shares Entitled to Vote as a Class Total (as listed immediately above) ----- ----------------------------- (1) (2) (3) Shares entitled to vote: 119,263 119,263 Shares voted in favor: 119,136 119,136 Shares voted against: -0- -0-
(b) By written consent executed on _______________________, 19__, signed by the holders of ___________ shares of the Corporation, being all of the shares. of the Corporation entitled to vote in respect of the Amendments, the Shareholders adopted the Amendments. Section 3. Compliance with Legal Requirements. The manner of the adoption of the Amendments, and the vote by which they were adopted, constitute full 1egal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. ARTICLE III STATEMENT OF CHANGES MADE WITH RESPECT TO THE NUMBER OF SHARES HERETOFORE AUTHORIZED NONE IN WITNESS WHEREOF, the undersigned officers execute these Articles of Amendment of the Articles of Incorporation of the Corporation, and certify to the truth of the facts herein stated, this 15th day of May, 1972. /s/ E.E. Paul /s/ Robert L. Rasor _______________________________________ ____________________________________ (Witness Signature) (Witness Signature) E. E. Paul Robert L. Rasor _______________________________________ ____________________________________ (Printed Signature) (Printed Signature) President of Secretary of The Dalton Foundries, Incorporated The Dalton Foundries, Incorporated _______________________________________ ____________________________________ (Name of Corporation) (Name of Corporation) STATE OF INDIANA ) ) SS: COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that E.E. Paul, the President, and Robert L. Rasor, the Secretary, of The Dalton Foundries, Incorporated, the officers executing the foregoing Articles of Amendment of Articles of Incorporation, personally appeared before me; acknowledged the execution thereof; and swore to the truth of the facts therein stated. WITNESS my hand and Notarial Seal this 15th day of May, 1972. /s/ Nila Mathews _______________________________ (Written Signature) Nila Matthews _______________________________ (Printed Signature) Notary Public My commission expires February 22, 1973 This instrument was prepared by Robert Rasor, Attorney at Law, 210 N. Buffalo St. Warsaw, Indiana 46580. STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE CERTIFICATE OF AMENDMENT OF THE DALTON FOUNDRIES, INCORPORATED I, LARRY A. CONRAD, Secretary of the State of Indiana, hereby certify that Articles of Amendment for the above Corporation have been filed in the form prescribed by my office, prepared and signed in duplicate in accordance with "An Act concerning domestic and foreign corporations for profit, providing penalties for the violation hereof, and repealing all laws or parts of laws in conflict herewith," approved March 16, 1929, and Acts supplemental thereto. THE AMENDMENT THE EXACT TEXT OF ARTICLE VI SECTION 1 IS AMENDED NOW, THEREFORE, upon due examination, I find that the Articles of Amendment conform to law, and have endorsed my approval upon the duplicate copies of such Articles; that all fees have been paid as required by law; that one copy of such Articles has been filed in my office; and that the remaining copy of such Articles bearing the endorsement of my approval and filing has been returned by me to the Corporation. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 9th day of September , 1977. ________________________________________________________ LARRY A. CONRAD, Secretary of State By _____________________________________________________ , Deputy ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INCORPORATED The undersigned officers of THE DALTON FOUNDRIES, INCORPORATED (hereinafter referred to as the "Corporation") existing pursuant to the provisions of the Indiana General Corporation Act (Medical Professional Corporation Act/Dental Professional Corporation Act/Professional Corporation Act of 1965), as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certify the following facts: ARTICLE I TEXT OF THE AMENDMENT The exact text of Article VI, Section 1 of the Articles of Incorporation of the Corporation, as amended (hereinafter referred to as the "Amendments"), now is as follows: The number of directors may be fixed from time to time by the By-Laws of the Corporation at any number not less than the lesser of three or the number of shareholders of the Corporation. In the absence of a By-Law fixing the number of Directors, the number shall be four. ARTICLE II MANNER OF ADOPTION AND VOTE Section 1. Action by Directors (select appropriate paragraph). (a) The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on ______________, 19__, at which a quorum of such Board of Directors was present, duly adopted a. resolution proposing to the Shareholders of the Corporation entitled to vote in respect of the Amendments that the provisions and terms of Article ____ of its Articles of Incorporation be amended so as to read as set forth in the Amendments; and called a meeting of such shareholders, to be held _____________, 19__ , to adopt or reject the Amendments, unless the same were so approved prior to such date by unanimous written consent. (b) By written consent executed on May 6, 1977, signed by all of the members of the Board of Directors of the Corporation, a resolution was adopted proposing to the Shareholders of the Corporation entitled to vote in respect of the Amendments, that the provisions and terms of Articles of its Articles of Incorporation be amended so as to read as set forth in the Amendments, and a meeting of such shareholders was called to be held Ju1y 14, 1977, to adopt or reject the Amendments, unless the same were so approved prior to such date by unanimous written consent. Section 2. Action by Shareholders (select appropriate paragraph). (a) The Shareholders of the Corporation entitled to vote in respect of the Amendments, at a meeting thereof, duly called, constituted and held on July 14, 1977, at which One Hundred and Three Thousand, Seven Hundred and Eighty-Five shares present in person or by proxy, adopted the Amendments. The holders of the following classes of shares were entitled to vote as a class in respect of the Amendments: (1) (2) N/A (3) The number of shares entitled to vote in respect of the Amendments, the number of shares voted in favor of the adoption of the Amendments, and the number of shares voted against such adoption are as follows:
Shares Entitled to Vote as a Class Total (as listed immediately above) ----- ----------------------------- (1) (2) (3) Shares entitled to vote: 108,785 Shares voted in favor: 108,785 Shares voted against: -0-
(b) By written consent executed on _____________, 19__, signed by the holders of _________ shares of the Corporation, being all of the shares of the Corporation entitled to vote in respect of the Amendments, the Shareholders adopted the Amendments. Section 3. Compliance with Legal Requirements. The manner of the adoption of the Amendments, and the vote by which they were adopted, constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. ARTICLE III STATEMENT OF CHANGES MADE WITH RESPECT TO ANY INCREASE IN THE NUMBER OF SHARES HERETOFORE AUTHORIZED Aggregate Number of Shares Previously Authorized 175,000 Increase -0- {indicate "0" or "N/A" if no increase} Aggregate Number of Shares To Be Authorized After Effect of This Amendment 175,000
IN WITNESS WHEREOF, the undersigned officers execute these Articles of Amendment of the Articles of Incorporation of the Corporation, and certify to the truth of the facts herein stated, this 30 day of August, 1977. /s/ Eugene E. Paul /s/ Don I. Brown _______________________________________ ____________________________________ (Witness Signature) (Witness Signature) E.E. Paul Don I. Brown _______________________________________ ____________________________________ (Printed Signature) (Printed Signature) President of Secretary of The Dalton Foundries, Incorporated The Dalton Foundries, Incorporated _______________________________________ ____________________________________ (Name of Corporation) (Name of Corporation) STATE OF INDIANA ) ) SS: COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that E.E. Paul, the President, and Don I. Brown, the Secretary, of The Dalton Foundries, Incorporated, the officers executing the foregoing Articles of Amendment of Articles of Incorporation, personally appeared before me; acknowledged the execution thereof; and swore to the truth of the facts therein stated. WITNESS my hand and Notarial Seal this 30th day of August, 1977. /s/ John J. Bruner _____________________________ (Written Signature) John J. Bruner _____________________________ (Printed Signature) Notary Public My commission expires September 29, 1979 This instrument was prepared by Lynn H. Goldschmidt, Attorney at Law, 1 First National Plaza, Chicago, Illinois 60603. STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE CERTIFICATE OF AMENDMENT OF OF THE DALTON FOUNDRIES, INCORPORATED I, EDWIN J. SIMCOX, Secretary of State of Indiana, hereby certify that Articles of Amendment for the above Corporation have been filed in the form prescribed by my office, prepared and signed in duplicate in accordance with Chapter Four of the Indiana General Corporation Act (IC 23-1-4). THE NAME OF THE CORPORATION IS AMENDED AS FOLLOWS: THE DALTON FOUNDRIES, INC. NOW, THEREFORE, upon due examination, I find that the Articles of Amendment conform to law, and have endorsed my approval upon the duplicate copies of such Articles; that all fees have been paid as required by law; that one copy of such Articles has been filed in my office; and that the remaining copy of such Articles bearing the endorsement of my approval and filing has been returned by me to the Corporation. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 16th day of September , 1985. ________________________________________________________ EDWIN J. SIMCOX, Secretary of State By _____________________________________________________ , Deputy ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INCORPORATED The undersigned officers of The Dalton Foundries, Incorporated (hereinafter referred to as "Corporation"), existing pursuant to the provisions of The Indiana General Corporation Act, as amended (hereinafter referred to as "Act"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, hereby certify that: I AMENDMENTS Section 1. The date of incorporation of the Corporation is February 21, 1923. Section 2. The name of the Corporation following the amendment of the Articles of Incorporation will be The Dalton Foundries, Inc. Section 3. (a) The exact text of Article II of the Articles of Incorporation of the Corporation, as amended (hereinafter referred to as the "Amendments"), now is as follows: ARTICLE II NAME The name of the Corporation is The Dalton Foundries, Inc. (b) The exact text of Article IV of the Articles of Incorporation of the Corporation now is as follows: ARTICLE IV CAPITAL STOCK Section 1. Number of Shares: The authorized capital stock of the Corporation is divided into 175,000 shares consisting of 175,000 shares with par value of Two Dollars ($2.00) per share and no shares without par value. Section 2. Share Ownership: The ownership of the shares of capital stock of the Corporation may be subject to such limitations and restraints on alienation of such shares as shall be provided for by the Code of By-Laws of the. Corporation. Section 3. Voting at Meetings: Every holder of the capital stock of the Corporation shall have the right, at every shareholders' meeting, to one vote for each share of stock standing in his name on the books of the Corporation, upon all matters submitted to the vote of the shareholders~ Provided that shares of capital stock of the Corporation held of record by the Trustee of The Dalton Foundries, Inc. Employees Stock Ownership Plan shall be voted by said Trustee at the direction of the Nominating Committee as provided for by the Code of By-Laws of the Corporation. (c) The exact text of Article X of the Articles of Incorporation of the Corporation, now is as follows: ARTICLE X AMENDMENT OF CODE OF BY-LAWS The Board of Directors of this Corporation shall have full power to adopt a Code of By-Laws for the regulation of the conduct of the affairs of this Corporation which are not inconsistent with the provisions of these Articles and from time to time to revoke, amend, repeal or otherwise alter such By-Laws in whole or in part without reference to the shareholders of the Corporation; Provided, that any amendment to the provisions of: (1) Article II, Section 2.10 of the Code of By-Laws (pertaining to VOTING OF STOCK) (or any replacement for, amendment to, or modification of such section) and (2) Article III, Section 3.05 of the Code of By-Laws (pertaining to vacancies in the Board of Directors) shall be adopted only at a meeting of shareholders by a vote of a majority of the shares of capital stock entitled to vote on amendments of the Articles of Incorporation. II MANNER OF ADOPTION AND VOTE Section 1. Action by Directors. The Board of Directors of the Corporation duly adopted the resolution to amend the terms and provisions of Articles II, IV and X of the Articles of Incorporation and directed a meeting of Shareholders to be held on September 13,1985, allowing such Shareholders to vote on the proposed amendment. The resolution was adopted by the vote of the Board of Directors at a meeting held on September 12, 1985 at which a quorum of the Board was present. Section 2. Action by Shareholders. The Shareholders of the Corporation entitled to vote in respect of the Articles of Amendment 'adopted the proposed amendments. The amendments were adopted by a vote of such Shareholders during a meeting called by the Board of Directors. The result of such vote is as follows: Shareholders Entitled to Vote: 96,035 Shareholders Voted in Favor 96,035 Shareholders Voted Against -0-
Section 3. Compliance With Legal Requirements. The manner of adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. -2- III STATEMENT OF CHANGES MADE WITH RESPECT TO ANY INCREASE IN NUMBERS HERETOFORE AUTHORIZED Aggregate Number of Shares Previously Authorized 96,035 Increase N/A Aggregate Number of Shares to be Authorized After Effect of this Amendment 96,035
IN WITNESS WHEREOF, the undersigned officers execute these Articles of Amendment of Incorporation of The Dalton Foundries, Incorporated and certify to the truth of the facts herein stated, this 13th day of September, 1985. /s/ Don I. Brown /s/ Eugene E. Paul _______________________________________ ____________________________________ Don I. Brown, Secretary E. Paul, President STATE OF INDIANA ) )SS COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that Eugene E. Paul, the President, and Don I. Brown, the Secretary, of The Dalton Foundries, Incorporated, personally appeared before me and acknowledged the execution of the foregoing Articles of Amendment of Articles of Incorporation for and on behalf of such Corporation, and swore to the truth of the facts therein stated. WITNESS my hand and Notary Seal this 13th day of September, 1985. /s/ Barbara D. Purrington __________________________ Notary Public County of Residence: Kosciusko My Commission-Expires: 4/18/86 -3- STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE CERTIFICATE OF MERGER To Whom These Presents Come, Greeting: WHEREAS, there have been presented to this office for filing duplicate copies of Articles of Merger, merging
Corporation State of Incorporation Date of Incorporation/Admission DALTON FOUNDRIES ACQUISITION INDIANA SEPTEMBER 10, 1985 COMPANY, INC.
the non-survivor(s), into THE DALTON FOUNDRIES, INC. an Indiana Corporation, the survivor, which corporation shall hereinafter be designated as THE DALTON FOUNDRIES, INC. NOW, THEREFORE, I, EDWIN J. SIMCOX, Secretary of State of Indiana, do hereby certify that I have this day endorsed my approval upon the duplicate copies of the Articles of Merger so presented, and having received the fees required by law, have filed one copy in this office and returned the other to the corporation. The effective date of the merger is SEPTEMBER 19, 1985. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 19th day of September , 1985. ________________________________________________________ EDWIN J. SIMCOX, Secretary of State By _____________________________________________________ , Deputy ARTICLES OF MERGER OF THE DALTON FOUNDRIES, INC. AND DALTON FOUNDRIES ACQUISITION COMPANY, INC. The undersigned The Dalton Foundries, Inc. (hereinafter referred to as the "Surviving Corporation") and Dalton Foundries Acquisition Company, Inc. (hereinafter referred to as the "Merging Corporation"), each existing pursuant to the provisions of The Indiana General Corporation Act, as amended, each desiring to give notice of corporate action effecting the merging of the Merging Corporation into the Surviving Corporation, and acting by its President and Secretary, hereby certify, each with respect to the facts and acts relating to it and the acts taken by its Board of Directors and shareholders, the following facts: SUBDIVISION A AGREEMENT OF MERGER AND SIGNATURES THERETO The Surviving Corporation and the Merging Corporation have entered into an Agreement of Merger, the title, parties, terms, conditions and signatures of which are as follows: AGREEMENT OF MERGER BETWEEN DALTON FOUNDRIES ACQUISITION COMPANY, INC. AND THE DALTON FOUNDRIES, INC. INTO THE DALTON FOUNDRIES, INC. THIS AGREEMENT OF MERGER is entered into this 13th day of September 1985 between The Dalton Foundries, Inc. (hereinafter referred to as the "Surviving Corporation") and Dalton Foundries Acquisition Company, Inc. (hereinafter referred to as the "Merging Corporation"): WHEREAS, the Surviving Corporation and the Merging Corporation are corporations properly organized and existing under The Indiana General Corporation Act, as amended, with their respective principal offices located at Warsaw, Indiana; and WHEREAS, the Surviving Corporation has authorized capital stock of 175,000 shares with $2.00 per share par value (of which there are presently issued and outstanding 96,035 shares); and the Merging Corporation has authorized capital stock of 33,612 shares with no par value (of which are presently issued and outstanding 29,618 shares); and WHEREAS, in order to effect certain administrative, managerial and financial benefits it is the desire of the parties to this Agreement. to merge the Merging Corporation into the Surviving Corporation; THEREFORE, in consideration of their mutual undertakings, the Surviving Corporation and the Merging Corporation hereby agree to make such merger upon the following terms and conditions: I Closing of Agreement and Effective Date of Merger Section 1. Time and Place of Closing. The execution and closing of this Agreement shall take place at the principal office of the Surviving Corporation at Warsaw, Indiana promptly following the completion of the approval hereof by the respective Boards of Directors and shareholders of the parties to this Agreement. Section 2. Effective Date of Merger. The effective date of the merger shall be September 19, 1985. -2- II Completion of Merger Following the execution of this Agreement, the proper officers of the Merging Corporation and the Surviving Corporation, respectively, shall execute on behalf of each corporation Articles of Merger, as required by The Indiana General Corporation Act, as amended. The Surviving Corporation .shall thereafter cause such Articles to be filed with the Secretary of State of Indiana. The filing of such Articles shall be effective no later than September 19, 1985. III Effect of Merger Upon the Surviving Corporation and the Merging Corporation Section 1. Surviving Corporate Entity. Upon the effective date of the merger, the Merging Corporation shall merge into and become a part of the Surviving Corporation, which shall be the sole corporate entity surviving the merger and the name of which shall continue to be The Dalton Foundries, Inc., and the separate existence of the Merging Corporation shall thereupon cease. Section 2. Attributes and Property of the Surviving Corporation. Upon and after the effective date of the merger, the Surviving Corporation, in accordance with the provisions of The Indiana General Corporation Act, as amended, shall possess all the rights, privileges, immunities, powers and franchises of a public as well as a private nature of each of the parties to this Agreement. All property, whether real, personal and mixed, tangible or intangible, all debts due on whatever account, all other choses in action, and every other interest owned by, belonging to, or to become due to any of the parties to this Agreement, shall be taken and deemed to be transferred to and vested in the Surviving Corporation without further act or deed; and the title to -3- any real estate, or any interest therein, under the laws of the State of Indiana vested in any party to this Agreement shall not revert or be in any manner impaired by reason of this merger. Section 3. Liabilities of the Surviving Corporation. Upon and after the effective date of the merger, the Surviving Corporation, in accordance with the provisions of The Indiana General Corporation Act, as amended, shall be responsible and liable for all the liabilities and obligations of each of the parties hereto in the same manner and to the same extent as if the Surviving Corporation had itself incurred the same or contracted therefor. Any claim existing or action or proceeding by or against any party hereto may be prosecuted to judgment as if the merger had not taken place, or the Surviving Corporation may be substituted by the appropriate party. Neither the rights of creditors nor any liens upon the property of the Merging Corporation or the Surviving Corporation shall be impaired by the merger, but such liens shall be limited to the property upon which they were liens immediately prior to the date of the merger. Section 4. Articles and By-Laws of the Surviving Corporation. The Articles of Incorporation, together with all amendments thereof, and the Code of By-Laws of the Surviving Corporation as they exist on the effective date of the merger shall continue to be the Articles of Incorporation and the Code of By-Laws, respectively, of the Surviving Corporation upon and after the effective date of the merger, until properly amended. Section 5. Board of Directors and Officers of the Surviving Corporation. All members of the Board of Directors and all officers of the Surviving Corporation on the effective date of the merger shall be and continue as the directors and officers, respectively, of the Surviving Corporation after such date, to hold office for the same term and upon the same conditions as theretofore existed between each of them, respectively, and the - Surviving Corporation. -4- IV Exchange of Stock Upon the effective date of the merger, the shares of stock of the Merging Corporation shall be exchanged for and converted into shares of the Surviving Corporation on the basis of one share of capital stock of the Surviving Corporation for each share of capital stock of the Merging Corporation. Following such exchange and conversion, the shares of the Merging Corporation shall be cancelled. V Miscellaneous Section 1. Additional Documents. The parties to this Agreement shall cause to be executed any further or additional documents which may from time to time reasonably be required for the purpose of completing or carrying out the merger contemplated hereby. Section 2. Successors and Assigns. This Agreement and each of its provisions shall inure to the benefit of and be binding upon the parties to this Agreement and their respective successors and assigns. Nothing expressed or implied by this Agreement is intended to or shall have the effect of conferring upon any person, firm or corporation other than the parties hereto and their respective successors and assigns, any claims, rights or remedies under or by reason of this Agreement. EXECUTED on the date first stated above. THE DALTON FOUNDRIES, INC. By /s/ Eugene E. Paul ___________________________________ Eugene E. Paul, President ATTEST: /s/ D. I. Brown ________________________ D. I. Brown, Secretary SURVIVING CORPORATION -5- DALTON FOUNDRIES ACQUISITION COMPANY, INC. By /s/ D. I. Brown ------------------------- D. I. Brown, President ATTEST: /s/ K. L. Davidson - ------------------ Secretary MERGING CORPORATION SUBDIVISION B MANNER OF ADOPT ION AND VOTE 1. Action by the Merging Corporation. (a) Action at First Directors' Meeting. The Board of Directors of the Merging Corporation, at a special meeting thereof duly called, constituted and held on September 12, 1985 adopted, by unanimous vote of the members of such Board, a resolution approving the Agreement of Merger and directing that it be submitted for approval or rejection to the shareholders of such corporation entitled to vote in respect thereof at a special meeting of such shareholders to be held on September 12, 1985, and authorizing the execution and consummation of the Agreement of Merger immediately upon the adoption thereof by the unanimous vote of the shareholders of such corporation and the Surviving Corporation. (b) Action at Shareholders' Meeting. The shareholders of the Merging Corporation entitled to vote in respect of the Agreement of Merger, at a special meeting thereof, duly called, constituted and held on September 12, 1985, at which 29,618 shares were represented in person or by proxy, authorized adoption of the Agreement of Merger by such corporation. The number of shares entitled to vote in respect of the Agreement of Merger, the number of shares voted in favor of the adoption of the Agreement of Merger, and the number of shares voted against such adoption are as follows: 29,618 were entitled to vote in respect of the Agreement of Merger, 29,618 were voted in favor of the adoption of the Agreement of Merger, and no shares were voted against such adoption. (c) No Second Directors' Meeting. A second meeting of the Board of Directors of the Merging Corporation was not required or held since the shareholders of the Merging Corporation and the Surviving Corporation voted unanimously in favor of the adoption of the Agreement of Merger and the Boards of Directors of the Merging Corporation and the Surviving Corporation, at their first meetings, authorized the execution and consummation of the Agreement of Merger immediately upon the adoption thereof by the unanimous vote of the shareholders of the Merging Corporation and the Surviving Corporation. (d) Compliance with Legal Requirements. The manner of the adoption of the Agreement of Merger, and the vote by which it was adopted, constitute full legal compliance with the provisions of the Act, the Articles of Incorporation and the By-Laws of the Merging Corporation. 2. Action by the Surviving Corporation. (a) Action at First Directors' Meeting. The Board of Directors of the Surviving Corporation at a special meeting thereof, duly called, constituted and held on September 12, 1985, adopted, by a majority vote of the members of such Board, a resolution approving the Agreement of Merger and directing that it be submitted for approval or rejection to the shareholders of the Surviving Corporation entitled to vote in respect thereof at a special meeting of such shareholders to be held on September 12, 1985, and authorizing the execution and consummation of the Agreement of Merger immediately upon the adoption thereof by the unanimous vote of the shareholders of the Merging Corporation and the Surviving Corporation. 7 (b) Action at Shareholders' Meeting. The shareholders of the Surviving Corporation entitled to vote in respect to the Agreement of Merger, at a special meeting thereof, duly called, constituted and held on September 12, 1985, at which 96,035 shares were represented in person or by proxy, authorized adoption of the Agreement of Merger by the Surviving Corporation. The number of shares entitled to vote in respect of the Agreement of Merger, the number of shares voted in favor of the adoption of the Agreement of Merger, and the number of shares voted against such adoption are as follows: 96,035 shares were entitled to vote in respect of the Agreement of Merger, 96,035 were voted in favor of the adoption of the Agreement of Merger and no shares were voted against such adoption. (c) No Second Directors' Meeting. A second meeting of the Board of Directors of the Surviving Corporation was not required or held since the shareholders of the Merging Corporation and the Surviving Corporation voted unanimously in favor of the adoption of the Agreement of Merger, and the Boards of Directors of the Merging Corporation and the Surviving Corporation, at their first meetings, authorized the execution and consummation of the Agreement of Merger immediately upon the adoption thereof by the unanimous vote of the shareholders of the Merging Corporation and the Surviving Corporation. (d) Compliance with Legal Requirements. The manner of the adoption of the Agreement of Merger, and the vote by which it was adopted, constitute full legal compliance with the provisions of the Indiana General Corporation Act, the Articles of Incorporation, and the By-Laws of the Surviving Corporation. IN WITNESS WHEREOF, the Merging Corporation and the Surviving Corporation, respectively, execute these Articles of Merger, the President and Secretary of such 8 corporation acting for and on behalf of such corporation; and each of such corporations certifies to the truth of the facts and acts relating to it and the action taken by its Board of Directors and shareholders. DATED this 13th day of September, 1985. THE DALTON FOUNDRIES, INC. By /s/ Eugene E. Paul --------------------------- Eugene E. Paul, President ATTEST: - --------------------------- Don I. Brown, Secretary SURVIVING CORPORATION 9 DALTON FOUNDRIES ACQUISITION COMPANY, INC. By /s/ Don I. Brown ------------------------ Don I. Brown, President ATTEST: /s/ K.L. Davidson - ------------------------- K. L. Davidson, Secretary MERGING CORPORATION STATE OF INDIANA ) ) SS: COUNTY OF MARION ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that Eugene E. Paul, the President, and Don I. Brown, the Secretary, of The Dalton Foundries, Inc., the officers executing the foregoing Articles of Merger, personally appeared before me, acknowledged the execution thereof for and on behalf of such corporation, and swore to the truth of the facts therein stated. WITNESS my hand and Notary Seal this 13th day of September, 1985. /s/ Barbara S. Perrington ------------------------------- Notary Public County of Residence: Kasciwska My Commission Expires:- 4-18-86 STATE OF INDIANA ) ) SS: COUNTY OF MARION ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer the oaths in the State of Indiana, certify that Don I. Brown, the President, and Kenneth L. Davidson, the Secretary, of Dalton Foundries Acquisition .Company, Inc., the officers executing the foregoing Articles of Merger, personally appeared before me, acknowledged the execution thereof for and on behalf of such corporation, and swore to the truth of the facts therein stated. WITNESS my hand and Notary Seal this 13th day of September, 1985. /s/ Barbara S. Perrington ------------------------------- Notary Public County of Residence: Kasciwska My Commission Expires: 4-18-86 STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE CERTIFICATE OF AMENDED ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INC I, EDWIN J. SIMCOX, Secretary of State of Indiana, hereby certify that Amended Articles of Incorporation for the above Corporation, have been filed, in the form prescribed by my office, prepared arid signed in duplicate in accordance with Chapter Four of the Indiana General Corporation Act (IC 23-1-4). Now, therefore, upon due examination, I find that the Amended Articles of Incorporation conform to law, and have endorsed my approval upon the duplicate copies of such Articles; that all fees have been paid as required by law; that one copy of such Articles bearing the endorsement of my approval and filing has been returned by me to the Corporation. In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 22nd day of May, 1986 /s/ Edwin J. Simcox ----------------------------------- EDWIN J. SIMCOX, Secretary of State By --------------------------------- Deputy AMENDED ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INC. The undersigned officers of The Dalton Foundries, Inc. (the Corporation), existing pursuant to the provisions of the Indiana General Corporation Act, as amended (the Act), desiring to give notice of corporate action effecting amendment of its Articles of Incorporation by the adoption of Amended Articles of Incorporation to supersede and take the place of its heretofore existing Articles of Incorporation, certify the following facts: I TEXT OF THE AMENDED ARTICLES The exact text of the entire Articles of Incorporation of the Corporation, as amended (the Amended Articles) , now is as follows: ARTICLE I Name The name of the Corporation is The Dalton Foundries, Inc. ARTICLE II Purposes The purposes for which. the Corporation is formed include the transaction of any or all lawful business for which corporations may be incorporated under the provisions of the Act. ARTICLE III Period of Existence The period during which the Corporation shall continue is perpetual. ARTICLE IV Resident Agent and Principal Off ice Section 1. Resident Agent. The name and post office address of the Resident Agent in charge of the Corporation's principal office are Don I. Brown, Vice President, The Dalton Foundries, Inc., Lincoln & Jefferson Streets, Warsaw, Indiana 46580. Section 2. Principal Office. The post office address of the principal office of the Corporation is Lincoln & Jefferson Streets, Warsaw, Indiana 46580. ARTICLE V Shares Section 1. Number Authorized. The total number of shares which the Corporation has authority to issue is One Hundred Seventy-Five Thousand (175,000) shares without par value. Section 2. Terms. The ownership of the shares of capital stock of the Corporation may be subject to such limitations and restraints on alienation of such shares as shall be provided for by the Code of By-Laws of the Corporation. Section 3. Voting Rights. Every holder of capital stock of the Corporation shall have the right, at every shareholders' meeting, to one vote for each share of stock standing in his name on the books of the Corporation, upon all matters submitted to the vote of the shareholders; Provided, that shares of capital stock of the Corporation held of record by the Trustee of The Dalton foundries, Inc. Employees' Stock Ownership Plan shall be voted by the Trustee at the direction of the Nominating Committee as provided for by the Code of By-Laws of the Corporation. ARTICLE VI Stated Capital The stated capital of the Corporation at the time of the filing of the Amended Articles of Incorporation is at least one thousand dollars ($1,000). ARTICLE VII Directors Section 1. Number of Directors. The Board of Directors may be fixed from time to time by the Code of By-Laws of the Corporation at any number not less than three. Section 2. Name and Post Office Address of the Directors. The names and post office addresses of the directors holding office at the time of the adoption of the Amended Articles are:
Name Post Office Address - ---- ------------------- W.M. Dalton The Dalton Foundries, Inc. Lincoln & Jefferson Streets Warsaw, IN 46580 Kenneth L. Davidson The Dalton Foundries, Inc. Lincoln & Jefferson Streets Warsaw, IN 46580 Don I. Brown The Dalton Foundries, Inc. Lincoln & Jefferson Streets Warsaw, IN 46580
ARTICLE VIII Officers The names and post office addresses of the President and Secretary of the Corporation are:
Name Office Address - ---- ------ ------- Kenneth L. Davidson President The Dalton Foundries, Inc. Lincoln & Jefferson Streets Warsaw, IN 46580 Don I. Brown Secretary The Dalton Foundries, Inc. Lincoln & Jefferson Streets Warsaw, IN 46580
ARTICLE IX Provisions for Regulation of Business and Conduct of Affairs of Corporation Section 1. Meetings of Shareholders. Meetings of the shareholders of the Corporation shall be held at such place, within or without the State of Indiana, as may be specified in the respective notices or waivers of notice of, or proxies to represent shareholders at, such meetings. Any action required to be or which may be taken at a meeting of the shareholders may be taken without a meeting if, prior to such action, a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof, and such written consent is filed with the minutes of the proceedings of the shareholders. Section 2. Meetings of the Board of Directors. Meetings of the Board of Directors of the Corporation shall be held at such place, within or without the ..state of Indiana, as may be specified in the respective notices, or waivers of notice, of such meetings. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if, prior to such action, a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3. Consideration for Shares. Shares of stock may be issued for such an amount of consideration as may be fixed from time to time by the Board of Directors. Section 4. Interest of Directors in Contracts. Any contract or other transaction between the Corporation and one or more of its directors, or between the Corporation and any firm of which one or more of its directors are members or employees, or in which they a re interested, or between the Corporation and any corporation or association of which one or more of its directors are shareholders, members, directors, officers, or employee s, or in which they are interested, shall be valid for all purposes, notwithstanding the presence of such director or directors at the meeting of the Board of Directors .of the Corporation which acts upon, or in reference to, such contract or transaction and notwithstanding his or their participation in such action, if the fact of such interest shall be disclosed or known to the Board of Directors and the Board of Directors shall nevertheless authorize, approve or ratify such contract or transaction. This section shall not be construed to invalidate any contract or other transaction which otherwise would be valid under the common or statutory law applicable to such contract or transaction. Section 5. Amendment of Code of By-Laws. (a) The Board of Directors of the Corporation shall have the power to adopt a Code of By-Laws for the regulation of the conduct of the affairs of the Corporation which is not. inconsistent with the provisions of the Articles of Incorporation and from time to time to revoke, amend, repeal or otherwise modify such Code of By-Laws in whole or in part; Provided, that the power to amend or otherwise modify the provisions of: (1) Article II, Section 2.10 of the Code of By-Laws (pertaining to Voting of Stock); and (2) Article III, Section 3.05 of the Code of By-Laws (pertaining to Vacancies in the Board of Directors), shall be vested only in the shareholders and may be exercised by the affirmative votes of the holders of two-thirds of the outstanding shares of capital stock entitled to vote on amendments of the Articles of Incorporation. (b) Any amendment or other modification of this Section 5, Article IX, of these Amended Articles of Incorporation may be effected only by the affirmative votes of the holders of two-thirds of the outstanding shares of capital stock entitled to vote on amendments of the Articles of Incorporation. II MANNER OF ADOPTION AND VOTE Section 1. Action by Directors. (a) The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on December 26, .1985, at which a quorum of the Board of Directors was present, duly adopted a resolution proposing to the shareholders of the Corporation entitled to vote in respect of the Amended Articles that the provisions and terms of its Articles of Incorporation be amended so as to read as set forth in the Amended Articles, and that the Amended Articles should supersede and take the place of the previously existing Articles of Incorporation; and the Board of Directors called a meeting of such shareholders, to-be held on April 26, 1986, to adopt or reject the Amended Articles. Section 2. Action by Shareholders. (a) The shareholders of the Corporation entitled to vote with respect to the Amended Articles, at a meeting thereof, duly called, constituted and held on April 26,1986, at which a quorum of the shareholders was present in person or by proxy, adopted the Amended Articles. (b) The number of shares entitled to vote in respect of the Amended Articles, the number of shares voted in favor of the adoption of the Amendments, and the number of shares voted against such adoption are as follows: Shares Entitled to Vote: 96,035 Shares Voted in Favor: 72,730 Shares Voted Against: 166 Section 3. Compliance With Legal Requirements. The manner of adoption of the Amended Articles, and the vote by which they were adopted, constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the Code of By-Laws of the Corporation. III STATEMENT OF CHANGES MADE WITH RESPECT TO THE SHARES HERETOFORE AUTHORIZED Section 1. Shares Previously Authorized. The Corporation had authority to issue, prior to the Amended Articles, an aggregate of 175,000 shares of stock with the par value of $2.00 per share. Section 2. Conversion to Shares Without Par Value. The Corporation by the Amended Articles converted the 175,000 authorized shares with par value into shares without par value. Section 3. Shares Hereafter Authorized. The shares authorized after giving effect to the Amended Articles consist of 175,000 shares of stock without par value. IN WITNESS WHEREOF, the undersigned officers execute these Amended Articles of Incorporation of the Corporation and certify to the truth of the facts stated therein, this 12th day of May, 1986. /s/ Kenneth L. Davidson ----------------------------------------- Kenneth L. Davidson President /s/ Don I. Brown ----------------------------------------- Don I. Brown Secretary STATE OF INDIANA ) ) SS: COUNTY OF KOSCIUSKO ) I, the undersigned, a Notary Public duly commissioned to take acknowledgments and administer oaths in the State of Indiana, certify that Kenneth L. Davidson and Don I. Brown, the President and. Secretary, respectively, of The Dalton Foundries, Inc., personally appeared before me, acknowledged the execution of the foregoing. Amended Articles of Incorporation, and swore to the truth of the facts therein stated. Witness my hand and notarial seal this 12th day of May, 1986. /s/ John J. Broner ----------------------------------------- Notary Public Resident of Kos. County, Indiana My Commission Expires: Sept. 29, 1987 RESOLUTION OF THE BOARD OF DIRECTORS ELECTING TO BE GOVERNED BY THE INDIANA BUSINESS CORPORATION LAW PRIOR TO AUGUST 1, 1987 OF THE DALTON FOUNDRIES, INC. The following resolution of the Board of Directors was adopted on November 5, 1986: RESOLVED, by the Board of Directors of The Dalton Foundries, Inc., that the Corporation hereby adopts the provisions of IC 23-1-18 through 23-1-54 (excepting IC 23-1-18-3, IC 23-1-21 and IC 23-1-53-3) effective on and after December 1, 1986. /s/ K.L. Davidson ----------------------------------------- K.L. Davidson President The Dalton Foundries, Inc. STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE ARTICLES OF AMENDMENT To Whom These Presents Come, Greeting: WHEREAS, there has been presented to me at this office, Articles of Amendment for: THE DALTON FOUNDRIES INC and said Articles of Amendment have been prepared and signed in accordance with the provisions of the Indiana Business Corporation Law, as amended. NOW, THEREFORE, I, JOSEPH H. HOGSETT, Secretary of State of Indiana, hereby certify that I have this day filed said articles in this office. The effective date of these Articles of Amendment is July 20, 1993. (SEAL) In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this Twentieth day of July, 1993 ----------------------------------------- JOSEPH H. HOGSETT, Secretary of State By --------------------------------------- Deputy ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INC. The undersigned officer of The Dalton Foundries, Inc. (the "Corporation"), a corporation existing pursuant to the provisions of the Indiana Business Corporation Law as amended from time to time (the "Law"),desiring to effect an amendment of its Articles of Incorporation, executes the following Articles of Amendment: ARTICLE I IDENTIFICATION The Corporation is The Dalton Foundries, Inc., incorporated February 27, 1923. Its name is not changed by the amendment. ARTICLE II TEXT OF THE AMENDMENT The text of Article V, Section 1 of the Articles of Incorporation as amended is: ARTICLE V Shares Section 1. Number Authorized. The total number of shares which the Corporation has authority to issue is One Million Seven Hundred Fifty Thousand (1,750,000) shares without par value. ARTICLE III DATE AND MANNER OF ADOPTION Section 3.1. Date of Adoption. The amendment was adopted April 16, 1993, and is effective upon the filing of these Articles of Amendment with the Secretary of State. Section 3.2. Action by Directors. The Board of Directors of the Corporation duly adopted a resolution amending the terms and provisions of Article V, Section 1 of the Articles of Incorporation, by vote of the Board of Directors at a meeting held on April 16, 1993, at which a quorum of the Board was present. At the same time, by resolution, the Board of Directors changed each issued and unissued authorized share into ten (10) shares. Section 3.3. Compliance With the Law. As authorized by I.C. 23-1-38-2(4), the Board of Directors adopted the amendment without shareholder action, and shareholder action was not required. The manner of the adoption of the amendment constitutes full compliance with .the Law and the Corporation's Articles of Incorporation. EXECUTED this 15th day of July, 1993. /s/ Don I. Brown ----------------------------------------- Don I. Brown, Secretary The Dalton Foundries, Inc. 21 STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE ARTICLES OF AMENDMENT To Whom These Presents Come, Greeting: WHEREAS, there has been presented to me at this office, Articles of Amendment for: THE DALTON FOUNDRIES INC and said Articles of Amendment have been prepared and signed in accordance with the provisions of the Indiana Business Corporation Law; as amended. NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of Indiana, hereby certify that I have this day filed said articles in this office. The effective date of these Articles of Amendment is July 25, 1996. In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this Twenty-fifth day of July, 1996. ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE DALTON FOUNDRIES, INC. The undersigned officer of The Dalton Foundries, Inc. (the "Corporation"), a corporation existing pursuant to the provisions of the Indiana Business Corporation Law as amended from time to time (the "Law"),desiring to effect an amendment of its Articles of Incorporation, executes the following Articles of Amendment: ARTICLE I IDENTIFICATION The Corporation is The Dalton Foundries, Inc., incorporated February 27, 1923. Its name is not changed by the amendment. ARTICLE II TEXT OF THE AMENDMENT The text of Article V, Section 1 of the Articles of Incorporation as amended is: ARTICLE V Shares Section 1. Number Authorized. The total number of shares which the Corporation has authority to issue is Eight Million Seven Hundred Fifty Thousand (8,750,000) shares without par value. ARTICLE III DATE AND MANNER OF ADOPTION Section 3.1. Date of Adoption. The amendment was adopted July 17, 1996, and is effective August 1, 1996. Section 3.2. Action by Directors. The Board of Directors of the Corporation duly adopted a resolution amending the terms and provisions of Article V, Section 1 of the Articles of Incorporation, by vote of the Board of Directors at a meeting held on July 17, 1996, at which a quorum of the Board was present. At the same time, by resolution, effective August 1, 1996 the Board of Directors changed each issued and unissued authorized share into five (5) shares. Section 3.3. Compliance With the Law. As authorized by I.C. 23-1-38-2(4), the Board of Directors adopted the amendment without shareholder action, and shareholder action was not required. The manner of the adoption of the amendment constitutes full compliance with the Law and the Corporation's Articles of Incorporation. EXECUTED this 22nd day of July, 1996. /s/ Don I. Brown ----------------------------------------- Don I. Brown, Secretary The Dalton Foundries, Inc. 24 STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE ARTICLES OF AMENDMENT To Whom These Presents Come, Greeting: WHEREAS, there has been presented to me at this office, Articles of Amendment for: THE DALTON FOUNDRIES INC and said Articles of Amendment have been prepared and signed in accordance with the provisions of the Indiana Business Corporation Law, as amended. The name of the corporation is as follows: DALTON CORPORATION NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of Indiana, hereby certify that I have this day filed said articles in this office. The effective date of these Articles of Amendment is May 07, 1997. In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this Seventh day of May, 1997. ARTICLES OF AMENDMENT OF THE Provided by: JOSEPH H. HOGSETT ARTICLES OF INCORPORATION SECRETARY OF STATE OF INDIANA State Form 38333 (R6 / 12-93) 302 W. WASHINGTON ST., ROOM E018 Approved by State Board of Accounts 1988 INDIANAPOLIS, IN 46204 TELEPHONE: (317) 232-6576 INSTRUCTIONS: Use 8 -1/2 x 11 inch Indiana Code 23-1-38-1 et seg. white paper for inserts. FILING FEE $30.00 Filing requirements - Present original and one copy to address in upper right hand corner of this form. ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF: The Dalton Foundries, Inc. The undersigned officers of: The Dalton Foundries, Inc. (hereinafter referred to as the "Corporation") existing pursuant to the provisions of: (indicate appropriate act) X Indiana Business Corporation Law as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certify the following facts: ARTICLE I AMENDMENT(S) SECTION 1 The date of incorporation of the corporation is: February 27, 1923 SECTION 2 The name of the corporation following this amendment to the Articles of Incorporation is: Dalton Corporation SECTION 3 The exact text of Article(s) I of the --------------------------------------- Articles of Incorporation is now as follows: Article I Name The name of the Corporation is Dalton Corporation. (SEAL:) RECEIVED CORPORATIONS DIV. 97MAY-7 AM 11:04 SUE ANNE GILROY Section 4 Date of each amendment's adoption: April 18, 1997 (Continued on the reverse side) 27 EX-3.4 6 y92210a1exv3w4.txt CERTIFICATE OF INCORPORATION Exhibit 3.4 STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE CERTIFICATE OF INCORPORATION OF DALTON CORPORATION, WARSAW MANUFACTURING FACILITY I, SUE ANNE GILROY, Secretary of State of Indiana, hereby certify that Articles of Incorporation of the above corporation have been presented to me at my office accompanied by the fees prescribed by law; that I have found such Articles conform to law; all as prescribed by the provisions of the Indiana Business Corporation Law, as amended. NOW, THEREFORE, I hereby issue to such corporation this Certificate of Incorporation, and further certify that its corporate existence will begin January 02,1997. In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this Second day of January, 1997. /s/ Sue Anne Gilroy ------------------------------------- Sue Anne Gilroy, Secretary of State ARTICLES OF INCORPORATION OF DALTON CORPORATION, WARSAW MANUFACTURING FACILITY The undersigned incorporator, desiring to form a corporation ("Corporation") pursuant to the provisions of the Indiana Business Corporation Law as amended from time to time (the "Law"), executes the following Articles of Incorporation: ARTICLE I NAME The name of the Corporation is Dalton Corporation, Warsaw Manufacturing Facility. ARTICLE II AUTHORIZED SHARES SECTION 2.1 NUMBER. The total number of shares which the Corporation is authorized to issue is one thousand (1,000). SECTION 2.2 CLASSES. There shall be one (1) class of shares, designated common Section 2.3 and relative rights. SECTION 2.3 RIGHTS. All common shares shall have the same preferences, limitations and relative rights. SECTION 2.3.1 VOTING RIGHTS. With respect to each matter upon which shareholders are entitled to vote, each holder of common shares shall be entitled to one (1) vote for each common share standing in the shareholder's name on the Corporation's books on the record date. SECTION 2.3.2 RIGHTS UPON DISSOLUTION. In the event of the dissolution of the Corporation, upon the winding up and liquidation of its business and affairs, each holder of common shares shall be entitled to receive a ratable portion of the net assets of the Corporation remaining after payment (or provision for payment) of the debts and other liabilities of the Corporation. SECTION 2.3.3 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive rights to subscribe to or purchase any common shares or other securities of the Corporation. SECTION 2.4 ISSUANCE AND CONSIDERATION. Common shares may be issued for the consideration fixed from time to time by the Board of Directors. SECTION 2.5 RESTRICTIONS ON TRANSFER OF SHARES. The Bylaws, an agreement among shareholders, or an agreement between shareholders and the Corporation may impose restrictions on the transfer (or registration of transfer) of shares of the Corporation. ARTICLE III REGISTERED OFFICE AND REGISTERED AGENT The street address of the Corporation's registered office in Indiana and the name of its Registered Agent at that office are: Don I. Brown, 3755 Lake City Highway, Warsaw, Indiana 46580. ARTICLE IV INCORPORATOR The name and address of the incorporator of the Corporation is Diane Hubbard Kennedy, Dutton & Overman, P.C., 710 Century Building, 36 South Pennsylvania Street, Indianapolis, Indiana 46204. ARTICLE V BOARD OF DIRECTORS SECTION 5.1 NUMBER. The Board of Directors shall consist of a minimum of two (2) individuals and a maximum of five (5) individuals. The number of directors may be fixed or changed from time to time, within the minimum and maximum, by resolution of the Board of Directors. In the absence of a resolution fixing the number of directors, the number shall be two (2). The initial Board of Directors shall consist of two (2) individuals. SECTION 5.2 QUALIFICATIONS. Directors need not be residents of the State of Indiana nor shareholders of the Corporation. ARTICLE VI PURPOSES AND POWERS SECTION 6.1 PURPOSE. The purpose for which the Corporation is formed is to transact any and all lawful business for which corporations may be incorporated under the Law. SECTION 6.2 POWERS. The Corporation shall have the powers to do all things necessary or convenient to carry out its business and affairs. ARTICLE VII PROVISIONS FOR MANAGING THE BUSINESS AND REGULATING THE AFFAIRS OF THE CORPORATION SECTION 7.1 AUTHORITY OF BOARD OF DIRECTORS. Subject to any specific limitation or restriction imposed by the Law or by these Articles of Incorporation, all corporate powers shall be exercised by or under the authority of the Board of Directors, and the business and affairs of 2 the Corporation shall be managed under the direction of the Board of Directors, without previous authorization or subsequent approval by the shareholders of the Corporation. Management by the Board of Directors includes, without limitation, the authority to cause the Corporation to be a promoter, partner or shareholder of any partnership, joint venture, corporation or other entity. SECTION 7.2 CODE OF BYLAWS. The Board of Directors shall have the power to adopt, amend or repeal the Code of Bylaws of the Corporation, without previous authorization or subsequent approval by the shareholders of the Corporation. The Code of Bylaws, including an amendment to the bylaws, may establish one or more procedures by which the Corporation regulates transactions that would, when consummated, result in a change of control of the Corporation. SECTION 7.3 REMOVAL OF DIRECTORS. Any director (or all of the directors) may be removed with or without cause by either the shareholders or the Board of Directors. Any director (or all of the directors) may be removed by the shareholders only at a meeting called for the purpose of removing the director(s), and the meeting notice must state that a purpose of the meeting is removal of the director(s). Any of the directors (or all of the directors) may be removed by the Board of Directors at any meeting of the Board, and no notice is required. In either case, a director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director. SECTION 7.4 AMENDMENT OF ARTICLES OF INCORPORATION. The Corporation may amend these Articles of Incorporation at any time to add or change a provision that, as of the effective date of the amendment, is required or permitted to be in the Articles of Incorporation or to delete a provision that, as of the effective date of the amendment, is not required to be in the Articles of Incorporation. Amendments to the Articles of Incorporation shall be adopted in any manner prescribed or permitted by the provisions of the Law as of the effective date of the amendment. All rights and powers conferred upon the shareholders or the directors by the Articles of Incorporation or the Code of Bylaws are subject to this reserved right to amend the Articles of Incorporation. An amendment is adopted if the votes cast favoring the amendment exceed the votes cast opposing the amendment. SECTION 7.5 POTENTIALLY ABANDONED PROPERTY. After a period of six (6) years from the date specified for payment or delivery, the following property shall revert to and become the property of the Corporation: (a) An unclaimed dividend, distribution or other sum payable to a shareholder, (b) An unclaimed sum payable to any claimant on any obligation of the Corporation, (c) Any unclaimed funds or other property, tangible or intangible, held by the Corporation for the benefit of any person other than the Corporation, and (d) The interest, income, earnings or appreciation on any of the funds or property described above. 3 Before the end of the seventh year after the date that particular funds or property described above should have been paid, distributed or delivered, the Secretary shall prepare the Corporation's written claim to the funds or property including the interest, income, earnings or appreciation. ARTICLE VIII INDEMNIFICATION SECTION 8.1 SCOPE OF INDEMNIFICATION. The Corporation shall indemnify the individuals listed in Section 8.2 against liability (including expenses) asserted or incurred in the defense of any proceeding to which the individual was made a party or a witness because of his status with the Corporation and in which the individual was (a) wholly successful on the merits or otherwise or (b) in which the Corporation (acting in accordance with Section 8.4) determines that the individual's conduct and beliefs met the standard of conduct prescribed by the Law, although the individual was not wholly successful on the merits or otherwise or (c) a court determines that the individual is entitled to indemnification. However, in a proceeding brought by or in the right of the Corporation, if an individual was adjudged liable to the Corporation, indemnification shall be made only upon order of a court acting upon the individual's application for court-ordered indemnification. SECTION 8.2 INDIVIDUALS ELIGIBLE FOR INDEMNIFICATION. The following individuals are eligible for indemnification, as described in this Article VII: any director, officer, employee or agent of the Corporation including an individual who is or was (or agreed to be) a director, officer, employee or agent of the Corporation or an individual who, while a director, officer, employee or agent of the Corporation, is or was serving (or agreed to serve) at the Corporation's request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, or other enterprise, whether for profit or not. The provisions of the Law governing mandatory and permissive indemnification of directors shall be applicable to indemnification under these Articles whether or not the eligible individual is a director. SECTION 8.3 ADVANCES. Subject to the conditions prescribed by the Law and in accordance with Section 8.4, the Corporation shall pay for or reimburse the reasonable expenses incurred by an eligible individual who is a party to or witness in a proceeding, in advance of the final disposition of the proceeding. SECTION 8.4 DETERMINATIONS BY THE CORPORATION. If the eligible individual was not wholly successful on the merits or otherwise, the Corporation shall authorize payments in each specific case only after a determination has been made, in a manner allowable by the Law, that indemnification is permissible in the circumstances because the individual has met the standard of conduct prescribed by the Law. SECTION 8.5 INSURANCE. The Corporation may purchase and maintain insurance on behalf of any individual described in Section 8.2, whether or not the Corporation would have power under these Articles or the Law to indemnify the individual against the liabilities covered by insurance. The insurance may provide coverage for liability to the Corporation. 4 SECTION 8.6 TERMS. Unless the context clearly requires otherwise, any term used in this Article VIII shall have the meaning ascribed to it in the Law. SECTION 8.7 INDEMNIFICATION AUTHORIZED BY CONTRACT OR RESOLUTION. Indemnification under this Article VIII does not exclude and shall not be deemed to limit any other right to indemnification that an individual may have under a contract, a resolution adopted by the Board of Directors or a resolution or other authorization adopted by the. shareholders. SECTION 8.8 SURVIVAL. With respect to any liability incurred or any act (or failure to act) occurring while this Article VIII is in effect, this Article VIII shall be- a contract between the Corporation and the eligible individual. As a contract, the provisions of this Article VIII shall survive the amendment or repeal of this Article VII or the Law and shall be binding upon and inure to the benefit of an eligible individual and his heirs and personal representatives, after he ceases to be a director, officer, employee or agent of the Corporation. SECTION 8.9 SEVERABILITY. If any provision of this Article VIII or its application to any individual or circumstance shall be invalid or unenforceable to any extent or in any jurisdiction, the remainder of this Article VIII and the application of its provisions to other individuals or circumstances or in other jurisdictions shall not be affected and shall be enforced to the extent permitted by law. /s/ Diane Hubbard Kennedy ------------------------------------- Signature Diane Hubbard Kennedy Incorporator 5 EX-3.5 7 y92210a1exv3w5.txt ARTICLES OF INCORPORATION EXHIBIT 3.5 THE STATE OF OHIO BOB TAFT Secretary of State 738408 CERTIFICATE It is hereby certified that the Secretary of State of Ohio has custody of the Records of Incorporation and Filings; that said records show the filing and recording of: AMA MIS AGS CHN CHL of: DALTON CORPORATION STRYKER MACHINING FACILITY CO. FORMERLY MACHINE & TOOL NORTH, INC. UNITED STATES OF AMERICA STATE OF OHIO OFFICE OF THE SECRETARY OF STATE Recorded on Roll 5767 at Frame 0241 of the Records of Incorporation and Miscellaneous Filings. WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE AT COLUMBUS, OHIO, THIS 6TH DAY OF MARCH . BOB TAFT Secretary of State AMENDED AND RESTATED ARTICLES OF INCORPORATION OF ECONOMY MACHINE & TOOL NORTH, INC. ARTICLE I Name The name of the corporation is Dalton Corporation, Stryker Machining Facility Co. (the "Corporation"). ARTICLE II PRINCIPAL OFFICE The principal office of the Corporation shall be located at 310 Ellis Street, Stryker, Ohio 43557. ARTICLE III CORPORATE PURPOSES AND POWERS The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be formed under Section 1701.01 to 1701.98, inclusive, of the Ohio Revised Code (the "Code"). The Corporation shall have the power to do all things necessary or convenient to carry out its business and affairs to the extent such acts are permitted under the Code. ARTICLE IV AUTHORIZED SHARES Section 4.1 NUMBER. The total number of shares which the Corporation is authorized to issue is One Thousand (1,000). SECTION 4.1.1 PAR VALUE SHARES. The number of authorized shares which the Corporation designates as having par value is zero (0). SECTION 4.1.2 NO PAR VALUE SHARES. The number of authorized shares which the Corporation designates as without par value is one thousand (1,000). Section 4.2 CLASSES. There shall be one (1) class of shares, designated common shares. Section 4.3 RIGHTS. All common shares shall have the same preferences, limitations and relative rights. SECTION 4.3.1 VOTING RIGHTS. With respect to each mater upon which shareholders are entitled to vote, each holder of common shares shall be entitled to one (1) vote for each common share standing in the shareholder's name on the Corporation's books on the record date. SECTION 4.3.2 RIGHTS UPON DISSOLUTION. In the event of the dissolution of the Corporation, upon the winding up and liquidation of its business and affairs, each holder of common shares shall be entitled to receive a ratable portion of the net assets of the Corporation remaining after payment (or provision for payment) of the debts and other liabilities of the Corporation. SECTION 4.3.3 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive rights to subscribe to or purchase any common shares or other securities of the Corporation. Section 4.4 ISSUANCE AND CONSIDERATION. Common shares may be issued for the consideration fixed from time to time by the Board of Directors. Section 4.5 RESTRICTIONS ON TRANSFER OF SHARES. The Code of Regulations, an agreement among shareholders, or an agreement between shareholders and the Corporation may impose restrictions on the transfer (or registration of transfer) of shares of the Corporation. ARTICLE V BOARD OF DIRECTORS Section 5.1 Number. The Board of Directors shall consist of a minimum of two (2) individuals and a maximum of five (5) individuals. The number of directors may be fixed or changed from time to time, within the minimum and maximum, by resolution of the Board of Directors. In the absence of a resolution fixing the number of directors, the number shall be three (3) unless there are fewer than three (3) shareholders, in which case the number shall be two (2). SECTION 5.2 QUALIFICATIONS. Directors need not be residents of the State of Ohio nor shareholders of the Corporation. ARTICLE VI PROVISIONS FOR MANAGING THE BUSINESS AND REGULATING THE AFFAIRS OF THE CORPORATION SECTION 6.1 AUTHORITY OF BOARD OF DIRECTORS. Subject to any specific limitation or restriction imposed by the Code or by these Articles of Incorporation, all corporate powers shall be exercised by or under the authority of the Board of Directors, and the business and affairs of the Corporation shall be managed under the direction of the Board of Directors, without previous authorization or subsequent approval by the shareholders of the Corporation. Management by 2 the Board of Directors includes, without limitation, the authority to cause the Corporation to be a promoter, partner or shareholder of any partnership, joint venture, corporation or other entity. SECTION 6.2 CODE OF REGULATIONS; BYLAWS. The Shareholders shall have the power to adopt, amend or repeal a Code of Regulations of the Corporation. The Code of Regulations, including any amendments thereto, may establish one or more procedures by which the Corporation regulates transactions that would, when consummated, result in a change of control of the Corporation. The Board of Directors shall be permitted to adopt Bylaws for their own government, or emergency regulations, as permitted under the Code, as amended from time to time. SECTION 6.3 REMOVAL OF DIRECTORS. Any director (or all of the directors) may be removed with or without cause by either the shareholders or the Board of Directors. Any director (or all of the directors) may be removed by the shareholders only at a meeting called for the purpose of removing the director(s), and the meeting notice must state that a purpose of the meeting is removal of the director(s). Any of the directors (or all of the directors) may be removed by the Board of Directors at any meeting of the Board, and no notice is required. In either case, a director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director. SECTION 6.4 AMENDMENT OF ARTICLES OF INCORPORATION. The Corporation may amend these Articles of Incorporation at any time to add or change a provision that, as of the effective date of the amendment, is required or permitted to be in the Articles of Incorporation or to delete a provision that, as of the effective date of the amendment, is not required to be in the Articles of Incorporation. Amendments to the Articles of Incorporation shall be adopted in any manner prescribed or permitted by the provisions of the Code as of the effective date of the amendment. All rights and powers conferred upon the shareholders or the directors by the Articles of Incorporation or the Code of Regulations are subject to this reserved right to amend the Articles of Incorporation. An amendment is adopted if the votes cast favoring the amendment exceed the votes cast opposing the amendment. SECTION 6.5 POTENTIALLY ABANDONED PROPERTY. After a period of six (6) years from the date specified for payment or delivery, the following property shall revert to and become the property of the Corporation: (a) An unclaimed dividend, distribution or other sum payable to a shareholder, (b) An unclaimed sum payable to any claimant on any obligation of the Corporation, (c) Any unclaimed funds or other property, tangible or intangible, held by the Corporation for the benefit of any person other than the Corporation, and (d) The interest, income, earnings or appreciation on any of the funds or property described above. 3 Before the end of the seventh year after the date that particular funds or property described above should have been paid, distributed or delivered, the Secretary shall prepare the Corporation's written claim to the funds or property including the interest, income, earnings or appreciation. ARTICLE VII INDEMNIFICATION SECTION 7.1 SCOPE OF INDEMNIFICATION. The Corporation shall indemnify the individuals listed in Section 7.2 against liability (including expenses) asserted or incurred in the defense of any proceeding to which the individual was made a party or a witness because of his status with the Corporation and in which the individual was (a) wholly successful on the merits or otherwise or (b) in which the Corporation (acting in accordance with Section 7.4) determines that the individual's conduct and beliefs met the standard of conduct prescribed by the Code, although the individual was not wholly successful on the merits or otherwise or (c) a court determines that the individual is entitled to indemnification. However, in proceeding brought by or in the right of the Corporation, if an individual was adjudged liable to the Corporation, indemnification shall be made only upon order of a court acting upon the individual's application for court-ordered indemnification. SECTION 7.2 SEVERABILITY. If any provision of this Article VII or its application to any individual or circumstance shall be invalid or unenforceable to any extent or in any jurisdiction, the remainder of this Article VII and the application of its provisions to other individuals or circumstances or in other jurisdictions shall not be affected and shall be enforced to the extent permitted by the Code. ARTICLE VIII The amended and restated Articles of Incorporation of the Economy Machine & Tool North, Inc. adopted February 11, 1997, supercede in their entirety all prior Articles of Incorporation for Economy Machine & Tool North, Inc. 4 CERTIFICATE OF AMENDED AND RESTATED ARTICLES OF INCORPORATION OF ECONOMY MACHINE & TOOL NORTH, INC. The undersigned, K.L. Davidson and D.I. Brown, being the President and Secretary, respectively, of Economy Machine & Tool North, Inc., an Ohio corporation (the "Corporation"), DO HEREBY CERTIFY that on February 11, 1997, in a writing executed pursuant to the provisions of Section 1701.54 of the Ohio Revised Code by all of the shareholders of the Corporation, the attached Amended and Restated Articles of Incorporation of the Corporation were adopted and approved. IN WITNESS WHEREOF, we have executed this Certificate of Amended and Restated Articles of Incorporation this 11th day of February, 1997. /s/ K.L. Davidson -------------------------------------- K.L. Davidson /s/ D.I. Brown -------------------------------------- D.I. Brown STATE OF NEBRASKA UNITED STATES OF AMERICA, DEPARTMENT OF STATE STATE OF NEBRASKA SS. LINCOLN, NEBRASKA I, JOHN A. GALE, SECRETARY OF STATE OF NEBRASKA DO HEREBY CERTIFY; THE ATTACHED IS A TRUE AND CORRECT COPY OF ARTICLES OF INCORPORATION AS FILED IN THIS OFFICE ON JUNE 29, 1946, AND ALL AMENDMENTS THERETO OF DEETER FOUNDRY, INC. WITH ITS REGISTERED OFFICE LOCATED IN LINCOLN, NEBRASKA. In Testimony Whereof, I have hereunto set my hand and affixed the Great Seal of the State of Nebraska on August 20, in the year of our Lord, two thousand three. (GRAPHIC SEAL) SECRETARY OF STATE As adopted __________ CODE OF BYLAWS OF NEWNAM MANUFACTURING, INC. ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS. As used in this Code of By-Laws: "CORPORATION" means Newnam Manufacturing, Inc. "LAW" means the Indiana Business Corporation Law, as amended from time to time. "ARTICLES OF INCORPORATION" means the Articles of Incorporation of the Corporation, as amended from time to time. "BYLAWS" means the Code of Bylaws of the Corporation, as amended from time to time. 1.2 CONSTRUCTION. The Bylaws shall be construed in a manner which harmonizes the Bylaws, the Articles of Incorporation and the Law. Where the Bylaws are silent, the. Articles of Incorporation and the Law shall control. If any provision of the Bylaws is inconsistent with the Articles of Incorporation, the Articles of Incorporation shall control. If any provision of the Bylaws is inconsistent with the Law, the Law shall control except in those circumstances in which the Law expressly allows bylaws to provide contrary rules. ARTICLE 2 INDEMNIFICATION 2.1 NAME. The name of the Corporation is Newnam Manufacturing, Inc. 2.2 PRINCIPAL OFFICE. The location of the principal office of the Corporation is 1900 East Jefferson Street, Warsaw, Indiana where the executive offices of the Corporation are located. 2.3 REGISTERED OFFICE AND REGISTERED AGENT. The street address of the Corporation's initial registered office in Indiana and the name of its initial registered agent at that address is set forth in Article III of the Articles of Incorporation. The registered office or registered agent, or both, may be changed, terminated or discontinued in any manner allowable by the Law, without amending the Articles of Incorporation or the Bylaws. As adopted __________ 2.4 SEAL. The seal of the Corporation shall be circular in form and mounted upon a metal die suitable for impressing the same upon paper, or upon a rubber stamp suitable for stamping or printing on paper. About the upper periphery of the seal shall appear the name of the Corporation and about the lower periphery thereof the word "Indiana." In the center of the seal shall appear the words "Seal" or "Corporate Seal." However, the use of the seal (or an impression of the seal) is not required and does not affect the validity of any instrument whatsoever. 2.5 FISCAL YEAR. The fiscal year of the Corporation shall be a 52-53 week fiscal year ending the Saturday on or nearest to the 31st day of December. ARTICLE 3 SHARES 3.1 CERTIFICATES FOR SHARES. Shares shall be represented by certificates signed by the President and the Secretary of the Corporation and bearing the seal of the Corporation. Restrictions on transfer shall be noted conspicuously on the front or back of the certificate. 3.2 REGISTRATION OF TRANSFER OF SHARES. The Corporation shall register in its records the transfer of shares and shall issue a new certificate to the transferee if a certificate endorsed by the appropriate person(s) is presented to the Corporation, reasonable assurance is given that the endorsement is genuine and effective, and other requirements of applicable Indiana statutes are met or are waived by resolution of the Board of Directors, except in those cases in which the Corporation has received written notification of an adverse claim or is charged with notice of an adverse claim. 3.3 LOST, DESTROYED OR WRONGFULLY TAKEN CERTIFICATES. If a registered owner of shares claims that the certificate representing his shares has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate if the registered owner makes a written request, complies with the requirements of applicable Indiana statutes and, in addition, complies with the requirements which the Board of Directors may adopt by resolution. The Board of Directors may waive the statutory requirement for an indemnity bond if the Board of Directors determines that the registered owner's agreement to indemnify the Corporation provides sufficient protection against potential liabilities to adverse claimants. ARTICLE 4 MEETINGS OF SHAREHOLDERS 4.1 ANNUAL MEETING. The shareholders' meeting for the election of directors and for the transaction of other business shall be held each year in the month of April at the date, time and place set by the Board of Directors. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action. Notice of an annual meeting may be communicated orally. Any or all shareholders may participate in an annual shareholders' meeting by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. -2- As adopted __________ 4.2 SPECIAL MEETING. Special meetings of shareholders shall be held upon the call of the Board of Directors or the President or if the holders of at least twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Secretary of the Corporation one (1) or more written demands for the special meeting describing the purpose or purposes for which it is to be held. Notice of a special meeting shall be in writing, shall designate the date, time and place of the meeting and shall describe the purpose or purposes for which the meeting is to be held. Any or all shareholders may participate in a special shareholders' meeting by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. ARTICLE 5 THE BOARD OF DIRECTORS 5.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. Directors shall be elected by the shareholders at the shareholders' annual meetings, but may be elected at any shareholders' meeting. The term of a director expires at the next annual shareholders' meeting following his election or upon his earlier death, resignation or removal from office. Despite the expiration of a director's term, the director continues to serve until a successor is elected and qualifies or until there is a decrease in the number of directors. (A decrease in the number of directors does not shorten an incumbent director's term except in the case of a director continuing to serve beyond the expiration of his term.) A director may qualify either by giving notice to the Secretary of his acceptance of the office of director or by attending a meeting of the Board of Directors. A director may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 5.2 VACANCIES. If a vacancy occurs on the Board of Directors, including a vacancy resulting from the resignation, death or removal of a director and a vacancy resulting from an increase in the number of directors, the Board of Directors may fill the vacancy, and, if the directors remaining in office constitute less than a quorum of the Board of Directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. 5.3 QUORUM; VOTING REQUIREMENT. Except as otherwise provided in Section 5.2 with respect to the filling of vacancies on the Board of Directors, a quorum of the Board of Directors shall consist of one-half (1/2) of the number of directors prescribed by the resolution of the Board of Directors in effect immediately before the meeting begins. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors, except as otherwise provided in Article 9 of the Bylaws with respect to the amendment or repeal of bylaws. 5.4 ANNUAL MEETING. Unless otherwise determined by the Board of Directors, the Board of Directors shall meet each year promptly after the shareholders' annual meeting for the purpose of electing officers and transaction of other business. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action, and if the -3- As adopted __________ meeting is not held at the designated time, the election of officers may be conducted at any subsequent meeting of the Board of Directors. No notice of the date, time, place, or purpose of the annual meeting need be given, if notice of the shareholders' annual meeting has been given, and in any event notice of an annual meeting may be communicated orally. 5.5 REGULAR MEETINGS. The Board of Directors may from time to time adopt resolutions scheduling the date(s), time(s) and place(s) of regular meetings of the Board of Directors. A scheduled regular meeting of the Board of Directors may be held without further notice of the date, time, place or purpose of the meeting, and in any event notice of a regular meeting may be communicated orally. 5.6 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held upon the call of the President or upon the written request of any director. The call or request shall state the date by which the special meeting shall be held and may state the purpose(s) for holding the special meeting. A special meeting of the Board of Directors must be preceded by at least two (2) days notice of the date, time and place of the meeting. The notice need not describe the purpose(s) of the special meeting unless a purpose is to remove an officer or director in which case notice of that purpose shall be given. Notice of a special meeting may be communicated orally. Whether or not the notice of a special meeting describes the purpose(s) of the meeting, the Board of Directors may consider and act upon any matter at a special meeting. 5.7 EMERGENCY MEETINGS. It an extraordinary event prevents a quorum of the Board of Directors from assembling in time to deal with the business for which a meeting has been or is to be called, any director may call an emergency meeting of the Board of directors. Notice of an emergency meeting need be given only to those directors whom it is practicable to reach and may be given in any practicable manner allowable under the Law. One (1) or more officers of the Corporation present at an emergency meeting of the Board of Directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum. ARTICLE 6 THE OFFICERS 6.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. The Board of Directors shall elect a President, Secretary and Treasurer and may elect one or more Vice Presidents. The same individual may simultaneously hold more than one (1) office in the Corporation. Officers shall normally be elected at the Annual Meeting of the Board of Directors, but may be elected at any meeting of the Board of Directors. An officer shall hold office from the effective date of his election until the next Annual Meeting of the Board of Directors and thereafter until his successor is duly elected and has qualified, or until the officer's earlier death, resignation or removal from office. The President must be a director, but other officers need not be directors. An officer shall qualify by giving notice to the Secretary of his acceptance of the office. An officer may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. -4- As adopted __________ 6.2 SALARIES. The salaries of the officers shall be fixed or changed, from time to time, by resolution of the Board of Directors or by contract. 6.3 PRESIDENT. The President shall be the chief executive officer of the Corporation and shall have an powers and "duties which are by law or custom incident to the office of the President. The President shall preside at all meetings of shareholders and the Board of Directors. All contracts, deeds, notes and similar documents shall be signed on behalf of the Corporation by the President or his designee, except in those instances in which the Board of Directors assigns that duty to another officer. The President shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors. 6.4 VICE PRESIDENTS. The Vice President(s) shall have the powers and perform the duties assigned from time to time by the Board of Directors and by the President. If the President resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the Vice President shall temporarily act in the place of the President. If the Board of Directors elects more than one vice president and neither the Board of Directors nor the President has designated a Vice President to act in the place of the President, the individual listed first in the resolution electing vice presidents shall temporarily act in the place of the President until the Board of Directors directs otherwise. 6.5 SECRETARY. The Secretary shall have the responsibility for preparing minutes of meetings of the shareholders and the Board of Directors and for authenticating records of the Corporation. The Secretary shall cause to be kept and maintained all records of the Corporation required by the Law. The Secretary shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors and by the President. 6.6 TREASURER. The Treasurer shall be the chief financial officer' of the Corporation and shall have responsibility for all funds of the Corporation. The Treasurer shall render to the President and the Board of Directors an accounting of the financial condition of the Corporation, from time to time whenever requested. The Treasurer shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors and by the President. ARTICLE 7 REQUIRED RECORDS 7.1 MEETING RECORDS. The Corporation shall keep as permanent records minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. 7.2 ACCOUNTING RECORDS. The Corporation shall maintain appropriate accounting 7.3 SHAREHOLDER LIST. The Corporation shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each. -5- As adopted __________ 7.4 FORM OF RECORDS. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time. 7.5 RECORDS KEPT AT PRINCIPAL OFFICE. The Corporation shall keep at its principal office a copy of the records: ARTICLES OF INCORPORATION. Its Articles of Incorporation or Restated Articles of Incorporation and an amendments to them currently in effect. BYLAWS. Its Code of Bylaws or Restated Code of Bylaws and all amendments to them currently in effect. "BLANK CHECK STOCK" Resolutions. Resolutions adopted by the Board of Directors with respect to one (1) or more classes or series of shares and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding. MINUTES. The minutes of all shareholders' meetings, and records of all actions taken by shareholders without a meeting, for the past three (3) years. COMMUNICATIONS. All written communications to shareholders generally within the past three (3) years, including the financial statements, if any, furnished to shareholders for the past three (3) years. DIRECTORS AND OFFICERS. A list of the names and business addresses of its current directors and officers. ANNUAL REPORT. Its most recent annual report delivered to the Indiana Secretary of State. All original records and all other records, including the records identified in Sections 7.1, 7.2 and 7.3, may be kept at another location including the office of counsel to the Corporation. 7.6 SHAREHOLDER INSPECTION. A shareholder shall be entitled to inspect and copy the records of the Corporation to the extent and in the manner provided by the Law. ARTICLE 8 INDEMNIFICATION 8.1 SCOPE OF INDEMNIFICATION. The Corporation shall indemnify the individuals listed in Section 8.2 against liability (including expenses) incurred in the defense of any proceeding to which the individual was made a party or a witness because of his status with the Corporation -6- As adopted __________ and in which the individual was (a) wholly successful on the merits or otherwise or (b) in which the Corporation (acting in accordance with Section 8.4) determines that the individual's conduct and beliefs met the standard of conduct prescribed by the Law, although the individual was not wholly successful on the merits or otherwise or (c) a court determines that the individual is entitled to indemnification. 8.2 INDIVIDUALS ELIGIBLE FOR INDEMNIFICATION. The following individuals are eligible for indemnification, as described in this Article 8: Any director, officer, employee or agent of the Corporation including an individual who is or was (or agreed to be) a director, officer, employee or agent of the Corporation or an individual who, while a director, officer, employee or agent of the Corporation, is or was serving (or agreed to serve) at the Corporation's request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, whether for profit or not. 8.3 ADVANCES. Subject to the conditions prescribed by the Law and in accordance with Section 8.4, the Corporation may pay for or reimburse the reasonable expenses incurred by an individual who is a party to or witness in a proceeding, in advance of the final disposition of the proceeding. 8.4 DETERMINATIONS BY THE CORPORATION. The Corporation shall authorize payments in each specific case only after a determination has been made, in a manner allowable by the Law, that indemnification is permissible in the circumstances because the individual has met the standard of conduct prescribed by the Law. 8.5 INSURANCE. The Corporation may purchase and maintain insurance on behalf of any individual described in Section 8.2, whether or not the Corporation would have power under these Bylaws or the Law to indemnify the individual against the liabilities covered by insurance. ARTICLE 9 AMENDMENTS 9.1 POWER TO AMEND OR REPEAL. The Board of Directors may adopt, amend or repeal the Bylaws of the Corporation without notice to or action by the shareholders. 9.2 NO NOTICE REQUIRED; QUORUM. The Bylaws (or any provision of the Bylaws) may be adopted, amended or repealed at any meeting of the Board of Directors at which a quorum is present without prior notice of the purpose of the meeting and without notice of the provision proposed to be adopted, amended or repealed. 9.3 SPECIAL VOTING REQUIREMENT. Notwithstanding Section 5.3 of these Bylaws, the adoption, amendment or repeal of the Bylaws (or any provision of the Bylaws) requires the -7- As adopted __________ affirmative vote of a majority of the number of directors in office immediately before the beginning of the meeting at which the adoption, amendment or repeal is voted upon. 9.4 AMENDMENT OR REPEAL OF QUORUM AND VOTING REQUIREMENTS. Action by the Board of Directors to adopt a bylaw that changes the quorum or voting requirement for action by the Board of Directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater. -8- EX-3.6 8 y92210a1exv3w6.txt ARTICLES OF INCORPORATION EXHIBIT 3.6 THE STATE OF OHIO BOB TAFT SECRETARY OF STATE 907962 CERTIFICATE It is hereby certified that the Secretary of State of Ohio has custody of the Records of Incorporation and Miscellaneous Filings; that said records show the filing and recording of: AMD MIS CHN of: DALTON CORPORATION, ASHLAND MANUFACTURING FACILITY FORMERLY ASHLAND CASTINGS CORPORATION UNITED STATES OF AMERICA STATE OF OHIO OFFICE OF THE SECRETARY OF STATE Recorded on Roll 5759 at Frame 0181 of the Records of Incorporation and Miscellaneous Filings. WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE AT COLUMBUS, OHIO, THIS 28TH DAY OF FEB , A.D. 1997. BOB TAFT Secretary of State CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ASHLAND CASTINGS CORPORATION The undersigned, K.L. Davidson and D.I. Brown, being the President and Secretary, respectively, of Ashland Castings Corporation, an Ohio corporation (the "Corporation"), DO HEREBY CERTIFY that on February 11, 1997, in a writing executed pursuant to the provisions of Section 1701.54 of the Ohio Revised Code by all of the shareholders of the Corporation, the following Amendment to the Articles of Incorporation of the Corporation were adopted and approved. "AMENDMENT TO ARTICLES OF INCORPORATION. THE ARTICLES OF INCORPORATION OF THE CORPORATION ARE HEREBY AMENDED BY THE DELETION THEREFROM OF ARTICLE I AND BY THE SUBSTITUTION OF THE FOLLOWING NEW ARTICLE I IN LIEU THEREOF: ARTICLE I NAME THE NAME OF THE CORPORATION IS DALTON CORPORATION, ASHLAND MANUFACTURING FACILITY." IN WITNESS WHEREOF, we have executed this Certificate of Amendment to Articles of Incorporation this 11th day of February, 1997. /s/ K.L. Davidson -------------------------------------- K.L. Davidson /s/ D.I. Brown -------------------------------------- D.I. Brown EX-3.7 9 y92210a1exv3w7.txt AMENDED AND RESTATED ARTICLES OF INCORPORATION Exhibit 3.7 [ FEB 11 1987 MICROFILMED] STATE OF INDIANA ---------------- OFFICE OF THE SECRETARY OF STATE -------------------------------- To Whom These Presents Come, Greeting: Whereas, there has been presented to me at this office, Restated Articles of Incorporation for NEWNAM MANUFACTURING, INC. -------------------------- and said Restated Articles have been prepared and signed in accordance with the provisions of the Indiana Business Corporation Law; WHEREAS, upon due examination, I find that it satisfies the requirements of I.C. 23-1-18-1; NOW, THEREFORE, I, Evan Bayh, Secretary of State of Indiana, hereby certify that I have this day filed said Articles in this office. Effective date the provisions will apply is January 16, 1987. [SEAL] In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this 16th day of ___January , 1987. Evan Bayh ------------------------------------ Secretary of State By ---------------------------------- , Deputy - -------------------------------------------------------------------------------- AGREEMENT AND PLAN OF MERGER Between DFS, INC. and NEWNAM MANUFACTURING, INC. joined in by THE DALTON FOUNDRIES, INC. - -------------------------------------------------------------------------------- EXHIBIT A AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER is made as of March 31,1992 (the "Agreement.) by DFS, Inc. ("DFS" or the "Merging Corporation") and Newnam Manufacturing, Inc. ("Newnam or the "Surviving Corporation"). The Dalton Foundries, Inc. ("Dalton") joins in this Agreement although it is neither the Surviving Corporation nor a Merging Corporation. DFS is an Indiana corporation having 1,000 authorized common shares without par value of which 100 shares are issued and outstanding. DFS is a wholly-owned subsidiary of Dalton. Newnam is an Indiana corporation having 10,000 authorized common shares without par value of which 6,952 shares are issued and outstanding. The respective Boards of Directors of the parties have determined that it is advisable for DFS to be merged with and into Newnam as described in this Agreement (the "Merger"), as a result of which all of Newnam's outstanding common shares will be converted into only the right to receive a cash payment of Fifty Dollars ($50.00) per share, all on the terms and subject to the conditions of this Agreement and of the Indiana Business Corporation Law ("IBCL "). NOW, THEREFORE, in consideration of the mutual agreements, covenants and warranties contained herein relating to the Merger, and intending to be legally bound hereby, the parties hereby adopt the following plan of merger and agree, in accordance with the provisions of the IBCL, as follows: Article 1 Terms of the Merger Section 1.1 The Merger. Upon the Effective Date (as defined in Section 1.6), in accordance with this Agreement and the IBCL, DFS will be merged with and into Newnam, and Newnam shall be the surviving corporation (the "Surviving Corporation") in the Merger. Section 1.2 Effect of the Merger. The Surviving Corporation continues to exist as a corporation under the IBCL, and the separate existence of DFS ceases. The title to all property (whether real or personal, tangible or intangible) owned by DFS or by Newnam is vested in the Surviving Corporation without reversion or impairment. The Surviving Corporation has all liabilities of DFS and Newnam. A proceeding pending against either DFS or Newnam may be continued as if the Merger did not occur or the Surviving Corporation may be substituted in the proceeding for the Merging Corporation. The Articles of Incorporation and the Bylaws of the Surviving Corporation are as provided in Section 1.3 and Section 1.4, respectively. The shares of Newnam that are to be converted into cash are converted, and the former holders of the shares are entitled only to the rights provided in this Agreement or to their rights under IC 23-1-44. At. any time, or from time to time, after the Effective Date, the officers .of the Surviving Corporation may, in the name of Newnam and/or DFS, and the former officers of Newnam shall, execute and deliver all such proper deeds, assignments, and other instruments and take or cause to be taken all such actions as the Surviving Corporation may deem necessary or desirable to vest, perfect or confirm in the Surviving Corporation title to and possession of, all of Newnam's property, rights, privileges, immunities, powers, purposes and franchises, and otherwise to carry out the purposes of this Agreement. Section 1.3 Articles of Incorporation. The Articles of Incorporation of DFS (the "Articles of Incorporation"), in effect immediately prior to the Effective Date shall from and after the Effective Date be the Articles of Incorporation of the Surviving Corporation, except that Article I (Name) shall be amended as follows: The name of the Corporation is Newnam Manufacturing, Inc. Section 1.4 Bylaws. The Code of Bylaws of DFS, as in effect immediately prior to the Effective Date, shall from and after the Effective Date be the Bylaws of the Surviving Corporation, except that Article 1 (Definitions and Construction), Section 1.1 shall be amended in pan as follows: "Corporation" means Newnam Manufacturing, Inc. and Article 2 (Identification), Section 2.1 shall be amended as follows: 2.1. Name. The name of the Corporation is Newnam Manufacturing, Inc. Section 1.5 Officers and Directors. The directors and officers of DFS at the Effective Date shall be the directors and officers of the Surviving Corporation, who shall hold office subject to the Bylaws of the Surviving Corporation. Section 1.6 Effective Date. The Merger (unless this Agreement is earlier terminated) shall become effective on the date and time, not later than April 30, 1992, when Articles of Merger are filed with the Secretary of State of the State of Indiana. Section 1.7 Closing. Unless this Agreement shall have been terminated pursuant to its provisions, the closing (the "Closing") of the transaction contemplated by this Agreement shall take place at a mutually agreeable location immediately following the Newnam Shareholders Meeting (as defined in Section 3.2) or, if later, as soon as practicable after the last of the conditions set forth herein is fulfilled or waived, or at such other time and place and on such date as Newnam, DFS and Dalton may agree. Article 2 Status of Shares Upon the Effective Date, by virtue of the Merger and without any action on the part of the holders of the Common Shares: Section 2.1 Outstanding Shares of Newnam. Each Newnam Common Share outstanding prior to the Effective Date (other than Newnam Common Shares subject to rights of appraisal as set forth in Section 2.7) shall be converted into only the right to receive Fifty Dollars ($50.00) in cash, subject to applicable withholding taxes, upon surrender of the certificate(s) representing Newnam Common Shares. Section 2.2 Common Shares or DFS. All DFS shares issued and outstanding as of the Effective Date of the Merger shall be deemed converted to common shares of the Surviving Corporation and shall continue to be issued and outstanding shares of the Surviving Corporation with identical designations, preferences, limitations, and relative rights as immediately prior to the Effective Date of the Merger. Section 2.3 Cancellation of Unissued Shares of Newnam. Each authorized but unissued Newnam Common Share shall, by virtue of the Merger and without further action, be cancelled and shall cease to exist. Section 2.4 No Further Rights or Transfers. Upon and after the Effective Date, the holder of a Certificate shall cease to have any rights as a shareholder of Newnam, except for the right to surrender his Certificate in exchange for payment of the Merger Payment in accordance with this Agreement, and no transfer of Newnam Common Shares shall be made on the stock transfer books of Newnam. Section 2.5 Procedure For Payment. (a) Payment to Agent. Dalton shall designate one or more banks or trust companies to act as a payment agent ("Payment Agent") hereunder pursuant to an agreement or agreements satisfactory to Dalton. (b) Surrender of Newnam Common Shares. DFS shall make appropriate arrangements with the Payment Agent so as to provide, commencing as soon as practical after the Effective Date, that each holder of record as of the Effective Date of one or more Newnam Common Shares, upon surrender to the Payment Agent of one or more certificates for Newnam Common Shares (the "Certificates") for cancellation, together with a duly executed transmittal letter and such other documents, information or assurances as may be required in accordance with this Section 25, shall be paid Fifty Dollars ($50.00) cash per share surrendered, subject to applicable withholding taxes, (the "Merger Payment"). No interest shall be paid or accrued on the Merger Payment payable upon surrender of any Certificate. (c) Aggregate Merger Payment. On or before the Effective Date and prior to the filing of the Articles of Merger with the Secretary of State of Indiana, Dalton or DFS shall deposit with the Payment Agent, in trust for the benefit of Newnam shareholders, the aggregate amount (in immediately available funds) to which holders of Newnam Common Shares are collectively entitled pursuant to this Article 2 ("Aggregate Merger Payment"). If so requested by the Surviving Corporation, any funds remaining with the Payment Agent(s) six months after the Effective Date shall be released and repaid by the Payment Agent to the Surviving Corporation, after which time persons entitled thereto may look, subject to applicable escheat and other similar laws, only to the Surviving Corporation for payment thereof. (d) Cancellation of Shares. All holders of Certificates shall cease on the Effective Date to have any rights as shareholders of Newnam or any interest in Newnam, DFS, or any subsidiary or affiliate of either, by reason of the Merger and in full satisfaction of all rights pertaining to their shares of Newnam, their exclusive right shall be to receive cash in accordance with this Article 2, without regard to any delay in surrender of any Certificate or appropriate accompanying documentation hereunder. (e) Transmittal Letter. As soon as practical after the Effective Date, but in any event not later than five (5) business days thereafter, the Payment Agent shall mail to each holder of record of a Certificate or Certificates: (1) a letter of transmittal which, without limitation, shall include a representation to be signed by the holder that the Newnam Common Shares represented by the Certificate(s) are owned by such holder free and clear of any liens, claims or other encumbrances and shall specify that the delivery shall be effective, and risk of loss entitled to the Certificate(s) shall pass, only upon delivery of the Certificate(s) to the Payment Agent; and (2) instructions for use in effecting the surrender of the Certificate(s) which shall specify what, if any, other documents, information or assurance may reasonably be required by the Surviving Corporation to effect a surrender of any Certificate or to be presented in the absence of a Certificate. (f) Lost Certificates. The holders of Certificates representing Newnam Common Shares shall not be entitled to receive the amount of cash payable pursuant to this Section 2.5 until they have surrendered such Certificates. If such Certificates are lost, stolen or destroyed, the Surviving Corporation shall determine the amount of bond, if any, and the type of additional documents, information or assurances as may be reasonably required to protect the Surviving Corporation from any other claimants with respect to the Newnam Common Shares represented thereby in conformity with applicable law. The Surviving Corporation shall have no obligation to payor recognize the claim of any holder of Newnam Common Shares who was not the holder of record thereof as of the Effective Date. Section 2.6 Dissenting Shareholders. Notwithstanding anything in this Agreement to the contrary, to the extent required by the IBCL, Newnam Common Shares which are issued and outstanding immediately prior to the Effective Date and which are held by any shareholder who validly asserts appraisal rights pursuant to IC 23-1-44, shall not be converted into the right to receive cash as provided in Section 2.1, unless and until such holder shall have failed to perfect, or shall have effectively withdrawn or lost, its right to appraisal and payment under the IBCL. If such holder shall have so failed to perfect or shall have effectively withdrawn or lost such right, its shares shall thereupon be deemed to have been converted as of the Effective Date into only the right to receive at the Effective Date Fifty Dollars ($50.00) per share, without interest. From and after the Effective Date, no shareholder who has demanded its appraisal rights as provided in IC 23-1-44 shall be entitled to vote its shares for any purpose or to receive payment of dividends or other distributions with respect to such shares (except dividends or other distributions payable to shareholders of record at a date which is prior to the Effective Date). Newnam shall promptly notify DFS of each shareholder who asserts appraisal rights, and DFS shall have the right to participate in all negotiations and proceedings with respect thereto. Prior to the Effective Date, Newnam shall not, except with the prior written consent of DFS, make any payment with respect to, or settle or offer to settle, any appraisal rights asserted under IC 23-1-44. Article 3 Representations and Warranties of Newnam. Newnam represents and warrants to DFS and Dalton as follows: Section 3.1 Existence, Power and Authority. Newnam is a corporation duly incorporated and validly existing under the laws of the State of Indiana, is duly qualified and in good standing as a foreign corporation in each of the jurisdictions where its business requires such qualification, and has all requisite corporate power and authority to own, lease, sublease and operate its properties and conduct its business as is presently conducted. Section 3.2 Capitalization. As of March 31,1992, the authorized shares of Newnam consist of 10,000 common shares, without par value, of which ___________ are issued and outstanding. All issued and outstanding Newnam Common Shares are validly issued, fully paid and nonassessable. Section 3.3 Authorization and Validity of Agreement. This Agreement has been duly executed and delivered by Newnam, subject to obtaining the approval of Newnam's shareholders at the Special Meeting of the Shareholders ("Newnam Shareholders Meeting") by the vote of not less than a majority of the outstanding common shares entitled to vote (which together with the execution of the Articles of Merger and their filing with the Secretary of State of the State of Indiana are the only additional corporate actions on the part of Newnam necessary for the execution, delivery and performance by Newnam of this Agreement and the consummation by Newnam of the transactions contemplated hereby) and is the legal, valid and binding obligation of Newnam, enforceable against it in accordance with its terms. Section 3.4 No Conflict; No Default. The execution, delivery and performance by Newnam of this Agreement and the consummation of the transactions contemplated hereby will not, except as disclosed prior to the Effective Date: (i) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, government agency or arbitrator presently in effect having applicability to Newnam or its properties or of the Articles of Incorporation or Bylaws of Newnam; or (ii) result in a breach of, constitute a default under, otherwise give any party the right to transactions contemplated hereby will not result in the creation of any lien upon any property, assets or business of DFS or Dalton. Section 3.5 No Government Approvals. The execution, delivery and performance by DFS or Dalton of this Agreement and the consummation of the transactions contemplated hereby will not require any consent or approval of any governmental or regulatory authority under any provisions of law applicable to DFS or Dalton except for the requirements of the IBCL with respect to the consummation of the Merger. Section 3.6 Litigation. There have been no actions, suits or proceedings pending or, to the knowledge of DFS or Dalton, overtly threatened or affecting DFS or Dalton or any of their respective properties before any court, arbitrator, or any governmental agency, domestic or foreign. Section 3.7 Proxy Materials. All of the information furnished in writing to Newnam by DFS or Dalton for inclusion in the Proxy Statement with respect to DFS or Dalton or its affiliates will not, at any time, contain any statement which is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements made therein not false or misleading. Article 4 Representations and Warranties of DFS and Dalton. DFS and Dalton represent and warrant to Newnam as follows: Section 4.1 Existence, Power and Authority. DFS and Dalton, respectively, are corporations duly incorporated and validly existing under the laws of the State of Indiana and are not required to qualify as a foreign corporation in any other jurisdiction. Section 4.2 Capitalization. DFS has one thousand (1,000) authorized common shares, without par value, of which 100 shares are issued and outstanding. Dalton is the sole shareholder of DFS. Section 4.3 Authorization and Validity of Agreement. This Agreement has been duly executed and delivered by DFS and Dalton, has been duly approved by Dalton, the sole shareholder of DFS (which, together with the execution of the Articles of Merger and their filing with the Secretary of State of the State of Indiana, are the only corporate actions on the part of DFS necessary for the execution, delivery and performance by DFS of this Agreement and the consummation by DFS of the transactions contemplated hereby) and is the legal, valid and binding obligation of DFS, enforceable against it in accordance with its terms. Section 4.4 No Conflict; No Default. The execution, delivery and performance by DFS or Dalton of this Agreement, does not and will not: (i) violate any provisions of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, government agency, or arbitrator presently in effect, having applicability to DFS or Dalton, or of the Articles of Incorporation or Bylaws of DFS or Dalton, or (ii) result in a breach of or constitute a default under, any material agreements, lease or instrument to which DFS or Dalton is a party or by which DFS or Dalton may be bound or affected. The execution, delivery and performance by DFS or Dalton of this Agreement and the consummation of the transactions contemplated hereby will not result in the creation of any lien upon any property, assets or business of DFS or Dalton. Section 4.5 No Government Approvals. The execution, delivery and performance by DFS or Dalton of this Agreement and the consummation of the transactions contemplated hereby will not require any consent or approval of any governmental or regulatory authority under any provisions of law applicable to DFS or Dalton except for the requirements of the IBCL with respect to the consummation of the Merger. Section 4.6 Litigation. There have been no actions, suits or proceedings pending or, to the knowledge of DFS or Dalton, overtly threatened or affecting DFS or Dalton or any of their respective properties before any court, arbitrator, or any governmental agency, domestic or foreign. Section 4.7 Proxy Materials. All of the information furnished in writing to Newnam by DFS or Dalton or inclusion in the Proxy Statement with respect to DFS or Dalton or its affiliates will not, at any time, contain any statement which is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements made therein not false or misleading. Article 5 Covenants. Section 5.1 Access to Information and Confidentiality. (a) Prior to the termination of this Agreement, Newnam shall, upon reasonable request, afford to DFS and its agents, full access during normal business hours to the plans, properties, books and records of Newnam and shall cause its officers, employees, accountants and other agents to furnish such additional information as DFS and its agent shall from time to time reasonably request. (b) DFS shall, upon reasonable request, provide Newnam and its agents with information concerning DFS and its affiliates and associates as may be necessary for Newnam to prepare the Proxy Statement and such applications or other documents as may be required to obtain all necessary governmental consents and approvals to the transactions contemplated by this Agreement. (c) Newnam and DFS shall cause their affiliates, associates, officers and other persons to hold in strict confidence all information obtained in accordance with this Section 5.1 and will not disclose such information to others without the prior written consent of the party from whom the information was obtained. If this Agreement is terminated: (i) DFS, Dalton and their affiliates, associates, officers and other personnel will not use such information acquired from Newnam and will promptly return to Newnam all information which Newnam or its agents furnished to each of them; and (ii) Newnam and its agents, affiliates, officers and other personnel will not use any information acquired from DFS or its associates and affiliates and will promptly return to DFS all information which they may have obtained from DFS. Section 5.2 Conduct of Business Prior to the Effective Date. Except as specifically contemplated by this Agreement, or otherwise assented to by DFS, during the period commencing on the date hereof and ending at the Effective Date: (a) Newnam shall conduct its business in the ordinary course, consistent with prior practice, and shall not acquire or dispose of any material amount of its assets; (b) Newnam shall not (i) amend its Articles of Incorporation or Bylaws; (ii) change the number of authorized shares of its common shares; (iii) declare, set aside, or pay any dividends or other distributions or payment in cash, stock, or property in respect of its common shares; (iv) issue, grant, or sell any shares of, or rights of any kind to acquire any Newnam Common Shares other than exercise of pre-existing stock options, if any; (v) mortgage, pledge, or subject to any material lien or other encumbrance properties or assets of Newnam; (vi) increase the salary, wage, bonus, or other compensation payable to any of Newnam's directors, officers or employees; or (vii) agree to do any of the foregoing; and (c) Newnam shall use its best efforts to preserve intact its business organization, to keep available the services of its key employees and to preserve the good will of those having business relationships with it. Section 5.3 Proxy Material. Newnam shall prepare as promptly as practical, a Proxy Statement. DFS shall furnish to Newnam such information relating to itself, its affiliates and associates, and the plans of such persons with respect to Newnam and DFS after the Effective Date, as may be necessary for Newnam to prepare the documents referenced herein. Newnam shall notify DFS of its intention to mail the Proxy Statement to Newnam's shareholders at least forty-eight hours prior to the intended time of such mailing. Newnam shall not be obligated to file or mail any proxy materials or any amendment or supplement thereto, until DFS shall have consented in writing to the portions thereof relating to it, any of its affiliates or associates and the pains of such persons with respect to Newnam and DFS after the Effective Date. Section 5.4 Submission to Shareholders. Newnam shall cause a meeting of its shareholders to be duly called as soon as reasonably practical for the purpose of voting on the Merger and all actions contemplated hereby which require shareholder approval. If the Board of Directors of Newnam recommends approval of the Merger, Newnam shall use its best efforts to solicit from shareholders of Newnam proxies in favor of adoption and approval of the Merger. Subject to the foregoing, Newnam shall take all other action necessary and reasonable to attempt to secure the necessary vote of shareholders in favor of the Merger. Newnam shall prepare and distribute such notices and consents in accordance with applicable laws and regulations. Section 5.5 Further Actions. Subject to the terms and conditions hereof, Newnam, DFS and Dalton shall each use reasonable efforts to take all actions to do such things as are reasonably advisable to enable them to consummate the transactions contemplated by this Agreement, including using all reasonable efforts: (a) (a) to effect all necessary filings; (b) (b) to defend any lawsuit or other legal proceedings challenging this Agreement or the consummation of the transactions contemplated hereby; and (c) (c) to furnish each other such information and assistance as reasonably may be requested in connection with the foregoing. Article 6 Conditions. Section 6.1 Conditions to Obligations of All Parties. The obligations of Newnam and DFS to effect the Merger and to consummate the transactions contemplated by this Agreement are subject to the satisfaction, at or prior to the Closing, of each of the following conditions: (a) Approval of Shareholders. The Merger shall have been approved by the shareholders of Newnam as provided in Section 3.2 and shall have been approved by the sole shareholder of DFS as provided in Section 4.3. (b) No Injunctions, Etc. No preliminary or permanent injunction or other order issued by any court of competent jurisdiction or any governmental body or any statute or rule promulgated or enacted by any governmental authority which enjoins or otherwise prohibits the transactions contemplated by shall be in effect. Section 6.2 Conditions to Obligations or DFS and Dalton. The obligations of DFS and Dalton to effect the Merger and to consummate the transactions contemplated by this Agreement are subject to the satisfaction, at or prior to the Closing, of each of the additional conditions: (a) Accuracy or Representations and Warranties. The representations and warranties of Newnam contained in Article 3 shall have been true and complete in all material respects when made and at the Closing, except for changes contemplated by this Agreement (b) Performance of Agreements. Newnam shall have performed in all material respects all obligations and agreements contained in this Agreement to be performed or to be complied with by it prior to or at the Closing. (c) Opinion or Newnam Counsel. Newnam shall have furnished the opinion of Baker & Daniels, counsel to Newnam, dated the Closing Date, in form and substance satisfactory to DFS, to the effect that: (i) Newnam is a corporation duly organized and existing under the laws of the State of Indiana; (ii) Newnam has full corporate power to carry out the Merger provided for in this Agreement and all corporate and other proceedings required to be taken by or on behalf of Newnam to authorize it to execute and deliver this Agreement and to consummate the Merger contemplated hereby have been duly taken; (iii) This Agreement and instruments to be delivered pursuant hereto have been duly executed and delivered by Newnam and constitute legal, valid, and binding obligations of Newnam enforceable in accordance with its, and their, respective terms (subject as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other similar laws affecting the enforcement of creditors' rights generally from time to time in effect and subject to equitable principles limiting the right to obtain specific performance); (iv) Such other matters incident to the Merger contemplated by this Agreement as DFS or its counsel may reasonably request. (d) Collective Bargaining Agreement. The International Molders and Allied Workers Union, Local 262, shall agree to extend the Collective Bargaining Agreement to July 30, 1996, with the following changes: - Adjust standards to 480 minute days from 455 and establish an incentive review system. - Eliminate wage gain plan. - On May 1, 1993, the medical co-payment will be improved: - Company will absorb $250.00 monthly (family) - Company will absorb $121.00 monthly (single) - On May 1, 1994, the medical co-payment was improved: - Company will absorb $300.00 monthly (family) - Company will absorb $171.00 monthly (family) - On May 1, 1995, add on 40 cents per hour. - 1992 only - 20% of pre-tax profits will be distributed to all employees on an equal basis. - Extend current labor agreement for three years, three months to July 30, 1996. - Establish committee with full authority to review and decide whether permissible to work to Dalton Foundries (this work would be replaced with comparable work.) - Establish committee to monitor and make recommendations for possible changes to insurance program to control costs. - It is the intention of the company to continue existing "shop rules". - All other contract language will remain the same. This proposal was ratified by members of Local #262, of the GMP-International Union, March 28, 1992 by a vote of 87 to 64. (e) Certain Resignations. David Bash ("Bash") and Russell Baker ("Baker") shall resign as the Chairman and President, respectively, of Newnam effective as of the Effective Date. Section 6.3 Conditions to Obligations of Newnam. The obligations of Newnam to effect the Merger and consummate the transactions contemplated by this Agreement are subject to the satisfaction at or prior to Closing, of each of the following conditions: (a) Accuracy of Representations and Warranties. The representations and warranties of DFS contained in Article 4 shall have been true and complete in all material respects when made and at the Closing, except for changes permitted as contemplated by this Agreement. (b) Performance of Agreements. DFS shall have performed in all material respects all obligations and agreements contained in this Agreement to be performed or complied with by it prior to or at the Closing, including, without limitation, deposit with the Payment Agent the Aggregate Merger Payment in accordance with Section 2.5 of this Agreement (c) Litigation. Immediately prior the Closing, there shall not be any action, suit, or pending proceeding against Newnam or any of its directors, offices, or shareholders before any court or governmental agency, domestic or foreign, which seeks to obtain substantial damages from the officers, or directors of Newnam, or seeks injunctive relief; in connection with the Merger or the other transactions contemplated by this Agreement. (c) Litigation. Immediately prior to the Closing, there shall not be any action, suite, or pending proceeding against Newnam or any of its directors, offices, or shareholders before any court or governmental agency, domestic or foreign, which seeks to obtain substantial damages from the officers or directors of Newnam, or seeks injunctive relief, in connection with the Merger or the other transactions contemplated by this Agreement. (d) Opinion of DFS Counsel. DFS shall have furnished the opinion of Dutton Overman Goldstein Pinkus, P.C., counsel to DFS, dated the Closing Date, in form and substance satisfactory to Newnam, to the effect that: (i) DFS is a corporation duly organized and existing under the laws of the State of Indiana; (ii) DFS has full corporate power to carry out the Merger provided for in this Agreement and all corporate and other proceedings required to be taken by or on the part of DFS to authorize it to execute and deliver this Agreement and to consummate the Merger contemplated hereby have been duly taken; (iii) This Agreement and the instruments to be delivered pursuant hereto have been duly executed and delivered by DFS and constitute legal, valid and binding obligations of DFS enforceable in accordance with its, and their, respective terms (subject as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other similar law affecting the enforcement of creditors' rights generally from time to time in effect and subject to equitable principles limiting the right to obtain specific performance); and (iv) The execution, delivery and performance by DFS of this Agreement, and the consummation of the merger contemplated thereby, does not and will not, to the best of counsel's knowledge: (i) violate any provision of law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect, having applicability to DFS or the Articles of Incorporation or Bylaws of DFS, or (ii) result in the breach of or constitute a default under, any material agreement, lease or instrument to which DFS is a party or by which it may be bound or affected. The execution, delivery and performance by DFS of this Agreement and the consummation of the transaction as contemplated hereby will not result in the creation of any lien upon any property, assets or business of DFS, except for such liens as may be created pursuant to the terms of this Agreement or the financing arrangements set forth herein. (v) Such other matters incident to the Merger contemplated by this Agreement as Newnam or its counsel may reasonably request. Article 7 Miscellaneous. Section 7.1 Termination and Abandonment. (a) General. This Agreement may be terminated and the transaction contemplated hereby abandoned at any time, notwithstanding approval thereof by the shareholders of Newnam, but not later than Closing: (i) by mutual consent of the respective Boards of Directors of Newnam and DFS; or (ii) by the Board of Directors of Newnam if the Closing shall not have occurred on or before April 3D, 1992, and the failure to close shall not have been caused by the non-fulfillment of any condition contained in Section 6.2; (iii) by the Board of Directors of DFS if the Closing shall not have occurred on or before April 30, 1992, and the failure to occur shall not have been caused by the nonfulfillment of any condition contained in Section 6.3; or (iv) by the Board of Directors of either Newnam or DFS if any court of competent jurisdiction or any governmental body having jurisdiction shall have issued an order, decree or ruling or taken any other action restraining or prohibiting the transactions contemplated hereby. (b) Procedure Upon Termination. In the event of termination and abandonment of this Agreement, written notice thereof shall be promptly given to the other parties hereto and this Agreement shall terminate and the transactions contemplated hereby shall be abandoned without further action by the parties hereto. (c) Liability Upon Termination. Upon termination as provided in this Section 7.1, this Agreement shall be void and of no further force or effect and there shall be no obligation on the part of the parties or their respective officers, directors, employees, agents or shareholders, other than as specified in Section 5.1(c). Section 7.2 Termination of Representations and Warranties. The respective representations and warranties of Newnam and DFS shall not be deemed waived or otherwise affected by any investigation made by any party. Each representation and warranty shall expire with, and be terminated and extinguished by, the Merger and thereafter Newnam and DFS shall have no liability with respect to any such representation or warranty. Notwithstanding the foregoing, Newnam shall have no liability for any misrepresentation or breach of warranty, except for intentional misrepresentations or breaches of warranty. This Section 8.3 shall have no effect upon any other obligation of the parties, whether to be performed before or after the Effective Date. Section 7.3 Governing Law. This Agreement shall be governed by and construed in accordance with - the laws of the State of Indiana applicable to agreements made and to be performed entirely within Indiana. Section 7.4 Binding; Assignment. This Agreement shall inure to the benefit of and be binding upon any successor to Newnam and DFS including Dalton. This Agreement may not be assigned by any party without the prior written consent of the other parties. Section 7.5 Notification or Certain Matters. Newnam shall give prompt notice to DFS, and DFS shall give prompt notice to Newnam of: (a) the occurrence, or nonoccurrence, of any event the occurrence, or nonoccurrence, of which would cause any of its representations or warranties in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Date and (b) any material failure of, or any event that will result in the material failure of, Newnam, on the one hand, or DFS, on the other hand, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; however, the delivery of any notice pursuant to this Section 7.5 shall not limit or otherwise affect the remedies available to the party receiving such notice under this Agreement Section 7.6 Notices. All notices and other communications under this Agreement shall be in writing and shall be considered given when delivered personally, delivered by telecopier, or sent by registered or certified letter, postage prepaid, addressed to the parties at the following addresses (or at such other address as a party may specify by written notice hereunder): If to Newnam: Newnam Manufacturing, Inc. 200 West Ohio Street P. O. Box 271 Kendallville, Indiana 46755 Attention: Telecopier Number: (219) ___________ With a copy to: Baker & Daniels 2400 Fort Wayne National Bank Bldg. Fort Wayne, Indiana 46802 Attention: Joseph W. Kimmell Telecopier Number: (219) 422-5925 If to DFS: DFS, Inc. 1900 East Jefferson Street Warsaw, Indiana 46580 Attention: Don I. Drown Telecopier Number: (219) 372-1820 With a copy to: Dutton Overman Goldstein Pinkus, P.C. 710 Century Building 36 South Pennsylvania Street Indianapolis, Indiana 46204 Attention: Carl D. Overman Telecopier Number: (317) 633-1494 Section 7.7 Entire Agreement; Waiver. This Agreement and the other agreements referred to herein or executed on the date hereof constitute a complete statement of all arrangements among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings between them, and this Agreement cannot be changed or terminated except by an instrument in writing signed by the parties hereto. No party has made nor shall it be deemed to have made any representation or warranty except as expressly set forth herein. No waiver of any provision of this Agreement given at any time shall be deemed to constitute a waiver of any other provision of this Agreement nor shall such waiver constitute a continuing waiver. Section 7.8 Headings. The headings in this Agreement are intended solely for the convenience of reference and shall not be given affect in the construction or interpretation of this Agreement. Section 7.9 Publicity. The parties shall consult with each other in issuing any press releases or otherwise making any public statements with respect to the transactions contemplated hereunder, and shall not issue any such press release or make any such public statement prior to such consultation except as may be required by law. Section 7.10 Further Actions. Each of the parties hereto agree that subject to its legal obligations, it will use its best efforts to fulfill all conditions precedent specified herein, to the extent that such conditions are within its control, and to do all things reasonably necessary to consummate the transactions contemplated hereby. Section 7.11 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. NEWNAM MANUFACTURING, INC. DFS, INC. By: /s/ David M. Bash By /s/ Don I. Brown ------------------ ----------------------- Don I. Brown, President THE DALTON FOUNDRIES, INC. By /s/ Kenneth L. Davidson ----------------------- K.L. Davidson, President and Chief Executive Officer ARTICLES OF INCORPORATION OF NEWNAM MANUFACTURING, INC. The undersigned incorporator, desiring to form a corporation ("Corporation") pursuant to the provisions of the Indiana Business Corporation law as amended from time to time (the "Law"), executes the following Articles of Incorporation: ARTICLE I NAME The name of the Corporation is NEWNAM MANUFACTURING, Inc. ARTICLE II AUTHORIZED SHARES SECTION 2.1 NUMBER. The total number of shares which the Corporation is authorized to issue is one thousand (1,000). SECTION 2.2 CLASSES. There shall be one (1) class of shares, designated common shares. SECTION 2.3 RIGHTS. All common shares shall have the same preferences, limitations and relative rights. SECTION 2.3.1 VOTING RIGHTS. With respect to each matter upon which shareholders are entitled to vote, each holder of common shares shall be entitled to one (1) vote for each common share standing in the shareholder's name on the Corporation's books on the record date. SECTION 2.3.2 RIGHTS UPON DISSOLUTION. In the event of the dissolution of the Corporation, upon the winding up and liquidation of its business and affairs, each holder of common shares shall be entitled to receive a ratable portion of the net assets of the Corporation remaining after payment (or provision for payment) of the debts and other liabilities of the Corporation. SECTION 2.3.3 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive rights to subscribe to or purchase any common shares or other securities of the Corporation. 1 EXHIBIT B SECTION 2.4 ISSUANCE AND CONSIDERATION. Common shares may be issued for the consideration fixed from time to time by the Board of Directors. SECTION 2.5 RESTRICTIONS ON TRANSFER OF SHARES. The By-Laws, an agreement among shareholders, or an agreement between shareholders and the Corporation may impose restrictions on the transfer (or registration of transfer) of shares of the Corporation. ARTICLE III REGISTERED OFFICE AND REGISTERED AGENT The street address of the Corporation's initial registered office in Indiana and the name of its initial Registered Agent at that office is: Don I. Brown, 1900 East Jefferson Street, Warsaw, Indiana 46580. ARTICLE IV INCORPORATOR The name and address of the incorporator of the Corporation is: Carl D. Overman, Dutton & Overman, P.C., 710 Century Building, 36 South Pennsylvania Street, Indianapolis, Indiana 46204. ARTICLE V BOARD OF DIRECTORS SECTION 5.1 NUMBER. The Board of Directors shall consist of a minimum of one (1) individual and a maximum of nine (9) individuals. The number of directors may be fixed or changed from time to time, within the minimum and maximum, by the Board of Directors. In the absence of a resolution fixing the number of directors, the number shall be three (3). SECTION 5.2 QUALIFICATIONS. Directors need not be residents of the State of Indiana nor shareholders of the Corporation. 2 ARTICLE VI PURPOSES AND POWERS SECTION 6.1 PURPOSE. The purpose for which the Corporation is formed is to transact any and all lawful business for which corporations may be incorporated under the Law. SECTION 6.2 POWERS. The Corporation shall have the powers to do all things necessary or convenient to carry out its business and affairs. 3 ARTICLE VII PROVISIONS FOR MANAGING THE BUSINESS AND REGULATING THE AFFAIRS OF THE CORPORATION SECTION 7.1 AUTHORITY OF BOARD OF DIRECTORS. Subject to any specific limitation or restriction imposed by the Law or by these Articles of Incorporation, all corporate powers shall be exercised by or under the authority of the Board of Directors, and the business and affairs of the Corporation shall be managed under the direction of the Board of Directors, without previous authorization or subsequent approval by the shareholders of the Corporation. SECTION 7.2 CODE OF BY-LAWS. The Board of Directors shall have the power to adopt, amend or repeal the Code of By-Laws of the Corporation, without previous authorization or subsequent approval by the shareholders of the Corporation. SECTION 7.3 REMOVAL OF DIRECTORS. Any director (or all of the directors) may be removed with or without cause by either the shareholders or the Board of Directors. Any director (or all of the directors) may be removed by the shareholders only at a meeting called for the purpose of removing the director(s), and the meeting notice must state that a purpose of the meeting is removal of the director(s). Any of the directors (or all of the directors) may be removed by the Board of Directors at any meeting of the Board, and no notice is required. In either case, a director may be removed only if the number of votes cast to remove the directors exceeds the number of votes cast not to remove the director. SECTION 7.4 AMENDMENT OF ARTICLES OF INCORPORATION. The Corporation may amend these Articles of Incorporation at any time to add or change a provision that, as of the effective date of the amendment, is required to be in the Articles of Incorporation or to delete a provision that, as of the effective date of the amendment, is not required to be in the Articles of Incorporation. Amendments to the Articles of Incorporation shall be adopted in any manner prescribed or permitted by the provisions of the Law as of the effective date of the amendment. All rights and powers conferred upon the shareholders or the directors by the Articles of Incorporation or the Code of By-Laws are subject to this reserved right to amend the Articles of Incorporation. An amendment is adopted if the votes cast favoring the amendment exceed the votes cast opposing the amendment. SECTION 7.5 POTENTIALLY ABANDONED PROPERTY. After a period of six (6) years from the date specified for payment or delivery, the following property shall revert to and become the property of the Corporation: (a) An unclaimed dividend, distribution or other sum payable to a shareholder, (b) An unclaimed sum payable to any claimant on any obligation of the Corporation, (c) Any unclaimed funds or other property, tangible or intangible, held by the Corporation for the benefit of any person other than the Corporation, and 4 (d) The interest, income, earnings or appreciation on any of the funds or property described above. Before the end of the seventh year after the date that particular funds or property described above should have been paid, distributed or delivered, the Secretary shall prepare the Corporation's written claim to the funds or property including the interest, income, earnings or appreciation. 5 STATE OF INDIANA OFFICE OF THE SECRETARY OF STATE ARTICLES OF AMENDMENT To Whom These Presents Come, Greeting: WHEREAS, there has been presented to me at this office, Articles of Amendment for: NEWNAM MANUFACTURING INC and said Articles of Amendment have been prepared and signed in accordance with the provisions of the Indiana Business Corporation Law; as amended. The name of the corporation is as follows: DALTON CORPORATION, KENDALLVILLE MANUFACTURING FACILITY NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of Indiana, hereby certify that I have this day filed said articles in this office. The effective date of these Articles of Amendment is May 07, 1997. In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this Seventh day of May, 1997. 6 ARTICLES OF AMENDMENT OF THE Provided by: JOSEPH H. HOGSETT ARTICLES OF INCORPORATION SECRETARY OF STATE OF INDIANA State Form 38333 (R6 / 12-93) 302 W. WASHINGTON ST., ROOM E018 Approved by State Board of Accounts 1988 INDIANAPOLIS, IN 46204 TELEPHONE: (317) 232-6576 Indiana Code 23-1-38-1 et seg. FILING FEE $30.00 INSTRUCTIONS: Use 8 -1/2 x 11 inch white paper for inserts. Filing requirements - Present original and one copy to address in upper right hand corner of this form. [APPROVED AND FILED IND. SECRETARY OF STATE] ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF: Newnam Manufacturing, Inc. The undersigned officers of: Newnam Manufacturing, Inc. (hereinafter referred to as the "Corporation") existing pursuant to the provisions of: (indicate appropriate act) X Indiana Business Corporation Law as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certify the following facts: ARTICLE I AMENDMENT(S) SECTION 1 The date of incorporation of the corporation is: February 9, 1987 SECTION 2 The name of the corporation following this amendment to the Articles of Incorporation is: Dalton Corporation, Kendallville Manufacturing Facility SECTION 3 The exact text of Article(s) I of --------------------------------------- the Articles of Incorporation is now as follows: ARTICLE I NAME The name of the Corporation is Dalton Corporation. Section 4 Date of each amendment's adoption: February 11, 1997 EX-3.8 10 y92210a1exv3w8.txt AMENDED AND RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3.8 Certificate of Amendment of White Foundry Company, Inc. changing name to Deeter Foundry Inc. Lincoln Filing $5.00 Recording 1.10 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF WHITE FOUNDRY COMPANY, INC. The undersigned, Glenn K. Deeter and Eugene A. Deeter, hereby certify that they are respectively the president and secretary of White Foundry Company, Inc.; that pursuant to Section 21-151 Re-issue Revised Statutes of Nebraska, 1943, the directors of said corporation at a meeting duly called adopted a resolution providing for the amendment of the Articles of Incorporation of said corporation as hereinafter set forth and declaring the advisability thereof: that thereafter, pursuant to said Section 21-151 and pursuant to Section 21-1, 153 Re-issue Revised Statutes of Nebraska, 1943, all of the stockholders of said corporation consented in writing to the amendment of the Articles of Incorporation of said corporation as hereinafter set forth, and waived any meeting or notice of meeting of stockholders for the consideration of such amendment; that the Articles of Incorporation of said corporation were thereby amended as follows: Article I of the Articles of Incorporation of said corporation are amended to provide the name of said corporation shall be Deeter Foundry Inc., such amendment to become effective on the 1st day of February, 1955. IN WITNESS WHEREOF, the undersigned have hereunto set their names and affixed the corporate seal of said corporation. -------------------------------------- -------------------------------------- STATE OF NEBRASKA ) ) LANCASTER COUNTY ) On this 21st day of January, 1955, before me, a Notary Public duly commissioned for and residing in said county, personally came Glenn K. Deeter, to me known, and known to me to be the President of White Foundry Company, Inc., a corporation, and to be the person whose signature is affixed to the above and foregoing certificate, a such President, and acknowledged the same to be his voluntary act and deed, pursuant to the statutes of the State of Nebraska requiring the execution and acknowledgment of such a certificate by the President of the corporation as to which such certificate is made. -------------------------------------- Notary Public My commission expires: 11/6/56 Van Pelt, Marti & O'Gara, Attorneys 718 First National Bank Building NOTICE OF AMENDMENT OF ARTICLES OF INCORPORATION OF WHITE FOUNDRY COMPANY, INC. NOTICE is hereby given that the Articles of Incorporation of White Foundry Company, Inc., have been amended in the following manner, to-wit: Article I of the Articles of Incorporation of said corporation is amended to provide the name of said Corporation shall be Deeter Foundry Inc., such amendment to become effective on the 1st day of February, 1955. WHITE FOUNDRY COMPANY, INC. By Van Pelt, Marti & O'Gara Its Attorneys Feb 9 (Wed) Jan 26, Feb 2-9 PROOF OF PUBLICATION AFFIDAVIT STATE OF NEBRASKA, LANCASTER COUNTY, SS: Robert L. Gant, being duly sworn, deposes and says that he is an editor and manager of The Daily Reporter, a legal daily newspaper printed, published and of general circulation in the County of Lancaster and State of Nebraska, and that the attached printed notice was published in the said newspaper once each week 3 successive weeks, the first insertion having been on the 26 day of January A.D., 1955, and thereafter on February 2 and 9, 1955, and that said newspaper is a legal newspaper under the statutes of the State of Nebraska. The above facts are within my personal knowledge. Filing Fee $6.65 Printer's Fee $ Total $ Robert L. Gant -------------------------------------- Subscribed in my presence and sworn to before me February 9, 1955 -------------------------------------- Notary Public Certificate of Amendment Deeter Foundry, Inc. Lincoln Filing $5.00 Increase 50.00 Recording 1.30 DEETER FOUNDRY, INC. CERTIFICATE OF AMENDMENT OF ARTICLES STATE OF NEBRASKA ) ) SS COUNTY OF LANCASTER ) The undersigned, Glenn K. Deeter, the duly elected, qualified and acting president of Deeter Foundry, Inc., and Eugene A. Deeter, the duly elected, qualified and acting secretary of said corporation, do certify that at a regular annual meeting of the stockholders of Deeter Foundry, Inc., held at ifs office at Lincoln, Nebraska, at 2:00 o'clock P.M. on the 6th day of April 1957, pursuant to a waiver of notice signed by the holders of all of the corporate stock of said corporation, the stockholders of said corporation adopted an amendment to Article IV of the Articles of Incorporation of Deeter Foundry, Inc., as hereinafter set forth. Such action was pursuant to a resolution of the Board of Directors of said corporation which recommended the adoption of such an amendment, declared the advisability of such an amendment, and set out the amendment to be adopted by the stockholders. At such meeting 434 shares of the capital stock of the said corporation were represented in person or by proxy out of a total of 434 shares issued and outstanding; and said amendment herein referred to was duly adopted in accord with the provisions of Section 21-151 of Reissue, Revised Statues of Nebraska, 1943, as follows: "Article IV The authorized capital stock of this corporation shall be One Hundred Thousand ($100,000.00) Dollars, divided into one thousand shares (1000) of the par value of One Hundred ($100.00) Dollars per share. Said shares shall all be common stock and shall be issued as fully paid and non-assessable. "Said shares may be paid for wholly or partly by cash, by labor done, or by real or personal property. The minimum amount of capital with which the corporation will commence business is the sum of Five Thousand ($5,000.00) Dollars." The undersigned further certify that all stockholders present at said meeting voted in favor of said amendment and no votes were cast against the same. Witness our hands and the seal of said corporation, this 30th day of January, 1958. -------------------------------------- President -------------------------------------- Secretary STATE OF NEBRASKA ) ) SS COUNTY OF LANCASTER ) On this 30th day of January, 1958, before me, the undersigned, a notary public in and for Lancaster County, Nebraska, came GLENN K. DEETER, personally known to me to be the president of Deeter Foundry, Inc. and Eugene A. Deeter, personally known to me to be the secretary of said corporation, and acknowledged the signatures to the foregoing certificate to be their voluntary act and deed as such officers and the voluntary act and deed of said corporation. IN WITNESS WHEREOF I have hereunto set my hand and affixed my notarial seal the day and year above last written. -------------------------------------- Notary Public My Commission Expires the 10th day of August, 1963. [ILLEGIBLE TEXT HERE] NOTICE OF AMENDMENT OF ARTICLES OF INCORPORATION OF DEETER FOUNDRY, INC. NOTICE is hereby given that the Articles of the Incorporation of Deeter Foundry, Inc., a corporation organized and operating under the laws of the State of Nebraska with its principal place of business in Lincoln, Lancaster County, Nebraska, have been amended in the following respects: Article IV of said Articles of Incorporation has been amended to read as follows: ARTICLE IV The authorized capital stock of this corporation shall be One Hundred Thousand ($100,000.00) Dollars, divided into one thousand shares (1000) of the par value of One Hundred ($100.00) Dollars per share. Said shares shall all be common stock and shall be issued as fully paid and non-assessable. Said shares may be paid for wholly or partly by cash, by labor done, or by real or personal property. The minimum amount of capital with which the corporation will commence business is the sum of Five Thousand ($5,000.00) Dollars. DEETER FOUNDRY, INC. By MARTI, O'GARA, DALTON & SHELDON Its Attorneys Feb. 18 (Tues) Feb. 4-11-186-18 PROOF OF PUBLICATION AFFIDAVIT STATE OF NEBRASKA, LANCASTER COUNTY, SS: Robert L. Gant, being duly sworn, deposes and says that he is an editor and manager of The Daily Reporter, a legal daily newspaper printed, published and of general circulation in the County of Lancaster and State of Nebraska, and that the attached printed notice was published in the said newspaper once each week three successive weeks, the first insertion having been on the 4th day of February A.D., 1958, and thereafter on February 11 and 18, 1958, and that said newspaper is a legal newspaper under the statutes of the State of Nebraska. The above facts are within my personal knowledge. Printer's Fee $12.60 Filing Fee $_____ Total $_____ -------------------------------------- Subscribed in my presence and sworn to before me February 18, 1958 Dorothy R. Paul -------------------------------------- Notary Public DEETER FOUNDRY, INC. CERTIFICATE OF AMENDMENT OF ARTICLES STATE OF NEBRASKA ) ) SS COUNTY OF LANCASTER ) The undersigned, Glenn K. Deeter, the duly elected, qualified and acting president of Deeter Foundry, Inc., and Eugene A. Deeter, the duly elected, qualified and acting secretary of said corporation, do certify that at a regular annual meeting of the stockholders of Deeter Foundry, Inc., held at ifs office at Lincoln, Nebraska, at 2:00 o'clock P.M. on the 6th day of April 1957, pursuant to a waiver of notice signed by the holders of all of the corporate stock of said corporation, the stockholders of said corporation adopted an amendment to Article IV of the Articles of Incorporation of Deeter Foundry, Inc., as hereinafter set forth. Such action was pursuant to a resolution of the Board of Directors of said corporation which recommended the adoption of such an amendment, declared the advisability of such an amendment, and set out the amendment to be adopted by the stockholders. At such meeting 434 shares of the capital stock of the said corporation were represented in person or by proxy out of a total of 434 shares issued and outstanding; and said amendment herein referred to was duly adopted in accord with the provisions of Section 21-151 of Reissue, Revised Statues of Nebraska, 1943, as follows: "Article IV The authorized capital stock of this corporation shall be One Hundred Thousand ($100,000.00) Dollars, divided into one thousand shares (1000) of the par value of One Hundred ($100.00) Dollars per share. Said shares shall all be common stock and shall be issued as fully paid and non-assessable. "Said shares may be paid for wholly or partly by cash, by labor done, or by real or personal property. The minimum amount of capital with which the corporation will commence business is the sum of Five Thousand ($5,000.00) Dollars." The undersigned further certify that all stockholders present at said meeting voted in favor of said amendment and no votes were cast against the same. Witness our hands and the seal of said corporation, this 30th day of January, 1958. - --------------------------------------- President - --------------------------------------- Secretary STATE OF NEBRASKA ) ) SS COUNTY OF LANCASTER ) On this 30th day of January, 1958, before me, the undersigned, a notary public in and for Lancaster County, Nebraska, came GLENN K. DEETER, personally known to me to be the president of Deeter Foundry, Inc. and Eugene A. Deeter, personally known to me to be the secretary of said corporation, and acknowledged the signatures to the foregoing certificate to be their voluntary act and deed as such officers and the voluntary act and deed of said corporation. IN WITNESS WHEREOF I have hereunto set my hand and affixed my notarial seal the day and year above last written. ------------------------------------------ Notary Public My Commission Expires the 10th day of August, 1963. 2 [ILLEGIBLE TEXT HERE] NOTICE OF AMENDMENT OF ARTICLES OF INCORPORATION OF DEETER FOUNDRY, INC. NOTICE is hereby given that the Articles of the Incorporation of Deeter Foundry, Inc., a corporation organized and operating under the laws of the State of Nebraska with its principal place of business in Lincoln, Lancaster County, PROOF OF PUBLICATION AFFIDAVIT STATE OF NEBRASKA, LANCASTER COUNTY, SS: Robert L. Gant, being duly sworn, deposes and says that he is an editor and manager of The Daily Reporter, a legal daily newspaper printed, published and of general circulation in the County of Lancaster and State of Nebraska, and that the attached printed notice was published in the said newspaper once each week three successive weeks, the first insertion having been on the 4th day of February A.D., 1958, and thereafter on February 11 and 18, 1958, and that said newspaper is a legal newspaper under the statutes of the State of Nebraska. The above facts are within my personal knowledge. Lancaster County, Nebraska, have been amended in the following respects: Article IV of said Articles of Incorporation has been amended to read as follows: ARTICLE IV The authorized capital stock of this corporation shall be One Hundred Thousand ($100,000.00) Dollars, divided into one thousand shares (1000) of the par value of One Hundred ($100.00) Dollars per share. Said shares shall all be common stock and shall be issued as fully paid and non-assessable. Said shares may be paid for wholly or partly by cash, by labor done, or by real or personal property. The minimum amount of capital with which the corporation will commence business is the sum of Five Thousand ($5,000.00) Dollars. DEETER FOUNDRY, INC. By MARTI, O'GARA, DALTON & SHELDON Its Attorneys Feb. 18 (Tues) Printer's Fee $12.60 ----- Filing Fee $ ----- Total $ -----
- -------------------------------------------------------------------------------- Subscribed in my presence and sworn to before me February 18, 1958 Dorothy R. Paul ------------------------------------------ Notary Public Change R.A. & R.O. Deeter Foundry Inc. Lincoln Filing. 5.00 Recording 1.00 Receipt No. A60975 ------ STATE OF NEBRASKA SECRETARY'S OFFICE SS Received and filed for record: July 28, 1967 And recorded on film roll No. 24 Misc. Inc. at page 1358 Frank Marsh (Secretary of State) By: -------------------------------------- INDEXED "MICROFILIMED" RECORDED DOMESTIC CHANGE OF REGISTERED AGENT AND/OR REGISTERED OFFICE TO: FRANK MARSH, SECRETARY OF STATE, LINCOLN, NEBRASKA 1. The name of this corporation is Deeter Foundry Inc. ---------------------------------------- , and said corporation is organized under - ------------------------------------ the laws of the State of Nebraska , with ----------------------------------------- principal office located at 5945 No. 70th St. Lincoln -------------------------------------------------- Nebraska 68529 - ------------------------ and that pursuant to the laws of the State of Nebraska, does hereby wish to change its Registered Agent and/or Registered Office, in the State of Nebraska. 2. The address of its present registered office is 303 Lincoln Bldg. -------------------------- Lincoln Lancaster NEBRASKA. - -------------------------------------------------------------------------------- 3. If the address of its registered office be changed, the address will be: 5945 No. 70th St., Lincoln Lancaster NEBRASKA. - -------------------------------------------------------------------------------- 4. The name of its present registered agent is Lloyd J. Marti ------------------------------ 303 Lincoln Bldg. Lincoln Lancaster NEBRASKA. - -------------------------------------------------------------------------------- 5. If the registered agent be changed the successor registered agent shall be: Glenn K. Deeter 5945 No. 70th St. Lincoln Lancaster - -------------------------------------------------------------------------------- NEBRASKA. - -------------------------------- 6. The corporation further states that the address of its Registered Office and the address of the business office of the Registered Agent are identical. The changes designated above were authorized by resolution duly adopted by the board of Directors on the 1st day of April, 1967 ------------ ----------- Dated this 27th day of July ___, 1967 Glenn K. Deeter ------------------ Fee: Filing $5.00 Recording 1.00 146 Form No. CD 5 SUBMIT TO THE SECRETARY OF STATE IN DUPLICATE CERTIFICATE OF REVIVAL OR RENEWAL DOMESTIC CORPORATIONS John A. Gale, Secretary of State Room 1305 State Capitol, P.O. Box 94608 Lincoln, NE 68509 http://www/nol.org/home/SOS/ Submit in Duplicate Name of Corporation Deeter Foundry, Inc. The corporation was dissolved by the Secretary of State on April, 2001, for (check one) X A. Nonpayment of occupational taxes --- B. Failure to maintain a registered agent - ---- C. Expiration of corporate existence - ---- The above named grounds for dissolution either did net exist or have been eliminated and the corporate name complies with the requirements of Neb. Rev. Stat. 21-2028. DATED 9-3-02 --------- --------------------------- --------------------------- NOTE: Every filing must be signed by the Chairman of the board of directors, the president, or one of the officers of the corporation. If the corporation has not yet been formed or directors have not yet been selected, the filing shall be signed by an incorporator. If the corporation is in the hands of a receiver, trustee, or other court appointed fiduciary, the filing shall be singed by that fiduciary. FILING FEE: $30.00 CERTIFICATE OF REINSTATEMENT I, JOHN A. GALE, Secretary of State, do hereby cancel the certificate of dissolution and reinstate the above named corporation as a corporation in good standing to do business in the State of Nebraska, and further state that the grounds for dissolution of the corporation did not exist or have been eliminated. IN TESTIMONY WHEREOF, I do hereby affix the Great Seal of the State of Nebraska. (State Seal) Revised 12/19/19/2000 Neb. Rev. Stat. 21-323.01 & 21-20,160 DOMESTIC CHANGE OF REGISTERED AGENT AND/OR OFFICE Submit in Duplicate John A. Gale, Secretary of State Room 1305 State Capitol. P.O. Box 94608 Lincoln, NE 68509 http://www.nol.org/homelSOS/ The following corporation, pursuant to the laws of the state of Nebraska, does hereby wish to change its Registered Agent and/or Registered Office. NAME OF CORPORATION Deeter Foundry, Inc. ----------------------------------------------------------- PREVIOUS: Registered Agent: Glenn K. Deeter ------------------------------------------------------------ Registered Office: 5945 No. 70th Street, Lincoln NE 68503 ------------------------------------------------------------ NEW: Registered Agent: Jack L. Schultz. ------------------------------------------------------------- Registered Office*: 121 So. 13th Street, #800, Lincoln NE 68508 ----------------------------------------------------------- - ---- *The street address of the registered office and the street address of the registered agent must be identical. DATED 9-3-02 --------- --------------------------- --------------------------- NOTE: Every filing must be signed by the chairperson of the board of directors. the president, or one of the officers of the corporation. If the corporation has not yet been formed or directors have not yet been selected, the filing shall be signed by an incorporator. If the corporation is in the hands of a receiver, trustee, or other court appointed fiduciary, the filing shall be signed by that fiduciary. Registered Agent: Please check A (current agent) or B (new agent) below and sign ___ A. I hereby state that the above named corporation has been notified of the change in address of my registered office. ___ B. I hereby consent to act as registered agent for the above named corporation. -------------------------------------------- FILING FEE: $30.00 Revised 12/19/2000 Neb. Rev. Stat.Section 21-2032 STATE OF NEBRASKA United States of America Department of State State of Nebraska Lincoln, Nebraska I, JOHN A. GALE, SECRETARY OF STATE OF NEBRASKA DO HEREBY CERTIFY; DEETER FOUNDRY, INC. WAS DULY INCORPORATED UNDER THE LAWS OF THIS STATE ON JUNE 29, 1946 AND DO FURTHER CERTIFY THAT NO OCCUPATION TAXES ASSESSED ARE UNPAID AND NO ANNUAL REPORTS ARE DELINQUENT; ARTICLES OF DISSOLUTION HAVE NOT BEEN FILED AND SAID CORPORATION IS IN EXISTENCE AS OF THE DATE OF THIS CERTIFICATE. IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED THE GREAT SEAL OF THE STATE OF NEBRASKA ON SEPTEMBER 25, IN THE YEAR OF OUR LORD TWO THOUSAND THREE SECRETARY OF STATE EX-3.9 11 y92210a1exv3w9.txt AMENDED ARTICLES OF INCORPORATION Exhibit 3.9 [STATE OF CALIFORNIA LOGO] [SEAL] SECRETARY OF STATE I, Kevin Shelley, Secretary of State of the State of California, hereby certify: That the attached transcript of 41 page(s) was prepared by and in this office from the record on file, of which it purports to be a copy, and that it is full, true and correct. IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of [SEAL] SEP 30 2003 -s- Kevin Shelley Secretary of State FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF CALIFORNIA FEB 6 - 1946 FRANK M. JORDAN, Secretary of State By -s- Frank M. Jordan ----------------------------- Assistant Secretary of state [SEAL] RESTRICTION OF RIGHT TO AMEND ARTICLE Yes No ARTICLES OF INCORPORATION OF GREGG IRON FOUNDRY KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, all of whom are residents of the State of California, have this day voluntarily associated ourselves together for the purpose of forming a corporation under the laws of the State of California, and do Constitute ourselves a body corporate in accordance with the laws of said State; AND WE HEREBY CERTIFY: First: That the name of said corporation shall be GREGG IRON FOUNDRY Second: That the purposes for which said corporation is formed are as follows: To conduct and carry on a general foundry and machine shop business and to engage in the manufacture of all kinds of iron castings and machinery and to buy iron, either manufactured or unmanufactured, and to sell the same; to buy, sell, manufacture and generally deal in goods, wares, merchandise, property and commodities of any and every class and description, and all articles used or useful in connection there-with, insofar as may be permitted by the laws of the State of California; to engage in any business, whether manufacturing or otherwise, which this corporation may deem advantageous or useful in connection with any or all of the foregoing, and to purchase, acquire, manufacture, market or prepare for market, sell and otherwise dispose of any article, commodity or 1. thing which this corporation may use in connection with its business. To subscribe for and/or to buy, own, hold, purchase or receive, and to sell, negotiate, guarantee, assign, deal in, exchange, transfer, mortgage, pledge, or otherwise dispose of shares of the capital stock, scrip, bonds, coupons, mortgages, debentures, debenture stock, securities, notes, acceptances, drafts and evidences of indebtedness issued or created by other corporations, joint stock companies or associations, whether public, private or municipal, or any corporate body, and while the owner thereof, to possess and to exercise in respect thereof all the rights, powers, and privileges of ownership, including the right to vote thereon. For the purposes of this corporation, to borrow money, either with or without security, and to issue bonds, debentures, capital stock, notes, installment notes, installment investment certificates and/or other written evidences of indebtedness and to secure the payment or such borrowed money by pledge or mortgage of the whole or any part of the property of this corporation, either real or personal, or to deposit the property and/or money of said corporation in a trust fund, to secure the repayment of said obligations and to create, pursuant thereto, a trust and to execute thereunder trust Indentures for such purpose or purposes; to issue bonus, debentures, capital stock, notes and/or other written obligations without security for their repayment. To secure, purchase, in any manner acquire, apply for, register, own, hold, sell or dispose of any and all copyrights, trade-marks, and other trade rights. To make, perform, enter into and carry out contracts of every kind for any lawful purpose, without limit as to amount, 2. with any person, firm, association or corporation. To make, accept, endorse, draw, discount, guarantee, execute and issue bills of exchange, drafts, warrants, promissory notes and all kinds of obligations, certificates, negotiable and transferable instruments. To maintain offices, to carry on its operations and business and, without restrictions or limit as to the amount of the same, to purchase, lease, or otherwise acquire, hold and own, and to mortgage, sell, convey, lease or otherwise encumber or dispose of real and personal property of every kind and description, in any of the states or territories of the United states and in the District of columbia and in all foreign countries, subject to the laws of such state, district, territory or country. To do any and all things which are or may be deemed by such corporation necessary or convenient to the carrying out of the purposes of this corporation to the same extent as natural persons lawfully might or could do, insofar as such acts are permitted to be done by a corporation organized under the laws of the State of California. To contract with, employ, hire, and remunerate any person, firm or corporation, for services rendered or to be rendered; to engage, hire, discharge, employ and compensate all persons whose services are necessary in connection with any of the business or businesses of this corporation. To acquire, either by purchase or otherwise, own, hold, sell, pledge, hypothecate, discount, and generally deal in, contracts for the purchase and sale of real or personal 3. property, contracts for the manufacture or creation of personal property, for the erection, construction, alteration, or repair of buildings, for the payment of money in installments or otherwise, and contracts of every other character and description; also promissory notes, drafts, bonds, and other obligations and evidences of indebtedness, whether corporate or individual, whether negotiable or non-negotiable, and whether secured or unsecured, together with any security for the same; also leases and mortgages of an interest in and liens upon real or personal property; and shares of corporate stock and other corporate securities. To acquire by purchase or otherwise, own, hold, sell, lease, mortgage, pledge, hypothecate, manage, operate, and generally deal in all kinds of real and personal property, or any interest therein or any kind or character ; to erect, construct, alter and repair buildings, and to do a general contracting and building business; to do a general manufacturing business; to do a general hotel and apartment house business; to acquire, own, manage, operate, improve, dispose of, and encumber manufacturing manufacturing plants and businesses and other plants and businesses of every kind. To engage in a general importing, exporting, buying, selling, brokering, jobbing, wholesaling, retailing and manufacturing business, with reference to all kinds of property, both real and personal. The foregoing statement of purposes shall be construed as a statement of purposes, objects and powers and it is hereby expressly declared by the incorporators of this corporation that the foregoing enumeration of purposes and objects 4. is not intended to limit or restrict in any manner the general powers of this corporation. The incorporators expressly declare that it is their intention in making this declaration of purposes to include all objects, or any object, which may lawfully be that of a corporation organized for business and profit under the laws of the State of California. Third: That the county in this State where the principal office for the transaction of the business of the corporation is to be located is the County of Los Angeles. Fourth: This corporation is authorized to issue two (2) classes of shares of stock to be designated respectively "Preferred" and "Common"; the total number of shares which this corporation shall have authority to issue is twenty thousand (20,000) shares and the aggregate par value of all shares that are to have a par value shall be One Hundred One Thousands Dollars($101,000.00). That the number of preferred shares that are to have a par value shall be ten thousand (10,000) and the par value or each share of such class shall be Ten Dollars ($10.00) and the number of common shares that are to have a par value shall be ten thousand (10,000) and the par value of each share of such class shall be Ten Cents (10cent(s)). Preferences: The statement of the preference, privileges and restrictions granted to and imposed upon the holders of the respective classes of shares of this corporation is as follows: (a) The holders of the preferred shares shall be entitled, when and as declared by the Board of Directors, to 5. dividends out of any funds of this corporation at the time legally available for the declaration of dividends at the rate of but not exceeding ten (10%) per cent per annum of the par value of such shares for each fiscal year payable in preference and priority to any payment of any dividend on common shares for such fiscal year and payable quarterly or otherwise as the Board of Directors may from time to time determine. The right to such dividends on preferred shares shall not be cumulative and no rights shall accrue to holders of preferred shares by reason of fact that dividends on said shares are not declared in any prior years; except, however, in the event funds legally available for dividends in the amount of Twenty Thousand Dollars ($20,000.00) or more are earned in any fiscal year and the full preferred ten (10%) per cent dividend is not declared and paid for said year on the preferred stock, then any portion of said ten (lO%) per cent dividend so undeclared and unpaid shall be cumulative as of said year and paid before any dividend shall be paid upon or declared or set apart for the common stock. (b) In the event there shall remain any surplus legally available for the payment of dividends after the payment of the dividend upon the preferred stock during any fiscal year provided for in Paragraph (a) hereof, such Surplus over and above such reserve for contingencies as the Board of Directors shall deem necessary may be paid as dividends upon the preferred and common stock equally share and share alike, (c) In the event of liquidation, dissolution or winding up of this corporation, whether voluntary or involuntary, the holders of preferred shares shall be entitled to receive out of the assets of this corporation, whether such assets are 6. capital or surplus, an amount equal to one hundred (100%) per cent of the par value of such preferred shares and a further amount equal to any dividends thereon declared or accumulated under the provisions of Paragraph (a) hereof and unpaid to the date of such distribution. That subject to the foregoing the residue of the assets of this corporation shall be divided equally between the preferred and common stock share and share alike. If upon such liquidation, dissolution, winding up, sale of assets or distribution of the capital of this corporation, whether voluntary or involuntary, the assets thus distributed among the holders of preferred shares shall be insufficient to permit the payment to such shareholders of the full preferential amounts aforesaid, then the entire assets of this corporation to be distributed shall be distributed ratably among the holders of the preferred shares. Consolidation or merger of this corporation with or into any other corporation or corporations shall not be deemed to be a liquidation, dissolution or winding up within the meaning of this clause. (d) Each share of preferred stock issued and outstanding on the records of the corporation on the day three (3) days prior to any meeting of the shareholders shall be entitled to two (2) votes at such meeting and each share of common stock issued and outstanding on the records of the corporation on the day three (3) days prior to any meeting of the shareholders shall be entitled to one (1) vote at such meeting. Fifth; The number of directors of said corporation shall be five (5), which number may be changed from time to time by an appropriate resolution of the Board of Directors except that at no time is the number of directors constituting the Board to be reduced to less than five. The names and resi- 7. dences of the directors are appointed for the first year to serve until their success are elected and qualified are as follows:
Name Address ---- ------- CHARLES R. GREGG 306 No. Mission Drive San Gabriel, California HERBERT W. LARSON 2109 Carlos, Alhambra, Calif. WAYNE L. TRAVIS 1415 E. California Street Pasadena, California RAY E. HOPPING 2240 Paloma, Pasadena, Calif. HOWARD R. REULAND 356 Pasqual, San Gabriel, Calif.
IN WITNESS WHEREOF, we have hereunto set our hands and seals this 31 day of January, 1946. - s - Charles R. Gregg ------------------------------ CHARLES R. GREGG Director and Organizer - s - Herbert W. Larson ------------------------------ HERBERT W. LARSON Director and Organizer - s - Wayne L. Travis ------------------------------ WAYNE L. TRAVIS Director and Organizer - s - Joseph Conrad ------------------------------ JOSEPH CONRAD Organizer - s - Ray E. Hopping ------------------------------ RAY E. HOPPING Director and Organizer - s - Harvey H. Weaver ------------------------------ HARVEY H. WEAVER Organizer - s - Paul Angst ------------------------------ PAUL ANGST Organizer - s - Howard R. Reulard ------------------------------ HOWARD R. REULARD Director and Organizer 8. - s - J.J. Kneier ---------------------------- J.J. KNEIER Organizer - s - Harold W. Robertson ---------------------------- Harold W. Robertson Organizer STATE OF CALIFORNIA ) ) SS: COUNTY OF LOS ANGELES ) On this 31st day of January, 1946, before the undersigned, a Notary Public in and for the said County of Los Angeles, State of California, residing therein, duly commissioned and sworn, personally appeared CHARLES R. GREGG, HERBERT W. LARSON, WAYNE L. TRAVIS, JOSEPH CONRAD, RAY E. HOPPING, HARVEY H. WEAVER, PAUL ANGST, HOWARD R. REULAND, J.J. KNEIER and HAROLD W. ROBERTSON, known to me to be the persons whose name are subscribed to the within instrument and acknowledged to me that they executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year in this certificate first above written. - s - [ILLEGIBLE] ------------------------------------ Notary Public in and for the County of Los Angeles, State of California. 9. FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF CALIFORNIA NOV 16 1954 FRANK M. JORDAN, Secretary of State By [ILLEGIBLE] ----------------------------- DEPUTY CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF GREGG IRON FOUNDRY The undersigned, Charles H. Gregg and H. W. Larson, do hereby certify that they are, respectively, and have been at all times herein mentioned, the duly elected and acting president, and secretary of Gregg Iron Foundry, a California corporation, and further that: One: At a special meeting of the board of directors of said corporation duly held at its principal office for the transaction of business at El Monto, California, at 8:00 o'clock p.m., on the 26th day at October, 1954, at which meeting there was at All times present and acting a quorum of the members, of said board, the following resolutions were duly adopted: WHEREAS, it is deemed by the board of Directors of this corporation to be to its best interests and to the best interests of its shareholder's that its Articles of Incorporation be amended as hereinafter provided: NOW, THEREFORE, BE IT RESOLVED that Article Second be amended to read as follows: "Second: That the purposes for which said corporation is formed are as follows: To conduct and carry on a general foundry and machine shop business and to engage in the manufacture of all kinds of iron castings and machinery and to buy iron, either manufactured or unmanufactured, and to sell the same; to buy, sell, manufacture and generally deal in goods, wares, merchandise, property and commodities of any and every class and description, and all articles used or useful in connection therewith, insofar as may be permitted by the laws of the State of California; to engage in any business, whether manufacturing or otherwise, which this corporation may deem advantageous or useful in connection with any or all of the foregoing, and to purchase, acquire, manufacture, market or prepare for market, sell and otherwise dispose of any article, commodity or thing which this corporation may use in connection with its business. To subscribe for and/or to buy, own, hold, purchase or receive, and to sell, negotiate, guarantee, assign, deal in, exchange, transfer, mortgage, pledge, or otherwise dispose of shares of the capital stock, scrip, bonds, coupons, mortgages, debentures, debenture stock, securities, notes, acceptances, drafts and evidences of indebtedness issued or created by other corporation, joint stock companies or associations, whether public, private or municipal, or any corporate body, and while the owner thereof, to possess and to exercise in respect thereof all the rights, powers, and privileges of ownership, including the right to vote thereon. For the purposes of this corporation, to borrow money, either with or without security, and to issue bonds, debentures, capital stock, notes, installment notes, installment investment certificates and/or other written evidences of indebtedness and to secure the payment of such borrowed money by pledge or mortgage of the whole or any part of the property of this corporation, either real, or personal, or to deposit the property and/or money of said corporation in a trust fund, to secure the repayment of said obligations and to create, pursuant thereto, a trust and to execute thereunder trust debentures for such purpose or purposes; to issue bonds, debentures, capital stock, notes and/or other written obligations without security for their repayment. To secure, purchase, in any manner acquire, apply for, register, own, hold, sell or dispose of any and all copy-rights, trade-marks, and other trade rights. To make, perform, enter into and carry out contracts of every kind for any lawful purpose, without limit as to amount with any person, firm, association or corporation. To make, accept, endorse, draw, discount, guarantee, execute and issue bills of exchange, drafts, warrants, promissory notes and all kinds of obligations, certificates, negotiable, and transferable instruments. To maintain offices, to carry on its operations and business and, without restrictions or limit as to the amount of the same, to purchase, lease, or otherwise acquire, hold and own, and to mortgage, sell, convey, lease or otherwise encumber or dispose of real and personal property of every kind and description, in any of the states or territories of the United States and in the District of Columbia and in all foreign countries, subject to the laws of such state, district, territory or country. To do any and all things, which are or may be deemed by such corporations necessary or convenient to 2. the carrying out of the purposes of this corporation to the same extent as natural persons lawfully might or could do, insofar as such acts are permitted to be done by a corporation organized under the laws of the State of California. To contract with, employ, hire, and remunerate any person, firm or corporation, for services rendered or to be rendered; to engage, hire, discharge, employ and compensate all persons whose services are necessary in connection with any of the business or businesses of this corporation. To acquire, either by purchase or otherwise, own, hold, sell, pledge, hypothecate, discount, and generally deal in, contracts for the purchase and sale of real or personal property, contracts for the manufacture or creation of personal property, for the erection, construction, alteration, or repair of buildings, for the payment of money in installments or otherwise, and contracts of every other character and description; also promissory notes, drafts, bonds, and other obligations and evidences of indebtedness, whether corporate or individual, whether negotiable or non-negotiable, and whether secured or unsecured, together with any security for the same; also leases and mortgages of an interest in and liens upon real or personal property; and shares of corporate stock and other corporate securities. To acquire, either by purchase or otherwise, own, hold, sell,lease, mortgage, pledge, hypothecate, manage, operate, and generally deal in all kinds of real and personal property, or any interest therein of any kind or character; to erect, construct, alter and repair buildings, and to do a general contracting an building business; to do a general manufacturing business; to do a general hotel and apartment house business; to acquire, own, manage, operate, improve, dispose of, and encumber manufacturing plants and businesses and other plants and businesses of every kind. To engage in a general importing, exporting, buying, selling, brokering, jobbing, wholesaling, retailing and manufacturing business, with reference to all kinds of property, both real and personal. To become a partner (either general or limited or both) and to enter into agreements of partnership, with one or more other persons or corporations, for the purpose of carrying on any business whatsoever which this corporation may deem proper or convenient in connection with any of the purposes herein set forth or otherwise, or which may be calculated directly or indirectly to promote the interest of this corporation or to enhance the value of its property / or business. The foregoing statement of purposes shall be construed as a statement of purposes, objects and powers 3. and it is hereby expressly decided by the incorporators of this corporation that the foregoing enumeration of purposes and objects is not intended to limit or restrict in any manner the general powers of this corporation. The incorporators expressly declare that it is their intention in making this declaration of purposes to include all objects, or any object, which may lawfully be that of a corporation organized for business and profit under the laws of the State of California. BE IT FURTHER RESOLVED that the Board of Directors of this corporation hereby adopts and approves said amendment of its articles of incorporation; and BE IT FURTHER RESOLVED that the president or vice-president, and the secretary or an assistant secretary of this corporation be and they are hereby authorized and directed to procure the adoption and approval of the foregoing amendment by the vote or written consent of the shareholders of this corporation holding at least a majority of the voting power and thereafter to sign and verify their oaths and to file a certificate in the form and manner required by Section 3672 of the California Corporations Code and in general to do any and all things necessary to effect said amendment in accordance with said Section 3672. Two: The total number of shares of said corporation entitled to vote on or consent to the adoption of such amendment is 20,000 of which 10,000 are preferred shares entitled by the articles of incorporation to two votes per share, and 10,000 are common shares entitled to one vote per share, and 10,000 are common shares entitled to one vote per share, making a total of 30,000 votes entitled to the cast or represented by written consents thereto: that the number of shares represented by written consents thereto are as follows: 9474 preferred shares representing 18,948 votes, and 10,000 common shares representing 10,000 votes, making a total of 28,948 votes represented by said written consents. The following is a copy of the form written consent executed by the holders of said shares: 4. WHEREAS, at least a special meeting of [ILLEGIBLE] of Gregg Iron Foundation California corporation, [ILLEGIBLE] held at the principal office for the transaction of business of said corporation [ILLEGIBLE] the 26th day of October [ILLEGIBLE] of the members of said board was at all times present and acting, an amendment of the articles of incorporation of said corporation was adopted and approved by resolution of said board amending Article Second of said articles of Incorporation to read as follows. "Second: That the purposes for which said corporation is formed are as follows: To conduct and carry on a general foundry and machine shop business and to engage in the manufacture of all kinds of iron [ILLEGIBLE] and machinery and to buy iron, either manufactured or unmanufactured, and to sell the same; to buy, sell, manufacture and generally deal in goods, wares, merchandise, property and commodities of any and every class and description and all articles used or useful in connection therewith, insofar as may be permitted by the laws of the State of California; to engage in any business, whether manufacturing or otherwise, which this corporation may deem advantageous or useful in connection with any or all of the forgoing, and to purchase, acquire manufacture, market or prepare for market, sell and otherwise dispose of any article commodity or thing which this corporation may use in connection with its business. To subscribe for and/or to buy, own, hold, purchase or receive and to sell, negotiate, guarantee, [ILLEGIBLE] purchase, transfer, mortgage, pledge, or otherwise [ILLEGIBLE] mortgages, debentures, debenture stock, [ILLEGIBLE] notes, acceptances, drafts and evidences of indebtedness issued or created by other corporation, joint stock companies or associations, whether public private or municipal or any corporate body, and while the owner thereof, to possess and to exercise in respect thereof all the rights, powers, and privileges of ownership, including the right to vote thereon. For the purposes of this corporation, to borrow money, either with or without security, and to issue bonds, debentures, capital stock, notes, installment notes, installment investment certificates and/or other written evidences of indebtedness and to secure the payment of such borrowed money by pledge or mortgage of the whole or any part of the property of this corporation, either real or personal, or to deposit the property and/or money of said corporation in a trust fund, to secure the repayment of said obligations and to create, pursuant thereto, a trust and to execute thereunder trust indentures for such purpose or purposes; to 5. [ILLEGIBLE] To secure, purchase, in any [ILLIGIBLE] acquire, apply for, register, own, hold, sell or dispose of any and all copy-rights, trade-marks, and other trade rights. To make, perform, enter into and carry out contracts of every kind for any lawful purpose, without limit as to amount with any person, firm, association or corporation. To make, accept, endorse, draw, discount, guarantee, execute and issue bills of exchange, drafts, warrants, promissory notes and all kinds of obligations, certificates, negotiable and transferable instruments. To maintain offices, to carry on its operations and business and, without restrictions or limit as to the amount of the same, to purchase, lease, or otherwise acquire, hold and own, and to mortgage, sell, convey, lease or otherwise [ILLEGIBLE] or dispose of real and personal property of every kind and description, in any of the states or territories of the United States and in the District of Columbia and in all foreign countries, subject to the laws of such state, district, territory or country. To do any and all things which are or may be deemed by such corporations necessary or convenient to the carrying out of the purposes of this corporation to the [ILLEGIBLE] extent as natural persons lawfully might or could do, insofar as such acts are permitted to be done by a corporation organized under the laws of the State of California. To contract with, employ, hire, and remunerate any person, firm or corporation, for services rendered or to be rendered; to engage, hire, discharge, employ and compensate all persons whose services are necessary in connection with any of the business or businesses of this corporation. To acquire, either by purchase or otherwise, own, hold, sell, pledge, hypothecate, discount, and generally deal in, contracts for the purchase and sale of real or personal property, contracts for the manufacture or creation of personal property, for the erection, construction, alteration, or repair of buildings, for the payment of money in installments or otherwise, and contracts of every other character and description; also promissory notes, drafts, bonds, and other obligations and evidences of indebtedness, whether corporate or individual, whether negotiable or non-negotiable, and 6. whether secured or unsecured, together with any security for the same; also leases and mortgages of an interest in and liens upon real or personal property; and shares of corporate stock and other corporate securities. To acquire by purchase or otherwise, own, hold, sell, lease, mortgage, pledge, hypothecate, manage, operate, and generally deal in all kinds of real and personal property, or any interest therein of any kind or character; to erect, construct, alter and repair buildings, and to do a general contracting and building business; to do a general manufacturing business; to do a general hotel and apartment house business; to acquire, own, manage, operate, improve, dispose of, and encumber manufacturing plants and businesses and other plants and businesses of every kind. To engage in a general importing, exporting, buying, selling, brokering, jobbing, wholesaling, retailing, and manufacturing business, with reference to all kinds of property, both real and personal. To become a partner (either general or limited or both) and to enter into agreements of partnership, with one or more other persons or corporations, for the purpose of carrying on any business whatsoever which this corporation may deem proper or convenient in connection with any of the purposes herein set forth or otherwise, or which may be calculated directly or indirectly to promote the interest of this corporation or to enhance the value of its property or business. The foregoing statement of purposes shall be considered as a statement of purposes, objects and powers and it is hereby expressly declared by the incorporators of this corporation that the foregoing enumeration of purposes and objects is not intended to limit or restrict in any manner the general powers of this corporation. The incorporators expressly declare that it is their intention in making this declaration of purposes to include all objects, or any object, which may lawfully be that of a corporation organized for business and profit under the laws of the State of California. NOW, THEREFORE, each of the undersigned shareholders of said corporation does hereby adopt, approve and consent to the foregoing amendment of said articles of incorporation, and does hereby consent that Article Second of said Articles of Incorporation be amended to read as herein set forth. IN WITNESS WHEREOF, each of the undersigned has hereunto signed his name and, following his name, the date of 7. [ILLEGIBLE] and the number of shares of said corporation [ILLEGIBLE] by him of record on said date entitled to vote upon amendments of said articles of incorporation or the character of the foregoing amendment.
Name Date No. of Shares - ---------------- ------------- ---------------------- Charles R. Gregg 10/26/54 10,000 Common 1,053 Preferred H. W. Larson 10/26/54 [ILLEGIBLE] Preferred J. J. Kneier 10/26/54 1,053 Preferred Harvey H. Weaver Oct. 26, 1954 1,053 Preferred Harry E. Hopping Oct. 26, 1954 789 Preferred Ray E. Hopping 10/26/54 789 Preferred Paul J. Angst Oct. 26, 1954 526 Preferred H. [ILLEGIBLE] Robertson Nov. 2, 1954 789 Preferred Wayne L. Travis Nov. 2, 1954 2,633 Preferred
IN WITNESS WHEREOF, the undersigned have executed this certificate of amendment this 8 day of November, 1954. /s/ [ILLEGIBLE] -------------------------- President /s/ [ILLEGIBLE] -------------------------- Secretary STATE OF CALIFORNIA ) ) SS. COUNTY OF LOS ANGELES ) Charles R. Gregg and H. W. Larson, being first duly sworn, each for himself deposes and says. That Charles R. Gregg is, and was at all of the times mentioned in the foregoing Certificate of Amendment, the president of Gregg Iron Foundry, the California corporation therein mentioned, and H. W. Larson is, and was at all of said times, the secretary of said corporation; that each 8. has read said certificate and that the statements [ILLEGIBLE] made are true of his own knowledge, and that the signatures purporting to be the signatures of said president and secretary thereto are the genuine signatures of said president and secretary, respectively. /s/ Charles R. Gregg -------------------------- Charles R. Gregg /s/ H. W. Larson -------------------------- H. W. Larson [ILLEGIBLE] /s/ [ILLEGIBLE] - ---------------------- [ILLEGIBLE] [SEAL] 9. 202437 A 198606 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF GREGG IRON FOUNDRY [SECRETARY OF STATE CALIFORNIA SEAL] CHARLES R. GREGG and THOMAS C. BARRETT certify that: 1. They are the President and Secretary, respectively, of Gregg Iron Foundry, a California corporation. 2. The Board of Directors of the corporation adopted the following resolution at a meeting duly held on 15, 1978. "RESOLVED, that Article First of the Articles of Incorporation is amended to read as follows: FIRST: The name of said corporation shall be GREGG INDUSTRIES, INC." 3. The total number of outstanding shares of said corporation entitled to vote on or consent to the adoption of such amendment is 15,902, of which 6,402 are preferred shares entitled by the Articles of Incorporation to two votes per share, and 9,500 are common shares entitled by the Articles of Incorporation to one vote per share, making a total of 22,304 votes entitled to be cast or represented by written consents thereto: and the number of shares represented by written consents thereto; are as follows -- 4970 preferred shares representing 9940 votes and 9000 common shares representing 9000 votes, making a total of 18,940 votes represented by said written consents. 4. The taking of such action by written consent of shareholders is not precluded by the Articles of Incorporation of said corporation. IN WITNESS WHEREOF, the undersigned signed this Certificate of Amendment on this 16 day of December, 1978. -s- Charles R. Gregg -------------------------------------- Charles R. Gregg President of Gregg Iron Foundry -s- Thomas C. Barrett -------------------------------------- Thomas C. Barrett Secretary of Gregg Iron Foundry 1 Each of the undersigned declares under penalty of perjury that the matters set forth in the foregoing certificate are true and correct. Executed at Los Angeles, California, on December 16, 1978. -s- Charles R. Gregg -------------------------------------- Charles R. Gregg -s- Thomas C. Barrett -------------------------------------- Thomas C. Barrett 2 202437 A269577 [SECRETARY OF STATE CALIFORNIA SEAL] CERTIFICATE OF OWNERSHIP Charles R. Gregg and Thomas C. Barrett hereby certify that they are the President and Secretary, respectively, of Gregg Industries, Inc. a California corporation, and further certify that: a) Gregg Industries, Inc. owns all of the outstanding shares of stock of Gregg Investments, Inc., a California corporation. b) At a duly held meeting of the Board of Directors of Gregg Industries, Inc. the following resolution was approved and adopted by the unanimous action of its Board of Directors and provided for the merger of Gregg Investments, Inc., a California corporation, with and into Gregg Industries, Inc. and for the assumption by Gregg Industries, Inc. of all of the liability of Gregg Investments, Inc.: Whereas, this Corporation owns all of the outstanding shares of stock of Gregg Investments, Inc., a California corporation; and Whereas, it is deemed advisable and in the best interests of the Corporation and its shareholders that this Corporation merge with Gregg Investments, Inc. and assume all its obligations; It is therefore Resolved that this Corporation merge Gregg Investments, Inc. into itself and assume all its obligations in accordance with the provisions of Section 1110 of the Corporations Code of the State of California; It is further Resolved that the president or any vice-president and the secretary or any assistant secretary of this Corporation are hereby authorized and empowered to execute and file a certificate of ownership, as prescribed by Section 1110 of the Corporations Code of the State of California, and take such further action as may be necessary and proper to implement such merger. At the meeting of the Board of Directors of Gregg Industries, Inc., which was held on July 12, 1983 at the principal executive office of that corporation located at 10460 Hickson Street, El Monte, California 91734, the foregoing resolution was approved and adopted by the vote of all five directors, being the authorized and elected number of directors on the board of directors, all of whom were present and voting. Dated: August 15, 1983. -s- Charles R. Gregg --------------------------------------- Charles R. Gregg, President -s- Thomas C. Barrett --------------------------------------- Thomas C. Barrett, Secretary Each of the undersigned declares under penalty of perjury that the matters set forth in the foregoing certificate are true of his own knowledge. Executed at El Monte, California on August 15, 1983. -s- Charles R. Gregg --------------------------------------- Charles R. Gregg -s- Thomas C. Barrett --------------------------------------- Thomas C. Barrett 202437 A398743 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF Gregg Industries, Inc. A California Corporation [SECRETARY OF STATE CALIFORNIA SEAL] Robert Gregg and Tom Hough certify that: 1. They are the president and secretary, respectively, of Gregg Industries, Inc., a California corporation. 2. The Board of Directors of Gregg Industries, Inc., has approved the following amendment to Article Fourth of the Articles of Incorporation of the corporation, as follows: Fourth; The corporation is authorized to issue only one class of shares, which shall be designated "common shares," having a total number of 2,000,000, with the aggregate par value of $200,000 and the par value of each share is $.10. On the amendment of this Article as set forth, each issued and outstanding share of preferred stock shall be exchanged for common stock at the ratio of 1 share of preferred stock for 2 shares of common stock. No distinction shall exist between the shares of the corporation or the holder's thereof. 3. The amendment has been approved by the required vote of the shareholders in accordance with Sections 902 and 903 of the California Corporations Code. The total numbers of outstanding shares of the corporation entitled to vote on or consent to the adoption of such amendment is 10,333, of which 1,053 are preferred shares entitled by the Articles of Incorporation to two votes per share and 9,280 are common shares entitled by the Articles of Incorporation to one vote per share, making a total of 11,386 votes entitled to be cast or represented by written consents thereto; and the number of shares represented by written consents thereto are as follows: 1,053 preferred shares representing 2,106 votes and 9,280 common shares representing 9,280 votes making a total of 11,386 votes represented by said written consents. 4. The taking of such action by written consent of the shareholders is not precluded by the Articles of Incorporation of said corporation. DATED: JANUARY 5, 1991 -s- Robert Gregg ------------------------- ROBERT GREGG, President DATED: JANUARY 5, 1991 -s- Tom Hough ------------------------- TOM HOUGH, Secretary Each of the undersigned declares under penalty of perjury that the matters set forth in the foregoing certificate are true and correct of his own knowledge and that this declaration was executed on January 5, 1991 at El Monte, California. DATED: JANUARY 5, 1991 -s- Robert Gregg ------------------------- ROBERT GREGG -s- Tom Hough DATED: JANUARY 5, 1991 ------------------------- TOM HOUGH 202437 A399671 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF [SECRETARY OF STATE CALIFORNIA SEAL] Gregg Industries, Inc. A California Corporation Robert Gregg and Tom Hough certify that: 1. They are the president and secretary, respectively, of Gregg Industries, Inc., a California corporation. 2. The Board of Directors of Gregg Industries, Inc., has approved the following amendment to Article Fourth of the Articles of Incorporation of the corporation, as follows: Fourth: The corporation is authorized to issue only one class of shares, which shall be designated "common shares," having a total number of 2,000,000 with the aggregate par value of $200,000 and the par value of each share is $.10. On the amendment of this Article as set forth, each outstanding share is split-up, divided, and converted into 100 shares. 3. The amendment has been approved by the required vote of the shareholders in accordance with Sections 902 and 903 of the California Corporations Code. The total numbers of outstanding shares of the corporation entitled to vote on or consent to the adoption of such amendment is 11,386, all of which are common shares entitled by the Articles of Incorporation to one vote per share, making a total of 11,386 votes entitled to be cast or represented by written consents thereto; and the number of shares represented by written consents thereto are as follows: 11,386 common shares making a total of 11,386 votes represented by said written consents. 4. The taking of such action by written consent of the shareholders is not precluded by the Articles of Incorporation of said corporation. DATED: JANUARY 30, 1991 -s- Robert Gregg ------------------------- ROBERT GREGG, President DATED: JANUARY 30, 1991 -s- Tom Hough ------------------------- TOM HOUGH, Secretary Each of the undersigned declares under penalty of perjury that the matters set forth in the foregoing certificate are true and correct of his own knowledge and that this declaration was executed on January 30, 1991 at El Monte, California. DATED: JANUARY 30, 1991 -s- Robert Gregg ------------------------- ROBERT GREGG DATED: JANUARY 30, 1991 -s- Tom Hough ------------------------- TOM HOUGH 0202437 A450664 AGREEMENT OF MERGER [SECRETARY OF STATE CALIFORNIA SEAL] This AGREEMENT OF MERGER, dated December 14, 1993, is made by and between GREGG INDUSTRIES, INC., a California corporation (hereinafter referred to as "Surviving Corporation"), and AUTO-CRAFT MACHINE INDUSTRIES, INC., a California corporation (hereinafter referred to as "Disappearing Corporation"), with respect to the following: A. Surviving Corporation is a California Corporation authorized to issue 2,000,000 shares of common stock with the aggregate paid in value of $325,869.00, of which there are outstanding as of the date hereof 931,516 shares. B. Disappearing Corporation is a California Corporation authorized to issue 10,000 shares of common stock of which there are outstanding as of the date hereof 1,000 shares. C. The parties hereto desire to merge Disappearing Corporation with and into Surviving Corporation. NOW, THEREFORE, based upon the mutual promises, covenants, and 1 conditions contained herein, the parties hereto agree as follows: 1. Merger. On the Effective Date (as defined in Section 6 herein), Disappearing Corporation shall merge with and into Surviving Corporation so that the corporate existence of Surviving Corporation shall continue and the separate corporate existence of Disappearing Corporation shall cease. The corporate identity, existence, purpose, franchises, powers, rights, and immunities of Surviving Corporation shall continue unaffected and unimpaired by the merger. The corporate identity, existence, purpose, franchises, powers, rights, and immunities of Disappearing Corporation shall be merged into Surviving Corporation which shall be fully vested therewith. Surviving Corporation shall be subject to all of the debts and liabilities of Disappearing Corporation as if Surviving Corporation had itself incurred them and all rights of creditors and all liens upon the property of each of Surviving Corporation and Disappearing Corporation shall be preserved unimpaired, provided that such liens, if any, upon the property of Disappearing Corporation shall be limited to the property affected thereby immediately prior the Effective Date. 2. Articles of Incorporation and Bylaws. The articles of incorporation and bylaws of Surviving 2 Corporation, as in effect on the Effective Date, shall be and remain (until amended or repealed as provided by law) its articles of incorporation and bylaws respectively. 3. Directors and Officers. The present directors and officers of Surviving Corporation shall continue to serve as the directors and officers of the Surviving Corporation until the next annual meeting of the Board of Directors or until such time as their successors have been elected and qualified. 4. Effect of Merger on Outstanding Shares of Surviving Corporation. The shares of Surviving Corporation outstanding on the Effective Date shall not be changed or converted as a result of the merger but shall remain outstanding as shares of Surviving Corporation. 5. Exchange of Share Certificates and Other Consideration. After the Effective Date, Raymond M. Fitzpatrick ("Fitzpatrick") and Robert C. Gregg ("Gregg"), shareholders of Disappearing Corporation, shall surrender their respective share certificates, duly endorsed as Surviving Corporation may require, to Surviving Corporation or its agent for cancellation. Thereupon such shareholders shall receive in exchange therefor certificates of common shares of Surviving Corporation and other consideration 3 totalling Two Million Dollars ($2,000,000.00), or such other value as determined in an independent appraisal, as follows: (a) To Fitzpatrick; [i] Cash in the amount of One Hundred ninety-Five Thousand Dollars ($195,000.00) shall be delivered to Fitzpatrick on or before January 31, 1994 as partial consideration for his shares; [ii] Cash in the amount of Five Thousand Dollars ($5,000.00) shall be delivered to Fitzpatrick on the Effective Date as consideration for his covenant not to compete set forth in Section 9 below; [iii] Surviving Corporation stock with a value of Eight Hundred Thousand Dollars ($800,000.00), determined as of December 31, 1993 by an independent appraisal. It is anticipated that the appraisal will be completed on or about May 31, 1994 at which time the number of shares shall be determined and issued to Fitzpatrick. [iv] Fitzpatrick agrees that the stock to be 4 issued under this paragraph shall not be sold or transferred by Fitzpatrick except as follows: at the end of each twelve (12) month period after the issuance of said stock, Fitzpatrick may sell up to one-third (1/3) of the total amount of shares issued to Fitzpatrick under this Agreement, unless Fitzpatrick obtains Surviving Corporation's express written consent. Any transfer made in violation of this restriction shall be void. The stock certificate(s) shall bear a legend condition restricting the sale of stock for three (3) years, which shall be binding on the heirs and successors in interest of Fitzpatrick. (b) To Gregg Or Gregg And His Spouse, As Trustees Of The Robert C. Gregg And Christine L. Gregg Trust: [i] Cash in the amount of Six Hundred Thousand Dollars ($600,000.00) shall be delivered to Gregg on or before January 31, 1994 as partial consideration for his shares; [ii] Surviving Corporation stock with a value of Four Hundred Thousand Dollars ($400,000.00) determined as of December 31, 1933 by an 5 independent appraisal. It is anticipated that the appraisal will be completed on or about May 31, 1994 at which time the number of shares shall be determined and issued to Gregg. 6. Effective Date. Surviving Corporation and Disappearing Corporation shall each take or cause to be taken all such actions, or do or cause to be done all such things, as are necessary, proper, or advisable under the laws of the State of California to make effective the merger herein provided, subject, however, to receipt of any required approval by outstanding shares of either party in accordance with California law and subject also to completion of any necessary qualification of securities under the Corporate Securities Law of California and compliance with all other applicable laws. Unless this Agreement shall be terminated as herein provided, Surviving Corporation and Disappearing Corporation each agree to use its best efforts, subject to the foregoing conditions, to take or cause to be taken all actions to effectuate the merger herein provided. Upon compliance with applicable laws and upon receipt of any required approval of the outstanding shares of either party, a copy of this Agreement of Merger with an officer's certificate of both 6 Surviving Corporation and Disappearing Corporation as required by Section 1103 of the California Corporations Code shall be filed in the office of the California Secretary of State. The merger shall become effective upon such filing. The date on which the merger so becomes effective is herein called the "Effective Date." 7. Operation of Businesses Pending Consummation of Merger. Prior to the Effective Date, neither Surviving Corporation nor Disappearing Corporation shall, without the prior written approval of the other, (a) engage in any activity or transaction other than in the ordinary course of business, except as contemplated by this Agreement, or (b) issue, sell, or subdivide any of its shares, except as contemplated by this Agreement, or (c) issue any shares, any options, warrants, or rights to purchase any shares or any securities convertible into or exchangeable for any shares, or (d) declare or pay any dividend or make any distribution on any of its shares, or (e) purchase or redeem any of its outstanding shares. 8. Termination or Abandonment. This Agreement of Merger may be terminated and the merger hereby provided for abandoned at any time prior to the Effective Date (a) by the mutual consent of the respective boards of directors of Disappearing Corporation and Surviving Corporation, or (b) if in the opinion of the board of directors of either Disappearing Corporation or Surviving Corporation, evidenced by a certified copy of resolutions of such board filed with the other 7 party to this Agreement, the merger it impractical and undesirable by reason of the fact that demands of dissenting shareholders of either corporation, for purchase of their shares, are so great in amount as to render the merger inadvisable, or (c) occurrence of a material and adverse change in the business, properties, or financial position of the other party. In the event of termination of this Agreement as herein provided, neither Disappearing Corporation nor Surviving Corporation or their respective boards of directors or shareholders shall be liable to the other or its directors or shareholders. 9. Covenant Not to Compete (a) Covenant. Fitzpatrick agrees that he will not, directly or indirectly, own, manage, operate, join, control, or participate in the ownership, management, operation, or control of, or be employed or connected in any manner with or by, any business, except Gregg Industries, Inc., involving the manufacturing of iron, turbo-chargers, or truck parts, or under any name similar to the name of the Surviving Corporation or Disappearing Corporation or which competes in any similar business in Los Angeles, Orange, Ventura, Riverside and San Bernardino Counties for a period of three (3) years from the date hereof, unless Fitzpatrick obtains the prior written consent of Surviving Corporation. (b) Injunctive Relief. Fitzpatrick agrees that the remedy at law for any breach by him of any provision of this paragraph will 8 be inadequate and that, in addition to any other remedies it may have, Surviving Corporation shall be entitled to temporary and permanent injuctive relief without the necessity of proving actual damage to Surviving Corporation. 10. Assumption of Lease. Effective as of the Effective Date, Surviving Corporation shall assume all of the obligations of the Disappearing Corporation under that certain Standard Industrial Lease - Net dated as of March 1, 1990 between Fitzpatrick and Gregg, as Lessor, and the Disappearing Corporation, as Lessee, relating to the Disappearing Corporation's facility at 11904 South Burke street, Santa Fe Springs, California 90670, for a period of one (1) year from the Effective Date or until Fitzpatrick and Gregg sell said real property, whichever is earlier. Such obligations shall include, without limitation, the obligation to pay the rental payments equivalent to the cost of debt service, taxes, insurance, and maintenance expenses, which are estimated to be approximately $7,500.00 per month. It is the understanding between Lessor and Lessee that the payment provided for herein shall meet the obligations of Lessee for payments under said Lease. 11. Employment. Surviving Corporation shall employ Fitzpatrick for a term of three (3) years at an annual salary equal to One Hundred Fifty Thousand Dollars ($150,000.00) per year, with such benefits, 9 including insurance and a company vehicle, as is customary for other management level executives of Surviving Corporation, all as set forth in an Employment Agreement between Surviving Corporation and Fitzpatrick. 12. General Provisions. (a) Governing Law: This Agreement of Merger shall be governed by the law of the State of California. (b) Entire Agreement: This Agreement between the parties hereto constitutes the entire agreement of the parties hereto and supersedes any prior written or oral agreements between them concerning the subject matter contained herein. (c) Counterparts: This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all of such counterparts together shall constitute but one agreement. (d) Further Assurances: Disappearing Corporation shall from time to time upon request by Surviving Corporation execute and deliver all such documents and instruments and take all such action as Surviving Corporation may request in order to vest or evidence the vesting in Surviving Corporation of title to and possession of /// /// 10 all rights, properties, assets, and business of Disappearing Corporation, or otherwise to carry out the full intent and purpose of this Agreement. IN WITNESS THEREOF, Disappearing Corporation and Surviving Corporation have caused this Agreement of Merger to be executed as of the day and year first written above. Surviving Corporation: GREGG INDUSTRIES INC. By: -s- ROBERT C. GREGG ------------------------------ ROBERT C. GREGG, President By: -s- MARK GROUT ------------------------- MARK GROUT, Secretary Disappearing Corporation: AUTO-CRAFT MACHINE INDUSTRIES INC. By: -s- RAYMOND M. FITZPATRICK -------------------------------- RAYMOND M. FITZPATRICK, President By: -s- ROBERT C. GREGG ---------------------------------- ROBERT C. GREGG, Secretary By signing below, the undersigned hereby consents to the provisions of Sections 5(a)(iv), 9 and 11 of this Agreement of Merger. -s- RAYMOND M. FITZPATRICK ---------------------------------- RAYMOND M. FITZPATRICK 11 OFFICER'S CERTIFICATE OF MERGER FOR GREGG INDUSTRIES, INC. We, the undersigned, do certify that: 1. We are, and at all time herein mentioned, were the duly elected and qualified President and Secretary of GREGG INDUSTRIES, INC., a corporation organized and existing under the laws of the State of California. 2. On December 14, 1993, the principal terms of the merger agreement in the form attached hereto were approved by the Board of Directors of said corporation. 3. The total number of outstanding shares of each class of said corporation entitled to vote on the merger is: 931,516 Common Shares 4. The merger agreement was entitled to be and was approved by the Board of Directors of said corporation alone under the provisions of Section 1201 of the California Corporations Code because the Shareholders of said corporation immediately prior to the merger shall own, immediately after the merger, equity securities, other than a warrant or right to subscribe or purchase 1 equity securities, of the surviving corporation possessing more than five-sixths of the voting power of the surviving corporation, to wit: the Shareholders of said corporation immediately before the merger will immediately after the merger own 92% of the outstanding voting shares of the surviving corporation, calculated as follows: No. of Shares Held No. of Shares Held Total Outstanding Prior to Merger By After Merger By Shares After Shareholders of Shareholders of Merger Corporation Prior Corporation Prior ------------------ to Merger to Merger - ------------------ ------------------ 931,516 975,960 1,064,849 [** 975,960/1,064,349 = 92%) We declare under penalty of perjury that the foregoing matters stated in this certificate are true of our own knowledge. Executed at El Monte, California on April 30, 1994. -s- Robert C. Gregg -------------------------- Robert C. Gregg, President -s- Mark Grout -------------------------- Mark Grout, Secretary 2 OFFICER'S CERTIFICATE OF MERGER FOR AUTO-CRAFT MACHINE INDUSTRIES, INC. We, the undersigned, do certify that: 1. We are, and at all time herein mentioned, were the duly elected and qualified President and Secretary of AUTO-CRAFT MACHINE INDUSTRIES, INC., a corporation organized and existing under the laws of the State of California. 2. On December 14, 1993, the principal terms of the merger agreement in the form attached hereto were approved by the corporation by a vote of a number of shares of each class which equaled or exceeded the vote required, under the General Corporation Law of California, for approval of the principal terms of the merger described in the attached agreement by the outstanding shares of each class of said corporation. 3. The total number of outstanding shares of each class of said corporation entitled to vote on the merger was and is: 1000 Common Shares 4. Each class of shares of said corporation entitled to vote on the merger agreement, the percentage vote required by each 1 class, and the number and percentage of affirmative votes cast by each class is as follows:
PERCENTAGE AFFIRMATIVE PERCENTAGE VOTE VOTES VOTE CLASS REQUIRED CAST OBTAINED - --------- ----------- ----------- ---------- Common 100% 1000 100%
We declare under penalty of perjury that the foregoing matters stated in this certificate are true of our own knowledge. Executed at El Monte, california on April 30, 1994. -s- Raymond M. Fitzpatrick -------------------------------- Raymond M. Fitzpatrick, President -s- Robert C. Gregg --------------------------------- Robert C. Gregg, Secretary [SEAL] 2 EX-3.10 12 y92210a1exv3w10.txt ARTICLES OF INCORPORATION Exhibit 3.10 COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF STATE SEPTEMBER 22, 2003 TO ALL WHOM THESE PRESENTS SHALL COME, GREETING: A & M SPECIALTIES, INC. I, Pedro A. Cortes, Secretary of the Commonwealth of Pennsylvania do hereby certify that the foregoing and annexed is a true and correct photocopy of Articles of Incorporation which appear of record in this department IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the Seal of the Secretary's Office to be affixed, the day and year above written. /s/ Pedro Cortes -------------------------------- Secretary of the Commonwealth Filed this 11 day of April, 1994 DSCB: 15-1306 (Rev. 9-89)_______________ Commonwealth of Pennsylvania (Line for Numbering) Department of State Secretary of the Commonwealth Articles of Incorporation Domestic Business Corporation - Open COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF STATE CORPORATION BUREAU In compliance with the requirements of 15 Pa. C.S. {1306 (relating to articles of incorporation), the undersigned, desiring to be incorporated as a business corporation, hereby states that: 1. The name of the corporation is: A & M SPECIALTIES, INC. 2. The address of the initial registered office of the Corporation in this Commonwealth is: EAST MARKET STREET EXTENSION MERCER, PA 16137 3. The corporation is incorporated under the Business Corporation Law of 1988. 4. The aggregate number of shares which the corporation shall have authority to issue is: 100,000 Common Voting Stock, no par value. 5. The name and address of each incorporator is: JOSEPH PAUL VALENTINO, ESQUIRE 194 EAST STATE STREET SHARON, PA 16146 6. These Articles of Incorporation may be amended in the manner now or hereafter prescribed by statute, and all rights conferred upon shareholders therein are granted subject to this reservation. 7. The corporation shall not issue any shares of stock of the corporation without first offering such shares pro rata at the same price and on the same terms and conditions on which the proposed issuance is to be made, to the holders of stock of the corporation. IN TESTIMONY WHEREOF, the incorporator has signed these Articles of Incorporation this 7th day of April, 1995. /s/ Joseph Paul Valentino -------------------------------------- JOSEPH PAUL VALENTINO EX-3.11 13 y92210a1exv3w11.txt RESTATED ARTICLES OF INCORPORATION Exhibit 3.11 DFI/CORP/38 United States of America RECORD 2/00 State of Wisconsin [SEAL OF THE STATE OF WISCONSIN] DEPARTMENT OF FINANCIAL INSTITUTIONS To All to Whom These Presents Shall Come, Greeting: I, RAY ALLEN, Deputy Administrator, Division of Corporate & Consumer Services, Department of Financial Institutions, do hereby certify that the annexed copy has been compared by me with the record on file in the Corporation Section of the Division of Corporate & Consumer Services of this department and that the same is a true copy thereof and the whole of such record; and that I am the legal custodian of said record, and that this certification is in due form. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the official seal of the Department. [SEAL OF THE DEPARTMENT OF FINANCIAL INSTITUTIONS] /s/ RAY ALLEN RAY ALLEN, Deputy Administrator Division of Corporate & Consumer Services Department of Financial Institutions DATE: AUG 20 2003 BY: /s/ Cathy Mickilson - -------------------------------------------------------------------------------- Effective July 1, 1996, the Department of Financial Institutions assumed the functions previously performed by the Corporations Division of the Secretary of State and is the successor custodian of corporate records formerly held by the Secretary of State. RESTATED ARTICLES OF INCORPORATION OF NEENAH TRANSPORT, INC. The following Restated Articles of Incorporation, duly adopted pursuant to the authority and provisions of Chapter 180 of the Wisconsin Statutes, supersede and take the place of the existing articles of incorporation and all amendments thereto: ARTICLE I NAME The name of the corporation is NEENAH TRANSPORT, INC. ARTICLE II PURPOSES The purposes for which the corporation is organized are to engage in any lawful activity within the purposes for which a corporation may be organized under the Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes. ARTICLE III AUTHORIZED SHARES The aggregate number of shares which the corporation shall have authority to issue is 560 shares, consisting of one class only, designated as Common Stock of the par value of $100.00 per share. Upon the effectiveness of these Restated Articles of Incorporation, the shares, without par value, then issued and outstanding shall, without any further action required on the part of the corporation or its sole shareholder, be converted into an aggregate of 100 shares of the corporation's Common Stock of the par value of $100.00 per share. ARTICLE IV BOARD OF DIRECTORS The number of directors shall be fixed by or in the manner provided in the Bylaws. ARTICLE V REGISTERED OFFICE AND AGENT The registered office of the corporation is located in Winnebago County, Wisconsin, and the address of such registered office is 2121 Brooks Avenue, P.O. Box 729, Neenah, Wisconsin 54957. The name of the registered agent at such address is E.W. Aylward, Sr. The undersigned offices of NEENAH TRANSPORT, INC., a Wisconsin corporation with its registered office in Winnebago County, Wisconsin, hereby certify that the foregoing Restated Articles of Incorporation, and the amendment of the heretofore existing articles of incorporation of the corporation reflected therein, were consented to in writing by the sole shareholder of the corporation, duly signed by such sole shareholder. The reclassification and conversion of the outstanding shares, without par value, of the corporation effected by the amendment reflected in the foregoing Restated Articles of Incorporation will change the stated capital of the corporation to the aggregate par value of the 100 shares of Common Stock, par value $100.00 per share, outstanding immediately after such reclassification. The amount of stated capital, as so changed, will be $10,000. The effective time of the foregoing Restated Articles of Incorporation shall be 12:01 a.m. on October 1, 1988. Executed in duplicate this 28th day of September, 1988. /s/ J.P. Keating, Jr. ---------------------------------- J.P. Keating, Jr., President [SEAL] /s/ T.R. Franklin ---------------------------------- T.R. Franklin, Secretary This instrument was drafted by: Bruce C. Davidson Quarles & Brady 411 East Wisconsin Avenue Milwaukee, Wisconsin 53202-4497 -2- Restated Articles - - Changes Restated shares to be 560 shares common @ $100 per share Winnebago $25 - - Adds P.O. Box to Reg. Office +25 exp STATE OF WISCONSIN FILED SEP 30 1988 DOUGLAS LA FOLLETTE SECRETARY OF STATE Bruce Davidson Quarles & Brady 411 E. Wisconsin Ave Milwaukee, WI 53202-4497 DFI/CORP/30 United States of America DOCUMENT 2/00 State of Wisconsin [SEAL OF THE STATE OF WISCONSIN] DEPARTMENT OF FINANCIAL INSTITUTIONS To All to Whom These Presents Shall Come, Greeting: I, RAY ALLEN, Deputy Administrator, Division of Corporate & Consumer Services, Department of Financial Institutions, do hereby certify that the annexed copy has been compared with the document on file in the Corporation Section of the Division of Corporate & Consumer Services of this department, and that the same is a true copy thereof; and that I am the legal custodian of said document, and that this certification is in due form. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the official seal of the Department. [SEAL OF THE DEPARTMENT OF FINANCIAL /s/ Ray Allen INSTITUTIONS] RAY ALLEN, Deputy Administrator Division of Corporate & Consumer Services Department of Financial Institutions DATE: AUG 20 2003 BY: /s/ Cathy Mickilson - -------------------------------------------------------------------------------- Effective July 1, 1996, the Department of Financial Institutions assumed the functions previously performed by the Corporations Division of the Secretary of State and is the successor custodian of corporate records formerly held by the Secretary of State. ARTICLES OF INCORPORATION OF NEENAH FOUNDRY TRANSPORT, INC. The following Articles of Incorporation are executed by the undersigned for the purpose of forming a Wisconsin corporation under Chapter 180 of the Wisconsin Statutes: ARTICLE I The name of the corporation shall be NEENAH FOUNDRY TRANSPORT, INC. ARTICLE II The period of existence of this corporation shall be perpetual. ARTICLE III The purpose of this corporation shall be to engage in any lawful activities authorized by Chapter 180 of the Wisconsin Statutes. ARTICLE IV The capital stock which this corporation shall have authority to issue shall be on one class only, designated as "common stock" and shall consist of 2,800 shares without Nominal or par value. Such shares of stock may be issued by the corporation from time to time for such consideration of money or of property, or services valued in terms of money, as may be fixed from time to time by the Board of Directors. ARTICLE V The address of the initial registered office of this corporation is 2121 Brooks Avenue, Neenah, Wisconsin 54956. ARTICLE VI The name of the initial registered agent at such address is E. W. Aylward. ARTICLE VII The number of directors shall be such number as is fixed from time to time by, or in the manner provided in, the by-laws of the corporation. ARTICLE VIII The name and address of the incorporator is as follows: Dewayne P. Nehs, 152 West Wisconsin Avenue, Milwaukee, Wisconsin 53203. ARTICLE IX The officers of this corporation shall be a president, vice-president, secretary and treasurer, and the duties of said officers shall be such as are assigned to them from time to time by the board of directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Executed this 8th day of April, A. D., 1981. /s/ Dewayne P. Nehs ---------------------------- STATE OF WISCONSIN ) ( SS MILWAUKEE COUNTY ) Personally came before me this 8th day of April, 1981, the above named Dewayne P. Nehs, to me known to be the person who executed the foregoing instrument and acknowledged the same. /s/ Harold W. ---------------------------------------- Notary Public, State of Wisconsin My Commission is Permanent [WISCONSIN NOTARY SEAL] (This instrument was drafted by Attorney Dewayne P. Nehs) -2- [Unable to read word] 180 Articles of Incorporation Winnebago $70 STATE OF WISCONSIN FILED D.P. NEHS APR 10 1981 Suite 408 Caswell Bldg. 152 W. Wisconsin Ave VEL PHILLIPS Milwaukee, WI 53203 SECRETARY OF STATE OFFICE OF THE The undersigned, as Register of Deeds of REGISTER OF DEEDS (County) Winnebago ------------------------------- County, Wisconsin, certifies that on (DATE) April 20, 1981 ------------------------------- there was received and accepted for record in my office, instrument(s) bearing the certificate of the Secretary of State of the State of Wisconsin, and des- cribed as (XX) Articles of Incorporation ( ) Amendment(s) to Articles of Incorporation * ( ) Articles of Dissolution ( ) Articles of Merger * ( ) Name Reservation * ( ) Articles of Consolidation * ( ) Restated Articles * ( ) Change of Registered Office and/or Agent ( ) Intent to Dissolve OF
LIST CORPORATE NAMES HERE NEENAH FOUNDRY TRANSPORT, INC. (S E A L) Witness my hand and official seal on April 20, 1981 (DATE) --------------------- /s/ Marjorie Dahms - - - - - - - - - - - Register of Deeds Please return executed Certificate to: Office of The Secretary of State 244 W. Washington Avenue Madison, Wisconsin 53702 (* Please identify documents by date of filing with Secretary of State) DFU/CORP/30 United States of America DOCUMENT 2/00 State of Wisconsin. [SEAL OF THE STATE OF WISCONSIN] DEPARTMENT OF FINANCIAL INSTITUTIONS To All to Whom These Presents Shall Come, Greeting: I, RAY ALLEN, Deputy Administrator, Division of Corporate & Consumer Services, Department of Financial Institutions, do hereby certify that the annexed copy has been compared with the document on file in the Corporation Section of the Division of Corporate & Consumer Services of this Department, and that the same is a true copy thereof; and that I am the legal custodian of said document, and that this certification is in due form. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the official seal of the Department. [SEAL OF THE DEPARTMENT /s/ RAY ALLEN OF FINANCIAL INSTITUTIONS] RAY ALLEN, Deputy Administrator Division of Corporate & Consumer Services Department of Financial Institutions DATE: AUG 20 2003 BY: /s/ Cathy Mickilson - -------------------------------------------------------------------------------- Effective July 1, 1996, the Department of Financial Institutions assumed the functions previously performed by the Corporations Division of the Secretary of State and is the successor custodian of corporate records formerly held by the Secretary of State. (Form 4)- 1963 AMENDMENT STATE OF WISCONSIN CORPORATION DIVISION (STOCK CORP) SECRETARY OF STATE P.O. BOX 7846 MADISON, WI 53707 Resolved, That The Articles of Incorporation of Neenah Foundry Transport, Inc. be amended as follows: That Article I be amended to read: The name of the corporation shall be NEENAH TRANSPORT COMPANY, INC. ---------------------------------------------------------- The undersigned officers of Neenah Foundry Transport, Inc. a Wisconsin corporation with registered office in Winnebago County, Wisconsin, CERTIFY: 1 (A) The foregoing amendment of the articles of incorporation of said corporation was consented to in writing by the holders of all shares entitled to vote with respect to the subject matter of said amendment, duly signed by said shareholders or in their names by their duly authorized attorneys. OR (Please strike out the item you do not use)- See instruction 1
VOTE ON ADOPTION Number of Number of Number of Number of Number of SHARES SHARES "Yes" votes "Yes" votes "Yes" votes Class outstanding entitled to vote REQUIRED CAST CAST Common Preferred 2 (See instruction 2) 2/06/87 WISCONSIN SECTY-STATE 1111 CORP * 1167 $25.00
Executed in duplicate and seal (if any) affix this 5th day of February 1987. ----------- -------------- --- /s/ James Keating, Jr. --------------------------------- President James Keating, Jr. (Affix seal or state that there is none) /s/ Fred C. Hathaway --------------------------------- Secretary Fred C. Hathaway This document was drafted by Attorney James L. Cummings (Section 14.38(14) Wis. Statutes ---------------------------- (Please print or type name)
Name Change Neenah Foundry Transport, Inc. Winnebago $25 Mail Returned Copy to: (FILL IN THE NAME AND ADDRESS HERE) Cummings, Snyder, Hanes STATE OF WISCONSIN & Wiegratz, S.C. FILED P. 0. Box 758 Neenah, WI 54956 FEB 11 1987 DOUGLAS LA FOLLETTE SECRETARY OF STATE INSTRUCTIONS 1. Amendement may be affected either by A) Vote of the shareholders, at OR B) Written consent of all a shareholder's meeting. shareholders, without a Use item 1 (b). meeting. Use item 1(a). Ref. sec, 180.25 Wis. Stats. For corporations organized on after 1 Jan 1973, statutory minimum of affirmative votes to adopt resolution is a majority of the shares entitled to vote. For corporations organized previously, statutory minimum is 2/3 of the shares entitled to vote, unless articles provide for majority vote. (If any class or series of shares is entitled to vote as a class, minimum vote requirements must be met by each class or series entitled to vote thereon as a class and of the total shares entitled to vote thereon.) 2. Item 2. If amendment provides for exchange, reclassification or cancellation of issued shares, or effects a change in the amount of stated capital, enter a statement of the manner in which the same will be accomplished. Ref. sec. 180.53 (6) & (7) Wisconsin Statutes. 3. Affix CORPORATE SEAL to each copy of the document or enter the remark "NO SEAL" if the corporation does not have a seal. The PRESIDENT (or vice-president) and SECRETARY (or asst. secretary) are to sign each copy with the original signatures. Carbon copy, xerox, or rubber stamp signatures are not acceptable. 4. Submit in DUPLICATE ORIGINAL. Furnish Secretary of State two copies of the document. (Mailing address: Corporation-Division, Secretary of State, P.O. Box 7846, Madison, WI 53707). One copy will be retained (filed) by Secretary of State and the other copy transmitted directly to the Register of Deeds of the county named in this document, together with your check for the recording fee. When the recording has been accomplished, the document will be returned to the address you furnish on the back of this form. 5. Two SEPARATE REMITTANCES are required. A) Send a filing fee of $25 (or more), Payable to SECRETARY OF STATE. Additional fee may be due if amendment causes an increase in authorized capital shares. The rate on shares is $1.25 per $1,000 on par value shares, and/or 2 1/2 cents per share on no par value shares. Compute fee at such rates on the aggregate number of shares AFTER giving effect to the amendment. Deduct therefrom the fee applicable to the authorized shares BEFORE amendment. The remainder, if any. is the additional fee due. B) Send a RECORDING FEE of $6, payable to REGISTER OF DEEDS of the county named in this document as the county within which the corporation's registered office is located. If you append additional pages to this standard form, add $2 more recording foe for each additional page. Please furnish the fee for the Register of Deeds in check form with your document, and we will transmit to the Register of Deeds with the documents for recording. DFI/CORP/30 United States of America [SEAL OF THE DOCUMENT STATE OF 2/00 State of Wisconsin WISCONSIN} DEPARTMENT OF FINANCIAL INSTITUTIONS To All to Whom These Presents Shall Come, Greeting: I, RAY ALLEN, Deputy Administrator, Division of Corporate & Consumer Services, Department of Financial Institutions, do hereby certify that the annexed copy has been compared with the document on file in the Corporation Section of the Division of Corporate & Consumer Services of this department, and that the same is a true copy thereof; and that I am the legal custodian of said document, and that this certification is in due form. [SEAL OF THE DEPARTMENT OF IN TESTIMONY WHEREOF, I have FINANCIAL INSTITUTIONS] hereunto set my hand and affixed the official seal of the Department. /s/ RAY ALLEN RAY ALLEN, Deputy Administrator Division of Corporate & Consumer Services Department of Financial Institutions DATE: AUG 20 2003 BY: /s/ Cathy Mickilson - -------------------------------------------------------------------------------- Effective July 1, 1996, the Department of Financial Institutions assumed the functions previously performed by the Corporations Division of the Secretary of State and is the successor custodian of corporate records formerly held by the Secretary of State. (Form 4) - 1982 STATE OF WISCONSIN CORPORATION DIVISION AMENDMENT SECRETARY OF STATE P O BOX 7946 (STOCK CORP) MADISON WI 53707 Resolved, That The Articles of Incorporation of Neenah Transport Company, Inc. be amended as follows: That Article I be amended to read: The name of the corporation shall be NEENAH TRANSPORT, INC. The undersigned officers of Neenah Transport Company, Inc. a Wisconsin corporation with registered office in Winnebago County, Wisconsin, CERTIFY: 1(A) The foregoing amendment of the articles of incorporation of said corporation was consented to in writing by the holders of all shares entitled to vote with respect to the subject matter of said amendment, duly signed by said shareholders or in their names by their duly authorized attorneys. OR (PLEASE STRIKE OUT THE ITEM YOU DO NOT USE) - See instruction 1
VOTE ON ADOPTION Number of Number of Number of Number of affirmative affirmative SHARES SHARES votes votes Class Outstanding entitled to vote CAST REQUIRED Common Preferred
2 (See instruction 2) [ILLEGIBLE] Executed in duplicate and seal (if any) affixed this 10th day of April, 1987 /s/ James Keating ------------------------------------ President (Affix seal or state that there is none) /s/ Fred C. Hathaway ------------------------------------ Secretary Fred C. Hathaway This document was drafted by Attorney James L. Cummings (Section 14.38(14) Wis. Statutes) AMENDMENT STOCK - Changes Name Neenah Transport Company, Inc. $25.00 - WINNEBAGO - STATE IF WISCONSIN MAIL RETURNED COPY TO: FILED (FILL IN THE NAME AND ADDRESS HERE) APR 20 1987 DOUGLAS LA FOLLETTE Cummings, Snyder, Hanes SECRETARY OF STATE & Wiegratz, S.C. P. O. Box 758 Neenah, WI 54956 INSTRUCTIONS 1. Amendment may be affected either by A) Vote of the shareholders at a OR B) Written, consent of all shareholder's meeting. Use item shareholders, without a 1(b) meeting. Use item 1(a). Ref. sec. 180.25 Wis. Stats. For corporations organized on or after 1 Jan 1973, statutory minimum of votes to adopt resolution is a majority of the shares entitled to vote. For corporations organized previously, statutory minimum is 2/3 of the shares entitled to vote, unless articles provide for majority vote. (Minimum vote requirements must be met for each class of stock as well as for the total shares entitled to vote.) 2. Item 2. If amendment provides for exchange, reclassification or cancellation of issued shares, or effects a change in the amount of stated capital, enter a statement of the manner in which the same wilt tie accomplished. Ref. sec. 180.53(6) & (7) Wisconsin Statutes. 3. Affix CORPORATE SEAL to each copy of the document, or enter the remark "NO SEAL" if the corporation does not have a seal. The PRESIDENT (or vice-president) and SECRETARY (or asst secretary) are to sign each copy with original signatures. Carbon copy, xerox, or rubber stamp signatures are not acceptable. 4. Submit in DUPLICATE ORIGINAL. Furnish Secretary of State two copies of the document. (Mailing address: Corporation Division, Secretary of State, P0 Box 7846, Madison WI, 53707). One copy will be retained (filed) by Secretary of State and the other copy transmitted directly to the Register of Deeds of the county named in this document, together with your check for the recording fee. When the recording has been accomplished, the document will be returned to the address you furnish on the back of this form. 5. Two SEPARATE REMITTANCES are required. A) Send a filing fee of $ 25 (or more), payable to SECRETARY OF STATE. Additional fee may be due if amendment causes an increase in authorized capital shares. The rate on shares is $1.25 per $1,000 on par value shares, and/or 2 1/2 cents per share on no par value shares. Compute fee at such rates on the aggregate number of shares AFTER giving effect to the amendment. Deduct therefrom the fee applicable to the authorized shares BEFORE amendment. The remainder, if any, is the additional fee due. B) Send a RECORDING FEE of $ 6, payable to REGISTER OF DEEDS of the county named in this document as the county within which the corporation's registered office is located. If you append additional pages to this standard form, add $ 2 more recording fee for each additional page. Please furnish the fee for the Register of Deeds in check form with your document, and we will transmit it to the Register of Deeds with the document for recording. United States of America State of Wisconsin DEPARTMENT OF FINANCIAL INSTITUTIONS Division of Corporate & Consumer Services To All to Whom These Presents Shall Come, Greeting: I, RAY ALLEN, Deputy Administrator, Division of Corporate & Consumer Services, Department of Financial Institutions, do hereby certify that; NEENAH TRANSPORT, INC. is a domestic corporation organized under the laws of this state and that its date of incorporation is April 10, 1981. I further certify that said entity has, within its most recently completed report year, filed an annual report required under section 180.1622, 180.1921, 181.1622, 183.0120 or 185.48 of the Wisconsin Statutes. I further certify that said company has not filed articles of dissolution with this department. [DEPARTMENT OF FINANCIAL INSTITUTIONS STATE OF WISCONSIN SEAL] IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the official seal of the Department on September 26, 2003. /s/ Ray Allen RAY ALLEN, Deputy Administrator Division Of Corporate & Consumer Services Department of Financial Institutions Effective July 1, 1996, the Department of Financial Institutions assumed the functions previously performed by the Corporations Division of the Secretary of State and is the successor of corporate records formerly held by the Secretary of State. DFI/Corp/33 TO VALIDATE THE AUTHENTICITY OF THIS CERTIFICATE Visit this web address: http://www.wdfi.org/apps/ccs/verify/ Enter this code: 117-CB6C8198 NEENAH TRANSPORT, INC. CERTIFICATE OF SECRETARY I, Gary W. LaChey, do hereby certify as follows: 1. I am the duly elected, qualified and acting Secretary of Neenah Transport, Inc., a Wisconsin corporation (the "Company") . 2. Attached hereto is a true, complete and correct copy of the Bylaws of the Company, as in full force and effect on the date hereof. IN WITNESS WHEREOF, I have executed this Certificate in my official capacity this 30th day of April, 1997. /s/ Gary W. LaChey --------------------------------------- Gary W. LaChey, Secretary BYLAWS OF NEENAH TRANSPORT, INC. As Amended and Restated June 13, 1989 1. The number of directors of this corporation shall be three (3). A director who is or was employed by the corporation (or an affiliated corporation) shall be eligible for reelection as a director of the corporation only so long as he or she is actively so employed. 2. The date of the annual meeting of shareholders shall be not earlier than the second Tuesday in April nor later than the third Tuesday in June, as determined each year by the President, and the time and place of meeting shall be such as shall be fixed by the Secretary and specified in the notice or waiver of notice of such meeting. 3. Regular or special directors' meetings may be held upon 48 hours written notice given in person or by telegraphing or depositing the same in the mail, addressed to each director at his or her address as set forth in the records of the corporation. 4. Notice of any meeting of shareholders or directors may be waived, and actions by shareholders or directors may be taken by unanimous written consent without a meeting, as provided by Sections 180.89 and 180.91 of the Wisconsin Business Corporation Law, or any successor provisions thereto. 5. The duties of the respective officers shall be such as usually pertain to their offices and such other duties as may be prescribed by the Board of Directors. The Board of Directors may delegate the duties of any officer to any other officer or to any assistant officer or other person designated by it for that purpose. 6. The fiscal year of the corporation shall begin on the first day of April and end on the last day of March in each year. 7. These bylaws may be amended by the Board of Directors or by the shareholders. EX-3.12 14 y92210a1exv3w12.txt RESTATED ARTICLES OF INCORPORATION Exhibit 3.12 RESTATED ARTICLES OF INCORPORATION OF CAST ALLOYS, INC. ----------------- (Under Section 1400 and 1401 of the General Corporation Law of the ------------------------------------------------------------------ State of California) -------------------- The undersigned, being a duly elected officer of Cast Alloys, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of California (the "Corporation"), does hereby certify as follows: 1. That the Corporation filed its original Articles of Incorporation with the California Secretary of State on October 24, 1984 (the "Certificate"). 2. That the Corporation filed a voluntary petition under chapter 11 of title 11 of the United States Code, as amended with the Bankruptcy Court of Delaware on August 5, 2003, and that this Certificate is being filed pursuant to Chapter 14 of the General Corporation Law of the State of California and shall become effective pursuant to the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries filed with the Delaware Bankruptcy Court on August 5, 2003, and amended on September 17, 2003, without further action by the board of directors or shareholders of the Corporation pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. The Corporation's Certificate is restated in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the "Restated Certificate"). RESTATED ARTICLES OF INCORPORATION OF CAST ALLOYS, INC. ARTICLE ONE ----------- The name of the corporation is Cast Alloys, Inc. (hereinafter called the "Corporation"). ARTICLE TWO ----------- The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. ARTICLE THREE ------------- The total number of shares which the Corporation shall have the authority to issue is Two Million Five Hundred Thousand (2,500,000) shares, all of which shall be shares of Common Stock, no par value per share. ARTICLE FOUR ------------ The directors shall have the power to adopt, amend or repeal By-Laws, except as may be otherwise be provided in the By-Laws. ARTICLE FIVE ------------ To the fullest extent permitted by the General Corporation Law of the State of California as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE FIVE shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE SIX ----------- The Corporation shall not issue nonvoting equity securities. ARTICLE SEVEN ------------- The Corporation reserves the right to amend or repeal any provisions contained in this Certificate of Incorporation from time to time and at any time in the manner now or hereafter prescribed by the laws of the State of California, and all rights conferred upon stockholders and directors are granted subject to such reservation. ARTICLE EIGHT ------------- * * * * 2 IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Articles of Incorporation of the Corporation pursuant to the General Corporation Law of the State of California, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate this ____ day of October, 2003. By: /s/ Gary W. LaChey ----------------------------- Gary W. LaChey Chief Financial Officer, Vice President - Finance, Treasurer and Secretary 3 EX-3.13 15 y92210a1exv3w13.txt CERTIFICATE OF INCORPORATION Exhibit 3.13 DELAWARE Page 1 --------------- THE FIRST STATE I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF "BELCHER CORPORATION" AS RECEIVED AND FILED IN THIS OFFICE. THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED: CERTIFICATE OF INCORPORATION, FILED THE ELEVENTH DAY OF AUGUST, A.D. 1989, AT 9 O'CLOCK A.M. CERTIFICATE OF CHANGE OF REGISTERED AGENT, FILED THE ELEVENTH DAY OF DECEMBER, A.D. 1996, AT 4 O'CLOCK P.M. AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION. /s/ Harriet Smith Windsor [SEAL] ------------------------- Harriet Smith Windsor, Secretary of State 2204798 8100H AUTHENTICATION: 2653874 030618135 DATE: 09-25-03 CERTIFICATE OF INCORPORATION OF BELCHER CORPORATION FIRST The name of the corporation is Belcher Corporation. SECOND The address of the corporation's registered office in the State of Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, 19805. The name of its registered agent at such address is Corporation Service Company. THIRD The nature of the business or purpose to be conducted or promoted by the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. In connection therewith, the corporation shall possess and exercise all of the powers and privileges granted by the General Corporation Law of Delaware or this Certificate of Incorporation together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the corporation. FOURTH The total number of shares of stock which the corporation shall have the authority to issue is one hundred (100) shares of Common Stock, without par value. FIFTH The name and mailing address of the Sole Incorporator of the Corporation is as follows: NAME MAILING ADDRESS Cindy Victor 1800 Society Building Cleveland, OH 44114-2688 SIXTH The Directors of the corporation shall have the power to adopt, amend, or repeal the by-laws of the corporation. SEVENTH To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a Director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director. THE UNDERSIGNED, being the Sole Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 11th day of August, 1989. /s/ Cindy Victor --------------------------- (Cindy Victor) (Sole Incorporator) 182\20573ACA.312 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 04:00 PM 12/11/1996 960365316 - 2204798 CERTIFICATE OF CHANGE OF REGISTERED AGENT AND REGISTERED OFFICE Belcher Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: The present registered agent of the corporation is Corporation Service Company and the present registered office of the corporation is in the county of New Castle. The Board of Directors of Belcher Corporation adopted the following resolution on the 21st day of August, 1996. Resolved, that the registered office of Belcher Corporation in the state of Delaware be and it hereby is changed to Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, and the authorization of the present registered agent of this corporation be the same is hereby withdrawn, and THE CORPORATION TRUST COMPANY, shall be and is hereby constituted and appointed the registered agent of this corporation at the address of its registered office. IN WITNESS WHEREOF, Belcher Corporation has caused this statement to be signed by Michael L. Miller, its Secretary, this 4th day of Nov., 1996. /s/ Michael L. Miller EX-3.14 16 y92210a1exv3w14.txt ARTICLES OF INCORPORATION Exhibit 3.14 DEPARTMENT OF STATE THE STATE OF OHIO SHERROD BROWN Secretary of State 755551 CERTIFICATE It is hereby certified that the Secretary of State of Ohio has custody of the Records of Incorporation and Miscellaneous Filings; that said records show the filing and recording of: ARF MIS of: PEERLESS CORPORATION UNITED STATES OF AMERICA Recorded on Roll _______ at Frame ______ STATE OF OHIO of the Records of Incorporation and OFFICE OF THE SECRETARY OF STATE Miscellaneous Filings. WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE, AT THE CITY OF COLUMBUS, OHIO, THIS __________ DAY OF ___________. A.D. 19__. SHERROD BROWN Secretary of State ARTICLES OF INCORPORATION OF PEERLESS CORPORATION * * * * * The undersigned, a citizen of the United States, desiring to form a corporation, FOR PROFIT, does hereby CERTIFY: ARTICLE I The name of the corporation is Peerless Corporation. ARTICLE II The principal office of the Corporation shall be located in Ironton, Lawrence County, Ohio. ARTICLE III The purpose or purposes for which, or for any of which, it is formed are to enter into, promote or conduct any kind of business, contract or undertaking permitted to corporations for profit organized under the General Corporation Laws of the State of Ohio, to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the Revised Code of Ohio, and, in connection therewith, to exercise all express and incidental powers normally permitted such corporations. ARTICLE IV The authorized number of shares of capital stock of the corporation shall consist of Seven Hundred Fifty (750) shares, all of which shall be common shares, without par value. ARTICLE V The corporation may purchase, from time to time, and to the extent permitted by the laws of Ohio, shares of any class of stock issued by it. Such purchases may be made either in the open market or at private or public sale, and in such manner and amounts, from such holder or holders of outstanding shares of the corporation and at such prices as the Board of Directors of the corporation shall from time to time determine, and the Board of Directors is hereby empowered to authorize such purchases from time to time without any vote of the holders of any class of shares now or hereafter authorized and outstanding at the time of any such purchase. ARTICLE VI Notwithstanding any provision of the laws of the State of Ohio now or hereafter in force requiring, for any purpose, the vote of the holders of greater than a majority but less than all of the voting power of the corporation or of any class or classes of shares thereof, such action (unless otherwise expressly prohibited by statute) may be taken by vote of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class or classes. ARTICLE VII The preemptive right to purchase additional shares or any other securities of the corporation is expressly denied to all shareholders of all classes. 2 IN WITNESS WHEREOF, I have subscribed my name to these Articles of Incorporation on August 25, 1989. /s/ Cindy Victor ------------------------------ Cindy Victor (Sole Incorporator) PEERLESS CORPORATION ORIGINAL APPOINTMENT OF STATUTORY AGENT * * * * * The undersigned, being the Sole Incorporator of Peerless Corporation, under the provisions of Section 1701.07 of the Ohio Revised Code, does hereby appoint as Statutory Agent, Cindy Victor, a natural person resident of the State of Ohio, upon whom any process, notice, or demand required or permitted by statute to be served upon the corporation may be served. The complete business address of said Agent is 1800 Society Building, in the City of Cleveland, in Cuyahoga County, Ohio, Zip Code 44114. IN WITNESS WHEREOF, the undersigned Sole Incorporator of Peerless Corporation, has executed this Original Appointment of Statutory Agent on August 25, 1989. /s/ Cindy Victor __________________________________ Cindy Victor EX-3.15 17 y92210a1exv3w15.txt AMENDED BYLAWS Exhibit 3.15 AMENDMENT TO NEENAH FOUNDRY COMPANY BYLAWS Article III, Section 3.01, Sentence 2 relating to the number of the board of directors of Neenah Foundry Company is hereby amended to read as follows: "The number of directors of the corporation shall be no less than two (2) and no more than seven (7)." This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of Neenah Foundry Company, pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. BYLAWS of NEENAH CORPORATION Neenah Foundry Company As Amended and Restated July 14, 1995 TABLE OF CONTENTS ARTICLE I. OFFICES; RECORDS .......................................... 2 1.01. Principal and Business Offices ............................ 2 1.02. Registered Office and Registered Agent .................... 2 1.03. Corporate Records ......................................... 2 ARTICLE II. SHAREHOLDERS .............................................. 3 2.01. Annual Meeting ............................................ 3 2.02. Special Meetings .......................................... 2 2.03. Place of Meeting .......................................... 2 2.04. Notices to Shareholders ................................... 2 2.05. Fixing of Record Date ..................................... 4 2.06. Shareholder List .......................................... 4 2.07. Quorum and Voting Requirements ............................ 5 2.08. Conduct of Meetings ....................................... 5 2.09. Proxies ................................................... 5 2.10. Voting of Shares .......................................... 6 ARTICLE III. BOARD OF DIRECTORS ........................................ 6 3.01. General Powers and Number ................................. 6 3.02. Election, Removal, Tenure and Qualifications .............. 6 3.03. Regular Meetings .......................................... 7 3.04. Special Meetings .......................................... 7 3.05. Meetings By Telephone or Other Communication Technology ................................................ 7 3.06. Notice of Meetings ........................................ 8 3.07. Quorum .................................................... 8 3.08. Manner of Acting .......................................... 8 3.09. Conduct of Meetings ....................................... 8 3.10. Vacancies ................................................. 9 3.11. Compensation .............................................. 9 3.12. Presumption of Assent ..................................... 9 3.13. Committees ................................................ 9 ARTICLE IV. OFFICERS .................................................. 10 4.01. Appointment ............................................... 10 4.02. Resignation and Removal ................................... 10 4.03. Vacancies ................................................. 10 4.04. Chairman of the Board ..................................... 11 4.05. President ................................................. 11 4.06. Shared Functions .......................................... 11 4.07. Vice Presidents ........................................... 12 4.08. Secretary ................................................. 12 4.09. Treasurer ................................................. 12 4.10. Assistants and Acting Officers ............................ 13 4.11. Salaries .................................................. 13 ARTICLE V. CERTIFICATES FOR SHARES AND THEIR TRANSFER ................ 13 5.01. Certificates for Shares ................................... 13 5.02. Signature by Former Officers .............................. 14 5.03. Transfer of Shares ........................................ 14
-i- TABLE OF CONTENTS (continued) 5.04. Restrictions on Transfer .................................. 14 5.05. Lost, Destroyed or Stolen Certificates .................... 14 5.06. Consideration for Shares .................................. 14 5.07. Stock Regulations ......................................... 15 ARTICLE VI. WAIVER OF NOTICE .......................................... 15 6.01. Shareholder Written Waiver ................................ 15 6.02. Shareholder Waiver by Attendance .......................... 15 6.03. Director Written Waiver ................................... 15 6.04. Director Waiver by Attendance ............................. 15 ARTICLE VII. ACTION WITHOUT MEETINGS ................................... 16 7.01. Shareholder Action Without Meeting ........................ 16 7.02. Director Action Without Meeting ........................... 16 ARTICLE VIII. INDEMNIFICATION .......................................... 16 8.01. Indemnification for Successful Defense .................... 16 8.02. Other Indemnification ..................................... 16 8.03. Written Request ........................................... 17 8.04. Nonduplication ............................................ 17 8.05. Determination of Right to Indemnification ................. 17 8.06. Advance of Expenses ....................................... 19 8.07. Nonexclusivity ............................................ 19 8.08. Court-Ordered Indemnification ............................. 20 8.09. Indemnification and Allowance of Expenses of Employees and Agents ...................................... 21 8.10. Insurance ................................................. 21 8.11. Securities Law Claims ..................................... 21 8.12. Liberal Construction ...................................... 21 8.13. Definitions Applicable to this Article .................... 21 ARTICLE IX. CONTRACTS, LOANS, CHECKS AND DEPOSITS ..................... 23 9.01. Contracts; Director Conflict of Interest .................. 23 9.02. Loans ..................................................... 24 9.03. Checks, Drafts, etc ....................................... 24 9.04. Deposits .................................................. 24 ARTICLE X. MISCELLANEOUS ............................................. 24 10.01. Corporate Seal ............................................ 24 10.02. Fiscal Year ............................................... 24 ARTICLE XI. AMENDMENTS ................................................ 24 11.01. By Shareholders ........................................... 24 11.02. By Directors .............................................. 25 11.03. Implied Amendments ........................................ 25
-ii- ARTICLE I. OFFICES; RECORDS 1.01. Principal and Business Offices. The corporation may have such principal and other business offices, either within or without the State of Wisconsin, as the Board of Directors may designate or as the business of the corporation may require from time to time. 1.02. Registered Office and Registered Agent. The registered office of the corporation required by the Wisconsin Business Corporation Law to be maintained in the State of Wisconsin may be, but need not be, identical with the principal office in the State of Wisconsin. The address of the registered office may be changed from time to time by any officer or by the registered agent. The office of the registered agent of the corporation shall be identical to such registered office. 1.03. Corporate Records. The following documents and records shall be kept at the corporation's principal office or at such other reasonable location as may be specified by the corporation: (a) Minutes of shareholders' and Board of Directors' meetings and any written notices thereof. (b) Records of actions taken by the shareholders or directors without a meeting. (c) Records of actions taken by committees of the Board of Directors. (d) Accounting records. (e) Records of its shareholders. (f) Current Bylaws. (g) Written waivers of notice by shareholders or directors (if any). (h) Written consents by shareholders or directors for actions without a meeting (if any). (i) Voting trust agreements (if any). (j) Stock transfer agreements to which the corporation is a party or of which it has notice (if any). ARTICLE II. SHAREHOLDERS 2.01. Annual Meeting. The annual meeting of the shareholders shall be held not earlier than the second Tuesday in April nor later than the third Tuesday in June, as determined each year by the Chairman of the Board or the President, and the time and place of meeting shall be such as shall be fixed by the Secretary and specified in the notice or waiver of notice of the meeting. The annual meeting shall be held for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors is not held on the day fixed as herein provided, for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a meeting of the shareholders as soon thereafter as may be convenient. 2.02. Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairperson of the Board, if there is one, the President or the Board of Directors. If and as required by the Wisconsin Business Corporation Law, a special meeting shall be called upon written demand describing one or more purposes for which it is to be held by holders of shares with at least 10% of the votes entitled to be cast on any issue proposed to be considered at the meeting. The purpose or purposes of any special meeting shall be described in the notice required by Section 2.04 of these Bylaws. 2.03. Place of Meeting. The Board of Directors may designate any place, either within or without the State of Wisconsin, as the place of meeting for any annual meeting or any special meeting. If no designation is made, the place of meeting shall be the principal office of the corporation but any meeting may be adjourned to reconvene at any place designated by vote of a majority of the shares represented thereat and entitled to vote thereon. 2.04. Notices to Shareholders. (a) Required Notice. Written notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten days nor more than sixty (60) days before the date of the meeting (unless a different time is provided by law or the Articles of Incorporation), by or at the direction of the Chairman of the Board, the President or the Secretary, to each shareholder entitled to vote at such meeting or, for the fundamental transactions described in subsections (e)(1) to (4) below (for which the Wisconsin Business Corporation Law requires that notice be given to shareholders not entitled to vote), to all shareholders. If mailed, such notice is effective when deposited in the United States mail, and shall be addressed to the shareholder's address shown in the current record of shareholders of the corporation, with postage thereon prepaid. At least twenty (20) days' notice shall be provided if the purpose, or one of the purposes, of the meeting is to consider a plan of merger or share exchange for which shareholder approval is required by law, or the sale, lease, exchange or other disposition of all or substantially all of the corporation's property, with or without good will, otherwise than in the usual and regular course of business. (b) Adjourned Meeting. Except as provided in the next sentence, if any shareholder meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, and place, if the new date, time, and place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed, then notice must be given pursuant to the requirements of paragraph (a) of this Section 2.04, to those persons who are shareholders as of the new record date. (c) Waiver of Notice. A shareholder may waive notice in accordance with Article VI of these Bylaws. (d) Contents of Notice. The notice of each special shareholder meeting shall include a description of the purpose or purposes for which the meeting is called, and only business within the purpose described in the meeting notice may be conducted at a special shareholder meeting. Except as otherwise provided in subsection (e) of this Section 2.04, in the Articles of Incorporation, or in the Wisconsin Business Corporation Law, the notice of an annual shareholder meeting need not include a description of the purpose or purposes for which the meeting is called. (e) Fundamental Transactions. If a purpose of any shareholder meeting is to consider either: (1) a proposed amendment to the Articles of Incorporation (including any restated articles); (2) a plan of merger or share exchange for which shareholder approval is required by law; (3) the sale, lease, exchange or other disposition of all or substantially all of the corporation's property, with or without good will, otherwise than in the usual and regular course of business; (4) the dissolution of the corporation; or (5) the removal of a director, the notice must so state and in cases (1), (2) and (3) above must be accompanied by, respectively, a copy or summary of the: (1) proposed articles of amendment or a copy of the restated articles that identifies any amendment or other change; (2) proposed plan of merger or share exchange; or (3) proposed transaction for disposition of all or substantially all of the corporation's property. If the proposed corporate action creates dissenters' rights, the notice must state that shareholders and beneficial shareholders are or may be entitled to assert dissenters' rights, and must be accompanied by a copy of Sections -3- 180.1301 to 180.1331 of the Wisconsin Business Corporation Law, or the corresponding provisions of any successor statute. 2.05. Fixing of Record Date. The Board of Directors may fix in advance a date as the record date for one or more voting groups for any determination of shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action, such date in any case to be not more than seventy (70) days prior to the meeting or action requiring such determination of shareholders, and may fix the record date for determining shareholders entitled to a share dividend or distribution. If no record date is fixed for the determination of shareholders entitled to demand a shareholder meeting, to notice of or to vote at a meeting of shareholders, or to consent to action without a meeting, (a) the close of business on the day before the corporation receives the first written demand for a shareholder meeting, (b) the close of business on the day before the first notice of the meeting is mailed or otherwise delivered to shareholders, or (c) the close of business on the day before the first written consent to shareholder action without a meeting is received by the corporation, as the case may be, shall be the record date for the determination of shareholders. If no record date is fixed for the determination of shareholders entitled to receive a share dividend or distribution (other than a distribution involving a purchase, redemption or other acquisition of the corporation's shares the close of business on the day on which the resolution of the Board of Directors is adopted declaring the dividend or distribution shall be the record date. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall be applied to any adjournment thereof unless the Board of Directors fixes a new record date and except as otherwise required by law. A new record date must be set if a meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. 2.06. Shareholder List. The officer or agent having charge of the stock transfer books for shares of the corporation shall, before each meeting of shareholders, make a complete record of the shareholders entitled to notice of such meeting, arranged by class or series of shares and showing the address of and the number of shares held by each shareholder. The shareholder list shall be available at the meeting and may be inspected by any shareholder or his or her agent or attorney at any time during the meeting or any adjournment. Any shareholder or his or her agent or attorney may inspect the shareholder list beginning two (2) business days after the notice of the meeting is given and continuing to the date of the meeting, at the corporation's principal office or at a place identified in the meeting notice in the city where the meeting will be held and, subject to Section 180.1602(2)(b) 3 to 5 of the Wisconsin Business Corporation Law, may copy the list, during regular business hours and at his or her expense, during the period that it is available for inspection hereunder. The original stock -4- transfer books and nominee certificates on file with the corporation (if any) shall be prima facie evidence as to who are the shareholders entitled to inspect the shareholder list or to vote at any meeting of shareholders. Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting. 2.07. Quorum and Voting Requirements. Except as otherwise provided in the Articles of Incorporation or in the Wisconsin Business Corporation Law, a majority of the votes entitled to be cast by shares entitled to vote as a separate voting group on a matter, represented in person or by proxy, shall constitute a quorum of that voting group for action on that matter at a meeting of shareholders. If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action unless a greater number of affirmative votes is required by the Wisconsin Business Corporation Law or the Articles of Incorporation. If the Articles of Incorporation or the Wisconsin Business Corporation Law provide for voting by two (2) on more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately. Action may be taken by one (1) voting group on a matter even though no action is taken by another voting group entitled to vote on the matter. Once a share is represented for any purpose at a meeting, other than for the purpose of objecting to holding the meeting or transacting business at the meeting, it is considered present for purposes of determining whether a quorum exists for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that meeting. 2.08. Conduct of Meetings. The Chairman of the Board, or in his or her absence, the President, and in the President's absence, a Vice President in the order provided under Section 4.07 of these Bylaws, and in their absence, any person chosen by the shareholders present shall call the meeting of the shareholders to order and shall act as chairperson of the meeting, and the Secretary shall act as secretary of all meetings of the shareholders, but, in the absence of the Secretary, the presiding officer may appoint any other person to act as secretary of the meeting. 2.09. Proxies. At all meetings of shareholders, a shareholder entitled to vote may vote in person or by proxy appointed in writing by the shareholder or by his or her duly authorized attorney-in-fact. All proxy appointment forms shall be filed with the Secretary or other officer or agent of the corporation authorized to tabulate votes before or at the time of the meeting. Unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest, a proxy appointment may be revoked at any time. The presence of a shareholder who has filed a proxy appointment shall -5- not of itself constitute a revocation. No proxy appointment shall be valid after eleven months from the date of its execution, unless otherwise expressly provided in the appointment form. The Board of Directors shall have the power and authority to make rules that are not inconsistent with the Wisconsin Business Corporation Law as to the validity and sufficiency of proxy appointments. 2.10. Voting of Shares. Each outstanding share of Class A common stock shall be entitled to one (1) vote on each matter submitted to a vote at a meeting of shareholders. The holders of preferred stock and of Class B common stock shall have no voting rights whatsoever, except as required by law. Shares owned directly or indirectly by another corporation are not entitled to vote if this corporation owns, directly or indirectly, sufficient shares to elect a majority of the directors of such other corporation. However, the prior sentence shall not limit the power of the corporation to vote any shares, including its own shares, held by it in a fiduciary capacity. Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares. ARTICLE III. BOARD OF DIRECTORS 3.01. General Powers and Number. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its Board of Directors. The number of directors of the corporation shall be three (3). The number of directors may be increased or decreased from time to time by amendment to this Section adopted by the shareholders or the Board of Directors, but no decrease shall have the effect of shortening the term of an incumbent director. 3.02. Election, Removal, Tenure and Qualifications. Unless action is taken without a meeting under Section 7.01 of these Bylaws, directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a shareholders meeting at which a quorum is present; i.e., the individuals with the largest number of votes in favor of their election are elected as directors up to the maximum number of directors to be chosen in the election. Votes against a candidate are not given legal effect and are not counted as votes cast in an election of directors. In the event two (2) or more persons tie for the last vacancy to be filled, a run-off vote shall be taken from among the candidates receiving the tie vote. Each director shall hold office until the next annual meeting of shareholders and until the director's successor shall have been elected and qualified or there is a decrease in the number of -6- directors, or until his or her prior death, resignation or removal. If cumulative voting for directors is not authorized by the Articles of Incorporation, any director or directors may be removed from office by the shareholders if the number of votes cast to remove the director exceeds the number cast not to remove him or her, taken at a meeting of shareholders called for that purpose (unless action is taken without a meeting under Section 7.01 of these Bylaws), provided that the meeting notice states that the purpose, or one of the purposes, of the meeting is removal of the director. The removal may be made with or without cause unless the Articles of Incorporation or these Bylaws provide that directors may be removed only for cause. A director may resign at any time by delivering a written resignation to the Board of Directors, to the Chairman of the Board, or to the corporation through the Secretary or otherwise. Directors need not be residents of the State of Wisconsin or shareholders of the corporation. 3.03. Regular Meetings. A regular meeting of the Board of Directors shall be held, without other notice than this Bylaw, immediately after the annual meeting of shareholders, and each adjourned session thereof. The place of such regular meeting shall be the same as the place of the meeting of shareholders which precedes it, or such other suitable place as may be announced at such meeting of shareholders. The Board of Directors and any committee may provide, by resolution, the time and place, either within or without the State of Wisconsin, for the holding of additional regular meetings without other notice than such resolution. 3.04. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, the President or any two (2) directors. Special meetings of any committee may be called by or at the request of the foregoing persons or the chairperson of the committee. The persons calling any special meeting of the Board of Directors or committee may fix any place, either within or without the State of Wisconsin, as the place for holding any special meeting called by them, and if no other place is fixed the place of meeting shall be the principal office of the corporation in the State of Wisconsin. 3.05. Meetings By Telephone or Other Communication Technology. (a) Any or all directors may participate in a regular or special meeting or in a committee meeting of the Board of Directors by, or conduct the meeting through the use of, telephone or any other means of communication by which either: (i) all participating directors may simultaneously hear each other during the meeting or (ii) all communication during the meeting is immediately transmitted to each participating director, and each participating director is able to immediately send messages to all other participating directors. -7- (b) If a meeting will be conducted through the use of any means described in paragraph (a), all participating directors shall be informed that a meeting is taking place at which official business may be transacted. A director participating in a meeting by any means described in paragraph (a) is deemed to be present in person at the meeting. 3.06. Notice of Meetings. Except as otherwise provided in the Articles of Incorporation or the Wisconsin Business Corporation Law, notice of the date, time and place of any special meeting of the Board of Directors and of any special meeting of a committee of the Board shall be given orally or in writing to each director or committee member at least 48 hours prior to the meeting, except that notice by mail shall be given at least 72 hours prior to the meeting. The notice need not describe the purpose of the meeting. Notice may be communicated in person, by telephone, telegraph or facsimile or by mail or private carrier. Oral notice is effective when communicated. Written notice is effective as follows: If delivered in person, when received; if given by mail, when deposited, postage prepaid, in the United States mail addressed to the director at his or her business or home address (or such other address as the director may have designated in writing filed with the Secretary); if given by facsimile, at the time transmitted to a facsimile number at any address designated above; and if given by telegraph, when delivered to the telegraph company. 3.07. Quorum. Except as otherwise provided by the Wisconsin Business Corporation Law, a majority of the number of directors as provided in Section 3.01 shall constitute a quorum of the Board of Directors. Except as otherwise provided by the Wisconsin Business Corporation Law, a majority of the number of directors appointed to serve on a committee shall constitute a quorum of the committee. 3.08. Manner of Acting. Except as otherwise provided by the Wisconsin Business Corporation Law, the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors or any committee thereof. 3.09. Conduct of Meetings. The Chairman of the Board, or in his or her absence, the President, and in the President's absence, a Vice President in the order provided under Section 4.07 of these Bylaws, and in their absence, any director chosen by the directors present, shall call meetings of the Board of Directors to order and shall chair the meeting. The Secretary of the corporation shall act as secretary of all meetings of the Board of Directors, but in the absence of the Secretary, the presiding officer may appoint any assistant secretary or any director or other person present to act as secretary of the meeting. -8- 3.10. Vacancies. Any vacancy occurring in the Board of Directors, including a vacancy created by an increase in the number of directors, may be filled by the shareholders or the Board of Directors. If the directors remaining in office constitute fewer than a quorum of the Board, the directors may fill a vacancy by the affirmative vote of a majority of all directors remaining in office. A vacancy that will occur at a specific later date (because of a resignation effective at a later date or otherwise) may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs. 3.11. Compensation. The Board of Directors, irrespective of any personal interest of any of its members, may fix the compensation of directors. 3.12. Presumption of Assent. A director who is present and is announced as present at a meeting of the Board of Directors or a committee thereof at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless (i) the director objects at the beginning of the meeting or promptly upon his or her arrival to holding the meeting or transacting business at the meeting, or (ii) the director's dissent or abstention from the action taken is entered in the minutes of the meeting, or (iii) the director delivers his or her written dissent or abstention to the presiding officer of the meeting before the adjournment thereof or to the corporation immediately after the adjournment of the meeting. Such right to dissent or abstain shall not apply to a director who voted in favor of such action. 3.13. Committees. The Board of Directors, by resolution adopted by the affirmative vote of a majority of all the directors then in office, may create one (1) or more committees, each committee to consist of two (2) or more directors as members, which to the extent provided in the resolution as initially adopted, and as thereafter supplemented or amended by further resolution adopted by a like vote, may exercise the authority of the Board of Directors, except that no committee may: (a) authorize distributions; (b) approve or propose to shareholders action that the Wisconsin Business Corporation Law requires be approved by shareholders; (c) fill vacancies on the Board of Directors or any of its committees, except that the Board of Directors may provide by resolution that any vacancies on a committee shall be filled by the affirmative vote of a majority of the remaining committee members; (d) amend the Articles of Incorporation; (e) adopt, amend or repeal Bylaws; (f) approve a plan of merger not requiring shareholder approval; (g) authorize or approve reacquisition of shares, except according to a formula or method prescribed by the Board of Directors or (h) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares, except within limits prescribed by the Board of Directors. All -9- members of the Board of Directors who are not members of a given committee shall be alternate members of such committee and may take the place of any absent member or members at any meeting of such committee, upon request by the Chairman of the Board, the President or upon request by the chairperson of such meeting. Each such committee shall fix its own rules (consistent with the Wisconsin Business Corporation Law, the Articles of Incorporation and these Bylaws) governing the conduct of its activities and shall make such reports to the Board of Directors of its activities as the Board of Directors may request. Unless otherwise provided by the Board of Directors in creating a committee, a committee may employ counsel, accountants and other consultants to assist it in the exercise of authority. The creation of a committee, delegation of authority to a committee or action by a committee does not relieve the Board of Directors or any of its members of any responsibility imposed on the Board of Directors or its members by law. ARTICLE IV. OFFICERS 4.01. Appointment. The principal officers shall include a Chairman of the Board, a President, one or more Vice Presidents (the number and designations to be determined by the Board of Directors), a Secretary and a Treasurer, each of whom shall be appointed by the Board of Directors. The Board of Directors may designate one or more of the Vice Presidents as Executive Vice Presidents or Senior vice Presidents. Such other officers and assistant officers as may be deemed necessary may be appointed by the Board of Directors, the Chairman of the Board or the President. Any two or more offices may be held by the same person. 4.02. Resignation and Removal. An officer shall hold office until he or she resigns, dies, is removed hereunder, or a different person is appointed to the office. An officer may resign at any time by delivering an appropriate written notice to the corporation. The resignation is effective when the notice is delivered, unless the notice specifies a later effective date and the corporation accepts the later effective date. Any officer may be removed by the Board of Directors with or without cause and notwithstanding the contract rights, if any, of the person removed. Except as provided in the preceding sentence, the resignation or removal is subject to any remedies provided by any contract between the officer and the corporation or otherwise provided by law. Appointment shall not of itself create contract rights. 4.03. Vacancies. A vacancy in any principal office because of death, resignation, removal or otherwise, shall be filled by the Board of Directors and a vacancy in any other office shall be filled by the Board of Directors, the Chairman of the Board or the President. If a resignation is effective at a -10- later date, the vacancy may be filled before the effective date if the appointment provides that the successor may not take office until the effective date. 4.04. Chairman of the Board. The Chairman of the Board shall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. He or she shall, when present, preside at all meetings of the shareholders and of the Board of Directors. He or she shall have authority, subject to such rules as may be prescribed by the Board of Directors, to appoint such agents and employees of the corporation as he or she shall deem necessary, to prescribe their powers, duties and compensation, and to delegate authority to them. Such agents and employees shall hold office at the discretion of the Chairman of the Board. In general, he or she shall perform all duties incident to the office of the Chairman of the Board and such other duties as may be prescribed by the Board of Directors from time to time. In the absence of the President, or in the event that such office is for any reason vacant, the Chairman of the Board shall perform the functions of the President. 4.05. President. The President shall be the chief operating officer of the corporation, carrying out his or her functions subject to the directions of the Chairman of the Board and the Board of Directors. In the absence of the Chairman of the Board, or in the event that such office is for any reason vacant, the President shall perform the functions of the Chairman of the Board. However, if the offices of Chairman of the Board and President are held by the same person, the Board of Directors may designate an Executive Vice President as the chief operating officer of the corporation, in which event references in the Bylaws to the President shall be regarded as references to such Executive Vice President, as chief operating officer, except where a contrary meaning is clearly required. 4.06. Shared Functions. Except in cases where the signing and execution thereof is expressly delegated by the Board of Directors or these Bylaws to some other officer or agent of the corporation, or is required by law to be otherwise signed or executed, the Chairman of the Board and the President shall each have authority to sign, execute and acknowledge, on behalf of the corporation, all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and all other documents or instruments necessary or proper to be executed in the course of a corporation's regular business, or which shall be authorized by resolution of the Board of Directors (provided that in no case shall the Chairman be empowered in place of the President to sign the certificates for shares of stock of the corporation); and, except as otherwise provided by law or the Board of Directors, they may authorize any Vice President or other officer or agent of the corporation to sign, execute and acknowledge such documents or instruments in their place and stead. -11- 4.07. Vice Presidents. In the absence of both the Chairman of the Board and the President, or in the event of the death, inability or refusal to act of both the Chairman of the Board and the President, or in the event for any reason it shall be impracticable for either of them to act personally, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties and have such authority as from time to time may be delegated or assigned to him or her by the Chairman of the Board, the President or the Board of Directors. The execution of any instrument of the corporation by any Vice President shall be conclusive evidence, as to third parties, of the Vice President's authority to act in the stead of the President. Vice Presidents may, by their election, have charge and supervision of designated divisions, departments or units of the corporation's business. 4.08. Secretary. The Secretary shall: (a) keep (or cause to be kept) regular minutes of all meetings of the shareholders, the Board of Directors and any committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation, if any, and see that the seal of the corporation, if any, is affixed to all documents which are authorized to be executed on behalf of the corporation under its seal; (d) keep or arrange for the keeping of a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; (e) sign with the President, or a Vice President, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the corporation; and (g) in general perform all duties incident to the office of Secretary and have such other duties and exercise such authority as from time to time may be delegated or assigned to him or her by the Chairman of the Board or the President or by the Board of Directors. 4.09. Treasurer. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositories as shall be selected by the corporation; and (c) in general perform all of the duties incident to the office of Treasurer and have such other duties and exercise such other authority as from time to -12- time may be delegated or assigned to him or her by the Chairman of the Board or the President or by the Board of Directors. 4.10. Assistants and Acting Officers. The Board of Directors, the Chairman of the Board and the President shall have the power to appoint any person to act as assistant to any officer, or as agent for the corporation in the officer's stead, or to perform the duties of such officer whenever for any reason it is impracticable for such officer to act personally, and such assistant or acting officer or other agent so appointed by the Board of Directors, the Chairman of the Board or President shall have the power to perform all the duties of the office to which that person is so appointed to be assistant, or as to which he or she is so appointed to act, except as such power may be otherwise defined or restricted by the Board of Directors, the Chairman of the Board or the President. 4.11. Salaries. The salaries of the principal officers may be fixed from time to time by the Board of Directors, and no officer shall be prevented form receiving such salary by reason of the fact that such officer is also a director of the corporation. ARTICLE V. CERTIFICATES FOR SHARES AND THEIR TRANSFER 5.01. Certificates for Shares. All shares of this corporation shall be represented by certificates. Certificates representing shares of the corporation shall be in such form, consistent with law, as shall be determined by the Board of Directors. At a minimum, a share certificate shall state on its face the name of the corporation and that it is organized under the laws of the State of Wisconsin, the name of the person to whom issued, and the number and class of shares and the designation of the series, if any, that the certificate represents. The front or back of the certificate also must contain either (a) a summary of the designations, relative rights, preferences and limitations applicable to each class, and the variations in the rights, preferences and limitations determined for each series and the authority of the Board of Directors to determine variations for future series, or (b) a conspicuous statement that the corporation will furnish the shareholder the information described in clause (a) on request, in writing and without charge. Such certificates shall be signed, either manually or in facsimile, by the President or a Vice President and by the Secretary or an Assistant Secretary. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have -13- been surrendered and cancelled, except as provided in Section 5.05. 5.02. Signature by Former Officers. If an officer or assistant officer, who has signed or whose facsimile signature has been placed upon any certificate for shares, has ceased to be such officer or assistant officer before such certificate is issued, the certificate may be issued by the corporation with the same effect as if that person were still an officer or assistant officer at the date of its issue. 5.03. Transfer of Shares. Prior to due presentment of a certificate for shares for registration of transfer, and unless the corporation has established a procedure by which a beneficial owner of shares held by a nominee is to be recognized by the corporation as the shareholder, the corporation may treat the registered owner of such shares as the person exclusively entitled to vote, to receive notifications and otherwise to have and exercise all the rights and power of an owner. The corporation may require reasonable assurance that all transfer endorsements are genuine and effective and in compliance with all regulations prescribed by or under the authority of the Board of Directors. 5.04. Restrictions on Transfer. The face or reverse side of each certificate representing shares shall bear a conspicuous notation of the restrictions upon the transfer of such shares imposed by the Articles of Incorporation of the corporation and any other restrictions imposed by any agreement of which the corporation has written notice. 5.05. Lost, Destroyed or Stolen Certificates. Where the owner claims that his or her certificate for shares has been lost, destroyed or wrongfully taken, a new certificate shall be issued in place thereof if the owner (a) so requests before the corporation has notice that such shares have been acquired by a bona fide purchaser, and (b) if required by the corporation, files with the corporation a sufficient indemnity bond or affidavit and indemnity agreement, and (c) satisfies such other reasonable requirements as may be prescribed by or under the authority of the Board of Directors. 5.06. Consideration for Shares. The shares of the corporation may be issued for such consideration as shall be fixed from time to time and determined to be adequate by the Board of Directors, but not less than the par value thereof. The consideration may consist of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation. When the corporation receives the consideration for which the Board of Directors authorized the issuance of shares, such shares shall be deemed to be fully paid and nonassessable by the corporation. -14- 5.07. Stock Regulations. The Board of Directors shall have the power and authority to make all such rules and regulations not inconsistent with the statutes of the State of Wisconsin as it may deem expedient concerning the issue, transfer and registration of certificates representing shares of the corporation, including the appointment or designation of one or more stock transfer agents and one or more registrars. ARTICLE VI. WAIVER OF NOTICE 6.01. Shareholder Written Waiver. A shareholder may waive any notice required by the Wisconsin Business Corporation Law, the Articles of Incorporation or these Bylaws before or after the date and time stated in the notice. The waiver shall be in writing and signed by the shareholder entitled to the notice, shall contain the same information that would have been required in the notice under the Wisconsin Business Corporation Law except that the time and place of meeting need not be stated, and shall be delivered to the corporation for inclusion in the corporate records. 6.02. Shareholder Waiver by Attendance. A shareholder's attendance at a meeting, in person or by proxy, waives objection to both of the following: (a) Lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting or promptly upon arrival objects to holding the meeting or transacting business at the meeting. (b) Consideration of a particular matter at the meeting that is not within the purpose described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. 6.03. Director Written Waiver. A director may waive any notice required by the Wisconsin Business Corporation Law the Articles of Incorporation or the Bylaws before or after the date and time stated in the notice. The waiver shall be in writing, signed by the director entitled to the notice and retained by the corporation. 6.04. Director Waiver by Attendance. A director's attendance at or participation in a meeting of the Board of Directors or any committee thereof waives any required notice to him or her of the meeting unless the director at the beginning of the meeting or promptly upon his or her arrival objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. -15- ARTICLE VII. ACTION WITHOUT MEETINGS 7.01. Shareholder Action Without Meeting. Action required or permitted by the Wisconsin Business Corporation Law to be taken at a shareholders' meeting may be taken without a meeting by all shareholders entitled to vote on the action. The action must be evidenced by one or more written consents describing the action taken, signed by the shareholders consenting thereto and delivered to the corporation for inclusion in its corporate records. A consent hereunder has the effect of a meeting vote and may be described as such in any document. The Wisconsin Business Corporation Law requires that notice of the action be given to certain shareholders and specifies the effective date thereof and the record date in respect thereto. 7.02. Director Action Without Meeting. Unless the Articles of Incorporation provide otherwise, action required or permitted by the Wisconsin Business Corporation Law to be taken at a Board of Directors meeting or committee meeting may be taken without a meeting if the action is taken by all members of the Board or committee. The action shall be evidenced by one or more written consents describing the action taken signed by each director and retained by the corporation. Action taken hereunder is effective when the last director signs the consent, unless the consent specifies a different effective date. A consent signed hereunder has the effect of a unanimous vote taken at a meeting at which all directors or committee members were present, and may be described as such in any document. ARTICLE VIII. INDEMNIFICATION 8.01. Indemnification for Successful Defense. Within twenty (20) days after receipt of a written request pursuant to Section 8.03, the corporation shall indemnify a director or officer, to the extent he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation. 8.02. Other Indemnification. (a) In cases not included under Section 8.01, the corporation shall indemnify a director or officer against all liabilities and expenses incurred by the director or officer in a proceeding to which the director or officer was a party because he or she is a director or officer of the corporation, unless liability was incurred because the director or officer breached or failed to perform a duty he or she owes to -16- the corporation and the breach or failure to perform constitutes any of the following: (1) A willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest. (2) A violation of criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful. (3) A transaction from which the director or officer derived an improper personal profit. (4) Willful misconduct. (b) Determination of whether indemnification is required under this Section shall be made pursuant to Section 8.05. (c) The termination of a proceeding by judgment, order, settlement or conviction, or upon a plea of no contest or an equivalent plea, does not, by itself, create a presumption that indemnification of the director or officer is not required under this Section. 8.03. Written Request. A director or officer who seeks indemnification under Sections 8.01 or 8.02 shall make a written request to the corporation. 8.04. Nonduplication. The corporation shall not indemnify a director or officer under Sections 8.01 or 8.02 if the director or officer has previously received indemnification or allowance of expenses from any person, including the corporation, in connection with the same proceeding. However, the director or officer has no duty to look to any other person for indemnification. 8.05. Determination of Right to Indemnification. (a) Unless otherwise provided by the Articles of Incorporation or by written agreement between the director or officer and the corporation, the director or officer seeking indemnification under Section 8.02 shall select one of the following means for determining his or her right to indemnification: -17- (1) By a majority vote of a quorum of the Board of Directors consisting of directors not at the time parties to the same or related proceedings. If a quorum of disinterested directors cannot be obtained, by majority vote of a committee duly appointed by the Board of Directors and consisting solely of two (2) or more directors who are not at the time parties to the same or related proceedings. Directors who are parties to the same or related proceedings may participate in the designation of members of the committee. (2) By independent legal counsel selected by a quorum of the Board of Directors or its committee in the manner prescribed in sub. (1) or, if unable to obtain such a quorum or committee, by a majority vote of the full Board of Directors, including directors who are parties to the same or related proceedings. (3) By a panel of three (3) arbitrators consisting of one arbitrator selected by those directors entitled under sub. (2) to select independent legal counsel, one arbitrator selected by the director or officer seeking indemnification and one arbitrator selected by the two arbitrators previously selected. (4) By an affirmative vote of shares represented at a meeting of Shareholders at which a quorum of the voting group entitled to vote thereon is present. Shares owned by, or voted under the control of, persons who are at the time parties to the same or related proceedings, whether as plaintiffs or defendants or in any other capacity, may not be voted in making the determination. (5) By a court under Section 8.08. (6) By any other method provided for in any additional right to indemnification permitted under Section 8.07. (b) In any determination under (a), the burden of proof is on the corporation to prove by clear and convincing evidence that indemnification under Section 8.02 should not be allowed. (c) A written determination as to a director's or officer's indemnification under Section 8.02 shall be submitted to both the corporation and the director or officer within 60 days of the selection made under (a). -18- (d) If it is determined that indemnification is required under Section 8.02, the corporation shall pay all liabilities and expenses not prohibited by Section 8.04 within ten (10) days after receipt of the written determination under (c). The corporation shall also pay all expenses incurred by the director or officer in the determination process under (a). 8.06. Advance of Expenses. Within ten (10) days after receipt of a written request by a director or officer who is a party to a proceeding, the corporation shall pay or reimburse his or her reasonable expenses as incurred if the director or officer provides the corporation with all of the following: (1) A written affirmation of his or her good faith belief that he or she has not breached or failed to perform his or her duties to the corporation. (2) A written undertaking, executed personally or on his or her behalf, to repay the allowance to the extent that it is ultimately determined under Section 8.05 that indemnification under Section 8.02 is not required and that indemnification is not ordered by a court under Section 8.08(b)(2). The undertaking under this subsection shall be an unlimited general obligation of the director or officer and may be accepted without reference to his or her ability to repay the allowance. The undertaking may be secured or unsecured. 8.07. Nonexclusivity. (a) Except as provided in (b), Sections 8.01, 8.02 and 8.06 do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under any of the following: (1) The Articles of Incorporation. (2) A written agreement between the director or officer and the corporation. (3) A resolution of the Board of Directors. (4) A resolution, after notice, adopted by a majority vote of all of the corporation's voting shares then issued and outstanding. (b) Regardless of the existence of an additional right under (a), the corporation shall not indemnify a director or officer, or permit a director or officer to -19- retain any allowance of expenses unless it is determined by or on behalf of the corporation that the director or officer did not breach or fail to perform a duty he or she owes to the corporation which constitutes conduct under Section 8.02(a)(l), (2), (3) or (4). A director or officer who is a party to the same or related proceeding for which indemnification or an allowance of expenses is sought may not participate in a determination under this subsection. (c) Sections 8.01 to 8.13 do not affect the corporation's power to pay or reimburse expenses incurred by a director or officer in any of the following circumstances. (1) As a witness in a proceeding to which he or she is not a party. (2) As a plaintiff or petitioner in a proceeding because he or she is or was an employee, agent, director or officer of the corporation. 8.08. Court-Ordered Indemnification. (a) Except as provided otherwise by written agreement between the director or officer and the corporation, a director or officer who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. Application shall be made for an initial determination by the court under Section 8.05(a)(5) or for review by the court of an adverse determination under Section 8.05(a) (1), (2), (3), (4) or (6). After receipt of an application, the court shall give any notice it considers necessary. (b) The court shall order indemnification if it determines any of the following: (1) That the director or officer is entitled to indemnification under Sections 8.01 or 8.02. (2) That the director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, regardless of whether indemnification is required under Section 8.02. (c) If the court determines under (b) that the director or officer is entitled to indemnification, the corporation shall pay the director's or officer's expenses incurred to obtain the court-ordered indemnification. -20- 8.09. Indemnification and Allowance of Expenses of Employees and Agents. The corporation shall indemnify an employee of the corporation who is not a director or officer of the corporation, to the extent that he or she has been successful on the merits or otherwise in defense of a proceeding, for all reasonable expenses incurred in the proceeding if the employee was a party because he or she was an employee of the corporation. In addition, the corporation may indemnify and allow reasonable expenses of an employee or agent who is not a director or officer of the corporation to the extent provided by the Articles of Incorporation or these Bylaws, by general or specific action of the Board of Directors or by contract. 8.10. Insurance. The corporation may purchase and maintain insurance on behalf of an individual who is an employee, agent, director or officer of the corporation against liability asserted against or incurred by the individual in his or her capacity as an employee, agent, director or officer, regardless of whether the corporation is required or authorized to indemnify or allow expenses to the individual against the same liability under Sections 8.01, 8.02, 8.06, 8.07 and 8.09. 8.11. Securities Law Claims. (a) Pursuant to the public policy of the State of Wisconsin, the corporation shall provide indemnification and allowance of expenses and may insure for any liability incurred in connection with a proceeding involving securities regulation described under (b) to the extent required or permitted under Sections 8.01 to 8.10. (b) Sections 8.01 to 8.10 apply, to the extent applicable to any other proceeding, to any proceeding involving a federal or state statute, rule or regulation regulating the offer, sale or purchase of securities, securities brokers or dealers, or investment companies or investment advisers. 8.12. Liberal Construction. In order for the corporation to obtain and retain qualified directors, officers and employees, the foregoing provisions shall be liberally administered in order to afford maximum indemnification of directors, officers and, where Section 8.09 of these Bylaws applies, employees. The indemnification above provided for shall be granted in all applicable cases unless to do so would clearly contravene law, controlling precedent or public policy. 8.13. Definitions Applicable to this Article. For purposes of this Article: (a) "Affiliate" shall include, without limitation, any corporation, partnership, joint venture, employee benefit plan, trust or other -21- enterprise that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the corporation. (b) "Corporation" means this corporation and any domestic or foreign predecessor of this corporation where the predecessor corporation's existence ceased upon the consummation of a merger or other transaction. (c) "Director or officer" means any of the following: (1) An individual who is or was a director or officer of this corporation. (2) An individual who, while a director or officer of this corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, member of any governing or decision-making committee, employee or agent of another corporation or foreign corporation, partnership, joint venture, trust or other enterprise. (3) An individual who, while a director or officer of this corporation, is or was serving an employee benefit plan because his or her duties to the corporation also impose duties on, or otherwise involve services by, the person to the plan or to participants in or beneficiaries of the plan. (4) Unless the context requires otherwise, the estate or personal representative of a director or officer. For purposes of this Article, it shall be conclusively presumed that any director or officer serving as a director, officer, partner, trustee, member of any governing or decision-making committee, employee or agent of an affiliate shall be so serving at the request of the corporation. (d) "Expenses" include fees, costs, charges, disbursements, attorney fees and other expenses incurred in connection with a proceeding. (e) "Liability" includes the obligation to pay a judgment, settlement, penalty, assessment, forfeiture or fine, including an excise tax assessed with respect to an employee benefit plan, and reasonable expenses. -22- (f) "Party" includes an individual who was or is, or who is threatened to be made, a named defendant or respondent in a proceeding. (g) "Proceeding" means any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding, whether formal or informal, which involves foreign, federal, state or local law and which is brought by or in the right of the corporation or by any other person. ARTICLE IX. CONTRACTS, LOANS, CHECKS AND DEPOSITS 9.01. Contracts; Director Conflict of Interest. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute or deliver any instrument in the name of and on behalf of the corporation, and such authorization may be general or confined to specific instances. Any contract or other transaction between the corporation and one or more of its directors, or between the corporation and any entity of which one or more of its directors are members or employees or in which one or more of its directors are interested, or between the corporation and any corporation or association of which one or more of its directors are shareholders, members, directors, officers or employees or in which one or more of its directors are interested, shall not be voidable by the corporation solely because of the director's interest, whether direct or indirect, in the transaction if: (a) The material facts of the transaction and the director's interest were disclosed or known to the Board of Directors or a committee of the Board of Directors, and a majority of disinterested members of the Board of Directors or committee authorized, approved, or specifically ratified the transaction; or (b) The material, facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote, and a majority of the shares held by disinterested shareholders authorized, approved, or specifically ratified the transaction; or (c) The transaction was fair to the corporation. For purposes of this Section 9.01, a majority of directors having no direct or indirect interest in the transaction shall constitute a quorum of the Board or a committee of the Board acting on the matter, and a majority of the shares entitled to Vote on the matter, whether or not present, and other than those -23- owned by or under the control of a director having a direct or indirect interest in the transaction, shall constitute a quorum of the shareholders for the purpose of acting on the matter. 9.02. Loans. No indebtedness for borrowed money shall be contracted on behalf of the corporation and no evidences of such indebtedness shall be issued in its name unless authorized by or under the authority of a resolution of the Board of Directors. Such authorization may be general or confined to specific instances. 9.03. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer(s), employee(s) or agents of the corporation and in such manner as shall from time to time be determined by or under the authority of a resolution of the Board of Directors. 9.04. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as may be selected by or under the authority of a resolution of the Board of Directors. ARTICLE X. MISCELLANEOUS 10.01. Corporate Seal. The Board of Directors may provide a corporate seal which may be circular in form and have inscribed thereon the name of the corporation and the state of incorporation and the words "Corporate Seal." 10.02. Fiscal Year. The fiscal year of the corporation shall begin on the first day of April and end on the last day of March in each year. ARTICLE XI. AMENDMENTS 11.01. By Shareholders. These Bylaws may be amended or repealed and new Bylaws may be adopted by the shareholders by the vote provided in Section 2.07 of these Bylaws or as specifically provided below. The shareholders may adopt or amend a Bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for shareholders or voting groups of shareholders than otherwise is provided in the Wisconsin Business Corporation Law. The adoption or amendment of a Bylaw that adds, changes or deletes a greater or lower quorum requirement or a greater voting requirement for shareholders must meet the same quorum requirement and be adopted by the same vote and voting -24- groups required to take action under the quorum and voting requirement then in effect. 11.02. By Directors. Except as the Articles of Incorporation may otherwise provide, these Bylaws may also be amended or repealed and new Bylaws may be adopted by the Board of Directors by the vote provided in Section 3.08, but (a) no Bylaw adopted by the shareholders shall be amended, repealed or readopted by the Board of Directors if the Bylaw so adopted so provides and (b) a Bylaw adopted or amended by the shareholders that fixes a greater or lower quorum requirement or a greater voting requirement for the Board of Directors than otherwise is provided in the Wisconsin Business Corporation Law may not be amended or repealed by the Board of Directors unless the Bylaw expressly provides that it may be amended or repealed by a specified vote of the Board of Directors. Action by the Board of Directors to adopt or amend a Bylaw that changes the quorum or voting requirement for the Board of Directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect, unless a different voting requirement is specified as provided by the preceding sentence. A Bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for shareholders or voting groups of shareholders than otherwise is provided in the Wisconsin Business Corporation Law may not be adopted, amended or repealed by the Board of Directors. 11.03. Implied Amendments. Any action taken or authorized by the shareholders or by the Board of Directors, which would be inconsistent with the Bylaws then in effect but is taken or authorized by a vote that would be sufficient to amend the Bylaws so that the Bylaws would be consistent with such action, shall be given the same effect as though the Bylaws had been temporarily amended or suspended so far, but only so far, as is necessary to permit the specific action so taken or authorized. -25- EX-3.16 18 y92210a1exv3w16.txt BYLAWS EXHIBIT 3.16 BY-LAWS OF ADVANCED CAST PRODUCTS, INC. Adopted August 1,1989 ARTICLE I OFFICES Section 1. Registered Office. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. Other Offices. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II FISCAL YEAR - STOCKHOLDERS Section 1. Fiscal Year. The fiscal year of the corporation shall be such period as the board of directors may designate from time to time by resolution. Section 2. Annual Meeting. The annual meeting of the stockholders for the election of directors and for the transaction of any other proper business, shall be held at such date and time during the first eight months of each calendar year as shall be determined by the board of directors. If no earlier date is determined by the board of directors, the annual meeting shall be held on the fourth Tuesday in August of each year, if not a legal holiday under the laws of the State where such meeting is to be held and if a legal holiday under the laws of such State, then on the next succeeding business day not a legal holiday under the laws of such State. Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise provided by statute or by the certificate of incorporation, may be called at any time by the chairman of the board, or the president, or any vice president, or secretary, and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Any such request shall state the purpose or purposes of the proposed meeting. Section 4. Place of Meetings. All meetings of the stockholders for the election of directors shall be held at such place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of such meeting. Section 5. Notice of Meetings and Adjourned Meetings. Written notice of the annual meeting or a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than fifty (50) days before the date of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, 2 a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 6. Stockholders' List. The officer who has charge of the stock ledger of the corporation shall prepare and make at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 7. Quorum and Adjournments. At such meeting of the stockholders, except as otherwise provided by statute or by the certificate of incorporation, the holders of a majority of the issued and outstanding shares of each class of stock entitled to vote thereat, present in person or represented by proxy, shall be necessary and sufficient to constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. Section 8. Voting. When a quorum is present or represented at any meeting, the vote of the holders of a majority of the shares of stock having voting power present in person or 3 represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation or of these by-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. Proxies. At each meeting of the stockholders, each stockholder shall, unless otherwise provided by the certificate of incorporation, be entitled to one vote in person or by proxy for each share of stock held by him which has voting power upon the matter in question, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Section 10. Action of Stockholders Without a Meeting. Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, whether by any provision of the statutes or of the certificate of in corporation or otherwise, such corporate action may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. 4 ARTICLE III BOARD OF DIRECTORS Section 1. Number of Directors. The number of directors which shall constitute the whole board shall be not less than one nor more than ten. Within these limits the number of directors elected shall be deemed to be the number of directors constituting the whole board unless otherwise fixed by resolution adopted at the meeting at which such directors are elected. Directors may, but need not, be stockholders. Section 2. Election of Directors. The directors shall be elected at the annual meeting of stockholders, or if not so elected, at a special meeting of stockholders called for that purpose. At any meeting of stockholders at which directors are to be elected, only persons nominated as candidates shall be eligible for election, and the candidates receiving the greatest number of votes shall be elected. Section 3. Removal. Any director may be removed with or without cause, at any time by the affirmative vote of the holders of record of a majority of the outstanding shares of stock entitled to vote in the election of directors, at a special meeting of the stockholders called for the purpose; and the vacancy in the board of directors caused by such removal may be filled by the stockholders, or if not so filled, by a majority of the board of directors remaining in office or by the sole remaining director. Section 4. Vacancies. A resignation from the board of directors shall be deemed to take effect immediately or at such other time as the director may specify. When one or more directors shall resign from the board, effective at a future date, a majority of the directors then in office, including those who have resigned, shall have the power to fill such vacancy or vacancies, the 5 vote thereon to take effect when such resignation or resignations shall become effective. If a director dies, a majority of the directors remaining in office, or the sole remaining director, shall have the power to fill such vacancy. Each director so chosen shall hold office until the next election of directors. Section 5. Annual Meeting. After each annual election of directors, on the same day the board of directors may meet for the purpose of organization, the election of officers and the transaction of other business at the place where the annual meeting of the stockholders for the election of directors is held. Notice of such meeting need not be given. Such meeting may be held at any other time or place which shall be specified in a notice given as hereinafter provided for special meetings of the board of directors or in a consent and waiver of notice thereof signed by all the directors. Section 6. Regular Meetings. Regular meetings of the board of directors may be held at such places (within or without the State of Delaware) and at such times as the board shall by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at such place at the same hour and on the next succeeding business day not a legal holiday. Notice of regular meetings need not be given. Section 7. Special Meetings. Special meetings of the board of directors shall be held whenever called by the president, or by any vice president, or by any two of the directors. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least three (3) days before the day on which the meeting is to be held, or shall be sent to him by telegraph, cable or wireless so addressed, or shall be delivered 6 personally or by telephone, at least 24 hours before the time the meeting is to be held. Each such notice shall state the time and place (within or without the State of Delaware) of the meeting but need not state the purposes thereof, except as otherwise provided by statute or by these by-laws. Notice of any meeting of the board need not be given to any director who shall be present at such meeting; and any meeting of the board shall be a legal meeting without any notice thereof having been given, if all of the directors then in office shall be present thereat. Section 8. Quorum. Except as otherwise provided by statute or by these by-laws, a majority of the total number of directors (or the closest whole number thereto) shall be required to constitute a quorum for the transaction of business at any meeting, and the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be necessary for the adoption of any resolution or the taking of any other action. In the absence of a quorum, the director or directors present may adjourn any meeting from time to time until a quorum be had. Notice of any adjourned meeting need not be given. Section 9. Telephone Communications. Members of the board of directors or any committee thereof may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting. Section 10. Action of Directors Without a Meeting. Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if all members of the board or of such committee, as the case may be, consent 7 thereto in writing and such written consent is filed with the minutes or proceedings of the board or such committee. Section 11. Compensation. Directors, as such, shall not receive any stated salary for their services, but by resolution of the board of directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at such regular and special meeting of the board or of any committee thereof. Nothing herein contained shall be construed so as to preclude any director from serving the corporation in any other capacity, or from serving any of its stockholders, subsidiaries or affiliated corporations in any capacity, and receiving compensation therefor. Section 12. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of two or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; provided, however, that in the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. 8 Section 13. Indemnification. The corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or serves or served any other enterprise at the request of the corporation, against any and all expenses (including attorneys fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with such action, suit or proceeding, in any circumstances, and to the full extent, permitted by Section 145 of the Delaware Corporation Law, any amendment thereto, or any law of similar import. ARTICLE IV NOTICES Section 1. Notices. Whenever under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be necessary that personal notice be given, and such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation or at his residence or usual place of business, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegraph, cable or wireless, and such notice shall be deemed to be given when the same shall be filed, or in person or by telephone, and such notice shall be deemed to be given when the same shall be delivered. Section 2. Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver 9 thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section 1. Officers. The officers of the corporation shall be a president, a secretary, a treasurer, and, if the board shall so determine, a chairman of the board, a vice chairman of the board, and one or more vice presidents. Any two or more offices may be held by the same person. Section 2. Election of Officers. The officers shall be elected by the board of directors and each shall hold office at the pleasure of the board of directors until his successor shall have been duly elected and qualified, or until his death, or until he shall resign or until he shall have been removed in the manner hereinafter provided. Section 3. Other Officers. In addition to the officers named in Section 1 of this Article, the corporation may have such other officers and agents as may be deemed necessary by the board of directors. Such other officers and agents shall be appointed in such manner, have such duties and hold their offices for such terms, as may be determined by resolution of the board of directors. Section 4. Resignation. Any officer may resign at any time by giving written notice of his resignation to the board of directors, to the president or to the secretary of the corporation. Any such resignation shall take effect at the time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 10 Section 5. Removal. Any officer may be removed, either with or without cause, by action of the directors. Section 6. Vacancy. A vacancy in any office because of death, resignation, removal or any other cause shall be filled by the board of directors. Section 7. President. The president shall have direct charge of the business of the corporation, subject to the general control of the board of directors, and shall be the chief executive officer of the corporation unless a chairman of the board of directors is elected and is designated chief executive officer by the board. Section 8. Secretary. The secretary shall, if present, act as secretary of, and keep the minutes of all the proceedings of the meetings of, the stockholders and of the board of directors and of any committee of the board of directors in one or more books to be keep for that purpose; shall perform such other duties as shall be assigned to him by the president or the board of directors; and, in general, shall perform all duties incident to the office of secretary. Section 9. Treasurer. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of his duties, in such sum and with such surety or sureties as the board of directors shall determine. The treasurer shall keep or cause to be kept full and accurate records of all receipts and disbursements in the books of the corporation and shall have the care and custody of all funds and securities of the corporation. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and shall perform such other duties as may be assigned to him by the president or the board of directors; and, in general, shall perform all duties incident to the office of treasurer. 11 Section 10. Salaries. The salaries of the officers shall be fixed from time to time by the board of directors or by the president or chief executive officer. Any such decision by the president or chief executive officer shall be final unless expressly overruled or modified by action of the board of directors, in which event such action of the board of directors shall be conclusive of the matter. Nothing contained herein shall preclude any officer from serving the corporation in any other capacity, including that of director, or from serving any of its stockholders, subsidiaries or affiliated corporations in any capacity, and receiving a proper compensation therefor. ARTICLE VI LOANS, CHECKS, DEPOSITS, ETC. Section 1. General. All checks, drafts, bill of exchange or other orders for the payment of money, issued in the name of the corporation, shall be signed by such person or persons and in such manner as may from time to time be designated by the board of directors, which designation may be general or confined to specific instances. Section 2. Loans and Evidences of Indebtedness. No loan shall be contracted on behalf of the corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the board of directors. Such authorization may be general or confined to specific instances. Loans so authorized by the board of directors may be effected at any time for the corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the corporation issued for such loans shall be made, executed and delivered as the board of directors shall authorize. When so authorized by the board of directors any part of or all the properties, including contract rights, assets, business or good will of the corporation, whether then owned or 12 thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures notes and other obligations or evidences of indebtedness of the corporation, and of the interest thereon by instruments executed and delivered in the name of the corporation. Section 3. Banking. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors may authorize. The board of directors may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these by-laws, as it may deem expedient. For the purpose of deposit and for the purpose of collection for the account of the corporation, checks, drafts and other orders for the payment of money which are payable to the order of the corporation shall be endorsed, assigned and delivered by such person or persons and in such manner as may from time to time be authorized by the board of directors. Section 4. Securities Held By The Corporation. Unless otherwise provided by resolution adopted by the board of directors, the resident or the chairman and chief executive officer may from time to time appoint an attorney or attorneys, or an agent or agents, to exercise in the name and on behalf of the corporation the powers and rights which the corporation may have as the holder of stock or other securities in any other corporation to vote or to consent in respect of such stock or other securities; and the president or the chairman and chief executive officer may instruct the person or persons so appointed as to the manner of exercising such powers and rights and the president or the chairman and chief executive officer may execute or cause to be executed in the name and on behalf of the corporation and under its corporate seal, or otherwise, 13 all such written proxies powers of attorney or other written instruments as he may deem necessary in order that the corporation may exercise such powers and rights. ARTICLE VII SHARES AND THEIR TRANSFER Section 1. Share Certificates. Every stockholder shall be entitled to have a certificate certifying the number of shares of stock of the corporation owned by him, signed by, or in the name of the corporation by the president or a vice president and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation (except that when any such certificate if countersigned by a transfer agent other than the corporation or its employee or by a registrar other than the corporation or its employee the signatures of any such officers may be facsimiles). If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except in the case of restrictions on transfers of securities which are required to be noted on the certificate, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation, will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. 14 Section 2. Lost Stolen or Destroyed Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum, as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 3. Transfers. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 4. Record Dates. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to such meeting or to any other action. A determination of stockholders of record entitled 15 to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 5. Protection of Corporation. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VIII CORPORATE SEAL The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE IX EMERGENCY REGULATIONS The board of directors may adopt, either before or during an emergency, as that term is defined by the Delaware Corporation Law, any emergency regulations permitted by the Delaware Corporation Law which shall be operative only during such emergency. In the event the board of directors does not adopt any such emergency regulations, the special rules provided in the Delaware Corporation Law shall be applicable during an emergency as therein defined. 16 ARTICLE X AMENDMENTS These by-laws may be altered or repealed at any regular or special meeting of the stockholders. Notice of such alternation or repeal shall be contained in the notice of any such special meeting. 17 EX-3.17 19 y92210a1exv3w17.txt AMENDED CODE OF REGULATIONS Exhibit 3.17 AMENDMENT TO DALTON CORPORATION CODE OF BYLAWS Article III, Section 3.02, Sentence 1 relating to the number of the board of directors of Dalton Corporation is hereby amended to read as follows: "The number of directors of the corporation shall be no less than two (2) and no more than seven (7)." Article IV, Section 4.01, Sentence 2 relating to the Chairman and President as members of the Board of Directors is hereby deleted. This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of Dalton Corporation, pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. DALTON CORPORATION Amendment to Code of By-Laws RESOLVED, by the Board of Directors of Dalton Corporation, that the Company's Code of By-Laws is hereby amended to delete Section 2.01 thereof. As adopted by the Board of Directors on August 28, 1998. ____________________________ Secretary THE DALTON FOUNDRIES, INC. Amendment to Code of By-Laws 2.01 LIMITATION OF SHARE OWNERSHIP. The ownership of substantially all of the outstanding shares of the Corporation shall be limited to its Salaried Employees and the Trustee of The Dalton Foundries, Inc. Employee Stock Ownership Plan. As adopted by the Board of Directors on April 21, 1995. /s/ [ILLEGIBLE] ------------------------ Secretary CODE OF BY-LAWS Amended and Restated of THE DALTON FOUNDRIES, INC. An Indiana Corporation ARTICLE I Offices 1.01 The principal office of the Corporation in the State of Indiana shall be located in the City of Warsaw and County of Kosciusko. The Corporation may have such other offices, either within or without the State of Indiana, as the Board of Directors may designate or the business of the Corporation may require from time to time. ARTICLE II Shareholders 2.01 LIMITATION OF SHARE OWNERSHIP. The ownership as amended of outstanding shares of the Corporation shall be limited to 3/21/95 its Officers, Directors, Salaried Employees and the Trustee of The Dalton Foundries, Inc. Employee Stock Ownership Plan, as deleted provided that not more than five percent (5%) may be held by 3/28/98 other persons. as amended 2.02 ANNUAL MEETING. An annual meeting of the 3/21/86 shareholders shall be held in April of each year at such time as the Board of Directors shall determine, for the election of Directors and for the transaction of such other business as may come before the meeting. 2.03 SPECIAL MEETINGS. Special meetings of the shareholders may be called by the Chairman, the President, the Board of Directors, or by the holders of not less than 25% of all of the stock outstanding and entitled to vote on the business proposed to be transacted thereat. 2.04 PLACE OF MEETING. The Board of Directors may designate any place, either within or without the State of Indiana, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the Corporation. 2.05 NOTICE OF MEETING. Written or printed notice of a special or annual meeting of the shareholders, stating the time, place, and, in the case of a special meeting, the purpose or purposes thereof, shall be given to each shareholder entitled to vote thereat at least ten (10) days before the date fixed for the meeting. 2.06 FIXING OF RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any proper purpose, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty (50) days and, in the case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action, requiring such determination of the shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof. 2.07 WAIVER OF NOTICE. Notice of any shareholders' meeting may be waived in writing by any shareholder if the waiver sets forth in reasonable detail the purpose or purposes for which the meeting is called and the time and place thereof. Attendance at any meeting in person, or by proxy when the instrument of proxy sets forth in reasonable detail the purpose of purposes for which the meeting is called, shall constitute a waiver of notice of such meeting. 2.08 LIST OF SHAREHOLDERS. The office or agent having charge of the stock transfer books for shares shall make, at least five (5) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, with the address of each and the number of shares held by each, which list, for a period of 5 days prior to such meeting, shall be kept on file at the principal office of the Corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the holding of such -2- meeting. The original share ledger or transfer book or a duplicate thereof, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of the shareholders. 2.09 QUORUM. The holders of a majority of the shares of stock issued and outstanding and entitled to vote, represented in person or by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented by proxy at any meeting of the shareholders, the shareholders present in person or represented by proxy shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented by proxy. At such adjourned meeting at which a quorum shall be present or represented by proxy any business may be transacted which might have been transacted at the meeting as originally notified. 2.10 VOTING OF STOCK. Each outstanding share of stock having voting power shall be entitled to one vote on as amended each matter submitted to a vote at a meeting of shareholders. ?/26/86 A shareholder may vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact; Provided, that shares of stock held of record by the Trustee ("Trustee") of The Dalton Foundries, Inc. Employees Stock Ownership Plan ("ESOP") will be voted by the Trustee at the direction of a Nominating Committee of the Board of Directors (consisting of members of the Board of Directors) with respect to any matter which, by law or the Articles of Incorporation, does not require more than a majority of outstanding common shares voted. With respect to any matter which, by law or the Articles of Incorporation, must be decided by more than a majority of outstanding common shares voted, shares held of record by the Trustee which have not been allocated to the accounts of participants in the ESOP shall be voted by the Trustee at the direction of the Nominating Committee and shares which have been allocated shall be voted by the Trustee at the direction of the participants to whose accounts such shares have been allocated. Among the duties of the Nominating Committee will be the selection of candidates for the Board of Directors. The initial Nominating Committee will consist of W. M. Dalton, Kenneth L. Davidson, and Dr. Otis R. Bowen. The procedures for succession of the members of the Nominating Committee shall be as follows: (a) In the event of his death or disability, W. M. Dalton's executor or guardian will act as his successor so -3- long as the Company or the ESOP has any indebtedness or obligation to Mr. Dalton, his estate, any trust of which he is presently a trustee, or the Dalton Decendant's Trust dated December 30, 1976, including any obligation to purchase any shares of the Company's common stock from any of them. If no such debt or obligation is outstanding, the remaining members of the Nominating Committee will select Mr. Dalton's successor. If the repayment of all such debt occurs at a time when a successor to Mr. Dalton is a member of the Nominating Committee, such successor will resign immediately upon repayment in full of such debt, and the remaining members of the Nominating Committee shall select his successor. (b) The seat of Mr. Davidson will be held by the person serving as Chief Executive Officer of the Corporation. (c) Dr. Bowen and each person selected to be his successor as a member of the Nominating Committee shall designate three independent persons as potential successors. On any vacancy of this third seat on the Nominating Committee, the other two members of the Nominating Committee shall select or appoint any person as successor, giving primary consideration to the designated list of three names. If the other two members of the Nominating Committee cannot agree upon a successor to this third seat on the Nominating Committee, and if one of the other two members gives written notice to The Dalton Foundries, Inc. Employee Stock Ownership Plan (the "ESOP") participants of such deadlock, then the other two members shall each submit one name (not an employee) to the participants of the ESOP who shall select and appoint such successor, selecting from such two submitted names and voting by majority vote with one vote per person. If a quorum is present, the affirmative vote of a majority of the shares of stock represented at the meeting shall be the act of the shareholders unless the vote of a greater number of shares of stock is required by law, the Articles of Incorporation or these By-Laws. 2.11 INFORMAL ACTION BY SHAREHOLDERS. Any action required to be taken at a meeting of the shareholders of the Corporation, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting if, prior to such action, a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof, and such written consent is filed with the minutes of the proceedings of the shareholders. Such consent shall have the same effect as a unanimous vote of shareholders, and may be stated as such in any document relating thereto. -4- 2.12 ORGANIZATION. The Chairman, and in his absence the President, and in their absence any shareholder chosen by the shareholders present, shall call meetings of the shareholders to order and shall act as Chairman of such meetings. The presiding officer may appoint any person to act as Secretary of the meeting. ARTICLE III Directors 3.01 GENERAL POWERS. The business affairs of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-Laws directed or required to be exercised or done by the shareholders. The Board of Directors, by the affirmative vote of a majority of the directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all officers and of all directors for services to the Corporation as officers, directors or otherwise. 3.02 NUMBER AND QUALIFICATIONS. The number of directors shall be four. Directors need not be residents of the State of Indiana nor shareholders of the Corporation. 3.03 ELECTION AND TERM. The directors shall be elected at the annual meeting of the shareholders, and each director elected shall serve until the next succeeding annual meeting and until his successor shall have been elected and qualified. Directors elected at the annual meeting of the shareholders or at any special meeting called for the purpose (including the filling of vacancies and newly created directorships) shall be elected by vote of a majority of the shares of stock represented at a meeting at which a quorum of the shareholders is present. The first Board of Directors shall hold office until the first annual meeting of shareholders. A director may resign at any time by filing his written resignation with the Secretary. 3.04 REMOVAL. Any or all of the members of the Board of Directors may be removed, with or without cause, at a meeting of the shareholders called expressly for that purpose, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors. 3.05 VACANCIES. Vacancies, whether by death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall be filled by vote of the shareholders at their next annual meeting or at a special meeting called for that purpose, by the affirmative vote -5- of a majority of the shares represented at any such meeting at which a quorum is present. 3.06 REGULAR MEETINGS. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Indiana, for the holding of a regular annual meeting and any additional regular meetings of the Board of Directors without other notice than such resolution. 3.07 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chairman, any two directors, or the President on two (2) days' notice to each director, either personally or by mail or by telegram. 3.08 WAIVER OF NOTICE. Attendance of a director at any meeting shall constitute a waiver of notice of such meeting, unless a director attends for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. 3.09 QUORUM. A majority of the directors shall constitute a quorum for the transaction of business unless a greater number is required by law or by the Articles of Incorporation. The act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by statute, by the Articles of Incorporation or by these By-Laws. If a quorum shall not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. 3.10 ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if prior to such action a written consent thereto is signed by all members of the Board and such written consent is filed with the minutes of proceedings of the Board. 3.11 ORGANIZATION. The Chairman and in his absence the President and in their absence any director chosen by the directors present, shall call meetings to order and shall act as Chairman of such meetings. The presiding officer may appoint any person to act as Secretary of the meeting. 3.12 COMMITTEES. The Board of Directors, by resolution adopted by a majority of the number of directors fixed by the By-Laws or otherwise, may designate an Executive Committee, and -6- one or more other committees, each to consist of two or more of the directors. Any such committee, to the extent provided in such resolution, shall have and exercise all of the authority of the Board of Directors in the management of the Corporation, except as otherwise required by law. Vacancies in the membership of the committees shall be filled by the Board of Directors at a regular or special meeting of the Board of Directors. The committees shall report actions taken at committee meetings to the Board when required. ARTICLE IV Officers 4.01 NUMBER. The officers of the Corporation shall be a Chairman, a President, one or more Vice-presidents (the number thereof to be determined by the Board of Directors), a Treasurer, a Secretary and such Assistant Treasurers, Assistant Secretaries or other officers as may be elected by the Board of Directors. The Chairman and President shall be members of the Board of Directors, but the other officers need not be members of the Board of Directors. Any two or more offices may be held by the same person, except the offices of President and Secretary. 4.02 ELECTION AND TERM OF OFFICE. The officers of the Corporation shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. New offices may be created and filled at any meeting of the Board of Directors. Each officer shall hold office until his successor is elected and has qualified or until his earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Election of an officer shall not of itself create contract rights. 4.03 REMOVAL. Any officer elected by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. 4.04 VACANCIES. A vacancy in any office occurring because of death, resignation, removal or otherwise, may be filled by the Board of Directors. 4.05 THE CHAIRMAN. The Chairman shall preside at all meetings of the shareholders and the Board of Directors, shall have supervisory authority over the business of the -7- Corporation, shall see that all orders and resolutions of the Board of Directors are carried into effect and shall, in the absence or disability of the President, perform the duties and exercise the powers of the President. The Chairman may execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. 4.06 THE PRESIDENT. In the absence of the Chairman, the President shall preside at all meetings of the shareholders and the Board of Directors. The President shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. 4.07 THE VICE-PRESIDENTS. The Vice-President, or if there shall be more than one, the Vice-Presidents, in the order determined by the Board of Directors, shall, in the absence or disability of the President and Chairman, perform the duties and exercise the powers of the President and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.08 THE SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall have custody of all records of the proceedings of the meetings of the Corporation and of the Board of Directors. He shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. He shall have custody of the corporate seal of the Corporation and he, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Assistant Secretary or if there be more than one, the Assistant Secretaries, in the order determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the -8- Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.09 THE TREASURER AND ASSISTANT TREASURERS. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, he shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. The Assistant Treasurer, or, if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. ARTICLE V Capital Stock 5.01 CERTIFICATES FOR SHARES OF CAPITAL STOCK. The shares of the Corporation shall be represented by certificates signed by the President or a Vice-President and the Secretary or an Assistant Secretary of the Corporation, and may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers of the Corporation upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the Corporation itself or an employee of -9- the Corporation. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of its issue. Every certificate shall state the name of the registered holder, the number of shares represented thereby, the par value of each share or a statement that such shares have no par value, and whether such shares have been fully paid-up and are non-assessable. If such shares are not fully paid-up, the certificate shall be legibly stamped to indicate the per centum which has been paid-up, and as further payments are made thereon the certificate shall be stamped accordingly. 5.02 LOST CERTIFICATES. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost or destroyed. When authorizing such issue of a new certificate, the Board of Directors in its discretion and as a condition precedent to the issuance thereof, may prescribe such terms and conditions as it deems expedient, and may require such indemnities as it deems adequate, to protect the Corporation from any claim that may be made against it with respect to any such certificate alleged to have been lost or destroyed. 5.03 TRANSFER OF SHARES. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, a new certificate shall be issued to the person entitled thereto, and the old certificate cancelled and the transaction recorded upon the books of the Corporation. ARTICLE VI General Provisions 6.01 DIVIDENDS. The Board of Directors shall have the power, subject to any restrictions contained in the Articles of Incorporation, to declare and pay dividends upon the Corporation's outstanding shares, out of the unreserved and unrestricted earned surplus of the Corporation. Dividends may be paid in cash, in property or in shares of the Corporation, but no dividend payable in cash or property shall be paid out of surplus due to or arising from unrealized appreciation in value, or from a revaluation of assets. No dividend shall be paid if the Corporation is, or is thereby rendered, insolvent, or if its stated capital is, or thereby becomes, impaired. -10- 6.02 CHECKS. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. 6.03 FISCAL YEAR. The fiscal year of the Corporation shall end on the Saturday on or nearest to the 31st day of December of each year. 6.04 SEAL. The corporate seal shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Indiana". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. 6.05 AMENDMENTS. Unless otherwise provided in the Articles of Incorporation, these By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the affirmative vote of a majority of the Board of Directors at any regular or special meeting of the Board. ARTICLE VII Indemnification of Directors, Officers, Employees and Agents 7.01 AUTHORIZATION FOR INDEMNIFICATION. The Corporation shall, to the fullest extent permitted by law, indemnify and hold harmless each person who shall serve at any time as a director, officer or employee of the Corporation against any judgments, fines, amounts paid in settlement and reasonable expenses, including attorney's fees, actually and necessarily incurred as a result of any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, arising out of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, including pending or completed claims, actions, suits or proceedings arising out of any actual or alleged act or failure to act on the part of such person in connection with the administration (including establishment, operation and termination) of any pension plan, profit-sharing plan or other employee benefit plan or plans maintained by the Corporation, provided that such person acted in good faith and for a purpose which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any such -11- civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such person did not act in good faith or for a purpose which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. 7.02 PAYMENT OF INDEMNIFICATION (a) A person who has been wholly successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in Section 7.01 shall be entitled to indemnification as authorized in such Section. (b) Except as provided in Section 7.02(a), any indemnification under Section 7.01, unless ordered by a court, shall be made by the Corporation only if authorized in the specific case: (1) By the Board of Directors of the Corporation acting by a quorum consisting of directors who are not parties to such action or proceeding upon a finding that such person has met the standard of conduct set forth in Section 7.01, or, (2) If a quorum under subparagraph (1) is not obtainable with due diligence by: (i) the Board of Directors of the Corporation upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the standard of conduct set forth in Section 7.01 has been met by such person or, (ii) A vote of the majority of the shares of stock of the Corporation voting at a special or annual meeting of shareholders upon a finding that such person has met the standard of conduct set forth in Section 7.01. (c) Expenses incurred in defending a civil or criminal action or proceeding may be paid by the Corporation in advance of the final disposition of such action or proceeding if authorized by the Board of Directors, but subject to an undertaking by each person on whose behalf such advances are made to repay such amounts if such person is ultimately found not to be entitled to indemnification under the provisions hereof. -12- 7.03 INDEMNIFICATION OF AGENTS. The Board of Directors may, by resolution, extend the indemnification provisions of this Article VII, as limited herein by Sections 7.01 and 7.02, to any person who is or was an agent of the Corporation or is or was serving at the request of the Corporation as the agent of another corporation, partnership, joint venture, trust or other enterprise. 7.04 GENERAL. The foregoing provisions of this Article VII shall be deemed to be a contract between the Corporation and each director, officer and employee who serves in such capacity at any time while this By-Law is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The foregoing rights of indemnification shall not be deemed exclusive of any other rights to which any director, officer, employee or agent may be entitled apart from the provisions of this By-Law. -13- EX-3.18 20 y92210a1exv3w18.txt AMENDED CODE OF BYLAWS Exhibit 3.18 AMENDMENT TO DALTON CORPORATION, WARSAW MANUFACTURING FACILITY CODE OF BYLAWS Article 5, Section 5.1, will be amended to add Sentence 7 relating to the number of the board of directors of Dalton Corporation, Warsaw Manufacturing Facility is hereby amended to read as follows: "The number of directors of the corporation shall be no less than two (2) and no more than seven (7)." Article 6, Section 6.1 Sentence 1 relating to the election of a Chairman of Dalton Corporation, Warsaw Manufacturing Facility is hereby amended to read as follows: "The Board of Directors shall elect a President, a Vice President-Finance, a Treasurer and a Secretary and may elect other officers including assistant officers if the Board of Directors determines that additional officers are advisable." Article 6, Section 6.3 is hereby deleted. This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of Dalton Corporation, pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. CODE OF BYLAWS OF DALTON CORPORATION, WARSAW MANUFACTURING FACILITY ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS. As used in this Code of Bylaws: "CORPORATION" means Dalton Corporation, Warsaw Manufacturing Facility "LAW" means the Indiana Business Corporation Law, as amended from time to time. "ARTICLES OF INCORPORATION" means the Articles of Incorporation of the Corporation, as amended from time to time. "BYLAWS" means the Code of Bylaws of the Corporation, as amended from time to time. 1.2 CONSTRUCTION. The Bylaws shall be construed in a manner which harmonizes the Bylaws, the Articles of Incorporation and the Law. Where the Bylaws are silent, the Articles of Incorporation and the Law shall control. If any provision of the Bylaws is inconsistent with the Articles of Incorporation, the Articles of Incorporation shall control. If any provision of the Bylaws is inconsistent with the Law, the Law shall control except in those circumstances in which the Law expressly allows bylaws to provide contrary rules. ARTICLE 2 IDENTIFICATION 2.1 NAME. The name of the Corporation is Dalton Corporation, Warsaw Manufacturing Facility 2.2 PRINCIPAL OFFICE. The location of the principal office of the Corporation is 3755 Lake City Highway, Warsaw, Indiana 46580 where the executive offices of the Corporation are located. 2.3 REGISTERED OFFICE AND REGISTERED AGENT. The street address of the Corporation's registered office in Indiana and the name of its registered agent at that address is set forth in Article III of the Articles of Incorporation. The registered office or registered agent, - 1 - or both may be changed terminated or discontinued in any manner allowable by the Law, without amending the Articles of Incorporation or the Bylaws. 2.4 SEAL. The seal of the Corporation shall be circular in form and mounted upon a metal die suitable for impressing the same upon paper, or upon a rubber stamp suitable for stamping or printing on paper. About the upper periphery of the seal shall appear the name of the Corporation and about the lower periphery thereof the word "Indiana". In the center of the seal shall appear the word "Seal" or "Corporate Seal". However, the use of the seal (or an impression of the seal) is not required and does not affect the validity of any instrument whatsoever. 2.5 FISCAL YEAR. The fiscal year of the Corporation shall be a 52-53 week fiscal year ending on the Saturday on or nearest to the 31st day of December. ARTICLE 3 SHARES 3.1 CERTIFICATES FOR SHARES. Shares may be represented by certificates signed by the Chairman and the Secretary of the Corporation. The Corporation may issue some or all of the shares of any or all of its classes without certificates. Restrictions on transfer shall be noted conspicuously on the front or back of the certificate or transaction statement. 3.2 REGISTRATION OF TRANSFER OF SHARES. The Corporation shall register in its records the transfer of shares and shall issue a new certificate or transaction statement to the transferee if a certificate or written instruction endorsed by the appropriate person(s) is presented to the Corporation, reasonable assurance is given that the endorsement is genuine and effective, and other requirements of applicable Indiana statutes are met or are waived by resolution of the Board of Directors, except in those cases in which the Corporation has received written notification of an adverse claim or is charged with notice of an adverse claim. 3.3 LOST DESTROYED OR WRONGFULLY TAKEN CERTIFICATES. If a registered owner of shares claims that the certificate representing his shares has been lost, destroyed or wrongfully taken, the corporation shall issue a new certificate if the registered owner makes a written request, complies with the requirements of applicable Indiana statutes and, in addition, complies with the requirements which the Board of Directors may adopt by resolution. The Board of Directors may waive the statutory requirement for an indemnity bond if the Board of Directors determines. that the registered owner's agreement to indemnify the Corporation provides sufficient protection against potential liabilities to adverse claimants. ARTICLE 4 MEETINGS OF SHAREHOLDERS 4.1 ANNUAL MEETING. The shareholders' meeting for the election of directors and for the transaction of other business shall be held each year at the date, time and place set by the - 2 - Board of Directors. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action. Notice of an annual. meeting may be communicated orally. Any or all shareholders may participate in an annual shareholders' meeting by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. 4.2 SPECIAL MEETING. Special meetings of shareholders shall be held upon the call of the Board of Directors or the President or if the holders of at least twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Secretary of the Corporation one (1) or more written demands for the special meeting describing the purpose or purposes for which ids to be held. Notice of a special meeting shall be in writing, shall designate the date, time and place of the meeting and shall describe the purpose or purposes for which the meeting is to be held. Any or all shareholders may participate in a special shareholders' meeting by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. ARTICLE 5 THE BOARD OF DIRECTORS 5.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. Directors shall be elected by the shareholders at the shareholders' annual meetings, but may be elected at any shareholders' meeting or by the Board of Directors pursuant to Section 5.2. The term of a director expires at the next annual shareholders' meeting following his election or upon his earlier death, resignation or removal from office. Despite the expiration of a director's term, the director continues to serve until a successor is elected and qualifies or until there is a decrease in the number of directors. (A decrease in the number of directors does not shorten an incumbent director's term except in the case of a director continuing to serve beyond the expiration of his term.) A director may qualify either by giving notice to the Secretary of his acceptance of the office of director or by attending a meeting of the Board of Directors. A director may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 5.2 VACANCIES. If a vacancy occurs on the Board of Directors, including a vacancy resulting from the resignation, death or removal of a director and a vacancy resulting from an increase in the number of directors, the Board of Directors may fill the vacancy, and, if the directors remaining in office constitute less than a quorum of the Board of Directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. 5.3 QUORUM; VOTING REQUIREMENT. Except as otherwise provided in Section 5.2 with respect to the filling of vacancies on the Board of Directors, a quorum of the Board of Directors shall consist of a majority of the actual number of directors in office immediately before the meeting begins, but not less than one-half (1/2) of the number fixed pursuant to the Articles of Incorporation. If a quorum is present when a vote is taken, the affirmative vote of a - 3 - majority of directors present is the act of the Board of Directors, except as otherwise provided in Article 8 of the Bylaws with respect to the amendment or repeal of bylaws. 5.4 ANNUAL MEETING. Unless otherwise determined by the Board of Directors, the Board of Directors shall meet each year promptly after the shareholders' annual meeting for the purpose of electing officers and transaction of other business. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action, and if the meeting is not held at the designated time, the election of officers may be conducted at any subsequent meeting of the Board of Directors. No notice of the date, time, place, or purpose of the annual meeting need be given, if notice of the shareholders' annual meeting has been given, and in any event notice of an annual meeting may be communicated orally. Any or all directors may participate in an annual meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. 5.5 REGULAR MEETINGS. The Board of Directors may from time to time adopt resolutions scheduling the date(s), time(s) and place(s) of regular meetings of the Board of Directors. A scheduled regular meeting of the Board of Directors may be held without. further notice of the date, time, place or purpose of the meeting, and in any event notice of a regular meeting may be communicated orally. Any or all directors may participate in a regular meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. 5.6 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held upon the call of the President or upon the written request of any director. The call or request shall state the date by which the special meeting shall be held and may state the purpose(s) for holding the special meeting. A special meeting of the Board of Directors must be preceded by at least two (2) days notice of the date, time and place of the meeting. The notice need not describe the purpose(s) of the special meeting unless a purpose is to remove an officer or director in which case notice of that purpose shall be given. Notice of a special meeting may be communicated orally. Whether or not the notice of a special meeting describes the purpose(s) of the meeting, the Board of Directors may consider and act upon any matter at a special meeting. Any or all directors may participate in a special meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. 5.7 EMERGENCY MEETINGS. If an extraordinary event prevents a quorum of the Board of Directors from assembling in time to deal with the business for which a meeting has been or is to be called, any director may call an emergency meeting of the Board of directors. Notice of an emergency meeting need be given only to those directors whom it is practicable to reach and may be given in any practicable manner allowable under the Law. One (1) or more officers of the Corporation present at an emergency meeting of the Board of Directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum. - 4 - ARTICLE 6 THE OFFICERS 6.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. The Board of Directors shall elect a Chairman, a President, a Vice President-Finance, a Treasurer and a Secretary and may elect other officers including assistant officers if the Board of Directors determines that additional officers are advisable. The same individual may simultaneously hold more than one (1) office in the Corporation. Officers shall normally be elected at the Annual Meeting of the Board of Directors, but may be elected at any meeting of the Board of Directors. An officer shall hold office from the effective date of his election until the next Annual Meeting of the Board of Directors and thereafter until his successor is duly elected and has qualified, or until the officer's earlier death, resignation or removal from office. The Chairman and the President must be directors, but other officers need not be directors. An officer shall qualify by giving notice to the Secretary of his acceptance of the office. An officer may resign by delivering notice to the Board of Directors or to any other officer of ' the Corporation. 6.2 SALARIES. The salaries of the officers shall be fixed or changed, from time to time, by resolution of the Board of Directors or by contract. 6.3 CHAIRMAN. The Chairman shall preside at all meetings of shareholders and the Board of Directors and shall have such powers and perform such duties as are incident to the office of the Chairman and as assigned from time to time by the Board of Directors. The Chairman shall be the Chief Executive Officer, with all the powers and duties incident to that office, unless those powers and duties are vested by the Board of Directors in the office of the President. 6.4 PRESIDENT. The President shall have all powers and duties which are by law or custom incident to the office of the President, except where those powers and duties are vested in the Chairman. If the Chairman resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the President shall temporarily act in the place of the Chairman. The President shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors or the Chairman. 6.5 VICE PRESIDENT-FINANCE. The Vice President-Finance shall have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. If the President resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the Vice President-Finance shall temporarily act in the place of the President. 6.6 TREASURER. The Treasurer shall have responsibility for all funds of the Corporation, shall cause to be kept and maintained correct books and records of account of the properties and business transactions of the Corporation, and shall render to the Chairman and the Board of Directors an accounting of the financial condition of the Corporation from time to time and whenever requested. The Treasurer shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. - 5 - 6.7 SECRETARY. The Secretary shall have the responsibility for preparing minutes of meetings of the shareholders and the Board of Directors and for authenticating records of the Corporation. The Secretary shall cause to be kept and maintained all records of the Corporation required by the Law. The Secretary shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. 6.8 OTHER OFFICERS. Other officers, if elected, shall have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or any officer designated in the resolution creating the additional office. 6.9 VOTING OF SHARES OR OTHER OWNERSHIP INTERESTS HELD BY THE CORPORATION. The Board of Directors shall designate from time to time the officer(s) authorized to act on behalf of the Corporation at any meeting of the shareholders or partners of a corporation or partnership in which the Corporation holds shares or is a partner. Subject always to further orders and directions from the Board of Directors, a general authority to act on behalf of the Corporation includes, without limitation, the voting of shares or partnership interests held by the Corporation. However, unless specifically authorized by the Board of Directors, a general authority to act on behalf of the Corporation does not include the authority to sell or otherwise dispose of shares or partnership interests held by the Corporation. ARTICLE 7 REQUIRED RECORDS 7.1 MEETING RECORDS. The Corporation shall keep as permanent records minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. 7.2 ACCOUNTING RECORDS. The Corporation shall maintain appropriate accounting records. 7.3 SHAREHOLDER LIST. The Corporation shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each. 7.4 FORM OF RECORDS. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time. 7.5 RECORDS KEPT AT PRINCIPAL OFFICE. The Corporation shall keep at its principal office a copy of the records: ARTICLES OF INCORPORATION. Its Articles of Incorporation or Restated Articles of Incorporation and all amendments to them currently in effect. - 6 - BYLAWS. Its Code of Bylaws or Restated Code of Bylaws and all amendments to them currently in effect. "BLANK CHECK STOCK" RESOLUTIONS. Resolutions adopted by the Board of Directors with respect to one (1) or more classes or series of shares and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding. MINUTES. The minutes of all shareholders' meetings, and records of all actions taken by shareholders without a meeting, for the past three (3) years. COMMUNICATIONS. All written communications to shareholders generally within the past three (3) years, including the financial statements, if any, furnished to shareholders for the past three (3) years. DIRECTORS AND OFFICERS. A list of the names and business addresses of its current directors and officers. ANNUAL REPORT. Its most recent annual report delivered to the Indiana Secretary of State. All original records and all other records, including the records identified in Sections 7.1, 7.2 and 7.3, may be kept at another location including the office of counsel to the Corporation. 7.6 SHAREHOLDER INSPECTION. A shareholder shall be entitled to inspect and copy the records of the Corporation to the extent and in the manner provided by the Law. ARTICLE 8 AMENDMENTS 8.1 POWER TO AMEND OR REPEAL. The Board of Directors may adopt, amend or repeal the Bylaws of the Corporation without notice to or action by the shareholders. 8.2 NO NOTICE REQUIRED; QUORUM. The Bylaws (or any provision of the Bylaws) may be adopted, amended or repealed at any meeting of the Board of Directors at which a quorum is present without prior notice of the purpose of the meeting and without notice of the provision proposed to be adopted, amended or repealed. 8.3 SPECIAL VOTING REQUIREMENT. Notwithstanding Section 5.3 of these Bylaws, the adoption, amendment or repeal of the Bylaws (or any provision of the Bylaws) requires the affirmative vote of a majority of the number of directors in office immediately before the beginning of the meeting at which the adoption, amendment or repeal is voted upon. - 7 - 8.4 AMENDMENT OR REPEAL OF QUORUM AND VOTING REQUIREMENTS. Action by the Board of Directors to adopt a bylaw that changes the quorum or voting requirement for action by the Board of Directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater. As Adopted January 5, 1997. /s/ Don L. Brown - ------------------------------- Don I. Brown, Secretary - 8 - EX-3.19 21 y92210a1exv3w19.txt CODE OF REGULATIONS Exhibit 3.19 CODE OF REGULATIONS OF DALTON CORPORATION, STRYKER MACHINING FACILITY ---------------------------------------------- ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS. As used in this Code of Regulations: "CORPORATION" means Dalton Corporation, Stryker Machining Facility. "LAW" means the Ohio Revised Code, as amended from time to time. "ARTICLES OF INCORPORATION" means the Articles of Incorporation of the Corporation, as amended from time to time. "REGULATIONS" means the Code of Regulations of the Corporation, as amended from time to time. 1.2 CONSTRUCTION. The Regulations shall be construed in a manner which harmonizes the Regulations, the Articles of Incorporation and the Law. Where the Regulations are silent, the Articles of Incorporation and the Law shall control. If any provision of the Regulations is inconsistent with the Articles of Incorporation, the Articles of Incorporation shall control. If any provision of the Regulations is inconsistent with the Law, the Law shall control except in those circumstances in which the Law expressly allows regulations to provide contrary rules. ARTICLE 2 IDENTIFICATION 2.1 NAME. The name of the Corporation is Dalton Corporation, Stryker Machining Facility 2.2 PRINCIPAL OFFICE. The location of the principal office of the Corporation is 310 Ellis Street, Stryker, Ohio 43559. 2.3 STATUTORY AGENT. The name and street address of the Corporation's statutory agent is CT Corporation System, 815 Superior Avenue, N.E., Cleveland, Ohio 44114. The registered office or registered agent, or both, may be changed, terminated or discontinued in any manner allowable by the Law, without amending the Articles of Incorporation or the Regulations. 2.4 FISCAL YEAR. The fiscal year of the Corporation shall end on the Saturday on or nearest to the thirty-first day of December of each year. ARTICLE 3 SHARES 3.1 CERTIFICATES FOR SHARES. Shares may be represented by certificates signed by the President and the Secretary of the Corporation. The Corporation may issue some or all of the shares of any or all of its classes without certificates. Restrictions on transfer shall be noted conspicuously on the front or back of the certificate or transaction statement. 3.2 REGISTRATION OF TRANSFER OF SHARES. The Corporation shall register in its records the transfer of shares and shall issue a new certificate or transaction statement to the transferee if a certificate or written instruction endorsed by the appropriate person(s) is presented to the Corporation, reasonable assurance is given that the endorsement is genuine and effective,. and other requirements of applicable Ohio statutes are met or are waived by resolution of the Board of Directors, except in those cases in which the Corporation has received written notification of an adverse claim or is charged with notice of an adverse claim. 3.3 LOST, DESTROYED OR WRONGFULLY TAKEN CERTIFICATES. If a registered owner of shares claims that the certificate representing his shares has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate if the registered owner makes a written request, complies with the requirements of applicable Indiana statutes and, in addition, complies with the requirements which the Board of Directors may adopt by resolution. The Board of Directors may waive the statutory requirement for an indemnity bond if the Board of Directors determines that the registered owner's agreement to indemnify the Corporation provides sufficient protection against potential liabilities to adverse claimants. ARTICLE 4 MEETINGS OF SHAREHOLDERS 4.1 ANNUAL MEETING. The shareholders' meeting for the election of directors and for the transaction of other business shall be held on the last weekday in April each year at the time and place (within or outside the State of Ohio) set by the Board of Directors. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action. Notice of an annual meeting may be communicated orally. 4.2 SPECIAL MEETING. Special meetings of shareholders shall be held upon the call of the Board of Directors or the President or if the holders of at least twenty-five percent (25 %) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Secretary of the Corporation one (1) or more written - 2 - demands for the special meeting describing the purpose or purposes for which it is to be held. Notice of a special meeting shall be in writing, shall designate the date, time and place of the meeting (within or outside the State of Ohio) and shall describe the purpose or purposes for which the meeting is to be held. ARTICLE 5 THE BOARD OF DIRECTORS 5.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. Directors shall be elected by the shareholders at the shareholders' annual meetings, but may be elected at any shareholders' meeting or by the Board of Directors pursuant to Section 5.2. The term of a director expires at the next annual shareholders' meeting following his election or upon his earlier death, resignation or removal from office. Despite the expiration of a director's term, the director continues to serve until a successor is elected and qualifies or until there is a decrease in the number of directors. (A decrease in the number of directors does not shorten an incumbent director's term except in the case of a director continuing to serve beyond the expiration of his term.) A director may qualify either by giving notice to the Secretary of his acceptance of the office of director or by attending a meeting of the Board of Directors. A director may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 5.2 VACANCIES. If a vacancy occurs on the Board of Directors, including a vacancy resulting from the resignation, death or removal of a director and a vacancy resulting from an increase in the number of directors, the Board of Directors may fill the vacancy, and, if the directors remaining in office constitute less than a quorum of the Board of Directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. 5.3 QUORUM; VOTING REQUIREMENT. Except as otherwise provided in Section 5.2 with respect to the filling of vacancies on the Board of Directors, a quorum of the Board of Directors shall consist of a majority of the actual number of directors in office immediately before the meeting begins. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors. 5.4 ANNUAL MEETING. Unless otherwise determined by the Board of Directors, the Board of Directors shall meet each year promptly after the shareholders' annual meeting for the purpose of electing officers and transaction of other business. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action, and if the meeting is not held at the designated time, the election of officers may be conducted at any subsequent meeting of the Board of Directors. No notice of the date, time, place, or purpose of the annual meeting need be given, if notice of the shareholders' annual meeting has been given, and in any event notice of an annual meeting may be communicated orally. Any or all directors may participate in an annual meeting of the Board of Directors by, or through the. use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. - 3 - 5.5 REGULAR MEETINGS. The Board of Directors may from time to time adopt resolutions scheduling the date(s), time(s) and place(s) of regular meetings of the Board of Directors. A scheduled regular meeting of the Board of Directors may be held without further notice of the date, time, place or purpose of the meeting, and in any event notice of a regular meeting may be communicated orally. Any or all directors may participate in a regular; meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. 5.6 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held upon the call of the President or upon the written request of any director. The call or request shall state the date by which the special meeting shall be held and may state the purpose(s) for holding the special meeting. A special meeting of the Board of Directors must be preceded by at least two (2) days written notice of the date, time and place of the meeting. The notice need not describe the purpose(s) of the special meeting unless a purpose is to remove an officer or director in which case notice of that purpose shall be given. Whether or not the notice of a special meeting describes the purpose(s) of the meeting, the Board of Directors may consider and act upon any matter at a special meeting. Any or all directors may participate in a regular meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. ARTICLE 6 THE OFFICERS 6.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. The Board of Directors shall elect a Chairman, a President, a Vice President-Finance, a Treasurer and a Secretary and may elect other officers including assistant officers if the Board of Directors determines that additional officers are advisable. The same individual may simultaneously hold more than one (1) office in the Corporation. Officers shall normally be elected at the Annual Meeting of the Board of Directors, but may be elected at any meeting of the Board of Directors. An officer shall hold office from the effective date of his election until the next Annual Meeting of the Board of Directors and thereafter until his successor is duly elected and has qualified, or until the officer's earlier death, resignation or removal from office. The Chairman and the President must be directors, but other officers need not be directors. An officer shall qualify by giving notice to the Secretary of his acceptance of the office. An officer may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 6.2 SALARIES. The salaries of the officers shall be fixed or changed, from time to time, by resolution of the Board of Directors or by contract. 6.3 CHAIRMAN. The Chairman shall preside at all meetings of shareholders and the Board of Directors and shall have such powers and perform such duties which are by law or custom incident to the office of the Chairman and as assigned from time to time by the Board of Directors. The Chairman shall be the Chief Executive Officer, with all the powers and duties incident to that office, unless those powers and duties are vested by the Board of Directors in the office of the President. - 4 - 6.4 PRESIDENT. The President shall have all powers and duties which are by law or custom incident to the office of the President, except where those powers and duties are vested in the Chairman. If the Chairman resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the President shall temporarily act in the place of the Chairman. The President shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors or the Chairman. 6.5 VICE PRESIDENT-FINANCE. The Vice President-Finance shall have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. If the President resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the Vice President-Finance shall temporarily act in the place of the President. 6.6 TREASURER. The Treasurer shall have responsibility for all funds of the Corporation, shall cause to be kept and maintained correct books and records of account of the properties and business transactions of the Corporation, and shall render to the President and the Board of Directors an accounting of the financial condition of the Corporation from time to time and whenever requested. The Treasurer shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. 6.7 SECRETARY. The Secretary shall have the responsibility for preparing minutes of meetings of the shareholders and the Board of Directors and for authenticating records of the Corporation. The Secretary shall cause to be kept and maintained all records of the Corporation required by the Law. The Secretary shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. 6.8 OTHER OFFICERS. Other officers, if elected, shall have the powers and perform the duties assigned from time to time by the Board of Directors or any officer designated in the resolution creating the additional office. 6.9 VOTING OF SHARES OR OTHER OWNERSHIP INTERESTS HELD BY THE CORPORATION. The Board of Directors shall designate from time to time the officer(s) authorized to act on behalf of the Corporation at any meeting of the shareholders or partners of a corporation or partnership in which the Corporation holds shares or is a partner. Subject always to further orders and directions from the Board of Directors, a general authority to act on behalf of the Corporation includes, without limitation, the voting of shares or partnership interests held by the Corporation. However, unless specifically authorized by the Board of Directors, a general authority to act on behalf of the Corporation does not include the authority to sell or otherwise dispose of shares or partnership interests held by the Corporation. ARTICLE 7 REQUIRED RECORDS 7.1 MEETING RECORDS. The Corporation shall keep as permanent records minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a - 5 - committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. 7.2 ACCOUNTING RECORDS. The Corporation shall maintain appropriate accounting records. 7.3 SHAREHOLDER LIST. The Corporation shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each. 7.4 FORM OF RECORDS. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time. 7.5 SHAREHOLDER INSPECTION. A shareholder shall be entitled to inspect and copy the records of the Corporation to the extent and in the manner provided by the Law. ARTICLE 8 AMENDMENTS 8.1 POWER TO AMEND OR REPEAL. The holders of a majority of the shares of the Corporation may adopt, amend or repeal the Regulations of the Corporation. As Adopted February 11, 1997. /s/ Don I. Brown - -------------------------------- Don I. Brown, Secretary - 6 - EX-3.20 22 y92210a1exv3w20.txt AMENDED AND RESTATED CODE OF REGULATIONS EXHIBIT 3.20 AMENDED AND RESTATED CODE OF REGULATIONS OF DALTON CORPORATION, ASHLAND MANUFACTURING FACILITY -------------------------------------------------------------------- ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS. As used in this Code of Regulations: "CORPORATION" means Dalton Corporation, Ashland Manufacturing Facility "LAW" means the Ohio Revised Code, as amended from time to time. "ARTICLES OF INCORPORATION" means the Articles of Incorporation of the Corporation, as amended from time to time. "REGULATIONS" means the Code of Regulations of the Corporation, as amended from time to time. 1.2 CONSTRUCTION. The Regulations shall be construed in a manner which harmonizes the Regulations, the Articles of Incorporation and the Law. Where the Regulations are silent, the Articles of Incorporation and the Law shall control. If any provision of the Regulations is inconsistent with the Articles of Incorporation, the Articles of Incorporation shall control. If any provision of the Regulations is inconsistent with the Law, the Law shall control except in those circumstances in which the Law expressly allows regulations to provide contrary rules. ARTICLE 2 IDENTIFICATION 2.1 NAME. The name of the Corporation is Dalton Corporation, Ashland Manufacturing Facility 2.2 PRINCIPAL OFFICE. The location of the principal office of the Corporation is 1861 Orange Road, Ashland, Ohio. 2.3 STATUTORY AGENT. The name and street address of the Corporation's statutory agent is CT Corporation System, 815 Superior Avenue, N.E., Cleveland, Ohio 44114. The registered office or registered agent, or both, may be changed, terminated or discontinued in any manner allowable by the Law, without amending the Articles of Incorporation or the Regulations. 2.4 FISCAL YEAR. The fiscal year of the Corporation shall end on the Saturday on or nearest to the thirty-first day of December of each year. ARTICLE 3 SHARES 3.1 CERTIFICATES FOR SHARES. Shares may be represented by certificates signed by the President and the Secretary of the Corporation. The Corporation may issue some or all of the shares of any or all of its classes without certificates. Restrictions on transfer shall be noted conspicuously on the front or back of the certificate or transaction statement. 3.2 REGISTRATION OF TRANSFER OF SHARES. The Corporation shall register in its records the transfer of shares and shall issue a new certificate or transaction statement to the transferee if a certificate or written instruction endorsed by the appropriate person(s) is presented to the Corporation, reasonable assurance is given that the endorsement is genuine and effective, and other requirements of applicable Ohio statutes are met or are waived by resolution of the Board of Directors, except in those cases in which the Corporation has received written notification of an adverse claim or is charged with notice of an adverse claim. 3.3 LOST, DESTROYED OR WRONGFULLY TAKEN CERTIFICATES. If a registered owner of shares claims that the certificate representing his shares has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate if the registered owner makes a written request, complies with the requirements of applicable Indiana statutes and, in addition, complies with the requirements which the Board of Directors may adopt by resolution. The Board of Directors may waive the statutory requirement for an indemnity bond if the Board of Directors determines that the registered owner's agreement to indemnify the Corporation provides sufficient protection against potential liabilities to adverse claimants. ARTICLE 4 MEETINGS OF SHAREHOLDERS 4.1 ANNUAL MEETING. The shareholders' meeting for the election of directors and for the transaction of other business shall be held on the last weekday in April each year at the time and place (within or outside the State of Ohio) set by the Board of Directors. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action. Notice of an annual meeting may be communicated orally. 4.2 SPECIAL MEETING. Special meetings of shareholders shall be held upon the call of the Board of Directors or the President or if the holders of at least twenty-five percent (25 %) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Secretary of the Corporation one (1) or more written -2- demands for the special meeting describing the purpose or purposes for which it is to be held. Notice of a special meeting shall be in writing, shall designate the date, time and place of the meeting (within or outside the State of Ohio) and shall describe the purpose or purposes for which the meeting is to be held. ARTICLE 5 THE BOARD OF DIRECTORS 5.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. Directors shall be elected by the shareholders at the shareholders' annual meetings, but may be elected at any shareholders' meeting or by the Board of Directors pursuant to Section 5.2. The term of a director expires at the next annual shareholders' meeting following his election or upon his earlier death, resignation or removal from office. Despite the expiration of a director's term, the director continues to serve until a successor is elected and qualifies or until there is a decrease in the number of directors. (A decrease in the number of directors does not shorten an incumbent director's term except in the case of a director continuing to serve beyond the expiration of his term.) A director may qualify either by giving notice to the . Secretary of his acceptance of the office of director or by attending a meeting of the Board of Directors. A director may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 5.2 VACANCIES. If a vacancy occurs on the Board of Directors, including a vacancy resulting from the resignation, death or removal of a director and a vacancy resulting from an increase in the number of directors, the Board of Directors may fill the vacancy, and, if the directors remaining in office constitute less than a quorum of the Board of Directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. 5.3 QUORUM; VOTING REQUIREMENT. Except as otherwise provided in Section 5.2 with respect to the filling of vacancies on the Board of Directors, a quorum of the Board of Directors shall consist of a majority of the actual number of directors in office immediately before the meeting begins. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors. 5.4 ANNUAL MEETING. Unless otherwise determined by the Board of Directors, the Board of Directors shall meet each year promptly after the shareholders' annual meeting for the purpose of electing officers and transaction of other business. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action, and if the meeting is not held at the designated time, the election of officers may be conducted at any subsequent meeting of the Board of Directors. No notice of the date, time, place, or purpose of the annual meeting need be given, if notice of the shareholders' annual meeting has been given, and in any event notice of an annual meeting may be communicated orally. Any or all directors may participate in an annual meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. -3- 5.5 REGULAR MEETINGS. The Board of Directors may from time to time adopt resolutions scheduling the date(s), time(s) and place(s) of regular meetings of the Board of Directors. A scheduled regular meeting of the Board of Directors may be held without further notice of the date, time, place or purpose of the meeting, and in any event notice of a regular meeting may be communicated orally. Any or all directors may participate in a regular meeting of the Board of Directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. 5.6 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held upon the call of the President or upon the written request of any director. The call or request shall state the date by which the special meeting shall be held and may state the purpose(s) for holding the special meeting. A special meeting of the Board of Directors must be preceded by at least two (2) days written notice of the date, time and place of the meeting. The notice need not describe the purpose(s) of the special meeting unless a purpose is to remove an officer or director in which case notice of that purpose shall be given. Whether or not the notice of a special meeting describes the purpose(s) of the meeting, the Board of Directors may consider and act upon any matter at a special meeting. Any or all directors may participate in a regular meeting of the Board of Directors by, or through the use. of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. ARTICLE 6 THE OFFICERS 6.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. The Board of Directors shall elect a Chairman, a President, a Vice President-Finance, a Treasurer and - a Secretary and may elect other officers including assistant officers if the Board of Directors determines that additional officers are advisable. The same individual may simultaneously hold more than one (1) office in the Corporation. Officers shall normally be elected at the Annual Meeting of the Board of Directors, but may be elected at any meeting of the Board of Directors. An officer shall hold office from the effective date of his election until the next Annual Meeting of the Board - of Directors and thereafter until his successor is duly elected and has qualified, or until the officer's earlier death, resignation or removal from office. The Chairman and the President must be directors, but other officers need not be directors. An officer shall qualify by giving notice to the Secretary of his acceptance of the office. An officer may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 6.2 SALARIES. The salaries of the officers shall be fixed or changed, from time to time, by resolution of the Board of Directors or by contract. 6.3 CHAIRMAN. The Chairman shall preside at all meetings of shareholders and the Board of Directors and shall have such powers and perform such duties which are by law or custom incident to the office of the Chairman and as assigned from time to time by the Board of Directors. The Chairman shall be the Chief Executive Officer, with all the powers and duties -4- incident to that office, unless those powers and duties are vested by the Board of Directors in the office of the President. 6.4 PRESIDENT. The President shall have all powers and duties which are by law or custom incident to the office of the President, except where those powers and duties are vested in the Chairman. If the Chairman resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the President shall temporarily act in the place of the Chairman. The President shall, in addition, have the powers and perform the . duties assigned from time to time by the Board of Directors or the Chairman. 6.5 VICE PRESIDENT-FINANCE. The Vice President-Finance shall have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. If the President resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the Vice President-Finance shall temporarily act in the place of the President. 6.6 TREASURER. The Treasurer shall have responsibility for all funds of the Corporation, shall cause to be kept and maintained correct books and records of account of the properties and business transactions of the Corporation, and shall render to the President and the Board of Directors an accounting of the financial condition of the Corporation from time to time and whenever requested. The Treasurer shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. 6.7 SECRETARY. The Secretary shall have the responsibility for preparing minutes of meetings of the shareholders and the Board of Directors and for authenticating records of the Corporation. The Secretary shall cause to be kept and maintained all records of the Corporation required by the Law. The Secretary shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors, the Chairman or the President. 6.8 OTHER OFFICERS. Other officers, if elected, shall have the powers and perform the duties assigned from time to time by the Board of Directors or any officer designated in the resolution creating the additional office. 6.9 VOTING OF SHARES OR OTHER OWNERSHIP INTERESTS HELD BY THE CORPORATION. The Board of Directors shall designate from time to time the officer(s) authorized to act on behalf of the Corporation at any meeting of the shareholders or partners of a corporation or partnership in which the Corporation holds shares or is a partner. Subject always to further orders and directions from the Board of Directors, a general authority to act on behalf of the Corporation includes, without limitation, the voting of shares or partnership interests held by the Corporation. However, unless specifically authorized by the Board of Directors, a general authority to act on behalf of the Corporation does not include the authority to sell or otherwise dispose of shares or partnership interests held by the Corporation. -5- ARTICLE 7 REQUIRED RECORDS 7.1 MEETING RECORDS. The Corporation shall keep as permanent records minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. . 7.2 ACCOUNTING RECORDS. The Corporation shall maintain appropriate accounting records. 7.3 SHAREHOLDER LIST. The Corporation shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each. 7.4 FORM OF RECORDS. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time. 7.5 SHAREHOLDER INSPECTION. A shareholder shall be entitled to inspect and copy the records of the Corporation to the extent and in the manner provided by the Law. ARTICLE 8 AMENDMENTS 8.1 POWER TO AMEND OR REPEAL. The holders of a majority of the shares of the Corporation may adopt, amend or repeal the Regulations of the Corporation. As Adopted February 11,1997. /s/ Don I. Brown - --------------------------- Don I. Brown, Secretary -6- EX-3.21 23 y92210a1exv3w21.txt AMENDED AND RESTATED CODE OF BYLAWS Exhibit 3.21 AMENDMENT TO DALTON CORPORATION, KENDALLVILLE MANUFACTURING FACILITY CODE OF BYLAWS Article 5, Section 5.1, will be amended to add Sentence 7 relating to the number of the board of directors of Dalton Corporation, Kendallville Manufacturing Facility is hereby amended to read as follows: "The number of directors of the corporation shall be no less than two (2) and no more than seven (7)." This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of Dalton Corporation, pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. As adopted ____________ CODE OF BYLAWS OF NEWNAM MANUFACTURING, INC. ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS. As used in this Code of By-Laws: "CORPORATION" means Newnam Manufacturing, Inc. "LAW" means the Indiana Business Corporation Law, as amended from time to time. "ARTICLES OF INCORPORATION" means the Articles of Incorporation of the Corporation, as amended from time to time. "BYLAWS" means the Code of Bylaws of the Corporation, as amended from time to time. 1.2 CONSTRUCTION. The Bylaws shall be construed in a manner which harmonizes the Bylaws, the Articles of Incorporation and the Law. Where the Bylaws are silent, the. Articles of Incorporation and the Law shall control. If any provision of the Bylaws is inconsistent with the Articles of Incorporation, the Articles of Incorporation shall control. If any provision of the Bylaws is inconsistent with the Law, the Law shall control except in those circumstances in which the Law expressly allows bylaws to provide contrary rules. ARTICLE 2 INDEMNIFICATION 2.1 NAME. The name of the Corporation is Newnam Manufacturing, Inc. 2.2 PRINCIPAL OFFICE. The location of the principal office of the Corporation is 1900 East Jefferson Street, Warsaw, Indiana where the executive offices of the Corporation are located. 2.3 REGISTERED OFFICE AND REGISTERED AGENT. The street address of the Corporation's initial registered office in Indiana and the name of its initial registered agent at that address is set forth in Article III of the Articles of Incorporation. The registered office or registered agent, or both, may be changed, terminated or discontinued in any manner allowable by the Law, without amending the Articles of Incorporation or the Bylaws. As adopted __________ 2.4 SEAL. The seal of the Corporation shall be circular in form and mounted upon a metal die suitable for impressing the same upon paper, or upon a rubber stamp suitable for stamping or printing on paper. About the upper periphery of the seal shall appear the name of the Corporation and about the lower periphery thereof the word "Indiana." In the center of the seal shall appear the words "Seal" or "Corporate Seal." However, the use of the seal (or an impression of the seal) is not required and does not affect the validity of any instrument whatsoever. 2.5 FISCAL YEAR. The fiscal year of the Corporation shall be a 52-53 week fiscal year ending the Saturday on or nearest to the 31st day of December. ARTICLE 3 SHARES 3.1 CERTIFICATES FOR SHARES. Shares shall be represented by certificates signed by the President and the Secretary of the Corporation and bearing the seal of the Corporation. Restrictions on transfer shall be noted conspicuously on the front or back of the certificate. 3.2 REGISTRATION OF TRANSFER OF SHARES. The Corporation shall register in its records the transfer of shares and shall issue a new certificate to the transferee if a certificate endorsed by the appropriate person(s) is presented to the Corporation, reasonable assurance is given that the endorsement is genuine and effective, and other requirements of applicable Indiana statutes are met or are waived by resolution of the Board of Directors, except in those cases in which the Corporation has received written notification of an adverse claim or is charged with notice of an adverse claim. 3.3 LOST, DESTROYED OR WRONGFULLY TAKEN CERTIFICATES. If a registered owner of shares claims that the certificate representing his shares has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate if the registered owner makes a written request, complies with the requirements of applicable Indiana statutes and, in addition, complies with the requirements which the Board of Directors may adopt by resolution. The Board of Directors may waive the statutory requirement for an indemnity bond if the Board of Directors determines that the registered owner's agreement to indemnify the Corporation provides sufficient protection against potential liabilities to adverse claimants. ARTICLE 4 MEETINGS OF SHAREHOLDERS 4.1 ANNUAL MEETING. The shareholders' meeting for the election of directors and for the transaction of other business shall be held each year in the month of April at the date, time and place set by the Board of Directors. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action. Notice of an annual meeting may be communicated orally. Any or all shareholders may participate in an annual shareholders' meeting by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. - 2 - As adopted __________ 4.2 SPECIAL MEETING. Special meetings of shareholders shall be held upon the call of the Board of Directors or the President or if the holders of at least twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Secretary of the Corporation one (1) or more written demands for the special meeting describing the purpose or purposes for which it is to be held. Notice of a special meeting shall be in writing, shall designate the date, time and place of the meeting and shall describe the purpose or purposes for which the meeting is to be held. Any or all shareholders may participate in a special shareholders' meeting by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. ARTICLE 5 THE BOARD OF DIRECTORS 5.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. Directors shall be elected by the shareholders at the shareholders' annual meetings, but may be elected at any shareholders' meeting. The term of a director expires at the next annual shareholders' meeting following his election or upon his earlier death, resignation or removal from office. Despite the expiration of a director's term, the director continues to serve until a successor is elected and qualifies or until there is a decrease in the number of directors. (A decrease in the number of directors does not shorten an incumbent director's term except in the case of a director continuing to serve beyond the expiration of his term.) A director may qualify either by giving notice to the Secretary of his acceptance of the office of director or by attending a meeting of the Board of Directors. A director may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. 5.2 VACANCIES. If a vacancy occurs on the Board of Directors, including a vacancy resulting from the resignation, death or removal of a director and a vacancy resulting from an increase in the number of directors, the Board of Directors may fill the vacancy, and, if the directors remaining in office constitute less than a quorum of the Board of Directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. 5.3 QUORUM; VOTING REQUIREMENT. Except as otherwise provided in Section 5.2 with respect to the filling of vacancies on the Board of Directors, a quorum of the Board of Directors shall consist of one-half (1/2) of the number of directors prescribed by the resolution of the Board of Directors in effect immediately before the meeting begins. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors, except as otherwise provided in Article 9 of the Bylaws with respect to the amendment or repeal of bylaws. 5.4 ANNUAL MEETING. Unless otherwise determined by the Board of Directors, the Board of Directors shall meet each year promptly after the shareholders' annual meeting for the purpose of electing officers and transaction of other business. The failure to hold an annual meeting at the designated time does not affect the validity of any corporate action, and if the - 3 - As adopted __________ meeting is not held at the designated time, the election of officers may be conducted at any subsequent meeting of the Board of Directors. No notice of the date, time, place, or purpose of the annual meeting need be given, if notice of the shareholders' annual meeting has been given, and in any event notice of an annual meeting may be communicated orally. 5.5 REGULAR MEETINGS. The Board of Directors may from time to time adopt resolutions scheduling the date(s), time(s) and place(s) of regular meetings of the Board of Directors. A scheduled regular meeting of the Board of Directors may be held without further notice of the date, time, place or purpose of the meeting, and in any event notice of a regular meeting may be communicated orally. 5.6 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held upon the call of the President or upon the written request of any director. The call or request shall state the date by which the special meeting shall be held and may state the purpose(s) for holding the special meeting. A special meeting of the Board of Directors must be preceded by at least two (2) days notice of the date, time and place of the meeting. The notice need not describe the purpose(s) of the special meeting unless a purpose is to remove an officer or director in which case notice of that purpose shall be given. Notice of a special meeting may be communicated orally. Whether or not the notice of a special meeting describes the purpose(s) of the meeting, the Board of Directors may consider and act upon any matter at a special meeting. 5.7 EMERGENCY MEETINGS. It an extraordinary event prevents a quorum of the Board of Directors from assembling in time to deal with the business for which a meeting has been or is to be called, any director may call an emergency meeting of the Board of directors. Notice of an emergency meeting need be given only to those directors whom it is practicable to reach and may be given in any practicable manner allowable under the Law. One (1) or more officers of the Corporation present at an emergency meeting of the Board of Directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum. ARTICLE 6 THE OFFICERS 6.1 ELECTION, TERM OF OFFICE, QUALIFICATION AND RESIGNATION. The Board of Directors shall elect a President, Secretary and Treasurer and may elect one or more Vice Presidents. The same individual may simultaneously hold more than one (1) office in the Corporation. Officers shall normally be elected at the Annual Meeting of the Board of Directors, but may be elected at any meeting of the Board of Directors. An officer shall hold office from the effective date of his election until the next Annual Meeting of the Board of Directors and thereafter until his successor is duly elected and has qualified, or until the officer's earlier death, resignation or removal from office. The President must be a director, but other officers need not be directors. An officer shall qualify by giving notice to the Secretary of his acceptance of the office. An officer may resign by delivering notice to the Board of Directors or to any other officer of the Corporation. - 4 - As adopted __________ 6.2 SALARIES. The salaries of the officers shall be fixed or changed, from time to time, by resolution of the Board of Directors or by contract. 6.3 PRESIDENT. The President shall be the chief executive officer of the Corporation and shall have the powers and duties which are by law or custom incident to the office of the President. The President shall preside at all meetings of shareholders and the Board of Directors. All contracts, deeds, notes and similar documents shall be signed on behalf of the Corporation by the President or his designee, except in those instances in which the Board of Directors assigns that duty to another officer. The President shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors. 6.4 VICE PRESIDENTS. The Vice President(s) shall have the powers and perform the duties assigned from time to time by the Board of Directors and by the President. If the President resigns, is removed from office or for any reason is unable or unavailable to perform his duties, the Vice President shall temporarily act in the place of the President. If the Board of Directors elects more than one vice president and neither the Board of Directors nor the President has designated a Vice President to act in the place of the President, the individual listed first in the resolution electing vice presidents shall temporarily act in the place of the President until the Board of Directors directs otherwise. 6.5 SECRETARY. The Secretary shall have the responsibility for preparing minutes of meetings of the shareholders and the Board of Directors and for authenticating records of the Corporation. The Secretary shall cause to be kept and maintained all records of the Corporation required by the Law. The Secretary shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors and by the President. 6.6 TREASURER. The Treasurer shall be the chief financial officer of the Corporation and shall have responsibility for all funds of the Corporation. The Treasurer shall render to the President and the Board of Directors an accounting of the financial condition of the Corporation, from time to time whenever requested. The Treasurer shall, in addition, have the powers and perform the duties assigned from time to time by the Board of Directors and by the President. ARTICLE 7 REQUIRED RECORDS 7.1 MEETING RECORDS. The Corporation shall keep as permanent records minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. 7.2 ACCOUNTING RECORDS. The Corporation shall maintain appropriate accounting 7.3 SHAREHOLDER LIST. The Corporation shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each. - 5 - As adopted __________ 7.4 FORM OF RECORDS. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time. 7.5 RECORDS KEPT AT PRINCIPAL OFFICE. The Corporation shall keep at its principal office a copy of the records: ARTICLES OF INCORPORATION. Its Articles of Incorporation or Restated Articles of Incorporation and an amendments to them currently in effect. BYLAWS. Its Code of Bylaws or Restated Code of Bylaws and all amendments to them currently in effect. "BLANK CHECK STOCK" Resolutions. Resolutions adopted by the Board of Directors with respect to one (1) or more classes or series of shares and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding. MINUTES. The minutes of all shareholders' meetings, and records of all actions taken by shareholders without a meeting, for the past three (3) years. COMMUNICATIONS. All written communications to shareholders generally within the past three (3) years, including the financial statements, if any, furnished to shareholders for the past three (3) years. DIRECTORS AND OFFICERS. A list of the names and business addresses of its current directors and officers. ANNUAL REPORT. Its most recent annual report delivered to the Indiana Secretary of State. All original records and all other records, including the records identified in Sections 7.1, 7.2 and 7.3, may be kept at another location including the office of counsel to the Corporation. 7.6 SHAREHOLDER INSPECTION. A shareholder shall be entitled to inspect and copy the records of the Corporation to the extent and in the manner provided by the Law. ARTICLE 8 INDEMNIFICATION 8.1 SCOPE OF INDEMNIFICATION. The Corporation shall indemnify the individuals listed in Section 8.2 against liability (including expenses) incurred in the defense of any proceeding to which the individual was made a party or a witness because of his status with the Corporation - 6 - As adopted __________ and in which the individual was (a) wholly successful on the merits or otherwise or (b) in which the Corporation (acting in accordance with Section 8.4) determines that the individual's conduct and beliefs met the standard of conduct prescribed by the Law, although the individual was not wholly successful on the merits or otherwise or (c) a court determines that the individual is entitled to indemnification. 8.2 INDIVIDUALS ELIGIBLE FOR INDEMNIFICATION. The following individuals are eligible for indemnification, as described in this Article 8: Any director, officer, employee or agent of the Corporation including an individual who is or was (or agreed to be) a director, officer, employee or agent of the Corporation or an individual who, while a director, officer, employee or agent of the Corporation, is or was serving (or agreed to serve) at the Corporation's request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, whether for profit or not. 8.3 ADVANCES. Subject to the conditions prescribed by the Law and in accordance with Section 8.4, the Corporation may pay for or reimburse the reasonable expenses incurred by an individual who is a party to or witness in a proceeding, in advance of the final disposition of the proceeding. 8.4 DETERMINATIONS BY THE CORPORATION. The Corporation shall authorize payments in each specific case only after a determination has been made, in a manner allowable by the Law, that indemnification is permissible in the circumstances because the individual has met the standard of conduct prescribed by the Law. 8.5 INSURANCE. The Corporation may purchase and maintain insurance on behalf of any individual described in Section 8.2, whether or not the Corporation would have power under these Bylaws or the Law to indemnify the individual against the liabilities covered by insurance. ARTICLE 9 AMENDMENTS 9.1 POWER TO AMEND OR REPEAL. The Board of Directors may adopt, amend or repeal the Bylaws of the Corporation without notice to or action by the shareholders. 9.2 NO NOTICE REQUIRED; QUORUM. The Bylaws (or any provision of the Bylaws) may be adopted, amended or repealed at any meeting of the Board of Directors at which a quorum is present without prior notice of the purpose of the meeting and without notice of the provision proposed to be adopted, amended or repealed. 9.3 SPECIAL VOTING REQUIREMENT. Notwithstanding Section 5.3 of these Bylaws, the adoption, amendment or repeal of the Bylaws (or any provision of the Bylaws) requires the - 7 - As adopted __________ affirmative vote of a majority of the number of directors in office immediately before the beginning of the meeting at which the adoption, amendment or repeal is voted upon. 9.4 AMENDMENT OR REPEAL OF QUORUM AND VOTING REQUIREMENTS. Action by the Board of Directors to adopt a bylaw that changes the quorum or voting requirement for action by the Board of Directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater. - 8 - EX-3.22 24 y92210a1exv3w22.txt BYLAWS EXHIBIT 3.22 BYLAWS OF DEETER FOUNDRY, INC. ARTICLE I. OFFICES Section 1. The principal office of the Corporation in the State of Nebraska shall be located in the City of Lincoln, County of Lancaster. The Corporation may have such other offices, either within or without the State of Nebraska, as the Board of Directors may designate or as the business of the Corporation may require from time to time. Section 2. The registered office of the Corporation may be, but need not be, identical with the principal office in the State of Nebraska, and the address of the registered office may be changed from time to time by the Board of Directors. ARTICLE II. SHAREHOLDERS Section 1. Annual Meeting. The annual meeting of the shareholders shall be held in the month of April at 4:00 o'clock p.m., for the purpose of electing Directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Nebraska, such meeting shall be held on the next succeeding business day. If the election of Directors shall not be held on the day designated herein for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be. Section 2. Special Meeting. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the President or by the Board of Directors, and shall be called by the President at the request of the holders of not less than one-tenth of all the outstanding shares of the corporation entitled to vote at the meeting. Section 3. Place of Meeting. The Board of Directors may designate any place, either within or without the State of Nebraska, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or without the State of Nebraska, as the place for holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the registered office of the corporation in the State of Nebraska. the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. ARTICLE III. BOARD OF DIRECTORS Section 1. General Powers. The business and affairs of the Corporation shall be managed by its Board of Directors. Section 2. Number, Tenure and Qualifications. The number of Directors of the ration shall be not less than five nor more than twelve, and the initial Board of Directors shall consist of eight Directors selected by the shareholders at their first meeting and Directors shall serve for a term of one year and until their successors are elected and qualified, and need not be shareholders. Section 3. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Nebraska, for the holding of additional regular meetings without other notice than such resolution. Section 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President or any two Directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Nebraska, as the place for holding any special meeting or the Board of Directors called by them. Section 5. Notice of Special Meetings. Notice of any special meeting shall be given at least two days previous thereto by written notice delivered personally or mailed to each Director at his business address, or by telegram. If mailed. such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Appearance of any Director at a meeting shall constitute a waiver of notice of such meeting to such Director, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 6. Quorum. A majority of the number of Directors fixed by Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice. Section 7. Manner of Acting. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Section 8. Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors. A Director elected to fill a vacancy shall be elected for the unexpired term 2 of his or her predecessor in office. Any directorship to be filled by reason of an increase in the number of Directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. Section 9. Compensation. By resolution of the Board of Directors the Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as Director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. ARTICLE IV. OFFICERS Section 1. Number. The officers of the Corporation shall be a President, one or more Vice Presidents {the number thereof to be determined by the Board of Directors), a Secretary, and a Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person. Section 2. Election and Term of Office. The officers of the Corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Section 3. Removal. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. A vacancy in an office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. Section 5. The President. The President shall be the principal executive officer Corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Corporation. The President shall, when present, preside at all meetings of the shareholders and of the Board of Directors. He or she may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties 3 incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. Section 6. The Vice President. In the absence of the President or in the event of his or her death, inability or refusal to act, the Executive Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. Section 7. The Secretary. The Secretary shall: (a) keep the minutes of the shareholders' and of the Board of Directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized; (d) keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholders; (e) sign with the President, or a Vice President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the Corporation; and (g) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. Section 8. The Assistant Secretary. In the absence of the Secretary, the Assistant Secretary shall perform the duties of the Secretary and when so acting shall have the powers of and be subject to all of the restrictions placed upon the Secretary, and shall perform such other duties as from time to time may be assigned to him or her by the Secretary or by the President or the Board of Directors. Section 9. The Treasurer. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his or her duties in such sum and with such surety or sureties as the Board of Directors shall determine. He or she shall: (a) have charge and custody of and be responsible for all funds and securities of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with provisions of Article V of these Bylaws; and (b) in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. Section 10. The Assistant Treasurer. In the absence of the Treasurer, the Assistant Treasurer shall perform the duties of the Treasurer and when so acting shall have the powers of and be subject to all of the restrictions placed upon the Treasurer, and shall perform such other duties as from time to time may be assigned to him or her by the Treasurer or by the President or the Board of Directors. 4 Section 11. Salaries. The salaries of the officers shall be fixed from time to time the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the Corporation. ARTICLE V. CONTRACTS, LOANS. CHECKS AND DEPOSITS Section 1. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 2. Loans. No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. Section 3. Checks, Drafts, and Other Orders for the Payment of Money. All checks, drafts or other orders for the payment of money, notes or other evidence of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 4. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select. ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER Section 1. Certificates for Shares. Certificates representing shares of the Corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be represented on the stock transfer books of the Corporation. All certificates surrendered to the Corporation for transfer shall be cancelled, except that in case of a lost, destroyed or the mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors may prescribe. Section 2. Transfer of Shares. Transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes. 5 ARTICLE VII. INDEMNIFICATION Section 1. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceedings, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Corporation, by reason of the fact that he or she is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust , or other enterprise, against expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not be opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Section 2. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee. or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. Section 3. To the extent that a director. officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 hereof, or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection therewith. Section 4. Any indemnification under Sections 1 and 2 hereof, unless ordered by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in sections 1 and 2 hereof. Such determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to suit or proceeding, or if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or by the shareholders, as the case may be. 6 Section 5. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in Section 4 hereof upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the Corporation as authorized in this section. Section 6. No provision for the Corporation to indemnify a director who is made a party to a proceeding, whether contained in the Articles of Incorporation, the Bylaws, a resolution of shareholders or directors, an agreement, or otherwise, shall be valid unless consistent with this Bylaw. Nothing contained in this Bylaw shall limit the Corporation's ability to reimburse expenses incurred by a director in connection with his or her appearance as a witness in a proceeding at a time when he or she has not been made a named defendant or respondent in the proceeding. Section 7. For purposes of this Bylaw, (i) the Corporation shall be deemed to have requested a director to serve an employee benefit plan when the performance by him or her of his or her duties to the corporation also imposes duties on, or otherwise involves services by him or her to the plan or participants or beneficiaries of the plan, (ii) excise taxes assessed on a director with respect to an employee benefit plan pursuant to applicable law shall be deemed fines, and (iii) action taken or omitted by a director with respect to an employee benefit plan in the performance of his or her duties for a purpose reasonably believed by him or her to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation. Section 8. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as an officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of this section. Section 9. Any indemnification of a director in accordance with this Bylaw, including any payment or reimbursement of expenses, shall be reported in writing to the shareholders with the notice of the next shareholders' meeting or prior to such meeting. ARTICLE VIII. FISCAL YEAR The fiscal year of the Corporation shall be January 1 to December 31. 7 ARTICLE IX. DIVIDENDS The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles of Incorporation. ARTICLE X. SEAL The Board of Directors may provide a corporate seal and shall have inscribed thereon the name of the Corporation and the state or incorporation and the words "Corporate Seal". ARTICLE XI. WAIVER OF NOTICE Whenever any notice is required to be given to any shareholder or Director or the Corporation under the provisions of these Bylaws or under the provisions of the Articles of Incorporation or under the provisions of The Nebraska Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XII. AMENDMENTS These Bylaws may be altered, amended or repealed and new bylaws may be adopted by the Board of Directors at any regular or special meeting of the Board of Directors; provided, however, that these Bylaws shall. not be amended without the unanimous consent of the Directors unless ten (10) days' written notice of any meeting called for the purpose of amending the Bylaws is delivered to each Director. 8 Approved and adopted by the Directors of the Corporation as of the 26th day of August, 1994. /s/ Douglas E. Deeter ------------------------------------- Douglas E. Deeter, Director /s/ Leslie P. Deeter ------------------------------------- Leslie P. Deeter, Director /s/ Eugene A. Deeter ------------------------------------- Eugene A. Deeter, Director /s/ Jacqueline Deeter ------------------------------------- Jacqueline Deeter, Director /s/ Jane Pohlman ------------------------------------- Jane Pohlman, Director /s/ Carol Campbell ------------------------------------- Carol Campbell, Director /s/ Jeffrey S. Jenkins ------------------------------------- Jeffrey S. Jenkins, Director /s/ L. Bruce Wright ------------------------------------- L. Bruce Wright, Director 9 EX-3.23 25 y92210a1exv3w23.txt BYLAWS Exhibit 3.23 BY-LAWS OF Gregg Industries, inc. A California Corporation ARTICLES I OFFICES Section 1.01. Principal Offices. The board of directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside this state, and the corporation has one or more business offices in this state, the board of directors shall fix and designate a principal business office in the State of California. Section 1.02. other Offices. The board of directors may at any time establish branch or subordinate offices at any place or places. ARTICLE II MEETINGS OF SHAREHOLDERS Section 2.01. Place of Meetings. Meetings of shareholders shall be held at any place within or outside the State of California designated by the board of directors. In the absence of any such designation, shareholders' meetings shall be held at the principal executive office of the corporation. Section 2.02. Annual Meeting. The annual meeting of shareholders shall be held each year on a date and at a time designated by the board of directors. At each annual meeting directors shall be elected, and any other proper business within the power of the shareholders may be transacted. Section 2.03. Special Meeting. A special meeting of the shareholders may be called at any time by the board of directors, or by the chairman of the board, or by the president or vice president, or by one or more shareholders holding shares in the aggregate entitled to cast not less than ten percent (10%) of the votes at that meeting. If a special meeting is called by any person or persons other than the board of directors, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the chairman of the board, the president, and any vice president, or the secretary of the corporation. The officer receiving the request shall cause notice to be promptly given to the shareholders entitled to vote, in accordance with the provisions of Sections 2.04 and 2.05 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.03 shall be construed as limiting, fixing, or affecting the time when a meeting of shareholders called by action of the board of directors may be held. Section 2.04. Notice of Shareholders' Meetings. All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 2.05 of this Article II not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the board of directors, at the time of giving the notice, intends to present for action by the shareholders. The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees whom, at the time of the notice, management intends to present for election. If action is proposed to be taken at any meeting for approval of (i) a contract or transaction in which a director has a direct or indirect financial interest under section 310 of the Corporations Code of California, (ii) an amendment of the articles of incorporation under section 902 of that code, (iii) a reorganization of the corporation, under section 1201 of that code, (iv) a voluntary dissolution of the corporation under section 1900 of that code, or (v) a distribution in dissolution other than in accordance with that code, the notice shall also state the general nature of that proposal. Section 2.05. Manner of Giving Notice; Affidavit of Notice. Notice of any shareholders' meeting shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address of that shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice. If no such address appears on the corporation's books or has been so given, notice shall be deemed to have been given if sent to that shareholder by first-class mail or telegraphic or other written communication to the corporation's principal executive office, or if published at least once in a newspaper of general circulation in the county where that office is located. Notice shall be deemed to have been given at the time when delivered personally, deposited in the mail, delivered to a common carrier for transmission to the recipient, actually transmitted by electronic means to the recipient by the person giving the notice, or sent by other means of written communication. If any notice addressed to a shareholder at the address of that shareholder appearing on the books of the corporation is returned to the corporation by the United State Postal Service as unable to deliver the notice to the shareholder at the address, all future notices or reports shall be deemed to have been duly given without further mailing if these shall be available to the shareholder on written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice. An affidavit of the mailing or other means of giving any notice of any shareholders' meeting may be executed by the secretary, assistant secretary, or any transfer agent of the corporation giving the notice, and filed and maintained in the minute book of the corporation. Section 2.06. Quorum. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. Section 2.07. Adjourned Meeting; Notice. Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except as provided in Section 2.06 of this Article II. When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place are announced at a meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than forty-five (45) days from the date set for the original meeting, in which case the board of directors shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Sections 2.04 and 2.05 of this Article II. At any adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. Section 2.08. Voting. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions of Section 2.11 of this Article II, subject to the provisions of Sections 702 to 704, inclusive, of the Corporations Code of California (relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership). The shareholders' vote may be by voice vote or by ballot; provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun. On any matter other than the election of directors, any shareholder may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares which the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is present (or if a quorum had been present earlier at the meeting but some shareholders had withdrawn) the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitutes a majority of the number of shares required for a quorum, shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by California General Corporation Law or by the articles of incorporation. At a shareholders' meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of votes which such shareholder normally is entitled to cast), unless the candidates' names have been placed in nomination before commencement of the voting and a shareholder has given notice before commencement of the voting of the shareholder's intention to cumulate votes. If any shareholder has given such a notice, then every shareholder entitled to vote may cumulate votes for candidates in nomination and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled, or distribute the shareholder's votes on the same principle among any or all of the highest number of votes, up to the number of directors to be elected, shall be elected. Section 2.09. Waiver of Notice or Consent by Absent Shareholders. The transactions of any meeting of shareholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, who was not present in person or by proxy, signs a written waiver of notice or a consent to a holding of the meeting, or an approval of the minutes. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matter specified in the second paragraph of Section 2.04 of this Article II, the waiver of notice or consent shall state the general nature of the proposal. All such waivers, consents, or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance by a person at a meeting shall also constitute a waiver of notice of that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice of the meeting, but not so included, if that objection is expressly made at the meeting. Section 2.10. Shareholder Action by Written Consent Without a Meeting. Any action which may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted. Directors may be elected by written consent without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that a vacancy in the board (other than a vacancy created by removal of a director) not filled by the board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote. All such consents shall be filed with the secretary of the corporation and shall be maintained in the corporate records. Any shareholder giving a written consent, or the shareholder's proxy holder, or a transferee of the shares or a personal representative of the shareholder or their respective proxy holders, may revoke the consent by a writing received by the secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the secretary. If the consents of all shareholders entitled to vote have not been solicited in writing, and if the unanimous written consent of all such shareholders shall not have been received, the secretary shall give prompt notice of the corporate action approved by the shareholders without a meeting. This notice shall be given in the manner specified in Section 2.05 of this Article II. In the case of approval of (i) contracts or transactions in which a director has a direct or indirect financial interest under section 310 of the Corporations Code of California, (ii) indemnification of agents of the corporation, under section 317 of the code, (iii) a reorganization of the corporation, under section 1201 of that code, or (iv) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, under section 2007 of that code, notice of such approval shall be given at least ten (10) days before the consummation of any action authorized by that approval. Section 2.11. Record Date for Shareholder Notice of Meeting, Voting, and Giving Consent. a. For purposes of determining the shareholders entitled to receive notice of and vote at a shareholders' meeting or give written consent to corporate action without a meeting, the board may fix in advance a record date that is not more than 60 or less than 10 days before the date of a shareholders' meeting, or not more than 60 days before any other action. b. If no record date is fixed: (1) The record date for determining shareholders entitled to receive notice of and vote at a shareholders' meeting shall be the business day next preceding the day on which notice is given, or if notice is waived as provided in Section 2.09 of this Article II, the business day next preceding the day on which the meeting is held. (2) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, if no prior action has been taken by the board, shall be the day on which the first written consent is given. (3) The record date for determining shareholders for any other purpose shall be as set forth in Section 8.1 of Article VIII of these bylaws. c. A determination of shareholders of record entitled to receive notice of and vote at a shareholders' meeting shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting. However, the board shall fix a new record date if the adjournment is to a date more than 45 days after the date set for the original meeting. d. Only shareholders of record on the corporation's books at the close of business on the record date shall be entitled to any of the notice and voting rights listed in subsection (a) of this section, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise required by law. Section 2.12. Proxies. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation. A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder's attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted; provided however, that no proxy shall be valid after the expiration of eleven (11) months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) of the Corporations Code of California. Section 2.13. Inspectors of Election. Before any meeting of shareholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or "Its adjournment. If no inspectors of election are so appointed, the chairman, of the meeting may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholder's proxy shall, appoint a person to fill that vacancy. These inspectors shall: (a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; (b) Receive votes, ballots, or consents; (c) Hear and determine all challenges and questions in any way arising in connection with the right to vote; (d) Count and tabulate all votes or consents; (e) Determine when the polls shall close; (f) Determine the result; and (g) Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders. ARTICLES III DIRECTORS Section 3.01. Powers. Subject to the provisions of the California General Corporation law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. Without prejudice to these general powers, and subject to the same limitations, the board of directors shall have the power to: (a) Select and remove all officers, agents, and employees of the corporation; prescribe any powers and duties for them that are consistent with law, with the articles of incorporation, and with these bylaws; fix their compensation; and require from them security for faithful service. (b) Change the principal executive office or the principal business office in the State of California from one location to another; (c) Adopt, make, and use a corporate seal; prescribe the forms of certificates of stock; and alter the form of the seal and certificates. (d) Authorize the issuance of shares of stock of the corporation on any lawful terms, in consideration of money paid, labor done, services actually rendered, debts or securities cancelled, or tangible or intangible property actually received. (e) Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed and delivered for the corporation's purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation, and other evidences of debt and securities. Section 3.02. Number and Qualification of Directors. The authorized number of directors shall be 5 until changed by a duly adopted amendment to the articles of incorporation or by an amendment to this bylaw adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote. Section 3.03. Election and Term of Office of Directors. Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires. Section 3.04. Vacancies. A vacancy or vacancies in the board of directors shall be deemed to exist in the event of the death, resignation, or removal of any director, or if the board of directors by resolution declares vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, or if the authorized number of directors is increased, or if the shareholders fail at any meeting of shareholders at which any director or directors are elected to elect the number of directors to be voted for at that meeting. Any director may resign effective on giving written notice to the chairman of the board, the president, the secretary, or the board of directors, unless the notice specifies a later time for that resignation to become effective. If the resignation of a director is effective at a future time, the board of directors may elect a successor to take office when the resignation becomes effective. Except for a vacancy caused by the removal of a director, vacancies on the board may be filled by a majority of the directors then in office, whether or not they constitute a quorum, or by a sole remaining director. A vacancy on the board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created when the board declares the office of a director vacant as provided in this section of the bylaws may be filled by the board of directors. The shareholders may elect a director at any time to fill a vacancy not filled by the board of directors. Each director so elected shall hold office until the next annual meeting of the shareholders and until a successor has been elected and qualified. Section 3.05. Place of Meetings and Meetings by Telephone. Regular meetings of the board of directors may be held at any place within or outside of the State of California that has been designated from time to time by the board. In the absence of such a designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or outside the State of California that has been designated in the notice of the meeting or, if not stated in the notice or if there is no notice, at the principal executive office of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, as long as all directors participating in the meeting can hear one another, and all such directors shall be deemed to be present in person at the meeting. Section 3.06. Annual Meeting. Immediately following each annual meeting of shareholders, the board of directors shall hold a regular meeting at the place that the annual meeting of shareholders was held or at any other place that shall have been designated by the board of directors, for the purpose of organization, any desired election of officers, and the transaction of other business. Notice of this meeting shall not be required. Section 3.07. Other Regular Meetings. Other regular meetings of the board of directors shall be held without call at such time as shall from time to time be fixed by the board of directors. Such regular meetings may be held without notice. Section 3.08. Special Meetings. Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board or the president, any vice president, the secretary, or any two directors. Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at that director's address as it is shown on the records of the corporation. In case the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of meeting. In case the notice is delivered personally, or by telephone or to the telegraph company at least forty-eight (48) hours before the time of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director whom the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting, nor need it specify the place if the meeting is to be held at the principal executive office of the corporation. Section 3.09. Quorum. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in section 3.11 of this Article III. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the board of directors, subject to the provisions of section 310 of the Corporations Code of California (as to approval of contracts or transactions in which a director has a direct, or indirect to material financial interest), section 311 of that code (as to appointment of committees), and section 317(e) of that code (as to indemnification of directors). A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting. Section 3.10. Waiver of Notice. The transactions of any meeting of the board of directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum is present and if each director (a) has received notice of the meeting, (b) attends the meeting without protesting before or at the beginning of the meeting, the lack of notice to such director, or (c) before or after the meeting signs a waiver of notice, a consent to holding the meeting, or an approval of the minutes of the meeting. Any such waiver of notice or consent need not specify the purpose of the meeting. All such waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 3.11. Adjournment. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place. Section 3.12. Notice of Adjournment. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than twentyfour hours, in which case notice of the time and place shall be given before the time of the adjourned meeting, in the manner specified in Section 2.08 of this Article III, to the directors who were not present at the time of the adjournment. Section 3.13. Action Without Meeting. Any action required or permitted to be taken by the board of directors may be taken without a meeting, if all members of the board shall individually or collectively consent in writing to that action. Such action by written consent shall have the same force and effect as a unanimous vote of the board of directors. Such written consent or consents shall be filed with the minutes of the proceedings of the board. Section 3.14. Fees and Compensation of Directors. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement of expenses, as may be fixed or determined by resolution of the board of directors. This Section 3.14 shall not be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for those services. ARTICLE IV COMMITTEES Section 4.01. Committees. The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of two or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternate members of any committee, who may replace any absent member at any meeting of the committee. Any committee, to the extent provided in the resolution of the board, shall have all the authority of the board, except with respect to: (a) The approval of any action which, under the General Corporation Law of California, also requires shareholders' approval or approval of the outstanding shares; (b) The filling of vacancies on the board of directors or in any committee; (c) The fixing of compensation of the directors for serving on the board or on any committee;. (d) The amendment or repeal of bylaws or the adoption of new bylaws; (e) The amendment or repeal of any resolution of the board of directors which by its express terms is not so amendable or repealable; (f) A distribution to the shareholders of the corporation, except at a rate or in a periodic amount or within a price range determined by the board of directors; or (g) The appointment of any other committees of the board of directors or the members of these committees. Section 4.02. Meetings and Action of Committees. Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Sections 3.05 (place of meetings), 3.07 (regular meetings), 3.08 (special meetings and notice), 3.09 (quorum), 3.10 (waiver of notice), 3.11 (adjournment), 3.12 (notice of adjournment), and 3.13 (action without meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members, except that the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee; special meetings of committees may also be called by resolution of the board or directors; and notice of special meetings or committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. the board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws. ARTICLE V OFFICERS Section 5.01. Officers. The officers of the corporation shall be a president, a secretary, and a chief financial officer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 5.03 of this Article V. Any number of offices may be held by the same person. Section 5.02. Election of Officers. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 5.03 or Section 5.05 of this Article V, shall be chosen by the board of directors, and each shall serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment. Section 5.03. Subordinate Officers. The board of directors may appoint, and may empower the president to appoint, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the board of directors may from time to time determine. Section 5.04. Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the board of directors, at any regular or special meeting of the board, or, except in case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors. Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. Section 5.05. Vacancies in Offices. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to that office. Section 5.06. Chairman of the Board. The chairman of the board, if such an officer is elected, shall, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the board of directors or prescribed by the bylaws. If there is no president, the chairman of the board shall in addition be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 5.07 of .this Article V. Section 5.07. President. Subject to such powers, if any, as may be given by the bylaws or board of directors to the chairman of the board, if there is such an officer, the president shall be the general manager and chief executive officer of the corporation and shall, subject to the control of the board of directors, have general supervision, direction, and control of the business and the officers of the corporation. He shall preside at all meetings of the shareholders and, in the absence of the chairman of the board, or, if there is none, at all meetings of the board of directors. He shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the board of directors and bylaws. Section 5.08. Vice Presidents. In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president, and when so acting shall have all of the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors or the bylaws, and the president, or the chairman of the board if there is no president. Section 5.09. Secretary. The secretary shall keep or cause to be kept, at the principal executive office or such other place as the board of directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice given, the names of those present at directors' meetings or committee meetings, the number of shares present or represented at shareholders' meetings, and the proceedings. The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporation's transfer agent or registrar, as determined by resolution of the board of directors, a record of shareholders, or a duplicate record of shareholders, showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The secretary or assistant secretary, or if they are absent or unable to act or refuse to act, any other officer of the corporation, shall give, or cause to be given, notice of all meetings of the shareholders, of the board of directors, and of committees of the board of directors, required by the bylaws or by law to be given. The secretary shall keep the seal of the corporation if one is adopted, in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the board of directors or by the bylaws. Section 5.10. Chief Financial Officer. The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director. The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositaries as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the board of directors or the bylaws. ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS Section 6.01. Agents, Proceedings, and Expenses. For the purposes of this Article, "agent" means any person who is or was a director, officer, employee, or other agent of this corporation, or is or was serving at the request of this corporation as a director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of this corporation or of another enterprise at the request of such predecessor corporation; "proceeding" means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes, without limitation, attorneys' fees and any expenses of establishing a right to indemnification under Section 6.04 or Section 6.05(c) of this Article. Section 6.02. Actions Other Than by the Corporation. This corporation shall have power to indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding (other than an action by or in the right of this corporation to procure a judgment in its favor) by reason of the fact that such person is or was an agent of this corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding if that person acted in good faith and in a manner that person reasonably believed to be in the best interests of this corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of that person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner that the person reasonably believed to be in the best interests of this corporation or that the person had reasonable cause to believe that the person's conduct was unlawful. Section 6.03. Actions by the Corporation. This corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action by or in the right of this corporation to procure a judgment in its favor by reason of the fact that that person is or was an agent of this corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of that action if that person acted in good faith, in a manner that person believed to be in the best interests of this corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like situation would use under similar circumstances. No indemnification shall be made under this Section 6.03. (a) With respect to any claim, issue, or matter as to which that person have been adjudged to be liable to this corporation in the performance of that person's duty to this corporation, unless and only to the extent that the court in which that proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, that person is fairly and reasonably entitled to indemnify for the expenses which the court shall determine. (b) Of amounts paid in settling or otherwise disposing of a threatened or pending action, with or without court approval; or (c) Of expenses incurred in defending a threatened or pending action that is settled or otherwise disposed of without court approval. Section 6.04. Successful Defense by Agent. To the extent that an agent of this corporation has been successful on the merits in defense of any proceeding referred to in Sections 6.02 or 6.03 of this Article, or in defense of any claim, issue, or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith. Section 6.05. Required Approval. Except as provided in Section 6.04 of this Article, any indemnification under this Article shall be made by this corporation only if authorized in the specific case on a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Sections 6.02 or 6.03 of this Article by: (a) A majority vote of a quorum consisting of directors who are not parties to the proceeding; (b) Approval by the affirmative vote of a majority of the shares of this corporation entitled to vote represented at a duly held meeting at which a quorum is present or by the written consent of holders of a majority of the outstanding shares entitled to vote. For this purpose, the shares owned by the person to be indemnified shall not be considered outstanding or entitled to vote thereon; or (c) The court in which the proceeding is or was pending, on application made by this corporation or the agent or the attorney or other person rendering services in connection with whether or not such application by the agent, attorney, or other person is opposed by this corporation. Section 6.06. Advance of Expenses. Expenses incurred in defending any proceeding may be advanced by this corporation before the final disposition of the proceeding on receipt of an undertaking by or on behalf of the agent to repay the amount of the advance unless it shall be determined ultimately that the agent is entitled to be indemnified as authorized in this Article. Section 6.07. Other Contractual Rights. Nothing contained in this Article shall affect any right to indemnification to which persons other than directors and officers of this corporation or any subsidiary hereof may be entitled by contract or otherwise. Section 6.08. Limitations. No indemnification or advance shall be made under this Article, except as provided in Section 6.04 or Section 6.05(c), in any circumstance where it appears: (a) That it would be inconsistent with a provision of the articles, a resolution of the shareholders, or an agreement in effect at the time, of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement. Section 6.09. Insurance. Upon and in the event of a determination by the board of directors of this corporation to purchase such insurance, this corporation shall purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such whether or not this corporation would have the power to indemnify the agent against that liability under the provisions of this section. Section 6.10. Fiduciaries of Corporate Employee Benefit Plan. This article does not apply to any proceeding against any trustee, investment manager, or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person may also be an agent of the corporation as defined in Section 6.01 of this Article. This corporation shall have the power to indemnify, and to purchase and maintain insurance on behalf of, any such trustee, investment manager, or other fiduciary of any pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plan, trust, and other provision for any or all of the directors, officers, and employees of the corporation or any of its subsidiary or affiliated corporations, and to indemnify and purchase and maintain insurance on behalf of any fiduciary of such plans, trusts, or provisions. Nothing contained in this Article shall limit any right to indemnification to which such a trustee, investment manager, or other fiduciary may be entitled by contract or otherwise, which shall be enforceable to the extent permitted by applicable law other than this Article. ARTICLE VII RECORDS AND REPORTS Section 7.01. Maintenance and Inspection of Record of Shareholders. The corporation shall keep at its principal executive office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the board of directors, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each shareholder. A shareholder or shareholders of the corporation holding at least five percent (5%) in the aggregate of the outstanding voting shares of the corporation may (i) inspect and copy the records of shareholders' names and addresses and share holdings during usual business hours on five days prior written demand on the corporation, and (ii) obtain from the transfer agent of the corporation, on written demand and on the tender of such transfer agent's usual charges for such list, a list of the shareholders' names and addresses, who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which that list has been compiled or as of a date specified by the shareholder after the date of demand. This list shall be made available to any such shareholder or shareholders by the transfer agent on or before the later of five (5) days after the demand is received or the date specified in the demand as the date as of which the list is to be compiled. The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or as the holder of a voting trust certificate. Any inspection and copying under this Section 7.01 may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand. Section 7.02. Maintenance and Inspection of Bylaws. The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the bylaws as amended to date. Section 7.03. Maintenance and Inspection of Other Corporate Records. The accounting books and records and minutes of proceedings of the shareholders and the board of directors and any committee or committees of the board of directors shall be kept at such place or places designated by the board of directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept in written form and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or as the holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary corporation of the corporation. Section 7.04. Inspection by Directors. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents. Section 7.05. Annual Report to Shareholders. Inasmuch as, and for as long as, there are fewer than 100 shareholders, the requirement of an annual report to shareholders referred to in section 1501 of the California Corporations Code is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the board of directors from issuing annual or other periodic reports to the shareholders, as the board considers appropriate. Section 7.06. Financial Statements. A copy of any annual financial statement and income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation for twelve (12) months and each such statement shall be exhibited at all reasonable times to any shareholder demanding an examination of any such statement or a copy shall be mailed to any such shareholder. If a shareholder or shareholders holding at least five percent (5%) of the outstanding shares of any class of stock of the corporation make a written request to the corporation for an income statement of the corporation for the three-month, six-month or nine-month period of the current fiscal year ended more than thirty (30) days before the date of the request, and a balance sheet of the corporation as of the end of that period, the chief financial officer shall cause that statement to be prepared, if not already prepared, and shall deliver personally or mail that statement or statements to the person making the request within thirty (30)days after the receipt of the request. If the corporation has not sent the shareholders its annual report for the last fiscal year, this report shall likewise be delivered or mailed to the shareholder or shareholders within thirty (30) days after the request. The corporation shall also, on the written request of any shareholder, mail to the shareholder a copy of the last annual, semiannual, or quarterly income statement which it has prepared, and a balance sheet as of the end of that period. The quarterly income statements and balance sheets referred to in this section shall be accompanied by the report, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that the financial statements were prepared without audit from the books and records of the corporation. Section 7.07. Annual Statement of General Information. The corporation shall, each year during the calendar month in which its articles of incorporation originally were filed with the California Secretary of State, or during the preceding five (5) calendar months, file with the Secretary of State, on the prescribed form, a statement setting forth the authorized number of directors, the names and complete business or residence addresses of all incumbent directors, the names and complete business or residence addresses of the chief executive officer, secretary, and chief financial officer, the street address of its principal executive office or principal business office in this state, and the general type of business constituting the principal business activity of the corporation, together with a designation of the agent of the corporation for the purpose of service of process, all in compliance with section 1502 of the Corporations Code of California. ARTICLE VIII GENERAL CORPORATE MATTERS Section 8.01. Record Date for Purposes Other Than Notice and Voting. For purposes of determining the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action (other than action by shareholders by written consent without a meeting), the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before any such action, and in that case only shareholders of record on the date so fixed are entitled to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date so fixed, except as otherwise provided in the California General Corporations Law. If the board of directors does not so fix a record date, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the board adopts the applicable resolution or the sixtieth (60th) day before the date of that action, whichever is later. Section 8.02. Checks, Drafts, Evidences of Indebtedness. All checks, drafts, or other orders for payment of money, notes, or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the board of directors. Section 8.03. Corporate Contracts and Instruments; How Executed. The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and this authority may be general or confined to specific instances; and, unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer, agent, or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. Section 8.04. Certificates for Shares. A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when any of these shares are fully paid, and the board of directors may authorize the issuance of certificates or shares as partly paid provided that these certificates shall state the amount of the consideration to be paid for them and the amount paid. All certificates shall be signed in the name of the corporation by the chairman of the board or vice chairman of the board or the president or vice president and by the chief financial officer or any assistant treasurer or the secretary or any assistant secretary, certifying the number of shares and the class or series of shares owned by the shareholder. None of the signatures on the certificate may be facsimile. In case any officer, transfer agent, or registrar who has signed a certificate shall have ceased to be that officer, transfer agent, or registrar before that certificate is issued, it may be issued by the corporation with the same effect as if that person were an officer, transfer agent, or registrar at the date of issue. Section 8.05. Lost Certificates. Except as provided in this Section 8.05, no new certificates for shares shall be issued to replace an old certificate unless the latter is surrendered to the corporation and cancelled at the same time. The board of directors may, in case any share certificate or certificate for any other security is lost, stolen, or destroyed, authorize the issuance of a replacement certificate on such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate security sufficient to protect the corporation against any claim that may be made against it, including any expense or liability, on account of the alleged loss, theft, or destruction of the certificate or the issuance of the replacement certificate. Section 8.06. Shares of Other Corporations; How Voted. Shares of other corporations standing in the name of this corporation shall be voted by one of the following persons, listed in order of preference: (1) Chairman of the board, or person designated by the chairman of the board; (2) President, or person designated by the president; (3) First vice president, or person designated by the first vice president; (4) Other person designated by the board of directors. The authority to vote shares granted by this section includes the authority to execute a proxy in the name of the corporation for purposes of voting the shares. Section 8.07. Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the California General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person. Section 8.08. Reimbursement. If all or part of the salary or other compensation paid to any officer or director of the corporation for travel or entertainment expense, is finally determined not to be allowable as a federal or state income tax deduction, the officer or director shall repay to the corporation the amount disallowed. The board of directors shall enforce repayment of each such amount disallowed. ARTICLE IX AMENDMENTS Section 9.01. Amendment by Shareholders. New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote, except as otherwise provided by law, these bylaws, or the articles of incorporation provided, however, that if the articles of incorporation of the corporation set forth the number of authorized directors of the corporation, the authorized number of directors may be changed only by an amendment of the articles of incorporation. Section 9.02. Amendment by Directors. Subject to the rights of the shareholders as provided in Section 9.01 of this Article IX, bylaws, other than a bylaw or an amendment of a bylaw changing the authorized number of directors, may be adopted, amended, or replaced by the board of directors. CERTIFICATE OF SECRETARY I, the undersigned, do hereby certify: 1. That I am the duly elected and acting secretary of Gregg Industries, inc. 2. That the foregoing bylaws comprising 25 pages constitute the new bylaws of said corporation as duly adopted by the written consent of the directors thereof. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said corporation this 21 day of December, 1990. -s- Tom Hough -------------------- Tom Hough, Secretary EXHIBIT C Resolutions WHEREAS, in 1998, the Board of Directors concluded that it would be in the best interests of this Corporation and its shareholders to investigate the possibility of selling this Corporation; WHEREAS, the Board of Directors engaged the investment banking firm of Barrington Associates to assist this Corporation in finding a buyer; WHEREAS, with the efforts of Barrington Associates, this Corporation obtained a proposal from Neenah Foundry Company ("Neenah") to acquire this Corporation and Environmental Sand Reclamation and Coating, Inc. ("ESR&C"), which is owned by Christine L. Gregg, on the general terms and subject to the general conditions set forth in a non-binding letter of intent from Neenah dated July 16,1999; WHEREAS, after consulting with Barrington Associates and its legal and other advisors as to this proposal, the Board of Directors concluded that this proposal was very favorable to this Corporation and its shareholders and accordingly authorized its officers to negotiate the terms of a definitive agreement for the sale of this Corporation to Neenah on the general terms of Neenah's proposal; WHEREAS, in view of the material interest of Ms. Gregg and, as described below, Mr. Gregg and Mr. Fitzpatrick, in these transactions, and the impracticability of finding non-interested persons who would be willing to serve on the Board of Directors, the Board of Directors determined that in light of its fiduciary responsibility to its shareholders and especially to the Gregg Industries Inc. Employee Stock Ownership Plan (the "ESOP"), the Board of Directors should advise the ESOP Trust Committee to engage a financial valuation firm to value this Corporation and determine whether the price to be paid to the ESOP for its equity interest in this Corporation would be fair to the ESOP from a financial point of view; WHEREAS, The Financial Valuation Group, which was engaged by the ESOP Trust Committee to perform the valuation, has delivered to the ESOP Committee, with a copy to the Board of Directors, its opinion that the price to be paid to the ESOP for its equity interest in this Corporation is fair to the ESOP from a financial point of view; WHEREAS, there has been presented to the Board of Directors a Stock Purchase Agreement by and among this Corporation, its shareholders and Neenah, a copy of which is attached hereto as Exhibit A (including the Exhibits and Schedules thereto, all of which are included in Exhibit A, the "Stock Purchase Agreement"); WHEREAS, the Stock Purchase Agreement provides for, among other things, (i) Neenah's purchase of all of the outstanding capital stock of this Corporation from its shareholders for the sum of $17,500,00 less "Funded Debt" and certain other amounts and subject to a working capital adjustment, as set forth in Sections 2.3 and 2.4 of the Stock Purchase Agreement, (ii) Neenah's agreement to make certain additional payments to this Corporation's shareholders, if this Corporation's EBITDA for 1999 and 2000 exceeds certain targeted amounts, as set forth in Section 2.5 of the Stock Purchase Agreement, and (iii) Neenah's payment to Robert C. Gregg and Raymond M. Fitzpatrick $2 million and $1 million, respectively, in consideration of their agreement to refrain from, among things, engaging in the manufacture of cast iron products and machine cast iron products for a period of three and a half years, as set forth in Section 5.6 of the Stock Purchase Agreement; WHEREAS, the Board of Directors is aware that Neenah has presented to the Board of Directors of ESR&C an Asset Purchase Agreement by which ESR&C would sell substantially all of its assets to Neenah in consideration for Neenah's assumption of certain liabilities of ESR&C and the payment to ESR&C of $2 million; and WHEREAS, after a thorough consideration of the Stock Purchase Agreement and the related transactions, the Board of Directors deems it to be in the best interests of this Corporation and all of its shareholders to enter into the Stock Purchase Agreement; NOW, THEREFORE, BE IT HEREBY RESOLVED, that the terms and provisions of the Stock Purchase Agreement and all other agreements and documents to be executed by this Corporation pursuant to the Stock Purchase Agreement (collectively such other agreements and documents, together with the Stock Purchase Agreement, referred to as the "Transaction Documents" and individually a "Transaction Document") be and they hereby are approved; RESOLVED FURTHER, that this Corporation be and hereby is authorized, empowered and directed to enter into each Transaction Document, and any agreements, documents and instruments required to be delivered by this Corporation pursuant thereto, to perform its obligations thereunder, and to consummate the transactions contemplated thereby; RESOLVED FURTHER, that each of the officers of this Corporation be and hereby is authorized, empowered and directed to execute each Transaction Document in the name of and on behalf of this Corporation, and is authorized to make such changes therein as the officers shall approve (which approval shall be conclusively evidenced by the execution of such Transaction Document by any such person), and to take such other action as may be necessary and advisable in order to carry out the purposes of these resolutions; and RESOLVED FURTHER, that each of the officers of this Corporation be and hereby is authorized, empowered and directed to execute all documents and to take such other actions as may be necessary or advisable in order to carry out the purposes of these resolutions. EX-3.24 26 y92210a1exv3w24.txt AMENDED AND RESTATED BYLAWS Exhibit 3.24 AMENDMENT TO A & M SPECIALTIES, INC. BYLAWS Article IV, Section 4.03(a) relating to the number of the board of directors of A & M Specialties, Inc. is hereby amended and restated in its entirety to read: "The number of directors of the corporation shall be no less than two (2) and no more than seven (7)." This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of A & M Specialties, Inc., pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. BYLAWS OF A & M SPECIALTIES, INC. a Pennsylvania Corporation ARTICLE I Offices and Fiscal Year Section 1.01 - Registered Office. The registered office of the corporation in Pennsylvania shall be at East Market Street Extension, Mercer, Mercer County, Pennsylvania, until otherwise established by an amendment of the articles or by the board of directors and a record of such change is filed with the Department of State in the manner provided by law. Section 1.02 - Other Offices. The corporation may also have offices at such other places within or without Pennsylvania as the board of directors may from time to time appoint or the business of the corporation may require. Section 103 - Fiscal Year. The fiscal year of the corporation shall begin on the 1st day of February in each year. ARTICLE II Notice - Waivers - Meetings Generally Section 2.01 - Manner of Giving Notice. (a) General Rule. Whenever notice is required to be given to any person under the provisions of the Business Corporation Law or by the articles or these bylaws, it may be given to the person either personally or by sending a copy thereof by first class or express mail, postage prepaid, or by telegram (with messenger service specified), telex or TWX (with answerback received) or courier service, charges prepaid, or by telecopier to the address (or to the telex, TWX, telecopier or telephone number) of the person appearing on the books of the corporation or, in the case of directors, supplied by the director to the corporation for the purpose of notice. If the notice is sent by mail, telegraph or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office or courier service for delivery to that person, or in the case of telex or TWX, when dispatched or, in the case of telecopier, when received. A notice of meeting shall specify the place, day and hour of the meeting and any other information required by any other provision of the Business Corporation Law, the articles or these bylaws. (b) Adjourned shareholder Meetings. When a meeting of shareholder is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the board fixes a new record date for the adjourned meeting. at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the board fixes a new record date for the adjourned meeting. Section 2.02 - Notice of Meetings of Board of Directors. Notice of a regular meeting of the board of directors need not be given. Notice of every special meeting of the board of directors shall be given to each director by telephone or in writing at least 24 hours (in the case of notice by telephone, telex, TWX or telecopier) or 48 hours (in the case of notice by telegraph, courier service or express mail) or five days (in the case of notice by first class mail) before the time at which the meeting is to be held. Every such notice shall state the time and place of the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board need be specified in a notice of the meeting. Section 2.03 - Notice of Meetings of Shareholders. (a) General Rule. Written notice of every meeting of the shareholders shall be given by, or at the direction of, the secretary to each shareholder of record entitled to vote at the meeting at least: (1) ten (10) days prior to the day named for a meeting called to consider a fundamental transaction under 15 Pa. C.S. Chapter 19; or (2) five (5) days prior to the day named for the meeting in any other case. If the secretary neglects or refuses to give notice of a meeting, the person or persons calling the meeting may do so. In the case of a special meeting of shareholders, the notice shall specify the general nature of the business to be transacted. (b) Notice of Action by Shareholders on Bylaws. In the case of a meeting of shareholders that has as one of its purposes action on the bylaws, written notice shall be given to each shareholder that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment or repeal of the bylaws. There shall be Included in, or enclosed with, the notice a copy of the proposed amendment or a summary of the changes to be effected thereby. Section 2.04 - Waiver of Notice. (a) Written Waiver. Whenever any written notice is required to be given under the provisions of the Business Corporation Law, the articles or these bylaws, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of the notice. Except as otherwise required by this subsection, neither the business to be transacted at, nor the purpose of, a meeting need be specified in the waiver of notice of the meeting. In the case of a special meeting of shareholder, the waiver of notice shall specify the general nature of the business to be transacted. (b) Waiver by Attendance. Attendance of a person at any meeting shall constitute a waiver of notice of the meeting except where a person attends a meeting for the express purpose of objecting, at the beginning of a meeting, to the transaction of any business because the meeting was not lawfully called or convened. Section 2.05 - Modification of Proposal Contained in Notice. Whenever the language of a proposed resolution is included in a written notice of a meeting required to be given under the provisions of the Business Corporation Law or the articles or these bylaws, the meeting considering the resolution may without further notice adopt it with such clarifying or other amendments as do not enlarge its original purpose. Section 2.06 - Exception to Requirement of Notice. (a) General Rule. Whenever any notice or communication is required to be given to any person under the provisions of the Business Corporation Law or by the articles or these bylaws or by the terms of any agreement or other instrument or as a condition precedent to taking any corporate action and communication with that person is then unlawful, the giving of the notice or communication to that person shall not be required. (b) Shareholders Without Forwarding Addresses. Notice or other communications shall not be sent to any shareholder with whom the corporation has been unable to communicate for more than 24 consecutive months because communications to the shareholder are returned unclaimed or the shareholder has otherwise failed to provide the corporation with a current address. Whenever the shareholders provide the corporation with a current address, the corporation shall commence sending notice and other communications to the shareholder in the same manner as to other shareholders. Section 2.07 - Use of Conference Telephone and Similar Equipment. One or more persons may participate in a meeting of the board of directors or the shareholders of the corporation by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person at the meeting. ARTICLE III Shareholders Section 3.01 - Place of Meeting. All meetings of the shareholders of the corporation shall be held at the registered office of the corporation unless another place is designated by the board of directors in the notice of a meeting. Section 3.02 - Annual Meeting. The board of directors may fix the date and time of the annual meeting of the shareholders, but if no such date and time is fixed by the board, the meeting for any calendar year shall be held on the_______________________day of ___________________________ in such year, if not a legal holiday under the laws of Pennsylvania, and, if a Saturday, at _______________________ o'clock ___________.M., and at said meeting the shareholders then entitled to vote shall elect directors and shall transact such other business as may properly be brought before the meeting. If the annual meeting shall not have been called and held within six months after the designated time, any shareholder may call the meeting at any time thereafter. Section 3.03 - Special Meetings. (a) Call of Special Meetings. Special meetings of the shareholders may be called at any time: (1) by the board of directors; or (2) unless otherwise provided in the Articles, by any shareholder. (b) Fixing of Time for Meeting. At any time, upon written request of any person who has called a special meeting, it shall be the duty of the secretary to fix the time of the meeting which shall be held not more than 60 days after the receipt of the request. If the secretary neglects or refuses to fix the time of the meeting, the person or persons calling the meeting may do so. Section 3.04 - Quorum and Adjournment. (a) General Rule. A meeting of shareholders of the corporation duly called shall not be organized for the transaction of business unless a quorum is present. The presence of shareholders entitled to cast at least 100% of the votes that all shareholders are entitled to cast on a particular matter to be acted upon at the meeting shall constitute a quorum for the purposes of consideration and action on the matter. Shares of the corporation owned, directly or indirectly, by it and controlled, directly or indirectly, by the board of directors of this corporation, as such, shall not be counted in determining the total number of outstanding shares for quorum purposes at any given time. (b) Withdrawal of a Quorum. The shareholders present at a duly organized meeting can continue to do business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum. (c) Adjournment for Lack of Quorum. If a meeting cannot be organized because a quorum has not attended, those present may, except as provided in the Business Corporation Law, adjourn the meeting to such time and place as they may determine. (d) Adjournments Generally. Any meeting at which directors are to be elected shall be adjourned only from day to day, or for such longer periods not exceeding 15 days each as the shareholders present and entitled to vote shall direct, until the directors have been elected. Any other regular or special meeting may be adjourned for such period as the shareholders present and entitled to vote shall direct. (e) Electing Directors at Adjourned Meeting. Those shareholders entitled to vote who attend a meeting called for the election of directors that has been previously adjourned for lack of a quorum, although less than a quorum as fixed in this section, shall nevertheless constitute a quorum for the purpose of electing directors. (f) Other Action in Absence of Quorum. Those shareholders entitled to vote who attend a meeting of shareholders that has been previously adjourned for one or more periods aggregating at least 15 days because of an absence of a quorum, although less than a quorum as fixed in this section, shall nevertheless constitute a quorum for the purpose of acting upon any matter set forth in the notice of the meeting if the notice states that those shareholders who attend the adjourned meeting shall nevertheless constitute a quorum for the purpose of acting upon the matter. Section 3.05 - Action by Shareholders. (a) General Rule. Except as otherwise provided in the Business Corporation Law or the articles or these bylaws, whenever any corporate action is to be taken by vote of the shareholders of the corporation, it shall be authorized by a majority of the votes cast at a duly organized meeting of shareholders by the holders of shares entitled to vote thereon. (b) Interested Shareholders. Any merger or other transaction authorized under 15 Pa. C.S. Subchapter 19C between the corporation or subsidiary thereof and a shareholder of this corporation, or any voluntary liquidation authorized under 15 Pa. C.S. Subchapter 19F in which a shareholder is treated differently from other shareholders of the same class (other than any dissenting shareholders), shall require the affirmative vote of the shareholders entitled to cast at least a majority of the votes that all shareholders other than the interested shareholder are entitled to cast with respect to the transaction, without counting the vote of the interested shareholder. For the purposes of the preceding sentence, interested shareholder shall include the shareholder who is a party to the transaction or who is treated differently from other shareholders and any person, or group of persons, that is acting jointly or in concert with the interested shareholder. An interested shareholder shall not include any person who, in good faith and not for the purpose of circumventing this subsection, is an agent, bank, broker, nominee or trustee for one or more other persons, to the extent that the other person or persons are not interested shareholders. (c) Exceptions. Subsection (b) shall not apply to a transaction: (1) that has been approved by a majority vote of the board of directors without counting the vote of directors who: (i) are directors or officer of, or have a material equity interest in, the interested shareholder; or (ii) were nominated for election as a director by the interested shareholder, and first elected as a director, within 24 months of the date of the vote on the proposed transaction; or (2) in which the consideration to be received by the shareholders for shares of any class of which shares are owned by the interested shareholder is not less than the highest amount paid by the interested shareholder in acquiring shares of the same class. (d) Additional Approvals. The approvals required by subsection (b) shall be in addition to, and not in lieu of, any other approval required by the Business Corporation Law, the articles or these bylaws, or otherwise. Section 3.06 - Organization. At every meeting of the shareholders, the chairman of the board, if there be one, or, in the case of vacancy in office or absence of the chairman of the board, one of the following officers present in the order stated: the vice chairman of the board, if there be one, the president, the vice presidents in their order of rank and seniority, or a person chosen by vote of the shareholders present, shall act as chairman of the meeting. The secretary or, in the absence of the secretary, an assistant secretary, or, in the absence of both the secretary and assistant secretaries, a person appointed by the chairman of the meeting, shall act as secretary. Section 3.07 - Voting Rights of Shareholder. Unless otherwise provided in the articles, every shareholder of the corporation shall be entitled to one vote for every share standing in the name of the shareholder on the books of the corporation. Section 3.08 - Voting and Other Action by Proxy. (a) General Rule (1) Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person to act for the shareholder by proxy. (2) The presence of, or vote or other action at a meeting of shareholders, or the expression of consent or dissent to corporate action in writing, by a proxy of a shareholder shall constitute the presence of, or vote or action by, or written consent or dissent of the shareholder. (3) Where two or more proxies of a shareholder are present, the corporation shall, unless otherwise expressly provided in the proxy, accept as the vote of all shares represented thereby the vote cast by a majority of them and, if a majority of the proxies cannot agree whether the shares represented shall be voted or upon the manner of voting the shares, the voting of the shares shall be divided equally among those persons. (b) Minimum Requirements. Every proxy shall be executed in writing by the shareholder or by the duly authorized attorney-in-fact of the shareholder and filed with the secretary of the corporation. A proxy, unless coupled with an interest, shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until written notice thereof has been given to the secretary of the corporation. An unrevoked proxy shall not be valid after three years from the date of its execution unless a longer time is expressly provided therein. A proxy shall not be revoked by the death or incapacity of the maker unless, before the vote is counted or the authority is exercised, written notice of the death or incapacity is given to the secretary of the corporation. (c) Expenses. Unless otherwise restricted in the articles, the corporation shall pay the reasonable expenses of solicitation of votes, proxies or consents of shareholders by or on behalf of the board of directors or its nominees for election to the board, including solicitation by professional proxy solicitors and otherwise. Section 3.09 - Voting by Fiduciaries and Pledgees. Shares of the corporation standing in the name of a trustee or other fiduciary and shares held by an assignee for the benefit of creditors or by a receiver may be voted by the trustee, fiduciary, assignee or receiver. A shareholder whose shares are pledged shall be entitled to vote the shares until the shares have been transferred into the name of the pledgee, or a nominee of the pledgee, but nothing in this section shall affect the validity of a proxy given to a pledgee or nominee. Section 3.10 - Voting by Joint Holders of Shares. (a) General Rule. Where shares of the corporation are held jointly or as tenants in common by two or more persons, as fiduciaries or otherwise: (1) if only one or more of such persons is present in person or by proxy, all of the shares standing in the names of such persons shall be deemed to be represented for the purpose of determining a quorum and the corporation shall accept as the vote of all of the shares the vote cast by a joint owner or a majority of them; and (2) if the persons are equally divided upon whether the shares held by them shall be voted or upon the manner of voting the shares, the voting of the shares shall be divided equally among the persons without prejudice to the rights of the joint owners or the beneficial owners thereof among themselves. (b) Exception. If there has been filed with the secretary of the corporation a copy, certified by an attorney at law to be correct, of the relevant portions of the agreement under which the shares are held or the instrument by which the trust or estate was created or the order of court appointing them or of an order of court directing the voting of the shares, the persons specified as having such voting power in the document latest in date of operative effect so filed, and only those persons shall be entitled to vote the shares but only in accordance therewith. Section 3.11 - Voting by Corporations. (a) Voting by Corporate Shareholders. Any corporation that is a shareholder of this corporation may vote by any of its officers or agents, or by proxy appointed by any officer or agent, unless some other person, by resolution of the board of directors of the other corporation or a provision of its articles or bylaws, a copy of which resolution or provision certified to be correct by one of its officers has been filed with the secretary of this corporation, is appointed its general or special proxy in which case that person shall be entitled to vote the shares., (b) Controlled Shares. Shares of this corporation owned, directly or indirectly, by it and controlled, directly or indirectly, by the board of directors of this corporation, as such, shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares for voting purposes at any given time. Section 3.12 - Determination of Shareholders of Record. (a) Fixing Record Date. The board of directors may fix a time prior to the date of any meeting of shareholders as a record date for the determination of the shareholders entitled to notice of, or vote at, the meeting, which time, except in the case of an adjourned meeting, shall be not more than 45 days prior to the date of the meeting of shareholders. Only shareholders of record on the date fixed shall be so entitled notwithstanding any transfer of shares on the books of the corporation after any record date fixed as provided in this subsection. The board of directors may similarly fix a record date for the determination of shareholders of record for any other purpose. When a determination of shareholders of record has been made as provided in this section for purposes of a meeting, the determination shall apply to any adjournment thereof unless the board fixes a new record date for the adjourned meeting. (b) Determination When a Record Date is Not Fixed. If a record date is not fixed: (1) The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. (2) The record date for determining shareholders entitled to express consent or dissent to corporate action in writing without a meeting, when prior action by the board of directors is not necessary, shall be the close of business on the day on which the first written consent or dissent is filed with the secretary of the corporation. (3) The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 3.13 - Voting Lists. (a) General Rule. The officer or agent having charge of the transfer books for shares of the corporation shall make a complete list of the shareholders entitled to vote at any meeting of shareholders, arranged in alphabetical order, with the address of and the number of shares held by each. The list shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof. (b) Effect of List. Failure to comply with the requirements of this section shall not affect the validity of any action taken at a meeting prior to a demand at the meeting by any shareholder entitled to vote thereat to examine the list. The original share register or transfer book, or a duplicate thereof kept in this Commonwealth, shall be prima facie evidence as to who are the shareholders entitled to examine the list or share register or transfer book or to vote at any meeting of shareholders. Section 3.14 - Consent of Shareholders in Lieu of Meeting. (a) Unanimous Written Consent. Any action required or permitted to be taken at a meeting of the shareholders or of a class of shareholders may be taken without a meeting if, prior or subsequent to the action, a consent or consents thereto by all of the shareholders who would be entitled to vote at a meeting for such purpose shall be filed with the secretary of the corporation. Section 3.15 - Minors as Security Holders. The corporation may treat a minor who holds shares or obligations of the corporation as having capacity to receive and to empower others to receive dividends, interest, principal and other payments or distributions, to vote or express consent or dissent and to make elections and exercise rights relating to such shares or obligations unless, in the case of payments or distributions on shares, the corporate officer responsible for maintaining the list of shareholders or the transfer agent of the corporation or, in the case of payments or distributions on obligations, the treasurer or paying officer or agent has received written notice that the holder is a minor. ARTICLE IV Board of Directors Section 4.01 - Powers; Personal Liability. (a) General Rule. Unless otherwise provided by statute, all powers vested by law in the corporation shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the board of directors. (b) Standard of Care; Justifiable Reliance. A director shall stand in a fiduciary relation to the corporation and shall perform his or her duties as a director, including duties as a member of any committee of the board upon which the director may service, in good faith, in a manner the director reasonably believes to be in the best interests of the corporation and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his or her duties, a director shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by any of the following: (1) one or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented. (2) counsel, public accountants or other persons as to matters which the director reasonably believes to be within the professional or expert competence of such person. (3) a committee of the board upon which the director does not serve, duly designated in accordance with law, as to matters within its designated authority, which committee the director reasonably believes to merit confidence. A director shall not be considered to be acting in good faith if the director has knowledge concerning the matter in question that would cause his or her reliance to be unwarranted. (c) Consideration of Factors. In discharging the duties of their respective positions, the board of directors, committees of the board and individual directors may, in considering the best interests of the corporation, consider the effects of any action upon employees, upon suppliers and customers of the corporation and upon communities in which offices or other establishments of the corporation are located, and all other pertinent factors. The consideration of those factors shall not constitute a violation of subsection (b). (d) Presumption. Absent breach of fiduciary duty, lack of good faith or self-dealing, actions taken as a director or any failure to take any action shall be presumed to be in the best interests of the corporation. (e) Personal Liability of Directors. (1) a director shall not be personally liable, as such, for monetary damages for any action taken, or any failure to take any action, unless: (i) the director has breached or failed to perform the duties of his or her office under this section; and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. (2) The provisions of paragraph (1) shall not apply to the responsibility or liability of a director pursuant to any criminal statute or the liability of a director for the payment of taxes pursuant to local, state or Federal law. (f) Notation of Dissent. A director who is present at a meeting of the board of directors, or of a committee of the board, at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent is entered in the minutes of the meeting or unless the director files a written dissent to the action with the secretary of the meeting to the secretary of the corporation immediately after the adjournment of the meeting. The right to dissent shall not apply to a director who voted in favor of the action. Nothing in this section shall bar a director from asserting that minutes of the meeting incorrectly omitted his or her dissent if, promptly upon receipt of a copy of such minutes, the director notifies the secretary, in writing, of the asserted omission or inaccuracy. Section 4.02 - Qualifications and Selection of Directors. (a) Qualifications. Each director of the corporation shall be a natural person of full age who need not be a resident of Pennsylvania but shall be a shareholder of the corporation. (b) Election of Directors. Except as otherwise provided in these bylaws, directors of the corporation shall be elected by the shareholders. In elections for directors, voting need not be by ballot, except upon demand made by a shareholder entitled to vote at the election and before the voting begins. The candidates receiving the highest number of votes from each class or group of classes, if any, entitled to elect directors separately up to the number of directors to be elected by the class or group of classes shall be elected. If at any meeting of shareholders, directors of more than one class are to be elected, each class of directors shall be elected in a separate election. (c) Cumulative Voting. Unless the articles provide for straight voting, in each election of directors every shareholder entitled to vote shall have the right to multiply the number of votes to which the shareholder may be entitled by the total number of directors to be elected in the same election by the holders of the class or classes of shares of which his or her shares are a part and the shareholder may cast the whole number of his or her votes for one candidate or may distribute them among two or more candidates. Section 4.03 - Number and Term of Office. (a) Number. The board of directors shall consist of four directors, two from Mercer Forge Corporation and two from Aerosonic Corporation, or as may be determined from time to time by resolution of the board of directors. (b) Term of Office. Each director shall hold office until the expiration of the term for which he or she was selected and until a successor has been selected and qualified or until his or her earlier death, resignation or removal. A decrease in the number of directors shall not have the effect of shortening the term of any incumbent director. (c) Resignation. Any director may resign at any time upon written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as shall be specified in the notice of resignation. Section 4.04 - Vacancies. (a) General Rule. Vacancies in the board of directors, including vacancies resulting from an increase in the number of directors, may be filled by a majority vote of the remaining members of the board though less than a quorum, or by a sole remaining director, and each person so selected shall be a director to serve until the next selection of the class for which such director has been chosen, and until a successor has been selected and qualified or until his or her earlier death, resignation or removal. (b) Action by Resigned Directors. When one or more directors resign from the board effective at a future date, the directors then in office, including those who have so resigned, shall have power by the applicable vote to fill the vacancies, the vote thereon to take effect when the resignations become effective. Section 4.05 - Removal of Directors. (a) Removal by the Shareholders. The entire board of directors, or any class of the board, or any individual director may be removed from office by vote of the shareholders entitled to vote thereon only for cause. In case the board or a class of the board or any one or more directors are so removed, new directors may be elected at the same meeting. The repeal of a provision of the articles or these bylaws prohibiting, or the addition of a provision to the articles or bylaws permitting, the removal by the shareholders of the board, a class of the board or a director without assigning any cause shall not apply to any incumbent director during the balance of the term for which he was selected. (b) Removal by the Board. The board of directors may declare vacant the office of a director who has been judicially declared of unsound mind or who has been convicted of an offense punishable by imprisonment for a term of more than one year or if, within 60 days after notice of his or her selection, the director does not accept the office either in writing or by attending a meeting of the board of directors. (c) Removal of Directors Elected by Cumulative Voting. An individual director shall not be removed (unless the entire board or class of the board is removed) if sufficient votes are cast against the resolution for his removal which, if cumulatively voted at an annual or other regular election of directors, would be sufficient to elect one or more directors to the board or to the class. Section 4.06 - Place of Meetings. Meetings of the board of directors may be held at such place within or without Pennsylvania as the board of directors may from time to time appoint or as may be designated in the notice of the meeting. Section 4.07 - Organization of Meetings. At every meeting of the board of directors, the chairman of the board, if there be one, or, in the case of a vacancy in the office or absence of the chairman of the board, one of the following officers present in the order stated: the vice chairman of the board, if there be one, the president, the vice presidents in their order of rank and seniority, or a person chosen by a majority of the directors present, shall act as chairman of the meeting. The secretary or, in the absence of the secretary and the assistant secretaries, any person appointed by the chairman of the meeting, shall act as secretary. Section 4.08 - Regular Meetings. Regular meetings of the board of directors shall be held at such time and place as shall be designated from time to time by resolution of the board of directors. Section 4.09 - Special Meetings. Special meetings of the board of directors shall be held whenever called by the chairman or by any one (1) or more of the directors. Section 4.10 - Quorum of and Action by Directors. (a) General Rule. At least 100% of the directors in office of the corporation shall be necessary to constitute a quorum for the transaction of business and the acts of a majority of the directors present and voting at a meeting at which a quorum is present shall be the acts of the board of directors. (b) Action by Written Consent. Any action required or permitted to be taken at a meeting of the directors may be taken without a meeting if, prior or subsequent to the action, a consent or consents thereto by all of the directors in office is filed with the secretary of the corporation. Section 4.11 - Compensation. The board of directors shall have the authority to fix the compensation of directors for their services as directors and a director may be a salaried officer of the corporation. ARTICLE V Officers Section 5.01 - Officers Generally. (a) Number, Qualifications and Designation. The officers of the corporation shall be a president, a secretary, a treasurer, and such other officers as may be elected in accordance with the provisions of Section 5.03. Officers may but need not be directors or shareholders of the corporation. The president and secretary shall be natural persons of full age. The treasurer may be a corporation, but if a natural person shall be of full age. The board of directors may elect from among the members of the board a chairman of the board and a vice chairman of the board who shall be officers of the corporation. Any number of offices may be held by the same person. (b) Resignations. Any officer may resign at any time upon written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as may be specified in the notice of resignation. (c) Bonding. The corporation may secure the fidelity of any or all of its officers by bond or otherwise. (d) Standard of Care. Except as otherwise provided in the articles, an officer shall perform his or her duties as an officer in good faith, in a manner he or she reasonably believes to be in the best interests of the corporation and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. A person who so performs his or her duties shall not be liable by reason of having been an officer of the corporation. Section 5.02 - Election and Term of Office. The officers of the corporation, except those elected by delegated authority pursuant to Section 5.03, shall be elected annually by the board of directors, and each such officer shall hold office for a term of one year and until a successor has been selected and qualified or until his or her earlier death, resignation or removal. Section 5.03 - Subordinate Officers, Committees and Agents. The board of directors may from time to time elect such other officers and appoint such committees, employees or other agents as the business of the corporation may require, including one or more assistant secretaries, and one or more assistant treasurers, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the board of directors may from time to time determine. The board of directors may delegate to any officer or committee the power to elect subordinate officers and to retain or appoint employees or other agents, or committees thereof and to prescribe the authority and duties of such subordinate officers, committees, employees or other agents. Section 5.04 - Removal of Officers and Agents. Any officer or agent of the corporation may be removed by the board of directors with or without cause. The removal shall be without prejudice to the contract rights, if any, of any person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. Section 5.05 - Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause, shall be filled by the board of directors or by the officer or committee to which the power to fill such office has been delegated pursuant to Section 5.03, as the case may be, and if the office is one for which these bylaws prescribe a term, shall be filled for the unexpired portion of the term. Section 5.06 - Authority. All officers of the corporation, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided by or pursuant to resolutions or orders of the board of directors or in the absence of controlling provisions in the resolutions or orders of the board of directors, as may be determined by or pursuant to these bylaws. Section 5.07 - The Chairman and Vice Chairman of the Board. The chairman of the board or in the absence of the chairman, the vice chairman of the board, shall preside at all meetings of the shareholders and of the board of directors and shall perform such other duties as may from time to time be requested by the board of directors. Section 5.08 - The President. The president shall be the chief executive officer of the corporation and shall have general supervision over the business and operations of the corporation, subject however, to the control of the board of directors. The president shall sign, execute, and acknowledge, in the name of the corporation, deeds, mortgages, bonds, contracts or other instruments authorized by the board of directors, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors, or by these bylaws, to some other officer or agent of the corporation; and, in general, shall perform all duties incident to the office of president and such other duties as from time to time may be assigned by the board of directors. Section 5.09 - The Vice Presidents. The vice presidents shall perform the duties of the president in the absence of the president and such other duties as may from time to time be assigned by the board of directors or the president. Section 5.10 - The Secretary. The secretary or an assistant secretary shall attend all meetings of the shareholders and of the board of directors and shall record all the votes of the shareholders and of the directors and the minutes of the meetings of the shareholders and of the board of directors and of committees of the board in a book or books to be kept for that purpose; shall see that notices are given and records and reports properly kept and filed by the corporation as required by law; shall be the custodian of the seal of the corporation and see that it is affixed to all documents to be executed on behalf of the corporation under its seal; and, in general, shall perform all duties incident to the office of secretary, and such other duties as may from time to time be assigned by the board of directors or the president. Section 5.11 - The Treasurer. The treasurer or an assistant treasurer shall have or provide for the custody of the funds or other property of the corporation; shall collect and receive or provide for the collection and receipt of monies earned by or in any manner due to or received by the corporation; shall deposit all funds in his or her custody as treasurer in such banks or other places of deposit as the board of directors may from time to time designate; shall, whenever so required by the board of directors, render an account showing all transactions as treasurer and the financial condition of the corporation; and, in general, shall discharge such other duties as may from time to time be assigned by the board of directors or the president. Section 5.12 - Salaries. The salaries of the officers elected by the board of directors shall be fixed from time to time by the board of directors or by such officer as may be designated by resolution of the board. The salaries or other compensation of any other officers, employees and other agents shall be fixed from time to time by the officer or committee to which the power to elect such officers or to retain or appoint such employees or other agents has been delegated pursuant to Section 5.03. No officer shall be prevented from receiving such salary or other compensation by reason of the fact that the officer is also a director of the corporation. ARTICLE VI CERTIFICATES OF STOCK, TRANSFER, ETC. Section 6.01 - Share Certificates. Certificates for shares of the corporation shall be in such form as approved by the board of directors, and shall state that the corporation is incorporated under the laws of Pennsylvania, the name of the person to whom issued, and the number and class of shares and the designation of the series (if any) that the certificate represents. The share register or transfer books and blank share certificates shall be kept by the secretary or by any transfer agent or registrar designated by the board of directors for that purpose. Section 6.02 - Issuance. The share certificates of the corporation shall be numbered and registered in the share register or transfer books of the corporation as they are issued. They shall be signed by the president or a vice president and by the secretary or an assistant secretary or the treasurer or an assistant treasurer, and shall bear the corporate seal, which may be a facsimile, engraved or printed; but where such certificate is signed by a transfer agent or a registrar the signature of any corporate officer upon such certificate may be a facsimile, engraved or printed. In case any officer who has signed, or whose facsimile signature has been placed upon, any share certificate shall have ceased to be such officer because of death, resignation or otherwise, before the certificate is issued, it may be issued with the same effect as if the officer had not ceased to be such at the date of its issue. The provisions of this Section 6.02 shall be subject to any inconsistent or contrary agreement at the time between the corporation and any transfer agent or registrar. Section 6.03 - Transfer. Transfers of shares shall be made on the share register or transfer books of the corporation upon surrender of the certificate therefor, endorsed by the person named in the certificate or by an attorney lawfully constituted in writing. No transfer shall be made inconsistent with the provisions of the Uniform Commercial Code, 13 Pa.C.S. ((8101 et seq., and its amendments and supplements. Section 6.04 - Record Holder of Shares. The corporation shall be entitled to treat the person in whose name any share or shares of the corporation stand on the books of the corporation as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such share or shares on the part of any other person. Section 6.05 - Lost, Destroyed or Mutilated Certificates. The holder of any shares of the corporation shall immediately notify the corporation of any loss, destruction or mutilation of the certificate therefor, and the board of directors may, in its discretion, cause a new certificate or certificates to be issued to such holder, in case of mutilation of the certificate, upon the surrender of the mutilated certificate or, in case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction and, if the board of directors shall so determine, the deposit of a bond in such form and in such sum, and with such surety or sureties, as it may direct. ARTICLE VII INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER AUTHORIZED REPRESENTATIVES Section 7.01 - Scope of Indemnification. (a) General Rule. The corporation shall indemnify an indemnified representative against any liability incurred in connection with any proceeding in which the indemnified representative may be involved as a party or otherwise by reason of the fact that such person is or was serving in an indemnified capacity, including, without limitation, liabilities resulting from any actual or alleged breach or neglect of duty, error, misstatement or misleading statement, negligence, gross negligence or act giving rise to strict or products liability, except: (1) where such indemnification is expressly prohibited by applicable law; (2) where the conduct of the indemnified representative has been finally determined pursuant to Section 7.06 or otherwise: (i) to constitute willful misconduct or recklessness within the meaning of 15 Pa.C.S. ((513(b) and 1746(b) and 42 Pa.C.S. (8365(b) or any superseding provision of law sufficient in the circumstances to bar indemnification against liabilities arising from the conduct; or (ii) to be based upon or attributable to the receipt by the indemnified representative from the corporation of a personal benefit to which the indemnified representative is not legally entitled; or (3) to the extent such indemnification has been finally determined in a final adjudication pursuant to Section 7.06 to be otherwise unlawful. (b) Partial Payment. If an indemnified representative is entitled to indemnification in respect of a portion, but not all, of any liabilities to which such person may be subject, the corporation shall indemnify such indemnified representative to the maximum extent for such portion of the liabilities. (c) Presumption. The termination of a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the indemnified representative is not entitled to indemnification. (d) Definitions. For the purposes of this Article: (1) "indemnified capacity" means any and all past, present and future service by an indemnified representative in one or more capacities as a director, officer, employee or agent of the corporation, as a director, officer, employee, agent, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise; (2) "indemnified representative" means any and all directors and officers of the corporation and any other person designated as an indemnified representative by the board of directors of the corporation (which may, but need not, include any person serving at the request of the corporation, as a director, officer, employee, agent, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise); (3) "liability" means any damage, judgment, amount paid in settlement, fine, penalty, punitive damages, excise tax assessed with respect to an employee benefit plan, or cost or expense, of any nature (including, without limitation, attorneys' fees and disbursements); and (4) "proceeding" means any threatened, pending or completed action, suit, appeal or other proceeding of any nature, whether civil, criminal, administrative or investigative, whether formal or informal, and whether brought by or in the right of the corporation, a class of its security holders or otherwise. Section 7.02 - Proceedings Initiated by Indemnified Representatives. Notwithstanding any other provision of this Article, the corporation shall not indemnify under this Article an indemnified representative for any liability incurred in a proceeding initiated (which shall not be deemed to include counterclaims or affirmative defenses) or participated in as an intervenor or amicus curiae by the person seeking indemnification unless such initiation of or participation in the proceeding is authorized, either before or after its commencement, by the affirmative vote of a majority of the directors in office. This section does not apply to reimbursement of expenses incurred in successfully prosecuting or defending an arbitration under Section 7.06 or otherwise successfully prosecuting or defending the rights of an indemnified representative granted by or pursuant to this Article. Section 7.03 - Advancing Expenses. The corporation shall pay the expenses (including attorneys' fees and disbursements) incurred in good faith by an indemnified representative in advance of the final disposition of a proceeding described in Section 7.01 or the initiation of or participation in which is authorized pursuant to Section 7.02 upon receipt of an undertaking by or on behalf of the indemnified representative to repay the amount if it is ultimately determined that such person is not entitled to be indemnified by the corporation pursuant to this Article. The financial ability of an indemnified representative to repay an advance shall not be a prerequisite to the making of such advance. Section 7.04 - Securing of Indemnification Obligations. To further effect, satisfy or secure the indemnification obligations provided herein or otherwise, the corporation may maintain insurance, obtain a letter of credit, act as self insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the corporation, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the board of directors shall deem appropriate. Absent fraud, the determination of the board of directors with respect to such amounts, costs, terms and conditions shall be conclusive against all security holders, officers and directors and shall not be subject to voidability. Section 7.05 - Payment of Indemnification. An indemnified representative shall be entitled to indemnification within thirty (30) days after a written request for indemnification has been delivered to the secretary of the corporation. Section 7.06 - Contribution. If the indemnification provided for in this Article or otherwise is unavailable for any reason in respect of any liability or portion thereof, the corporation shall contribute to the liabilities to which the indemnified representative may be subject in such proportion as is appropriate to reflect the intent of this Article of otherwise. Section 7.07 - Mandatory Indemnification of Directors, Officers, Etc. To the extent that an authorized representative of the corporation has been successful on the merits or otherwise in defense of any action or proceeding referred to in 15 Pa.C.S. ((1741 or 1742 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection therewith. Section 7.08 - Contract Rights; Amendment or Repeal. All rights under this Article shall be deemed a contract between the corporation and the indemnified representative pursuant to which the and each indemnified representative intend to be legally bound. Any repeal, amendment or modification hereof shall be prospective only and shall not affect any rights or obligations then existing. Section 7.09 - Scope of Article. The rights granted by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification, contribution or advancement of expenses may be entitled under any statute, agreement, vote of shareholders or disinterested directors or otherwise both as to action in an indemnified capacity and as to action in any other capacity. The indemnification, contribution and advancement of expenses provided by or granted pursuant to this Article shall continue as to a person who has ceased to be an indemnified representative in respect of matters arising prior to such time, and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person. Section 7.10 - Reliance on Provisions. Each person who shall act as an indemnified representative of the corporation shall be deemed to be doing so in reliance upon the rights provided by this Article. Section 7.11 - Interpretation. The provisions of this Article are intended to constitute bylaws authorized by 15 Pa.C.S. ((513 and 1746 and 42 Pa.C.S. (8365. ARTICLE VIII MISCELLANEOUS Section 8.01 - Corporate Seal. The corporation shall have a corporate seal in the form of a circle containing the name of the corporation, the year of incorporation and such other details as may be approved by the board of directors. Section 8.02 - Checks. All checks, notes, bills of exchange or other orders in writing shall be signed by such person or persons as the board of directors or any person authorized by resolution of the board of directors may from time to time designate. Section 8.03 - Contracts. (a) General Rule. Except as otherwise provided in the Business Corporation Law in the case of transactions that require action by the shareholders, the board of directors may authorize any officer or agent to enter into any contract or to execute or deliver any instrument on behalf of the corporation, and such authority may be general or confined to specific instances. (b) Statutory Form of Execution of Instruments. Any note, mortgage, evidence of indebtedness, contract or other document, or any assignment or endorsement thereof, executed or entered into between the corporation and any other person, when signed by one or more officers or agents having actual or apparent authority to sign it, or by the president or vice president and secretary or assistant secretary or treasurer or assistant treasurer of the corporation, shall be held to have been properly executed for and in behalf of the corporation, without prejudice to the rights of the corporation against any person who shall have executed the instrument in excess of his or her actual authority. Section 8.04 - Interested Directors or Officers; Quorum. (a) General Rule. A contract or transaction between the corporation and one or more of its directors or officers or between the corporation and another corporation, partnership, joint venture, trust or other enterprise in which one or more of its directors or officers are directors or officers or have a financial or other interest, shall not be void or voidable solely for that reason, or solely because the director or officer is present at or participates in the meeting of the board of directors that authorizes the contract or transaction, or solely because his, her or their votes are counted for that purpose, if: (1) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors and the board authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors even though the disinterested directors are less than a quorum; (2) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon and the contract or transaction is specifically approved in good faith by vote of those shareholders; or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors or the shareholders. (b) Quorum. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board which authorizes a contract or transaction specified in subsection (a). Section 8.05 - Deposits. All funds of the corporation shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors may approve or designate, and all such funds shall be withdrawn only upon checks signed by such one or more officers or employees as the board of directors shall from time to time determine. Section 8.06 - Corporate Records. (a) Required Records. The corporation shall keep complete and accurate books and records of account, minutes of the proceedings of the incorporators, shareholders and directors and a share register giving the names and addresses of all shareholders and the number and class of shares held by each. The share register shall be kept at either the registered office of the corporation in Pennsylvania or at its principal place of business wherever situated or at the office of its registrar or transfer agent. Any books, minutes or other records may be in written form or any other form capable of being converted into written form within a reasonable time. (b) Right of Inspection. Every shareholder shall, upon written verified demand stating the purpose thereof, have a right to examine, in person or by agent or attorney, during the usual hours for business for any proper purpose, the share register, books and records of account, and records of the proceedings of the incorporators, shareholders and directors and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to the interest of the person as a shareholder. In every instance where an attorney or other agent is the person who seeks the right of inspection, the demand shall be accompanied by a verified power of attorney or other writing that authorizes the attorney or other agent to so act on behalf of the shareholder. The demand shall be directed to the corporation at its registered office in Pennsylvania or at its principal place of business wherever situated. Section 8.07 - Financial Reports. Unless otherwise agreed between the corporation and a shareholder, the corporation shall furnish to its shareholders annual financial statements, including at least a balance sheet as of the end of each fiscal year and a statement of income and expenses for the fiscal year. The financial statements shall be prepared on the basis of generally accepted accounting principles, if the corporation prepares financial statements for the fiscal year on that basis for any purpose, and may be consolidated statements of the corporation and one or more of its subsidiaries. The financial statements shall be mailed by the corporation to each of its shareholders entitled thereto within one hundred twenty (120) days after the close of each fiscal year and, after the mailing and upon written request, shall be mailed by the corporation to any shareholder or beneficial owner entitled thereto to whom a copy of the most recent annual financial statements has not previously been mailed. Statements that are audited or reviewed by a public accountant shall be accompanied by the report of the accountant; in other cases, each copy shall be accompanied by a statement of the person in charge of the financial records of the corporation: (1) Stating his reasonable belief as to whether or not the financial statements were prepared in accordance with generally accepted accounting principles and, if not, describing the basis of presentation. (2) Describing any material respects in which the financial statements were not prepared on a basis consistent with those prepared for the previous year. Section 8.08 - Amendment of Bylaws. These bylaws may be amended or repealed, or new bylaws may be adopted, either (i) by vote of the shareholders at any duly organized annual or special meeting of shareholders, or (ii) with respect to those matters that are not by statute committed expressly to the shareholders and regardless of whether the shareholders have previously adopted or approved the bylaw being amended or repealed, by vote of a majority of the board of directors of the corporation in office at any regular or special meeting of directors. Any change in these bylaws shall take effect when adopted unless otherwise provided in the resolution effecting the change. See Section 2.03(b) (relating to notice of action by shareholders on bylaws). EX-3.25 27 y92210a1exv3w25.txt AMENDED AND RESTATED BYLAWS Exhibit 3.25 AMENDMENT TO NEENAH TRANSPORT, INC. BYLAWS Section 1, Sentence 1 relating to the number of the board of directors of Neenah Transport, Inc. is hereby amended to read as follows: "The number of directors of the corporation shall be no less than two (2) and no more than seven (7)." This amendment shall became effective on the Effective Date of the Prepackaged Joint Plan of Reorganization of ACP Holding Company, NFC Castings, Inc., Neenah Foundry Company and certain of its subsidiaries, without further action by the board of directors or shareholders of Neenah Transport, Inc., pursuant to the Bankruptcy Court Confirmation Order dated September 25, 2003. NEENAH TRANSPORT, INC. CERTIFICATE OF SECRETARY I, Gary W. LaChey, do hereby certify as follows: 1. I am the duly elected, qualified and acting Secretary of Neenah Transport, Inc., a Wisconsin corporation (the "Company"). 2. Attached hereto is a true, complete and correct copy of the Bylaws of the Company, as in full force and effect on the date hereof. IN WITNESS WHEREOF, I have executed this Certificate in my official capacity this 30th day of April, 1997. /s/ Gary W. LaChey --------------------------- Gary W. LaChey, Secretary BYLAWS OF NEENAH TRANSPORT, INC. As Amended and Restated June 13, 1989 1. The number of directors of this corporation shall be three (3). A director who is or was employed by the corporation (or an affiliated corporation) shall be eligible for reelection as a director of the corporation only so long as he or she is actively so employed. 2. The date of the annual meeting of shareholders shall be not earlier than the second Tuesday in April nor later than the third Tuesday in June, as determined each year by the President, and the time and place of meeting shall be such as shall be fixed by the Secretary and specified in the notice or waiver of notice of such meeting. 3. Regular or special directors' meetings may be held upon 48 hours' written notice given in person or by telegraphing or depositing the same in the mail, addressed to each director at his or her address as set forth in the records of the corporation. 4. Notice of any meeting of shareholders or directors may be waived, and actions by shareholders or directors may be taken by unanimous written consent without a meeting, as provided by Sections 180.89 and 180.91 of the Wisconsin Business Corporation Law, or any successor provisions thereto. 5. The duties of the respective officers shall be such as usually pertain to their offices and such other duties as may be prescribed by the Board of Directors. The Board of Directors may delegate the duties of any officer to any other officer or to any assistant officer or other person designated by it for that purpose. 6. The fiscal year of the corporation shall begin on the first day of April and end on the last day of March in each year. 7. These bylaws may be amended by the Board of Directors or by the shareholders. EX-3.26 28 y92210a1exv3w26.txt BYLAWS EXHIBIT 3.26 BY-LAWS OF NIEMIN PORTER & CO. A California Corporation ARTICLE I OFFICES Section 1. Principal Executive Office. The principal executive office of the corporation is hereby fixed and located at: 1032 Via Palestra, Palos Verdes Estates, California 90274. The board of directors is hereby granted full power and authority to change said principal executive office from one location to another. The location of the principal executive office of the corporation need not be in the State of California. Any such change shall be noted on the By-Laws by the secretary, opposite this section, or this section may be amended to state the new location. Section 2. Other Offices. Other business offices may at any time be established by the board of directors at any place or places where the corporation is qualified to do business. ARTICLE II MEETINGS OF SHAREHOLDERS Section 1. Place of Meetings. All annual or other meetings of shareholders shall be held at the principal executive office of the corporation, or at any other, place within or without the State of California which may be designated either by the board of directors or by the written consent of all persons entitled to vote thereat and not present at the meeting. Such written consent may be given either before or after the meeting and shall be filed with the secretary of the corporation. Section 2. Annual Meetings. The annual meetings of shareholders for the election of directors and for the transaction of such other business as is within the powers of shareholders shall be held on the second Tuesday in October in each year at ten o'clock a.m. or at such other time and date as may be designated by the board of directors; provided, however, that should the date set forth herein fall on a legal holiday, then any such annual meeting of shareholders shall be held at the same time and place on the next day thereafter ensuing which is a business day. Written or printed notice of each annual meeting shall be given to each shareholder entitled to vote, either personally or by mail or other means of written communication, charges prepaid, addressed to such shareholder at his address appearing on the books of the corporation or given by him to the corporation for the purpose of notice. If any notice or report addressed to the shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice or report to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available for the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice or report to all other shareholders. If a shareholder gives no address, notice shall be deemed to have been given him if sent by mail or other means of written communication addressed to the place where the principal executive office of the corporation is situated, or if published at least once in some newspaper of general circulation in the county in which said principal executive office is located. All such notices shall be given to each shareholder entitled thereto not less than ten (10) days nor more than sixty (60) days before each annual meeting. Any such notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. Such notices shall specify: (a) the place, the date, and the hour of such meeting; (b) those matters which the board of directors, at the time of the mailing of the notice, intends to present for action by the shareholders; (c) if directors are to be elected, the names of nominees intended at the time of the notice to be presented by management for election: (d) the general nature of a proposal, if any, to take action with respect to approval of: (i) a transaction with an interested director, (ii) amendment of the articles of incorporation, (iii) a reorganization of the corporation as defined in Section 181 of the California General Corporation Law, (iv) voluntary dissolution of the corporation, or (v) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, if any; and (e) such other matters, if any, as may be expressly required by statute. Section 3. Special Meetings. Special meetings of the shareholders, for the purpose of taking any action permitted by the shareholders under the California General Corporation Law and the articles of incorporation of this corporation, may be called at any time by the chairman of the board or the president, or by the board of directors, or by one or more shareholders holding not less than ten percent (10%) of the votes at the meeting. Upon request in writing that a special meeting of shareholders be called for any proper purpose, directed to the chairman of the board, president, vice-president or secretary by any person (other than the board of directors) entitled to call a special meeting of shareholders, the officer forthwith shall cause notice to be given to shareholders entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after receipt of the request. Except in special cases where other express provision is made by statute, notice of such special meetings shall be given in the same manner as for annual meetings of shareholders. In addition to the matters required by items (a) and, if applicable, (c) 2 of the preceding Section, notice of any special meeting shall specify the general nature of the business to be transacted, and no other business may be transacted at such meeting. Section 4. Quorum. The presence in person or by proxy of the persons entitled to vote a majority of the voting shares at any meeting shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. Section 5. Adjourned Meeting and Notice Thereof. Any shareholders' meeting annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum no other business may be transacted at such meeting, except as provided in Section 4 above. When any shareholders' meeting, either annual or special, is adjourned for forty-five (45) days or more, or if after adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting. Except as provided above, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement of the time and place thereof at the meeting at which such adjournment is taken. Section 6. Voting. (a) Record Date: Unless a record date for voting purposes is fixed as provided in Section 1 of Article V of these By-Laws, then, subject to the provisions of Sections 702 through 704, inclusive, of the California General Corporation Law (relating to voting of shares held by a fiduciary, in the name of a corporation, or in joint ownership), only persons in whose names shares entitled to vote stand on the stock records of the corporation at the close of business on the business day next preceding the day on which notice of the meeting is given or if such notice is waived, at the close of business on the business day next preceding the day on which the meeting of shareholders is held, shall be entitled to vote at such meeting, and such day shall be the record date for such meeting. (b) Ballots: Such vote may be viva voce or by ballot; provided, however, that all elections of directors must be by ballot upon demand made by a shareholder at any election and before the voting begins. (c) Action by Majority: If a quorum is present, except with respect to election of directors, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter 3 shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the California General Corporation Law or the articles of incorporation. (d) Cumulative Voting: Subject to the requirements of the next sentence, every shareholder entitled to vote at any election of directors shall have the right to cumulate his votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which his shares are entitled, or to distribute his votes on the same principle among as many candidates as he shall deem fit. No shareholder shall be entitled to cumulate votes unless the name of the candidate or candidates for whom such votes would be cast has been placed in nomination prior to the voting and any shareholder has given notice, at the meeting prior to the voting, of such shareholder's intention to cumulate his votes. If any shareholder has given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nomination. The candidates receiving the highest number of votes of shares entitled to be voted for them, up to the number of directors to be elected, shall be elected. Section 7. Validation of Defectively Called or Noticed Meetings. The transactions of any meeting of shareholders, either annual or special, however called and, noticed, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, or who, though present, has, at the beginning of the meeting, properly objected to the transaction of any business because the meeting was not lawfully called or convened, or to particular matters of business legally required to be included in the notice, but not so included, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. Except as provided in Sections 601(e) and 601(f) of the California General Corporation Law, the business transacted at the meeting need not be specified in a written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof by a shareholder. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 8. Action Without Meeting. (a) Election of Directors by Written Consent: Directors may be elected without a meeting by a consent in writing, setting forth the action so taken, signed by all of the persons who would be entitled to vote for the election of directors, provided that, without notice except as hereinafter set forth, a director may be elected at any time to fill a vacancy not filled by the board of directors by the written consent of persons holding a majority of the outstanding shares entitled .to vote for the election of directors unless the election is to fill a vacancy created by removal, in which case election by written consent of a director requires the unanimous consent of all shares entitled to vote for the election of directors. (b) Other Actions by Written Consent: Any other action which, under any provision of the California General Corporation Law, may be taken at a meeting of the shareholders, may be taken without a meeting, and without notice except as hereinafter set forth, if a consent in writing, setting forth 4 the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. (c) Notice of Action by Written Consent: Unless the consents of all shareholders entitled to vote have been solicited in writing, (i) Notice of any proposed shareholder approval of: (A) a contract or other transaction with an interested director; (B) indemnification of an agent of the corporation as authorized by these By-Laws; (C) a reorganization of the corporation as defined in Section 181 of the California General Corporation Law; or (D) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, if any, without a meeting by less than unanimous written consent, shall be given at least ten (10) days before the consummation of the action authorized by such approval; and (ii) Prompt notice shall be given of the taking of any other corporate action approved by shareholders without a meeting by less than unanimous written consent to those shareholders entitled to vote who have not consented in writing. Such notices shall be given in the manner and shall be deemed to have been given as provided in Section 2 of Article II of these By-Laws. (d) Record Date: Unless, as provided in Section 1 of Article V of these By-Laws, the board of directors has fixed a record date for the determination of shareholders entitled to notice of and to give such written consent, the record date for such determination shall be the day on which the first written consent is given. All such written consents shall be filed with the secretary of the corporation. (e) Revocation of Written Consent: Any shareholder giving a written consent, or the shareholder's proxyholders, or a transferee of the shares or a personal representative of the shareholder, or his respective proxyholders, may revoke the consent by a writing received by the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been 5 filed with the secretary of the corporation, but may not do so thereafter. Such revocation is effective upon its receipt by the secretary of the corporation. Section 9. Proxies. Every person entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of the corporation. Any proxy duly executed is not revoked and continues in full force and effect until: (i) an instrument revoking it is delivered to the corporation or a duly executed proxy bearing a later date is presented to the meeting prior to the vote pursuant thereto, (ii) the person executing the proxy attends the meeting and votes in person, or (iii) written notice of the death or in capacity of the maker of such proxy is received by the corporation before the vote pursuant thereto is counted; provided that no such proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless otherwise provided in the proxy. Notwithstanding the foregoing, a proxy may be made irrevocable pursuant to the provisions of Section 705(e) of the California General Corporation Law. Section 10. Inspectors of Election. In advance of any meeting of shareholders, the board of directors may appoint any persons other than nominees for office as inspectors of election to act at such meeting or any adjournment thereof. If inspectors of election are not so appointed, the chairman of any such meeting may, and on the request of any shareholder or his proxy shall, make such appointment at the meeting. The number of inspectors shall be either one (1) or three (3). If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed. Incase any person appointed as inspector fails to appear or fails or refuses to act, the vacancy may, and on the request of any shareholder or a shareholder's proxy shall, be filled by appointment by the board of directors in advance of the meeting, or at the meeting by the chairman of the meeting. The duties of such inspectors shall be as prescribed by Section 707 of the California General Corporation Law and shall include: determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining when the polls shall close; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all shareholders. In the determination of the validity and effect of proxies, the dates contained on the forms of proxy shall presumptively determine the order of execution of the proxies, regardless of the postmark dates on the envelopes in which they are mailed. The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three (3) inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein. 6 ARTICLE III DIRECTORS Section 1. Powers. Subject to any limitations in the articles of incorporation and the California General Corporation Law relating to action requiring shareholder approval, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. The board of directors may delegate the management of the day-to-day operation of the business of the corporation to a management company or other person, provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the board of directors. Section 2. Number and Qualification of Directors. The authorized number of directors shall be three (3). The minimum and maximum limits may be changed only by amendment of the articles of incorporation or by a by-law amending this Section duly adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote. Section 3. Election and Term of Office. The directors shall be elected at each annual meeting of shareholders. If any annual meeting is not held or the directors are not elected at any annual meeting, however, they may be elected at any special meeting of shareholders held for that purpose, or at the next annual meeting of shareholders held thereafter. Each director shall hold office until the next annual meeting of shareholders and until his successor has been elected and qualified or until his earlier resignation or removal. Section 4. Resignation and Removal of Directors. (a) Resignation: Any director may resign effective upon giving written notice to the chairman of the board, the president, the secretary or the board of directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation, in which case such resignation shall be effective at the time specified. (b) Unsound Mind; Felony: The board of directors may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony. (c) Removal Without Cause by Shareholders: Any or all of the directors may be removed without cause if such removal is approved by the affirmative vote of a majority of the outstanding shares entitled to vote, provided that no director may be removed (unless the entire board of directors is removed) when the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of the directors' most recent election were then being elected. 7 (d) Reduction of Authorized Number of Directors: No reduction of the authorized number of directors shall have the effect of removing any director before his term of office expires. Section 5. Vacancies. (a) Vacancy Defined: A vacancy in the board of directors shall be deemed to exist in case of the death, resignation or removal of any director, if a director has been declared of unsound mind by order of court or convicted of a felony, if the authorized number of directors is increased, or if the shareholders fail, at any annual or special meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting. (b) Action by Board of Directors: Vacancies in the board of directors, except for a vacancy created by the removal of a director, may be filled by a majority of the remaining directors, although less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting of the shareholders. A vacancy in the board of directors created by the removal of a director may be filled only by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by the unanimous written consent of the holders of the outstanding shares entitled to vote. (c) Action by Shareholders: The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the board of directors. Any such election by written consent shall require the consents provided for in Section 8(a) of Article II of these By-Laws. Section 6. Place of Meetings. Regular and special meetings of the board of directors shall be held at the first of the places set forth in the following sentence of this Section which is applicable. Such meetings shall be held at any place within or without the "State of California which has been designated: (a) in the notice of the meeting; (b) by resolution of the board of directors; (c) in these By-Laws; or (d) at the corporation's principal office. Notwithstanding the foregoing, such meetings may be held at any place which is consented to in writing by the members of the board of directors, either before or after the meeting, pursuant to the provisions of Article III, Section 12 of these By-Laws. Section 7. Regular Meetings. Immediately following each annual meeting of shareholders, the board of directors shall hold a regular meeting at the place of said annual meeting or at another location as set forth in Article III, Section 6 of these By-Laws. If the regular meeting is held at the place of the annual meeting of shareholders, notice of such regular meeting shall not be required. 8 Section 8. Special Meetings. Special meetings of the board of directors for any purpose may be called at any time by the chairman of the board or the president, or any vice-president or the secretary or any assistant secretary, or any two directors. Notice of the time of special meetings shall be delivered personally or by telephone or telegraph or sent to each director by mail. In case notice is given by mail or telegram, it shall be sent, charges prepaid, to each director's address appearing on the corporate records, or if it is not on such records or is not readily ascertainable, at the place where the regular meetings of the board of directors are held. If notice is delivered personally or given by telephone or telegraph, it shall be given or delivered to the telegraph office at least twenty-four (24) hours before the meeting. If notice is mailed, it shall be deposited in the United States mail at least seventy-two (72) hours before the meeting. A notice, or waiver of notice, need not specify the purpose of the meeting of the board of directors. Section 9. Action Without Meeting. Any action by the board of directors may be taken without a meeting if all members of the board of directors shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the board of directors and shall have the same force and effect as a unanimous vote of such directors. Section 10. Meetings By Conference Telephone. Members of the board of directors may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear and speak to one another. Participation by a director in a meeting in the manner provided in this Section shall constitute presence in person by such director at such meeting. Section 11. Action at a Meeting: Quorum and Required Vote. Presence of a majority of the authorized number of directors at a meeting of the board of directors constitutes a quorum for the transaction of business. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the board of directors, unless a greater number, or the same number after disqualifying one or more directors from voting, is required by law or by the articles of incorporation. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of one or more directors, provided that any action taken is approved by at least a majority of the required quorum for such meeting such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 12. Adjournment. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than twenty-four (24) hours, notice of the adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who Were not present at the time of the adjournment. Section 13. Fees and Compensation. Directors and members of committees may receive such compensation for their services and such reimbursement for expenses as may be fixed or determined by resolution of the board of directors. 9 Section 14. Committees. The board of directors may, at its discretion, by specific resolution adopted by a majority of the authorized number of directors, designate one or more committees, each of which shall be composed of two or more directors, to serve at the pleasure of the board of directors. The appointment of members or alternate members of a committee shall require the vote of a majority of the authorized number of directors. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent member at any meeting of the committee. The board of directors may delegate to any such committee, to the extent provided in a specific resolution, any of the board of directors' powers and authority in the management of the corporation's business and affairs, except with respect to: (a) the approval of any action for which the California General Corporation Law or the articles of incorporation also require shareholder approval; (b) the filling of vacancies on the board of directors or in any committee; (c) the fixing of compensation of directors for serving on the board of directors or on any committee; (d) the amendment or repeal of by-laws or the adoption of new by-laws; (e) the amendment or repeal of any resolution of the board of directors which by its express terms is not so amendable or repealable; (f) a distribution to the shareholders of the corporation, except at a rate or in a periodic amount or within a price range determined by the board of directors; and (g) the appointment of other committees of the board of directors or the members thereof. The board of directors may prescribe appropriate rules, not inconsistent with these By-Laws, by which proceedings of any such committee shall be conducted. The provisions of these By-Laws relating to the calling of meetings of the board of directors, notice of meetings of the board of directors and waiver of such notice, adjournments of meetings of the board of directors, written consents to meetings of the board of directors and approval of minutes, action by the board of directors by consent in writing without a meeting, the place of holding such meetings, meetings by conference telephone or similar communications equipment, the quorum for such meetings, the vote required at such meetings and the withdrawal of directors after commencement of a meeting shall apply to committees of the board of directors and action by such committees. In addition, any member of the committee designated by the board of directors as the chairman or as secretary of the committee may call meetings of the committee. 10 ARTICLE IV OFFICERS Section 1. Officers. The officers of the corporation shall be a chairman of the board or a president, or both, a secretary and a chief financial officer. The corporation may also have, at the discretion of the board of directors, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the By-Laws or as the board of directors may from time to time determine. Officers other than the chairman of the board need not be directors. Any two or more offices may be held by the same person. Section 2. Election. The officers of the corporation, except those appointed by the chief executive officer pursuant to authority of the board of directors, shall be elected annually by the board of directors at the first meeting of the board of directors held after the annual meeting of the shareholders. If the election of officers does not occur at such meeting, such election shall occur within a reasonable time thereafter. Each officer shall serve at the pleasure of the board of directors and until his successor shall be elected and shall qualify, or until his death or until he shall resign or shall be otherwise disqualified to serve. Section 3. Removal and Resignation. Any officer may be removed at any time with or without cause either by the board of directors or by any officer to whom the power of removal has been conferred by the board of directors, subject to the rights, if any, of the officer under a contract of employment with the corporation. Subject to the rights, if any, of the corporation under such a contract of employment, any officer may resign at any time by giving written notice to the corporation. Unless otherwise specified therein, any such resignation shall take effect at the date of the receipt of such notice, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to render it effective. Section 4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed in the By-Laws for regular appointments to that office. Section 5. Chairman of the Board. The board of directors may, in its discretion, elect a chairman of the board, who shall preside at all meetings of the board of directors at which he is present and shall have such other powers and duties as may be prescribed by the board of directors or the By-Laws. If the office of president is vacant, the chairman of the board shall be the chief executive officer of the corporation and shall exercise the powers and duties of the president. Section 6. President. Subject to any supervisory powers that may be given by the board of directors or the By-Laws to the chairman of the board, the president shall be the corporation's general manager and chief executive officer and shall, subject to the control of the board of directors, pave general supervision, direction and control over the corporation's business and officers. He shall preside at all meetings of the shareholders, unless the board of directors designates another person to so preside. He shall have the general powers and duties of management customarily vested in a corporation's president, and shall have such other powers and duties as may be prescribed by the board of directors or the By-Laws. 11 Section 7. Vice President. In the absence or disability of the president, unless the board of directors designates another officer, the vice presidents in order of their rank as fixed by the board of directors, or if not ranked, the vice president designated by the board of directors, or if there has been no such designation, the vice president designated by the chief executive officer, shall perform all the duties of the chief executive officer, and when so acting shall have all the powers of and be subject to all the restrictions upon the chief executive officer. Each vice president shall have such powers and duties as may be prescribed by the board of directors or the By-Laws. Section 8. Secretary. The secretary shall keep, or cause to be kept, a book of minutes of all meetings and actions taken by the written consent of the board of directors, shareholders or any committees appointed by the board of directors. The minutes shall set forth any actions taken at any such meeting, its time and place, the names of those present at a board or committee meeting, and the number of shares present or represented at a shareholders' meeting, and, regarding meetings of the shareholders or board of directors, the notice thereof given, whether regular or special, and, if special, how authorized. The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporation's transfer agent, a record of the shareholders of the corporation, which record shall set forth the names and addresses of all shareholders, the number and classes of shares held by each, the number and date of the certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The secretary shall give, or cause to be given, notice of all meetings of the shareholders and of the board of directors required by the By-Laws or by law to be given, and he shall keep the records of the corporation and the seal in safe custody. He shall perform all duties incident to the office of secretary and shall have such other powers and duties as may be prescribed by the board of directors or the By-Laws. Any assistant secretary may perform any of the duties and exercise any of the powers of the secretary, unless prohibited from doing so by the board of directors, the chief executive officer or the secretary, and shall have any such other powers and duties as may be prescribed by the board of directors or the By-Laws. Section 9. Chief Financial Officer. The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of account of the corporation's properties and business transactions, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, earned surplus and shares. The chief financial officer shall have charge and custody of and be responsible for all funds, securities and other valuables of the corporation; receive and give receipts for monies due and payable to the corporation from any source whatsoever, and deposit all such monies in the name of the corporation at the depositories designated by the board of directors, or any person authorized by the board of directors to designate such depositories; and, in general, have all the duties and powers incident to the office of chief financial officer, as well as any other duties or powers which may be prescribed by the board of directors or the By-Laws. Any assistant treasurer may perform any of the duties and exercise any of the powers of the chief financial officer, unless prohibited from doing so by the board of directors, the chief executive officer or the chief financial officer, and shall have any such other powers and duties as may be prescribed by the board of directors or the By-Laws. 12 ARTICLE V MISCELLANEOUS Section 1. Record Date. The board of directors may fix a time in the future as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders or entitled to give consent to corporate action in writing without a meeting, to receive any report, to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall be not more than sixty (60) days nor less than ten (10) days prior to the date of any meeting, nor more than sixty (60) days prior to any other event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record at the close of business on that date are entitled to notice of and to vote at any such meeting, to give consent without a meeting, to receive any report, to receive a dividend, distribution, or allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date, except as otherwise provided in the articles of incorporation, the By-Laws or an agreement among all of the shareholders. Section 2. Inspection of Corporate Records. (a) The accounting books and records, the record of shareholders, and minutes of proceedings of the shareholders and the board of directors and committees of the board of directors of this corporation and any subsidiary of this corporation shall be open to inspection upon the written demand on the corporation of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to such holder's interests as a shareholder or as the holder of such a voting trust certificate. Such inspection by a shareholder or holder of a voting trust certificate may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts. (b) A shareholder or shareholders holding at least five (5) percent in the aggregate of the outstanding voting shares of the corporation or who hold at least one (1) percent of such voting shares and have filed a Schedule 14B with the United States Securities and Exchange Commission relating to the election of directors of the corporation shall have (in person, or by agent or attorney) the right to inspect and copy the record of shareholders' names and addresses and shareholdings during usual business hours upon five business days' prior written demand upon the corporation and to obtain from the transfer agent for the corporation, upon written demand and upon the tender of its usual charges, a list of the names and addresses of the shareholders who are-entitled to vote for the election of directors and their shareholdings, as of the most recent record date for which it has been compiled or as of a date specified by the shareholder subsequent to the date of demand. Such a list shall be made available on or before either five business days after the demand is received or the date specified therein as the date as of which the list is to be compiled, whichever is later. (c) Every director of either the corporation or its parent shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation. Such inspection by a 13 director may be made in person or by agent or attorney and the right of inspection includes the right to copy and make extracts. Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the board of directors. Section 4. Annual and Other Reports. (a) The annual report to shareholders described in California General Corporation Law Section 1501 is hereby expressly waived. (b) A shareholder or shareholders holding at least five (5) percent of the outstanding shares of any class of the corporation may make a written request to the corporation for an income statement of the corporation for the three (3) month, six (6) month or nine (9) month period of the current fiscal year ended more than thirty (30) days prior to the date of the request and a balance sheet of the corporation as of the end of such period and, in addition, if no annual report for the last fiscal year has been sent to shareholders, the annual report for the last fiscal year. The corporation shall use its best efforts to deliver the statement to the person making the request within thirty (30) days thereafter. A copy of any such statements shall be kept on file in the principal executive office of the corporation for twelve (12) months, and they shall be exhibited at all reasonable times to any shareholder demanding an examination of them or a copy shall be mailed to such shareholder. (c) If no annual report for the last fiscal year has been sent to shareholders, the corporation shall, upon the written request of any shareholder made more than 120 days after the close of such fiscal year, deliver or mail to the person making the request within 30 days thereafter the financial statements required by subdivision (a) for such year. (d) The quarterly income statements and balance sheets referred to in this section shall be accompanied either by the report thereon, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that such financial statements were prepared without audit from the books and records of the corporation. Section 5. Contracts, Etc., How Executed. The board of directors, except as otherwise provided in the By-Laws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; and, unless so authorized by the board of directors, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount, except for contracts or commitments in the regular course of business of the corporation executed by an officer within the scope of his authority. 14 Section 6. Certificate for Shares (a) Every holder of shares in the corporation shall be entitled to a certificate signed in the name of the corporation by the chairman or vice chairman of the board or the president or a vice president and by the chief financial officer or an assistant treasurer or the secretary or an assistant secretary; and this certificate shall certify the number of shares and the class or series of the shares owned by the shareholder. Any or all of the signatures on the certificate may be facsimile. Before it becomes effective, every certificate for shares authenticated solely by facsimile signatures shall be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company as registrar of transfers. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issuance. Notwithstanding the above, certificates need not be issued if the corporation is exempt pursuant to Section 416(b) of the California General Corporation Law. (b) Any such certificate shall also contain in a conspicuous manner any and all legends or other statements required by Sections 418(a) and/or 4l8(c) of the California General Corporation Law, the California Corporate Securities Law of 1968 or the federal securities laws. (c) Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the board of directors or the By-Laws may provide; provided, however, that any certificate so issued prior to full payment shall state on the face thereof both the amount paid and the amount remaining unpaid. (d) No new certificates generally shall be issued until the former certificates for the shares represented thereby shall have been surrendered for cancellation and cancelled. All such surrendered and cancelled certificates shall be preserved by the secretary for reference. In the case of lost, destroyed or stolen certificates, however, new certificates shall be issued upon request made to the corporation before it has notice that any such certificates have been acquired by a bona fide purchaser, if the owner gives the corporation an adequate indemnity bond and satisfies any other reasonable requirements imposed by the corporation. Section 7. Representation of Shares of Other Corporations. The chairman of the board, president or any vice president is authorized to vote, represent and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation, unless the board of directors designates another person to exercise such rights, or unless the By-Laws of the other corporation otherwise provide. The authority herein granted to said officers to vote or represent on behalf of this corporation any and all shares held by this corporation in any other corporation or corporations may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by any such officer. Section 8. Inspection of By-Laws. The corporation shall keep at its principal executive office in California, or if its principal executive office is not in California, then at its 15 principal business office in California, the original or a copy of the By-Laws as amended or otherwise altered to date, certified by the secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the corporation has no principal business office in California, upon the written request of any shareholder, the corporation shall furnish to such shareholder a, copy of the By-Laws as amended to that date. Section 9. Construction and Definitions. Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the California General Corporation Law shall govern the construction of these By-Laws. Without limiting the generality of the foregoing, the masculine gender includes the feminine and neuter, the singular number includes the plural and the plural number includes the singular, and the term "person" includes a corporation as well as a natural person. Section 10. Indemnification of Agents of the Corporation; Liability Insurance. The corporation shall indemnify its agents to the maximum extent permitted by law. Section 11. [Deleted in its entirety by Amended dated 2/18/91.] ARTICLE VI AMENDMENTS Section 1. Power of Shareholders. Subject to the limitations imposed by Section 212(a) of the California General Corporation Law, new By-Laws may be adopted or these By-Laws may be amended or repealed by the affirmative vote of a majority of the outstanding shares entitled to vote, or by the written consent of shareholders entitled to vote such shares, except as otherwise provided by law or by the articles of incorporation. Section 2. Power of Directors. Subject to the right of shareholders as provided in Section 1 of this Article to adopt, amend or repeal By-Laws, the board of directors may adopt, amend, or repeal By-Laws, other than a By-Law or amendment thereof changing the authorized number of directors, changing from a fixed to a variable board or providing for the filling of a vacancy in the board of directors created by the removal of a director by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. 16 CERTIFICATE OF ASSISTANT SECRETARY I, the undersigned, do hereby certify: 1. That I am the duly elected and acting Assistant Secretary of Niemin Porter & Ca., a California corporation; and 2. That the foregoing By-Laws, comprising 24 pages, constitute the By-Laws of said corporation as duly adapted by action of the Board of Directors of the corporation taken on December 5, 1984. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said corporation as of this 7th day of December, 1984. /s/ William J. Wippich ------------------------------------ William J. Wippich EX-3.27 29 y92210a1exv3w27.txt BYLAWS EXHIBIT 3.27 BY-LAWS OF BELCHER CORPORATION Adopted September 8, 1989 ARTICLE I OFFICES Section 1. Registered Office. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. Other Offices. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II FISCAL YEAR - STOCKHOLDERS Section 1. Fiscal Year. The fiscal year of the corporation shall be such period as the board of directors may designate from time to time by resolution. Section 2. Annual Meeting. The annual meeting of the stock-holders for the election of directors and for the transaction of any other proper business, shall be held at such date and time during the first eight months of each calendar year as shall be determined by the board of directors. If no earlier date is determined by the board of directors, the annual meeting shall be held on the fourth Tuesday in August of each year, if not a legal holiday under the laws of the State where such meeting is to be held and if a legal holiday under the laws of such State, then on the next succeeding business day not a legal holiday under the laws of such State. Section 3. Special Meetings. Special meetings of the stock- holders, for any purpose or purposes, unless otherwise provided by statute or by the certificate of incorporation, may be called at any time by the chairman of the board, or the president, or any vice president, or secretary, and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Any such request shall state the purpose or purposes of the proposed meeting. Section 4. Place of Meetings. All meetings of the stock- holders for the election of directors shall be held at such place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of such meeting. Section 5. Notice of Meetings and Adjourned Meetings. Written notice of the annual meeting or a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than fifty (50) days before the date of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 6. Stockholders' List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 7. Quorum and Adjournments. At such meeting of the stockholders, except as otherwise provided by statute or by the certificate of incorporation, the holders of a majority of the issued and outstanding shares of each class of stock entitled to vote thereat, present in person or represented by proxy, shall be necessary and sufficient to constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. Section 8. Voting. When a quorum is present or represented at any meeting, the vote of the holders of a majority of the shares of stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation or of these by-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. Proxies. At each meeting of the stockholders, each stockholder shall, unless otherwise provided by the certificate of incorporation, be entitled to one vote in person or by proxy for each share of stock held by him which has voting power upon the matter in question, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Section 10. Action of Stockholders Without a Meeting. When- ever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, whether by any provision of the statutes or of the certificate of in-corporation or otherwise, such corporate action may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III BOARD OF DIRECTORS Section 1. Number of Directors. The number of directors which shall constitute the whole board shall be not less than one nor more than ten. Within these limits the number of directors elected shall be deemed to be the number of directors constituting the whole board unless otherwise fixed by resolution adopted at the meeting at which such directors are elected. Directors may, but need not, be stockholders. Section 2. Election of Directors. The directors shall be elected at the annual meeting of stockholders, or if not so elected, at a special meeting of stockholders called for that purpose. At any meeting of stockholders at which directors are to be elected, only persons nominated as candidates shall be eligible for election, and the candidates receiving the greatest number of votes shall be elected. Section 3. Removal. Any director may be removed with or without cause, at any time by the affirmative vote of the holders of record of a majority of the outstanding shares of stock entitled to vote in the election of directors, at a special meeting of the stockholders called for the purpose; and the vacancy in the board of directors caused by such removal may be filled by the stockholders, or if not so filled, of such State, then on the next succeeding business day not a legal holiday under the laws of such State. Section 3. Special Meetings. Special meetings of the stock- holders, for any purpose or purposes, unless otherwise provided by statute or by the certificate of incorporation, may be called at any time by the chairman of the board, or the president, or any vice president, or secretary, and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Any such request shall state the purpose or purposes of the proposed meeting. Section 4. Place of Meetings. All meetings of the stock- holders for the election of directors shall be held at such place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of such meeting. Section 5. Notice of Meetings and Adjourned Meetings. Written notice of the annual meeting or a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than fifty (50) days before the date of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 6. Stockholders' List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 7. Quorum and Adjournments. At such meeting of the stockholders, except as otherwise provided by statute or by the certificate of incorporation, the holders of a majority of the issued and outstanding shares of each class of stock entitled to vote thereat, present in person or represented by proxy, shall be necessary and sufficient to constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. Section 8. Voting. When a quorum is present or represented at any meeting, the vote of the holders of a majority of the shares of stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation or of these by-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. Proxies. At each meeting of the stockholders, each stockholder shall, unless otherwise provided by the certificate of incorporation, be entitled to one vote in person or by proxy for each share of stock held by him which has voting power upon the matter in question, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Section 10. Action of Stockholders Without a Meeting. When- ever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, whether by any provision of the statutes or of the certificate of Incorporation or otherwise, such corporate action may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III BOARD OF DIRECTORS Section 1. Number of Directors. The number of directors which shall constitute the whole board shall be not less than one nor more than ten. Within these limits the number of directors elected shall be deemed to be the number of directors constituting the whole board unless otherwise fixed by resolution adopted at the meeting at which such directors are elected. Directors may, but need not, be stockholders. Section 2. Election of Directors. The directors shall be elected at the annual meeting of stockholders, or if not so elected, at a special meeting of stockholders called for that purpose. At any meeting of stockholders at which directors are to be elected, only persons nominated as candidates shall be eligible for election, and the candidates receiving the greatest number of votes shall be elected. Section 3. Removal. Any director may be removed with or without cause, at any time by the affirmative vote of the holders of record of a majority of the outstanding shares of stock entitled to vote in the election of directors, at a special meeting of the stockholders called for the purpose; and the vacancy in the board of directors caused by such removal may be filled by the stockholders, or if not so filled, by a majority of the board of directors remaining in office or by the sole remaining director. Section 4. Vacancies. A resignation from the board of directors shall be deemed to take effect immediately or at such other time as the director may specify. When one or more directors shall resign from the board, effective at a future date, a majority of the directors then in office, including those who have resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. If a director dies, a majority of the directors remaining in office, or the sole remaining director, shall have the power to fill such vacancy. Each director so chosen shall hold office until the next election of directors. Section 5. Annual Meeting. After each annual election of directors, on the same day the board of directors may meet for the purpose of organisation, the election of officers and the transaction of other business at the place where the annual meeting of the stockholders for the election of directors is held. Notice of such meeting need not be given. Such meeting may be held at any other time or place which shall be specified in a notice given as hereinafter provided for special meetings of the board of directors or in a consent and waiver of notice thereof signed by all the directors. Section 6. Regular Meetings. Regular meetings of the board of directors may be held at such places (within or without the State of Delaware) and at such times as the board shall by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at such place at the same hour and on the next succeeding business day not a legal holiday. Notice of regular meetings need not be given. Section 7. Special Meetings. Special meetings of the board of directors shall be held whenever called by the president, or by any vice president, or by any two of the directors. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least three (3) days before the day on which the meeting is to be held, or shall be sent to him by telegraph, cable or wireless so addressed, or shall be delivered personally or by telephone, at least 24 hours before the time the meeting is to be held. Each such notice shall state the time and place (within or without the State of Delaware) of the meeting but need not state the purposes thereof, except as otherwise provided by statute or by these by-laws. Notice of any meeting of the board need not be given to any director who shall be present at such meeting; and any meeting of the board shall be a legal meeting without any notice thereof having been given, if all of the directors then in office shall be present thereat. Section 8. Quorum. Except as otherwise provided by statute or by these by-laws, a majority of the total number of directors (or the closest whole number thereto) shall be required to constitute a quorum for the transaction of business at any meeting, and the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be necessary for the adoption of any resolution or the taking of any other action. In the absence of a quorum, the director or directors present may adjourn any meeting from time to time until a quorum be had. Notice of any adjourned meeting need not be given. Section 9. Telephone Communications. Members of the board of directors or any committee thereof may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting. Section 10. Action of Directors Without a Meeting. Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if all members of the board or of such committee, as the case may be, consent thereto in writing and such written consent is filed with the minutes or proceedings of the board or such committee. Section 11. Compensation. Directors, as such, shall not receive any stated salary for their services, but by resolution of the board of directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at such regular and special meeting of the board or of any committee thereof. Nothing herein contained shall be construed so as to preclude any director from serving the corporation in any other capacity, or from serving any of its stockholders, subsidiaries or affiliated corporations in any capacity, and receiving compensation therefor. Section 12. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of two or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; provided, however, that in the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 13. Indemnification. The corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or serves or served any other enterprise at the request of the corporation, against any and all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with such action, suit or proceeding, in any circumstances, and to the full extent, permitted by Section 145 of the Delaware Corporation Law, any amendment thereto, or any law of similar import. ARTICLE IV NOTICES Section 1. Notices. Whenever under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be necessary that personal notice be given, and such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation or at his residence or usual place of business, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegraph, cable or wireless, and such notice shall be deemed to be given when the same shall be filed, or in person or by telephone, and such notice shall be deemed to be given when the same shall be delivered. Section 2. Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section 1. Officers. The officers of the corporation shall be a president, a secretary, a treasurer, and, if the board shall so determine, a chairman of the board, a vice chairman of the board, and one or more vice presidents. Any two or more offices may be held by the same person. Section 2. Election of Officers. The officers shall be elected by the board of directors and each shall hold office at the pleasure of the board of directors until his successor shall have been duly elected and qualified, or until his death, or until he shall resign or until he shall have been removed in the manner hereinafter provided. Section 3. Other Officers. In addition to the officers named in Section 1 of this Article, the corporation may have such other officers and agents as may be deemed necessary by the board of directors. Such other officers and agents shall be appointed in such manner, have such duties and hold their offices for such terms, as may be determined by resolution of the board of directors. Section 4. Resignation. Any officer may resign at any time by giving written notice of his resignation to the board of directors, to the president or to the secretary of the corporation. Any such resignation shall take effect at the time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. Removal. Any officer may be removed, either with or without cause, by action of the directors. Section 6. Vacancy. A vacancy in any office because of death, resignation, removal or any other cause shall be filled by the board of directors. Section 7. President. The president shall have direct charge of the business of the corporation, subject to the general control of the board of directors, and shall be the chief executive officer of the corporation unless a chairman of the board of directors is elected and is designated chief executive officer by the board. Section 8. Secretary. The secretary shall, if present, act as secretary of, and keep the minutes of, all the proceedings of the meetings of the stockholders and of the board of directors and of any committee of the board of directors in one or more books to be keep for that purpose; shall perform such other duties as shall be assigned to him by the president or the board of directors; and, in general, shall perform all duties incident to the office of secretary. Section 9. Treasurer. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of his duties, in such sum and with such surety or sureties as the board of directors shall determine. The treasurer shall keep or cause to be kept full and accurate records of all receipts and disbursements in the books of the corporation and shall have the care and custody of all funds and securities of the corporation. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and shall perform such other duties as may be assigned to him by the president or the board of directors; and, in general, shall perform all duties incident to the office of treasurer. Section 10. Salaries. The salaries of the officers shall be fixed from time to time by the board of directors or by the president or chief executive officer. Any such decision by the president or chief executive officer shall be final unless expressly overruled or modified by action of the board of directors, in which event such action of the board of directors shall be conclusive of the matter. Nothing contained herein shall preclude any officer from serving the corporation in any other capacity, including that of director, or from serving any of its stockholders, subsidiaries or affiliated corporations in any capacity, and receiving a proper compensation therefor. ARTICLE VI LOANS, CHECKS, DEPOSITS, ETC. Section 1. General. All checks, drafts, bill of exchange or other orders for the payment of money, issued in the name of the corporation, shall be signed by such person or persons and in such manner as may from time to time be designated by the board of directors, which designation may be general or confined to specific instances. Section 2. Loans and Evidences of Indebtedness. No loan shall be contracted on behalf of the corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the board of directors. Such authorization may be general or confined to specific instances. Loans so authorized by the board of directors may be effected at any time for the corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the corporation issued for such loans shall be made, executed and delivered as the board of directors shall authorize. When so authorized by the board of directors any part of or all the properties, including contract rights, assets, business or good will of the corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the corporation, and of the interest thereon, by instruments executed and delivered in the name of the corporation. Section 3. Banking. All funds of the corporation not other- wise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors may authorize. The board of directors may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these by-laws, as it may deem expedient. For the purpose of deposit and for the purpose of collection for the account of the corporation, checks, drafts and other orders for the payment of money which are payable to the order of the corporation shall be endorsed, assigned and delivered by such person or persons and in such manner as may from time to time be authorized by the board of directors. Section 4. Securities Held By The Corporation. Unless other- wise provided by resolution adopted by the board of directors, the president or chairman and chief executive officer may from time to time appoint an attorney or attorneys, or an agent or agents, to exercise in the name and on behalf of the corporation the powers and rights which the corporation may have as the holder of stock or other securities in any other corporation to vote or to consent in respect of such stock or other securities; and the president or chairman and chief executive officer may instruct the person or persons so appointed as to the manner of exercising such powers and rights and the president or chairman and chief executive officer may execute or cause to be executed in the name and on behalf of the corporation and under its corporate seal, or otherwise, all such written proxies powers of attorney or other written instruments as he may deem necessary in order that the corporation may exercise such powers and rights. ARTICLE VII SHARES AND THEIR TRANSFER Section 1. Share Certificates. Every stockholder shall be entitled to have a certificate certifying the number of shares of stock of the corporation owned by him, signed by, or in the name of the corporation by the president or a vice president and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation (except that when any such certificate if countersigned by a transfer agent other than the corporation or its employee or by a registrar other than the corporation or its employee the signatures of any such officers may be facsimiles). If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarised on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except in the case of restrictions on transfers of securities which are required to be noted on the certificate, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 2. Lost Stolen or Destroyed Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 3. Transfers. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 4. Record Dates. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to such meeting or to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 5. Protection of Corporation. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VIII CORPORATE SEAL The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE IX EMERGENCY REGULATIONS The board of directors may adopt, either before or during an emergency, as that term is defined by the Delaware Corporation Law, any emergency regulations permitted by the Delaware Corporation Law which shall be operative only during such emergency. In the event the board of directors does not adopt any such emergency regulations, the special rules provided in the Delaware Corporation Law shall be applicable during an emergency as therein defined. ARTICLE X AMENDMENTS These by-laws may be altered or repealed at any regular or special meeting of the stockholders. Notice of such alternation or repeal shall be contained in the notice of any such special meeting. EX-3.28 30 y92210a1exv3w28.txt CODE OF REGULATIONS EXHIBIT 3.28 CODE OF REGULATIONS OF PEERLESS CORPORATION Adopted September 8, 1989 ARTICLE I Fiscal Year The fiscal year of the Corporation shall be such period as the Board of Directors may designate by resolution from time to time. ARTICLE II Shareholders Section 1. Meetings of Shareholders. (a) Annual Meeting. The annual meeting of the Shareholders of this Corporation, for the election of Directors, the consideration of Financial statements and other reports, and the transaction of such other business as may properly be brought before such meeting, shall be held at such date after the annual financial statements of the Corporation have been prepared as the Board of Directors shall determine from time to time. Upon due notice there may also be considered and acted upon at an annual meeting any matter which could properly be considered and acted upon at a special meeting, in which case and for which purpose the annual meeting shall also be considered as, and shall be, a special meeting. In the event that the annual meeting is not held or if Directors are not elected thereat, a special meeting may be called and held for that purpose. [1701.39, 1701.38(A)] (b) Special Meeting. Special meetings of the Shareholders may be held on any business day when called by any person or persons who may be authorized by law to do so. Calls for special meetings shall specify the purpose or purposes thereof, and no business shall be considered at any such meeting other than that specified in the call there for. [1701.40(A), 1701.41] (c) Place of Meetings. Any meeting of Shareholders may be held at such place within or without the State of Ohio as may be designated in the Notice of said meeting. [1701.40(B)] (d) Notice of Meeting and Waiver of Notice. (1) Notice. Written notice of the time, place and purposes of any meeting of Shareholders shall be given to each Shareholder entitled thereto not less than seven (7) days nor more than sixty (60) days before the date fixed for the meeting and as prescribed by law. Such notice shall be given either by personal delivery or mailed to each Shareholder entitled to notice of or to vote at such meeting. If such notice is mailed, it shall be directed, postage prepaid, to the Shareholders at their respective addresses as they appear upon the records of the Corporation, and notice shall be deemed to have been given on the day so mailed. If any meeting is adjourned to another time or place, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such an adjournment is taken. No business shall be transacted at any such adjourned meeting except as might have been lawfully transacted at the meeting at which such adjournment was taken. (1701.41 (A), 1701.02) (2) Notice to Joint Owners. All notices with respect to any shares to which persons are entitled by joint or common ownership may be given to that one of such persons who is named first upon the books of this Corporation, and notice so given shall be sufficient notice to all the holders of such shares. (3) Waiver. Notice of any meeting, however, may be waived in writing by any "Shareholder either before or after any meeting of Shareholders, or by attendance at such meeting without protest prior to the commencement thereof. (1701.42) (e) Shareholders Entitled to Notice and to Vote. If a record date shall not be fixed or the books of the Corporation shall not be closed against transfers of shares pursuant to statutory authority, the record date for the determination of Shareholders entitled to notice of or to vote at any meeting of Shareholders shall be the date next preceding the day on which notice is given or the date next preceding the day on which the meeting is held, as the case may be, and only Shareholders of record as of the close of business on such record date shall he entitled to notice of and to vote at such meeting. Such record date shall continue to be the record date for all adjournments of such meeting unless a new record date shall be fixed and notice thereof and of the date of the adjourned meeting be given to all Shareholders entitled to notice in accordance with the new record date so fixed. (1701.45 (A) (C) (E)) (f) Quorum. At any meeting of Shareholders, the holders of shares entitling them to exercise a majority of the voting power of the Corporation, present in person or by proxy, shall constitute a quorum for such meeting; provided, however, that no action required by law, the Articles, or these Regulations to be authorized or taken by the holders of a designated proportion of the shares of the Corporation may be authorized or taken by a lesser proportion. The Shareholders present in person or by proxy, whether or not a quorum be present, may adjourn the meeting from time to time without notice other than by announcement at the meeting. (1701.51) -2- (g) Organization of Meetings: (1) Presiding Officer. The Chairman of the Board, or in his absence, the President, or in the absence of both of them, a Vice President of the Corporation shall call all meetings of the Shareholders to order and shall act as Chairman thereof. If all are absent, the Shareholders shall select a Chairman. (2) Minutes. The Secretary of the Corporation, or, in his absence, an Assistant Secretary, or, in the absence of both, a person appointed by the Chairman of the meeting, shall act as Secretary of the meeting and shall keep and make a record of the proceedings thereat. (h) Order of Business. The order of business at all meetings of the Shareholders, unless waived or otherwise determined by a vote of the holder or holders of the majority of the number of shares entitled to vote present in person or represented by proxy, shall be as follows: 1. Call meeting to order. 2. Selection of Chairman and/or Secretary, if necessary. 3. Proof of notice of meeting and presentment of affidavit thereof. 4. Roll call, including filing of proxies with Secretary. 5. Upon appropriate demand, appointment of inspectors of election. (1701.50) 6. Reading, correction and approval of previously unapproved minutes. 7. Reports of officers and committees. 8. If annual meeting, or meeting called for that purpose, election of Directors. 9. Unfinished business, if adjourned meeting. 10. Consideration in sequence of all other matters set forth in the call for and written notice of the meeting. 11. Adjournment. (i) Voting. Except as provided by statute or in the Articles, every Shareholder entitled to vote shall be entitled to cast one vote on each proposal submitted to the meeting for each share held of record by him on the record date for the determination of the Shareholders entitled to vote at the meeting. At any meeting at which a quorum is present, all questions and business which may come before the meeting shall be determined by a majority of votes cast, except when a -3- greater proportion is required by law, the Articles, or these Regulations. (1701.44(A)) (j) Proxies. A person who is entitled to attend a Shareholders' meeting, to vote thereat, or to execute consents, waivers and releases, may be represented at such meeting or vote thereat, and execute consents, waivers, and releases, and exercise any of his rights, by proxy or proxies appointed by a writing signed by such person, or by his duly authorized attorney, as provided by the laws of the State of Ohio. (1701.48) (k) List of Shareholders. At any meeting of Shareholders a list of shareholders, alphabetically arranged, showing the number and classes of shares held by each on the record date applicable to such meeting shall be produced on the request of any Shareholder. (1701.37(B)) Section 2. Action of Shareholders Without a Meeting. Any action which may be taken at a meeting of Shareholders may be taken without a meeting if authorized by a writing or writings signed by all of the holders of shares who would be entitled to notice of a meeting for such purpose, which writing or writings shall be filed or entered upon the records of the Corporation. (1701.54) ARTICLE III Directors Section 1. General Powers. The business, power and authority of this Corporation shall be exercised, conducted and controlled by a Board of Directors, except where the law, the Articles or these Regulations require action to be authorized or taken by the Shareholders. (1701.59) Section 2. Election, Number and Qualification of Directors. (a) Election. The Directors shall be elected at the annual meeting of Shareholders, or if not so elected, at a special meeting of Shareholders called for that purpose. At any meeting of Shareholders at which Directors are to be elected, only persons nominated as candidates shall be eligible for election. (1701.39, 1701.55 (A)) (b) Number. The number of Directors, which shall not be less than the lesser of three or the number of shareholders of record, may be fixed or changed at a meeting of the Shareholders called for the purpose of electing Directors at which a quorum is present, by the affirmative vote of the holders of a majority of the shares represented at the meeting and entitled to vote on such proposal. The number of Directors elected shall be deemed to be the number of Directors fixed unless otherwise fixed by resolution adopted at the meeting at which such Directors are elected. (1701.56) -4- (c) Qualification. Directors need not be Shareholders of the Corporation. (1701.56 (C)) Section 3. Term of Office of Directors. (a) Term. Each Director shall hold office until the next annual meeting of the Shareholders and until his successor has been elected or until his earlier resignation, removal from office, or death. Directors shall be subject to removal as provided by statute or by other lawful procedures and nothing herein shall be construed to prevent the removal of any or all Directors in accordance therewith. (1701.57, 1701.58(C)) (b) Resignation. A resignation from the Board of Directors shall be deemed to take effect immediately upon its being received by any incumbent corporate officer other than an officer who is also the resigning Director, unless some other time is specified therein. (1701.58(A)) (c) Vacancy. In the event of any vacancy in the Board of Directors for any cause, the remaining Directors, though less than a majority of the whole Board, may fill any such vacancy for the unexpired term.(1701.58 (D)) Section 4. Meetings of Directors. (a) Regular Meetings. A regular meeting of the Board of Directors shall be held immediately following the adjournment of the annual meeting of the Shareholders or a special meeting of the Shareholders at which Directors are elected. The holding of such Shareholders' meeting shall constitute notice of such Directors' meeting and such meeting may be held without further notice. Other regular meetings shall be held at such other times and places as may be fixed by the Directors. (1701.61) (b) Special Meetings. Special meetings of the Board of Directors may be held at any time upon call of the Chairman of the Board, the President, any Vice President, or any two Directors. (1701.61 (A)) (c) Place of Meeting. Any meeting of Directors may be held at any place within or without the State of Ohio in person and/or through any communications equipment if all persons participating in the meeting can hear each other. (1701.61 (B)) (d) Notice of Meeting and Waiver of Notice. Notice of the time and place of any regular or special meeting of the Board of Directors (other than the regular meeting of Directors following the adjournment of the annual meeting of the Shareholders or following any special meeting of the Shareholders at which Directors are elected) shall be given to each Director by personal delivery, telephone, mail, telegram or cablegram at least forty-eight (48) hours before the meeting, which notice need not specify the purpose of the meeting. Such notice, however, may be waived in writing by any Director either before or after -5- any such meeting, or by attendance at such meeting (including attendance (presence) by means of participation through any communications equipment as above provided) without protest prior to the commencement thereof. (170.61 (B)(C), 1701.42) Section 5. Quorum and Voting. At any meeting of Directors, no fewer than one-half of the whole authorized number of Directors must be present, in person and/or through any communications equipment, to constitute a quorum for such meeting, except that a majority of the remaining Directors in office constitutes a quorum for filling a vacancy in the Board. At any meeting at which a quorum is present, all acts, questions and business which may come before the meeting shall be determined by a majority of votes cast by the Directors present at such meeting, unless the vote of a greater number is required by the Articles, Regulations or By-Laws. (1701.62) Section 6. Committees. (a) Appointment. The Board of Directors may from time to time appoint certain of its members (but in no event less than three) to act as a committee or committees in the intervals between meetings of the Board and may delegate to such committee or committees powers to be exercised under the control and direction of the Board. Each such committee and each member thereof shall serve at the pleasure of the Board. (b) Executive Committee. In particular, the Board of Directors may create from its membership and define the powers and duties of an Executive Committee. During the intervals between meetings of the Board of Directors the Executive Committee shall possess and may exercise all of the powers of the Board of Directors in the management and control of the business of the Corporation to the extent permitted by law. All action taken by the Executive Committee shall be reported to the Board of Directors at its first meeting thereafter. (c) Committee Action. Unless otherwise provided by the Board of Directors, a majority of the members of any committee appointed by the Board of Directors pursuant to this Section shall constitute a quorum at any meeting thereof and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. Action may be taken by any such committee without a meeting by a writing signed by all its members. Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all action taken by it. (1701.63) Section 7. Action of Directors Without a Meeting. Any action which may be taken at a meeting of Directors may be taken without a meeting if authorized by a writing or writings signed by all the Directors, which writing or writings shall be filed or entered upon the records of the Corporation. (1701.54) -6- Section 8. Compensation of Directors. The Board of Directors may allow compensation for attendance at meetings or for any special services, may allow compensation to members of any committee, and may reimburse any Director for his expenses in connection with attending any Board or committee meeting. (1701.60) Section 9. Attendance at Meetings of Persons Who Are Not Directors. Unless waived by a majority of Directors in attendance, not less than twenty-four (24) hours before any regular or special meeting of the Board of Directors any Director who desires the presence at such meeting of not more than one person who is not a Director shall so notify all other Directors, request the presence of such person at the meeting, and state the reason in writing. Such person will not be permitted to attend the Directors' meeting unless a majority of the Directors in attendance vote to admit such person to the meeting. Such vote shall constitute the first order of business for any such meeting of the Board of Directors. Such right to attend, whether granted by waiver or vote, may be revoked at any time during any such meeting by the vote of a majority of the Directors in attendance. ARTICLE IV Officers Section 1. General Provisions. The Board of Directors shall elect a President, a Secretary and a Treasurer, and may elect a Chairman of the Board, one or more Vice-Presidents, and such other officers and assistant officers as the Board may from time to time deem necessary. The Chairman of the Board shall be a Director, but no one of the other officers need be a Director. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required to be executed, acknowledged or verified by two or more officers. (1701.64 (A)) Section 2. Powers and Duties. All officers, as between themselves and the Corporation, shall respectively have such authority and perform such duties as are customarily incident to their respective offices, and as may be specified from time to time by the Board of Directors, regardless of whether such authority and duties are customarily incident to such office. In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board of Directors may delegate for the time being, the powers or duties of such officer, or any of them, to any other officer or to any Director. The Board of Directors may from time to time delegate to any officer authority to appoint and remove subordinate officers and to prescribe their authority and duties. Since the lawful purposes of this Corporation include the -7- acquisition and ownership of real property, personal property and property in the nature of patents, copyrights, and trademarks and the protection of the Corporation's property rights in its patents, copyrights and trademarks, each of the officers of this Corporation is empowered to execute any power of attorney necessary to protect, secure, or vest the Corporation's interest in and to real property, personal property and its property protectable by patents, trademarks and copyright registration and to secure such patents, copyrights and trademark registrations. (1701.64(B)(1)) Section 3. Term of Office and Removal. (a) Term. Each officer of the corporation shall hold office at the pleasure of the Board of Directors until his successor has been elected or until his earlier resignation, removal from office or death. It shall not be necessary for the officers of the corporation to be elected annually. The election or appointment of an officer for a given term, or a general provision in the Articles, Regulations or Bylaws with respect to term of office, shall not be deemed to create contract rights. (1701.64(A) and 1701.64(B)(2)) (b) Removal. Any officer may be removed, with or without cause, by the Board of Directors without prejudice to the contract rights, if any, of such officer. (1701.64(B)(2)) (c) Vacancies. The Board of Directors may fill any such vacancy in any office occurring for whatever reason. (1701.64(B)(3)). Section 4. Compensation of Officers. Unless compensation is otherwise determined by a majority of the Directors at a regular or special meeting of the Board of Directors, or unless such determination is delegated by the Board of Directors to another officer or officers, the President of the Corporation from time to time shall determine the compensation to be paid to all officers and other employees for services rendered to the Corporation. (1701.60) ARTICLE V Indemnification of Directors and Officers (a) Right of Indemnification. The Corporation shall indemnify any Director or officer to the fullest extent provided by, or permissible under Section 1701.13(E), Ohio Revised Code; and the Corporation is hereby specifically authorized to take any and all further action to effectuate any indemnification of any Director or officer which any Ohio corporation may have power to take, by any vote of the Shareholders, vote of disinterested Directors, by any Agreement, or otherwise. This Section of the Code of Regulations of the Corporation shall be interpreted in all respects to expand such power to indemnify to the maximum extent permissible to any Ohio Corporation with regard to the particular facts of each case, and not in any way to limit -8- any statutory or other power to indemnify, or right of any individual to indemnification. (b) Insurance for Indemnification. The Corporation may purchase and maintain insurance for protection of the Corporation and for protection of any Director, officer, employee and/or any other person for whose protection, and to the fullest extent, such insurance may be purchased and maintained under Section 1701.13(E)(7), Ohio Revised Code, or otherwise. Such policy or policies of insurance may provide such coverage and be upon such terms and conditions as shall be authorized and approved from time to time by the Board of Directors or the Shareholders of the Corporation. ARTICLE VI Securities Held by the Corporation Section 1. Transfer of Securities Owned by the Corporation. All endorsements, assignments, transfers, stock powers, share powers or other instruments of transfer of securities standing in the name of the Corporation shall be executed for and in the name of the Corporation by the President, by a Vice President, by the Secretary or by the Treasurer or by any other person or persons as may be thereunto authorized by the Board of Directors. Section 2. Voting Securities Held by the Corporation. The Chairman of the Board, President, any Vice President, Secretary or Treasurer, in person or by another person thereunto authorized by the Board of Directors, in person or by proxy or proxies appointed by him, shall have full power and authority on behalf of the Corporation to vote, act and consent with respect to any securities issued by other corporations which the Corporation may own. (1701.47 (A)) ARTICLE VII Share Certificates Section 1. Transfer and Registration of Certificates. The Board of Directors shall have authority to make such rules and regulations, not inconsistent with law, the Articles or these Regulations, as it deems expedient concerning the issuance, transfer and registration of certificates for shares and the shares represented thereby and may appoint transfer agents and registrars thereof. (1701.14 (A), 1701.26) Section 2. Substituted Certificates. Any person claiming that a certificate for shares has been lost, stolen or destroyed, shall make an affidavit or affirmation of -9- that fact and, if required, shall give the Corporation (and its registrar or registrars and its transfer agent or agents, if any) a bond of indemnity, in such form and with one or more sureties satisfactory to the Board, and, if required by the Board of Directors, shall advertise the same in such manner as the Board of Directors may require, whereupon a new certificate may be executed and delivered of the same tenor for the same number of shares as the one alleged to have been lost, stolen or destroyed. (1701.27, 1308.35) ARTICLE VIII Seal The Directors may adopt a seal for the Corporation which shall be in such form and of such style as is determined by the Directors. Failure to affix any such corporate seal shall not affect the validity of any instrument. (1701.13(B)) ARTICLE IX Consistency with Articles of Incorporation If any provision of these Regulations shall be inconsistent with the Corporation's Articles of Incorporation (and as they may be amended from time to time), the Articles of Incorporation (as so amended at the time) shall govern. ARTICLE X Section Headings The headings contained in this Code of Regulations are for reference purposes only and shall not be construed to be part of and/or shall not affect in any way the meaning or interpretation of this Code of Regulations. ARTICLE XI Amendments This Code of Regulations of the Corporation (and as it may be amended. from time to time) may be amended of added to by the affirmative vote or the written consent of the Shareholders of record entitled to exercise a majority of the voting power on such proposal; provided, how-ever, that if an amendment or addition is adopted by written consent without a meeting of the Shareholders, it shall be the duty of the Secretary to enter the amendment or addition in the records of the Corporation, and to mail a copy of such amendment or addition to each Shareholder of record who would be entitled to vote thereon and did not participate in the adoption thereof. (1701.11) -10- EX-10.1 31 y92210a1exv10w1.txt CREDIT AGREEMENT Exhibit 10.1 ------------------------------------------------------- NEENAH FOUNDRY COMPANY AND THE SUBSIDIARIES OF NEENAH FOUNDRY COMPANY IDENTIFIED ON THE SIGNATURE PAGES HERETO, AS BORROWERS ------------------------------------------------------- LOAN AND SECURITY AGREEMENT Dated as of October 8, 2003 $92,085,000 ------------------------------------------------------- FLEET CAPITAL CORPORATION, INDIVIDUALLY AND AS AGENT FOR ANY LENDER WHICH IS OR BECOMES A PARTY HERETO, FLEET SECURITIES, INC., AS ARRANGER, CONGRESS FINANCIAL CORPORATION (CENTRAL), INDIVIDUALLY AND AS SYNDICATION AGENT, GENERAL ELECTRIC CAPITAL CORPORATION, INDIVIDUALLY AND AS DOCUMENTATION AGENT, AND THE ADDITIONAL LENDERS NOW AND FROM TIME TO TIME PARTY HERETO ------------------------------------------------------- TABLE OF CONTENTS
PAGE SECTION 1. CREDIT FACILITY...................................................... 1 1.1 Loans......................................................... 1 1.2 Letters of Credit; LC Guaranties.............................. 4 1.3 Term Loan..................................................... 5 1.4 Borrowing Agent............................................... 6 SECTION 2. INTEREST, FEES AND CHARGES........................................... 6 2.1 Interest...................................................... 6 2.2 Computation of Interest and Fees.............................. 7 2.3 Fee Letter.................................................... 7 2.4 Letter of Credit and LC Guaranty Fees......................... 7 2.5 Unused Line Fee............................................... 8 2.6 Prepayment Fee................................................ 8 2.7 Audit Fees.................................................... 9 2.8 Reimbursement of Expenses..................................... 9 2.9 Bank Charges.................................................. 10 2.10 Collateral Protection Expenses; Appraisals.................... 10 2.11 Payment of Charges............................................ 11 2.12 No Deductions................................................. 11 2.13 Joint and Several Obligations................................. 12 SECTION 3. LOAN ADMINISTRATION.................................................. 13 3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option....... 13 3.2 Payments...................................................... 17 3.3 Mandatory and Optional Prepayments............................ 19 3.4 Application of Payments and Collections....................... 22 3.5 All Loans to Constitute One Obligation........................ 23 3.6 Loan Account.................................................. 23 3.7 Statements of Account......................................... 23 3.8 Increased Costs............................................... 24 3.9 Basis for Determining Interest Rate Inadequate................ 25 3.10 Sharing of Payments........................................... 25 3.11 Optional Prepayment/Replacement of Lenders.................... 26 SECTION 4. TERM AND TERMINATION................................................. 26 4.1 Term of Agreement............................................. 26 4.2 Termination................................................... 27 SECTION 5. SECURITY INTERESTS................................................... 28 5.1 Security Interest in Collateral............................... 28 5.2 Other Collateral.............................................. 29 5.3 Lien Perfection; Further Assurances........................... 30 5.4 Lien on Realty................................................ 30
i SECTION 6. COLLATERAL ADMINISTRATION.................................................. 31 6.1 General............................................................. 31 6.2 Administration of Accounts.......................................... 32 6.3 Administration of Inventory......................................... 34 6.4 Administration of Equipment......................................... 34 6.5 Payment of Charges.................................................. 35 SECTION 7. REPRESENTATIONS AND WARRANTIES............................................. 35 7.1 General Representations and Warranties.............................. 35 7.2 Continuous Nature of Representations and Warranties................. 42 7.3 Survival of Representations and Warranties.......................... 42 SECTION 8. COVENANTS AND CONTINUING AGREEMENTS........................................ 43 8.1 Affirmative Covenants............................................... 43 8.2 Negative Covenants.................................................. 47 8.3 Specific Financial Covenants........................................ 57 SECTION 9. CONDITIONS PRECEDENT....................................................... 57 9.1 Conditions Precedent to Initial Loans and Other Initial Credit Accommodations.................................................... 57 9.2 Conditions Precedent to all Loans and other Credit Accommodations... 59 SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT......................... 59 10.1 Events of Default................................................... 59 10.2 Acceleration of the Obligations..................................... 63 10.3 Other Remedies...................................................... 63 10.4 Set Off and Sharing of Payments..................................... 64 10.5 Remedies Cumulative~ No Waiver...................................... 65 SECTION 11. THE AGENT................................................................. 65 11.1 Authorization and Action............................................ 65 11.2 Agent's Reliance, Etc............................................... 66 11.3 Fleet and Affiliates................................................ 67 11.4 Lender Credit Decision.............................................. 67 11.5 Indemnification..................................................... 67 11.6 Rights and Remedies to be Exercised by Agent Only................... 68 11.7 Agency Provisions Relating to Collateral............................ 68 11.8 Agent's Right to Purchase Commitments............................... 69 11.9 Right of Sale....................................................... 69 11.10 [Intentionally Omitted]............................................. 71 11.11 Resignation of Agent: Appointment of Successor...................... 71 11.12 Audit and Examination Reports; Disclaimer by Lenders................ 71 11.13 Syndication Agent, Documentation Agent and Arranger................. 72 11.14 Real Property Collateral............................................ 72 SECTION 12. MISCELLANEOUS............................................................. 73 12.1 Power of Attorney................................................... 73
ii 12.2 Indemnity........................................................... 74 12.3 Amendments.......................................................... 75 12.4 Sale of Interest.................................................... 76 12.5 Severability........................................................ 76 12.6 Successors and Assigns.............................................. 76 12.7 Cumulative Effect; Conflict of Terms................................ 76 12.8 Execution in Counterparts........................................... 76 12.9 Notice.............................................................. 76 12.10 Consent ............................................................ 77 12.11 Credit Inquiries.................................................... 77 12.12 Time of Essence..................................................... 78 12.13 Entire Agreement.................................................... 78 12.14 Interpretation...................................................... 78 12.15 Confidentiality..................................................... 78 12.16 GOVERNING LAW: CONSENT TO FORUM..................................... 79 12.17 WAIVERS ............................................................ 80 12.18 Advertisement....................................................... 80 12.19 Non-Applicability of Exculpation Provisions in Confirmation Order... 80
iii LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT is made as of this 8th day of October, 2003, by and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island corporation with an office at One South Wacker Drive, Suite 1400, Chicago, Illinois 60606, individually as a Lender and as Agent ("Agent") for itself and the other Lenders, each other financial institution which is or becomes a party hereto and any registered assigns of any such Person (each such financial institution, including Fleet, is referred to hereinafter individually as a "Lender" and collectively as the "Lenders"), CONGRESS FINANCIAL CORPORATION (CENTRAL), individually as a Lender and as Syndication Agent for Lenders, GENERAL ELECTRIC CAPITAL CORPORATION, individually as a Lender and as Documentation Agent for Lenders, FLEET SECURITIES, INC., as arranger ("Arranger"), and each of NEENAH FOUNDRY COMPANY, a Wisconsin corporation with its chief executive office and principal place of business at 2121 Brooks Avenue, Neenah, Wisconsin 54956 ("Neenah") and EACH SUBSIDIARY OF NEENAH THAT IS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS A BORROWER; Neenah and each such Subsidiary are hereafter referred to collectively, as "Borrowers" and individually, as "Borrower". Capitalized terms used in this Agreement have the meanings assigned to them in Appendix A, General Definitions. Accounting terms not otherwise specifically defined herein shall be construed in accordance with GAAP consistently applied. SECTION 1. CREDIT FACILITY Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lenders agree to make available to Borrowers a Total Credit Facility of up to $92,085,000 upon a Borrower's request therefor, as follows: 1.1 Loans. 1.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof, each Lender agrees, severally and not jointly, to make Revolving Credit Loans to Borrowers from time to time during the period from the date hereof to but not including the last day of the Term, as requested by Borrowers in the manner set forth in Section 1.4 and subsection 3.1.1 hereof, up to a maximum principal amount at any time outstanding equal to the lesser of (i) such Lender's Revolving Loan Commitment minus the product of such Lender's Revolving Loan Percentage and the LC Amount minus the product of such Lender's Revolving Loan Percentage and Reserves, if any and (ii) the product of (A) such Lender's Revolving Loan Percentage and (B) an amount equal to the Borrowing Base at such time minus the LC Amount minus Reserves, if any. Subject to the third to last sentence of this subsection 1.1.1, Agent shall have the right to establish Reserves, including without limitation or duplication with respect to (i) price adjustments, damages, unearned discounts, returned products or other matters for which a Borrower issues credit memoranda in the ordinary course of such Borrower's business; (ii) potential dilution related to Accounts; (iii) shrinkage, spoilage and obsolescence of Inventory; (iv) slow moving Inventory; (v) other sums due and payable within ninety (90) days and chargeable (but not yet charged) against a Borrower's Loan Account as Revolving Credit 1 Loans under any section of this Agreement; (vi) amounts owing by a Borrower to any Person to the extent secured by a Lien on, or trust over, any Property of a Borrower (excluding Liens permitted under subsection 8.2.5(iv) or subsection 8.2.5(ix); (vii) amounts owing by a Borrower to Bank, Agent or any Affiliate of Bank or Agent in connection with Product Obligations; (viii) the Rebuild Reserve, (ix) Inventory that consists of coke, sand or grinding wheels or that consists of Inventory in transit; (x) the real Property, fixed assets and Inventory of Mercer located on or at Mercer's facility located at 200 Brown Street in Mercer, Pennsylvania, but only if Borrowers have failed to procure within 90 days of the date of this Agreement flood insurance in respect of such facility in Mercer, Pennsylvania that is in an amount of at least $2,500,000, has a deductible that does not exceed $500,000, and is otherwise reasonably satisfactory to Agent, (xi) any Rent Reserves and (xii) such other specific events, conditions or contingencies as to which Agent, in its reasonable credit judgment exercised in good faith, determines Reserves should be established from time to time hereunder. In addition to the foregoing Reserves, commencing on the first day of the second fiscal quarter after the fiscal quarter during which the MACT Deadline has been established, Agent shall establish a Reserve that accretes in no more than eight equal, successive quarterly installments on the first day of each fiscal quarter to a total that is the MACT Reserve Amount (which installments shall be scheduled such that the last installment occurs on a date that is at least six months prior to the MACT Deadline); provided, that the amount of the Reserve established pursuant to this sentence shall be reduced on a dollar-for-dollar basis by the amount of MACT Capital Expenditures actually made by Borrowers (as evidenced by written documentation that is reasonably acceptable to Agent). Notwithstanding anything contained in this Agreement to the contrary, (a) except with respect to the Reserve provided for in the immediately preceding sentence and in clauses (v), (vii), (viii), (ix) and (x) in the second sentence of this subsection 1.1.1, so long as no Event of Default is in existence Agent shall only establish Reserves based on demonstrable changes in the underlying assets and liabilities of Borrowers and Borrowers' Subsidiaries (including, without limitation, a contingent liability of a Borrower or a Subsidiary of a Borrower having become an actual liability of such Borrower or such Subsidiary) that Agent determines is necessary in its reasonable credit judgment and (b) Agent shall not establish any Reserves in respect of any matters relating to any items of Collateral that have been taken into account in determining Eligible Inventory or Eligible Accounts, as applicable. Agent agrees that it shall provide Borrowers with reasonably prompt notice of the establishment of a Reserve. The Revolving Credit Loans shall be repayable in accordance with the terms of the Revolving Notes and shall be secured by all of the Collateral. 1.1.2 Overadvances. Insofar as a Borrower may request and Agent or all Lenders (as provided below) may be willing in their sole and absolute discretion to make Revolving Credit Loans to such a Borrower at a time when the unpaid balance of Revolving Credit Loans plus the sum of the LC Amount plus the amount of LC Obligations that have not been reimbursed by Borrowers or funded with a Revolving Credit Loan, plus reserves, exceeds, or would exceed with the making of any such Revolving Credit Loan, the Borrowing Base (such Loan or Loans being herein referred to individually as an "Overadvance" and collectively, as "Overadvances"), Agent shall enter such Overadvances as debits in the Loan Account. All Overadvances shall be repaid on 2 demand, shall be secured by the Collateral and shall bear interest as provided in this Agreement for Revolving Credit Loans generally. Any Overadvance made pursuant to the terms hereof shall be made by all Lenders ratably in accordance with their respective Revolving Loan Percentages. Overadvances in the aggregate amount of $1,000,000 or less may, unless a Default or Event of Default has occurred and is continuing (other than a Default or Event of Default caused by the existence or making of such Overadvance), be made in the sole and absolute discretion of Agent. Overadvances in an aggregate amount of more than $1,000,000 and Overadvances to be made after the occurrence and during the continuation of a Default or an Event of Default (other than a Default or Event of Default caused by the existence or making of such Overadvance) shall require the consent of all Lenders. The foregoing notwithstanding, in no event, unless otherwise consented to by all Lenders, (w) shall any Overadvances be outstanding for more than sixty (60) consecutive days, (x) after all outstanding Overadvances have been repaid, shall Agent or Lenders make any additional Overadvances unless sixty (60) days or more have expired since the last date on which any Overadvances were outstanding, (y) shall Overadvances be outstanding on more than ninety (90) days within any one hundred eighty day (180) period or (z) shall Agent make Revolving Credit Loans on behalf of Lenders under this subsection 1.1.2 to the extent such Revolving Credit Loans would cause a Lender's share of the Revolving Credit Loans to exceed such Lender's Revolving Loan Commitment minus such Lender's Revolving Loan Percentage of the LC Amount. 1.1.3 Use of Proceeds. The Revolving Credit Loans shall be used solely for (i) the satisfaction of existing Indebtedness of Chapter 11 Debtors in connection with the Plan of Reorganization and the Confirmation (including the payment of an aggregate of $30,000,000 in cash on the 11 1/8% Series A, B, D and F Senior Subordinated Notes due 2007 of Neenah Foundry Company, Chapter 11 Debtor-in-Possession, in connection with the satisfaction in full of such Senior Subordinated Notes), (ii) the payment of fees and expenses associated with the transactions contemplated hereby, including the transactions provided for under the Plan of Reorganization, (iii) Borrowers' general operating capital needs (including Capital Expenditures permitted hereunder) in a manner consistent with the provisions of this Agreement and all applicable laws, (iv) to fund Permitted Acquisitions, (v) repayments or prepayments of principal amounts owing under the Subordinated Bond Documents that are permitted to be made under subsection 8.2.6(i) and (vi) other purposes permitted under this Agreement. 1.1.4 Swingline Loans. Subject to the terms and conditions hereof, in order to reduce the frequency of transfers of funds from Lenders to Agent for making Revolving Credit Loans, Agent shall be permitted (but not required) to make Revolving Credit Loans to Borrowers upon request by Borrowers (such Revolving Credit Loans to be designated as "Swingline Loans") provided that the aggregate amount of Swingline Loans outstanding at any time will not (i) exceed $5,000,000; (ii) when added to the principal amount of Agent's other Revolving Credit Loans then outstanding plus Agent's Revolving Loan Percentage of the LC Amount, exceed Agent's Revolving Credit Commitment; or (iii) when added to the principal amount of all other Revolving Credit Loans then outstanding plus the LC Amount, exceed the Borrowing Base. Within the foregoing limits, each Borrower may borrow, repay and reborrow Swingline Loans. All Swingline Loans shall be treated as Revolving Credit Loans for purposes of this 3 Agreement, except that (a) all Swingline Loans shall be Base Rate Revolving Portions and (b) notwithstanding anything herein to the contrary (other than as set forth in the next succeeding sentence), all principal and interest paid with respect to Swingline Loans shall be for the sole account of Agent in its capacity as the lender of Swingline Loans. Notwithstanding the foregoing, not more than 2 Business Days after (1) Lenders receive notice from Agent that a Swingline Loan has been advanced in respect of a drawing under a Letter of Credit or LC Guaranty or (2) in any other circumstance, demand is made by Agent during the continuance of an Event of Default, each Lender shall irrevocably and unconditionally purchase and receive from Agent, without recourse or warranty from Agent, an undivided interest and participation in each Swingline Loan to the extent of such Lender's Revolving Loan Percentage thereof, by paying to Agent, in same day funds, an amount equal to such Lender's Revolving Loan Percentage of such Swingline Loan. Swingline Loans will be settled between the Agent and the Lenders in the manner set forth in subsection 3.1.3. 1.1.5 Agent Loans. Upon the occurrence and during the continuance of an Event of Default, Agent, in its sole discretion, may make Revolving Credit Loans on behalf of Lenders, in an aggregate amount not to exceed $3,000,000 (such maximum amount being reduced by the outstanding balance of any Overadvances that have been authorized by Agent alone pursuant to subsection 1.1.2), if Agent, in its reasonable business judgment, deems that such Revolving Credit Loans are necessary or desirable (i) to protect all or any portion of the Collateral, (ii) to enhance the likelihood, or maximize the amount of, repayment of the Loans and the other Obligations, or (iii) to pay any other amount chargeable to any Borrower pursuant to this Agreement, including without limitation costs, fees and expenses as described in Sections 2.8 and 2.9 (hereinafter, "Agent Loans"); provided, that in no event shall (a) the maximum principal amount of the Revolving Credit Loans exceed the aggregate Revolving Loan Commitments and (b) Majority Lenders may at any time revoke Agent's authorization to make Agent Loans. Any such revocation must be in writing and shall become effective prospectively upon Agent's receipt thereof. Each Lender shall be obligated to advance its Revolving Loan Percentage of each Agent Loan. If Agent Loans are made pursuant to the preceding sentence, then (a) the Borrowing Base shall be deemed increased by the amount of such permitted Agent Loans, but only for so long as Agent allows such Agent Loans to be outstanding, and (b) notwithstanding any terms contained herein to the contrary (including, without limitation, the terms of subsection 10.2.2), all Lenders that have committed to make Revolving Credit Loans shall be bound to make, or permit to remain outstanding, such Agent Loans based upon their Revolving Loan Percentages in accordance with the terms of this Agreement. 1.2 Letters of Credit; LC Guaranties. 1.2.1 Issuance of Letters of Credit and LC Guarantees. Subject to the terms and conditions hereof, each of Agent and, if applicable, any Lender designated by Agent and Neenah as a Letter of Credit Issuer (each such Lender, a "Letter of Credit Issuer") agrees, if requested by a Borrower, to (i) issue its, or, in the case of Agent, cause to be issued by Bank or another Affiliate of Agent, on the date requested by such Borrower, Letters of Credit for the account of a Borrower or (ii) execute LC Guaranties by which Agent, such 4 Letter of Credit Issuer, Bank, or another Affiliate of Agent, on the date requested by a Borrower, shall guaranty the payment or performance by a Borrower of its reimbursement obligations with respect to letters of credit issued for a Borrower's account by other Persons; provided that the LC Amount shall not exceed $5,000,000 at any time. No Letter of Credit or LC Guaranty may have an expiration date after the last day of the Term. 1.2.2 Lender Participation. Immediately upon the issuance of a Letter of Credit or an LC Guaranty under this Agreement, each Lender shall be deemed to have irrevocably and unconditionally purchased and received from Agent, without recourse or warranty, an undivided interest and participation therein equal to the applicable LC Obligations multiplied by such Lender's Revolving Loan Percentage. Agent will notify each Lender on a weekly basis, or if determined by Agent, a more frequent basis, upon presentation to it of a draw under a Letter of Credit or a demand for payment under a LC Guaranty. On a weekly basis, or more frequently if requested by Agent, each Lender shall make payment to Agent in immediately available funds, of an amount equal to such Lender's pro rata share of the amount of any payment made by Agent in respect to any Letter of Credit or LC Guaranty. The obligation of each Lender to reimburse Agent under this subsection 1.2.2 shall be unconditional, continuing, irrevocable and absolute, except in respect of indemnity claims arising out of Agent's gross negligence or willful misconduct. In the event that any Lender fails to make payment to Agent of any amount due under this subsection 1.2.2, Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until Agent receives such payment from such Lender or such obligation is otherwise fully satisfied; provided, however, that nothing contained in this sentence shall relieve such Lender of its obligation to reimburse the Agent for such amount in accordance with this subsection 1.2.2. 1.2.3 Reimbursement. Notwithstanding anything to the contrary contained herein, Borrowers, Agent, each Letter of Credit Issuer and Lenders hereby agree that all LC Obligations and all obligations of each Borrower relating thereto shall be satisfied by the prompt issuance of one or more Revolving Credit Loans that are Base Rate Revolving Portions, which Borrowers hereby acknowledge are requested and Lenders hereby agree to fund. In the event that Revolving Credit Loans are not, for any reason, promptly made to satisfy all then existing LC Obligations, each Lender hereby agrees to pay to Agent, on demand, an amount equal to such LC Obligations multiplied by such Lender's Revolving Loan Percentage, and until so paid, such amount shall be secured by the Collateral and shall bear interest and be payable at the same rate and in the same manner as Base Rate Revolving Portions. In no event shall Agent or any Lender make any Revolving Credit Loan in respect of any Obligation that has already been satisfied by any Borrower. 1.3 Term Loan. Each Lender, severally and not jointly, agrees to make a term loan (collectively, the "Term Loan") to Borrowers on the Closing Date, in the aggregate principal amount of such Lender's Term Loan Commitment, which shall be repayable in accordance with the terms hereof and the terms of the Term Notes and shall be secured by all of the Collateral. The proceeds of 5 the Term Loan shall be used solely for the purposes for which the proceeds of the Revolving Credit Loans are authorized to be used. 1.4 Borrowing Agent. For ease of administration of this Agreement, each Borrower other than Neenah hereby appoints Neenah as its borrowing agent hereunder. In such capacity, Neenah will request all Revolving Credit Loans to be made pursuant to Section 1.1, will request all Letters of Credit and LC Guaranties to be issued pursuant to Section 1.2 and will submit all LIBOR Requests with respect to obtaining any LIBOR Portion pursuant to subsection 3.1.7, converting any Base Rate Portion into a LIBOR Portion pursuant to subsection 3.1.8 or continuing any LIBOR Portion into a subsequent Interest Period pursuant to subsection 3.1.9, in each case pursuant to the procedures set forth in Section 3.1. Notwithstanding anything to the contrary contained in this Agreement, no Borrower other than Neenah shall be entitled to request any Revolving Credit Loans, Letters of Credit or LC Guaranties or to submit any LIBOR Requests hereunder. The proceeds of all Revolving Credit Loans made hereunder shall be advanced to or at the direction of Neenah and used solely for the purposes described in subsection 1.1.3. SECTION 2. INTEREST, FEES AND CHARGES 2.1 Interest. 2.1.1 Rates of Interest. Interest shall accrue on the principal amount of the Base Rate Revolving Portions and the Base Rate Term Portions outstanding at the end of each day at a fluctuating rate per annum equal to the Applicable Margin then in effect for the Base Rate Revolving Portions or the Base Rate Term Portions, as applicable plus the Base Rate. Said rate of interest shall increase or decrease by an amount equal to any increase or decrease in the Base Rate, effective as of the opening of business on the day that any such change in the Base Rate occurs. If a Borrower exercises its LIBOR Option as provided in Section 3.1, interest shall accrue on the principal amount of the LIBOR Revolving Portions and the LIBOR Term Portions outstanding at the end of each day at a rate per annum equal to the Applicable Margin then in effect for the LIBOR Revolving Portions or the LIBOR Term Portions, as applicable plus the LIBOR applicable to each LIBOR Portion for the corresponding Interest Period. 2.1.2 Default Rate of Interest. At the option of Agent or the Majority Lenders, upon and after the occurrence of an Event of Default arising under subsection 10.1.1, subsection 10.1.3 (as a result of a breach of subsection 8.1.3, subsection 8.1.4, subsection 8.2.4, subsection 8.2.6, subsection 8.2.7, subsection 8.2.8, subsection 8.2.12 or Section 8.3) or subsection 10.1.8, and during the continuation thereof, the principal amount of all Loans shall bear interest at a rate per annum equal to 2.0% plus the interest rate otherwise applicable thereto (the "Default Rate"). 2.1.3 Maximum Interest. In no event whatsoever shall the aggregate of all amounts deemed interest hereunder or under the Notes and charged or collected pursuant to the terms of this Agreement or pursuant to the Notes exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final 6 determination, deem applicable hereto. If any provisions of this Agreement or the Notes are in contravention of any such law, such provisions shall be deemed amended to conform thereto (the "Maximum Rate"). If at any time, the amount of interest paid hereunder is limited by the Maximum Rate, and the amount at which interest accrues hereunder is subsequently below the Maximum Rate, the rate at which interest accrues hereunder shall remain at the Maximum Rate, until such time as the aggregate interest paid hereunder equals the amount of interest that would have been paid had the Maximum Rate not applied. 2.2 Computation of Interest and Fees. Interest, Letter of Credit and LC Guaranty fees and Unused Line Fees hereunder shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days. 2.3 Fee Letter. Borrowers shall jointly and severally pay to Agent certain fees and other amounts in accordance with the terms of the fee letter among Borrowers and Agent (the "Fee Letter"). 2.4 Letter of Credit and LC Guaranty Fees. Borrowers shall jointly and severally pay to Agent: (i) for standby Letters of Credit and LC Guaranties of standby letters of credit, for the ratable benefit of Lenders a per annum fee equal to the Applicable Margin then in effect for LIBOR Revolving Portions multiplied by the weighted average daily balance of the aggregate undrawn face amount of such Letters of Credit and LC Guaranties outstanding from time to time during the term of this Agreement, plus all normal and customary charges associated with the issuance thereof, which fees and charges shall be deemed fully earned upon issuance of each such Letter of Credit or LC Guaranty, shall be due and payable in arrears on the first Business Day of each month and shall not be subject to rebate or proration upon the termination of this Agreement for any reason; provided that at any time that the Default Rate is in effect, the fee applicable under this subsection shall be equal to the otherwise applicable fee plus 2.00%; (ii) for documentary Letters of Credit and LC Guaranties of documentary letters of credit, for the ratable benefit of Lenders a per annum fee equal to the Applicable Margin then in effect for LID OR Revolving Portions multiplied by the weighted average daily balance of the aggregate undrawn face amount of such Letters of Credit and LC Guaranties outstanding from time to time during the term of this Agreement, plus all normal and customary charges associated with the issuance and administration of each such Letter of Credit or LC Guaranty (which fees and charges shall be fully earned upon issuance, renewal or extension (as the case may be) of each such Letter of Credit or LC Guaranty, shall be due and payable in arrears on the first Business Day of each month, and shall not be subject to rebate or proration upon the termination of this 7 Agreement for any reason); provided that at any time that the Default Rate is in effect, the fee applicable under this subsection shall be equal to the otherwise applicable fee plus 2.00%; (iii) with respect to all Letters of Credit and LC Guaranties issued by Agent, Bank or another Affiliate of Agent, for the account of Agent only, a fronting fee equal to 0.125% per annum of the weighted average daily balance of the aggregate undrawn face amount of such Letters of Credit and LC Guaranties outstanding from time to time during the term of this Agreement issued by such Person, which fronting fees shall be due and payable monthly in arrears on the first Business Day of each month and shall not be subject to rebate or proration upon the termination of this Agreement for any reason; and (iv) with respect to all Letters of Credit and LC Guaranties issued by a Letter of Credit Issuer, for the account of such Letter of Credit Issuer only, a fronting fee equal to 0.125% per annum of the weighted average daily balance of the aggregate undrawn face amount of such Letters of Credit and LC Guaranties outstanding from time to time during the term of this Agreement issued by such Letter of Credit Issuer, which fronting fees shall be due and payable monthly in arrears on the first Business Day of each month and shall not be subject to rebate or proration upon the termination of this Agreement for any reason. 2.5 Unused Line Fee. Borrowers shall jointly and severally pay to Agent, for the ratable benefit of Lenders, a fee (the "Unused Line Fee") equal to the Applicable Margin per annum for the Unused Line Fee multiplied by the average daily amount by which the Revolving Credit Maximum Amount exceeds the sum of (i) the outstanding principal balance of the Revolving Credit Loans plus (ii) the LC Amount; provided, that for purposes of allocating the Unused Line Fee among Lenders, outstanding Swingline Loans shall not be included as part of the outstanding balance of the Loans for purposes of calculating such fees owed to Lenders other than Agent. The Unused Line Fee shall be payable monthly in arrears on the first day of each month hereafter. 2.6 Prepayment Fee. Upon the termination of this Agreement by Borrowers pursuant to subsection 4.2.2, upon any optional prepayment of the Term Loan pursuant to subsection 3.3.5 or upon any optional reduction of the Revolving Loan Commitments pursuant to subsection 3.3.6, Borrowers shall jointly and severally pay to Agent, for the ratable benefit of the Lenders (in addition to the then outstanding principal, accrued interest and other charges then due and owing under the terms of this Agreement and any of the other Loan Documents and any amounts then due and owing pursuant to subsection 3.2.5), as liquidated damages for the loss of the bargain and not as a penalty, an amount equal to (i) 1% of the sum of the aggregate amount of the Revolving Loan Commitments then being reduced or terminated and the outstanding amount of the Term Loan then being prepaid, if such termination, prepayment or reduction occurs during the first 12 month period of the Term (October 8, 2003 through October 7, 2004) and (ii) 0.50% of the sum of the 8 aggregate amount of the Revolving Loan Commitments then being reduced or terminated and the outstanding amount of the Term Loan then being prepaid, if such termination, prepayment or reduction occurs during the second 12 month period or the third 12 month period of the Term (October 8, 2004 through October 7, 2006). Notwithstanding the foregoing, no such prepayment fee resulting from a prepayment of the Term Loan pursuant to subsection 3.3.5 shall be payable unless the aggregate Revolving Loan Commitments are being simultaneously, or have previously been, reduced by any amount pursuant to subsection 3.3.6. In addition, if such termination, prepayment or reduction occurs on or after October 8, 2006, no such prepayment fee shall be payable. 2.7 Audit Fees. Borrowers shall jointly and severally pay to Agent audit fees in accordance with Agent's current schedule of fees in effect from time to time in connection with audits of the books and records and Properties of each Borrower and its Subsidiaries and such other matters as Agent shall deem appropriate in its reasonable credit judgment, plus all reasonable out-of-pocket expenses incurred by Agent in connection with such audits; provided, that so long as no Event of Default has occurred and is continuing, Borrowers shall not be liable for such audit fees incurred in connection with more than three complete audits during any fiscal year, whether such audits are conducted by employees of Agent or by third parties hired by Agent. Such audit fees and out-of-pocket expenses shall be payable on the first day of the month following the date of issuance by Agent of a request for payment thereof to Neenah. Agent may, in its discretion, provide for the payment of such amounts by making appropriate Revolving Credit Loans to one or more Borrowers and charging the appropriate Loan Account or Loan Accounts therefor. 2.8 Reimbursement of Expenses. If, at any time or times regardless of whether or not an Event of Default then exists, (i) Agent or Arranger incurs reasonable and documented legal or accounting expenses or any other costs or out-of-pocket expenses in connection with (1) the negotiation and preparation of this Agreement or any of the other Loan Documents, any amendment of or modification of this Agreement or any of the other Loan Documents, or any syndication or attempted syndication of the Obligations (including, without limitation, printing and distribution of materials to prospective Lenders and all costs associated with bank meetings, but excluding any closing fees paid to Lenders in connection therewith) or (2) the administration of this Agreement or any of the other Loan Documents and the transactions contemplated hereby and thereby; or (ii) Agent or any Lender incurs reasonable and documented legal or accounting expenses or any other costs or out-of-pocket expenses in connection with (I) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Agent, any Lender, any Borrower or any other Person) relating to the Collateral, this Agreement or any of the other Loan Documents or any Borrower's, any of its Subsidiaries' or any Guarantor's affairs; (2) any amendment, modification, waiver or consent with respect to the Loan Documents that is requested of Lenders at a time when an Event of Default is in existence (provided, that Borrowers shall only be responsible under this clause (2) for the reasonable and documented fees of one law firm, acting on behalf of all Lenders other than Fleet), (3) any attempt to enforce any rights of Agent or any Lender against any Borrower or any other Person which may be obligated to Agent or any Lender by virtue of this Agreement or any of the other Loan Documents, including, without limitation, the Account Debtors; or (4) any 9 attempt to inspect, verify, protect, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Collateral; then all such legal and accounting expenses, other costs and out of pocket expenses of Agent or any Lender, as applicable, shall be charged to Borrowers on a joint and several basis; provided, that Borrowers shall not be responsible for such expenses, costs and out-of-pocket expenses to the extent incurred because of the gross negligence, bad faith or willful misconduct (as determined by a court of competent jurisdiction in a final nonappealable judgment) of Agent or any Lender seeking reimbursement. All amounts chargeable to Borrowers under this Section 2.8 shall be Obligations secured by all of the Collateral, shall be payable within 15 days following demand to Agent or such Lender, as the case may be, and shall bear interest from the date due and owing until paid in full at the rate applicable to Base Rate Revolving Portions from time to time. Borrowers shall also jointly and severally reimburse Agent for expenses incurred by Agent in its administration of the Collateral to the extent and in the manner provided in Sections 2.9 and 2.10 hereof 2.9 Bank Charges. Borrowers shall jointly and severally pay to Agent and each applicable Lender, on demand, any and all fees, costs or expenses which Agent or any such Lender pays to a bank or other similar institution arising out of or in connection with (i) the forwarding to any Borrower or any other Person on behalf of any Borrower, by Agent or any Lender, of proceeds of Loans made to any Borrower pursuant to this Agreement and (ii) the depositing for collection by Agent or any Lender of any check or item of payment received or delivered to Agent or any Lender on account of the Obligations. 2.10 Collateral Protection Expenses; Appraisals. All out-of-pocket expenses incurred in protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral, and any and all excise, property, sales, and use taxes imposed by any state, federal, or local authority on any of the Collateral or in respect of the sale thereof shall be jointly and severally borne and paid by Borrowers. If Borrowers fail to promptly pay any portion thereof when due, Agent may, at its option, but shall not be required to, pay the same and charge one or more Borrowers therefor. On an annual basis, Agent shall, at Borrowers' joint and several expense, obtain an appraisal of the Inventory of Borrowers from a third party appraiser reasonably acceptable to Agent, which appraisal shall include an assessment of the net orderly liquidation percentage of each category or type of Eligible Inventory. Further, if average Availability (as determined by Agent in its reasonable credit judgment) for any thirty (30) day period during a fiscal year is less than $10,000,000, Agent may, and, at the request of Majority Lenders, shall obtain updated appraisals of the Equipment and real Property of Borrowers for such fiscal year at Borrowers' joint and several expense, which updated appraisals shall provide an assessment of the fair market value and the net orderly liquidation value of such Equipment and real Property; provided, that Borrowers shall only be obligated to pay for one such updated appraisal of such Equipment and real Property per year pursuant to this sentence. Additionally, from time to time, if obtaining appraisals is necessary in order for Agent or any Lender to comply with applicable laws or regulations, and at any time if an Event of Default shall have occurred and be continuing, Agent may, at Borrowers' joint and several expense, obtain appraisals from appraisers (who may be personnel of Agent), stating the then current fair market value and/or net orderly liquidation value of all or any portion of the real Property or 10 personal Property of any Borrower or any of its Subsidiaries, including without limitation the Inventory of any Borrower or any of its Subsidiaries. 2.11 Payment of Charges. All amounts chargeable to any Borrower under this Agreement shall be Obligations secured by all of the Collateral, shall be, unless specifically otherwise provided, payable on demand and shall bear interest from the date demand was made or such amount is due, as applicable, until paid in full at the rate applicable to Base Rate Revolving Portions from time to time. 2.12 No Deductions. 2.12.1 Any and all payments or reimbursements made hereunder shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto; excluding, however, the following: taxes imposed on the income of Agent or any Lender or franchise taxes by the jurisdiction under the laws of which Agent or any Lender is organized or doing business or any political subdivision thereof and taxes imposed on its income by the jurisdiction of Agent's or such Lender's applicable lending office or any political subdivision thereof or franchise taxes (all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto but excluding such taxes imposed on net income, "Tax Liabilities"). If any Borrower shall be required by law to deduct any such Tax Liabilities from or in respect of any sum payable hereunder to Agent or any Lender, then the sum payable hereunder by Borrowers shall be increased as may be necessary so that, after all required deductions are made, Agent or such Lender receives an amount equal to the sum it would have received had no such deductions been made. 2.12.2 Each Lender that is organized in a jurisdiction outside the United States hereby agrees that it shall, no later than the Closing Date or, if later, the date on which such Lender became a party hereto (and from time to time thereafter, upon reasonable request of Borrowers or Agent), (i) furnish to Borrowers and Agent two accurate, complete and signed copies of either United States Internal Revenue Service Form W-8BEN or United States Internal Revenue Service Form W-8ECI (on which such Lender claims entitlement to complete exemption from United States federal withholding tax on all interest payments hereunder) and (ii) to the extent that such Lender is legally able to do so, provide Borrowers and Agent a new Form W-8BEN or Form W -8ECI upon the obsolescence of any previously delivered form, duly executed and completed by such Lender, and comply with all applicable United States laws and regulations as in effect from time to time with regard to such withholding tax exemption. Notwithstanding anything to the contrary in this Section 2.12, for the avoidance of doubt, (A) Borrowers shall be entitled, to the extent they are required to do so by law, to deduct or withhold Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from any amounts payable hereunder to any Lender that is not a United States person (as defined in Section 770l(a)(30) of the Internal Revenue Code of 1986, as amended) to the extent the Lender has not provided to Borrowers the United States Internal Revenue Service forms described above, and (B) after the date a Lender 11 becomes a party hereto, Borrowers shall have no obligation to make additional payments under this Section 2.12 to any Lender organized outside the United States if the Lender has not provided such forms to the Borrower. 2.13 Joint and Several Obligations. Each Borrower acknowledges that it is jointly and severally liable for all of the Obligations and as a result hereby unconditionally guaranties the full and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise, and at all times thereafter, of all indebtedness, liabilities and obligations of every kind and nature of each other Borrower to Agent and Lenders and, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, joint or several, now or hereafter existing, or due or to become due, and howsoever owned, held or acquired by Agent or any Lender. Each Borrower agrees that if this guaranty, or any Liens securing this guaranty, would, but for the application of this sentence, be unenforceable under applicable law, this guaranty and each such Lien shall be valid and enforceable to the maximum extent that would not cause this guaranty or such Lien to be unenforceable under applicable law, and this guaranty shall automatically be deemed to have been amended accordingly at all relevant times. Each Borrower hereby agrees that its obligations under this guaranty shall be unconditional, irrespective of (a) the validity or enforceability of the Obligations or any part thereof, or of any promissory note or other document evidencing all or any part of the Obligations, (b) the absence of any attempt to collect the Obligations from any other Borrower or any Guarantor or other action to enforce the same, ( c) the waiver or consent by Agent or any Lender with respect to any provision of any agreement, instrument or document evidencing or securing all or any part of the Obligations, or any other agreement, instrument or document now or hereafter executed by any other Borrower and delivered to Agent or any Lender (other than a waiver, forgiveness or consent by Agent and Lenders that reduces the amount of any of the Obligations), (d) the failure by Agent or any Lender to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or Collateral for the Obligations, for its benefit, (e) Agent's or any Lender's election, in any proceeding instituted under the United States Bankruptcy Code or any other similar bankruptcy or insolvency legislation, of the application of Section 1111 (b )(2) of the United States Bankruptcy Code or any other similar bankruptcy or insolvency legislation, (f) any borrowing or grant of a security interest by any Borrower as debtor-in-possession, under Section 364 of the United States Bankruptcy Code or any other similar bankruptcy or insolvency legislation, (g) the disallowance, under Section 502 of the United States Bankruptcy Code or any other similar bankruptcy or insolvency legislation, of all or any portion of Agent's or any Lender's claim(s) for repayment of the Obligations or (h) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a borrower or a guarantor. Each Borrower hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of receivership or bankruptcy of any Borrower, protest or notice with respect to the Obligations and all demands whatsoever, and covenants that this guaranty will not be discharged, except by complete and irrevocable payment and performance of the Obligations. No notice to any Borrower or any other party shall be required for Agent or any Lender to make demand hereunder. Such demand shall constitute a mature and liquidated 12 claim against the applicable Borrower. Upon the occurrence of any Event of Default, Agent or any Lender may, in its sole election, proceed directly and at once, without notice, against all or any Borrower to collect and recover the full amount or any portion of the Obligations, without first proceeding against any other Borrower or any other Person, or any security or collateral for the Obligations. During the existence of an Event of Default, Agent and each Lender shall have the exclusive right to determine the application of payments and credits, if any from any Borrower, any other Person or any security or collateral for the Obligations, on account of the Obligations or of any other liability of any Borrower to Agent or any Lender. Each Borrower expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel Agent or Lenders to marshal assets or to proceed in respect of the Obligations guaranteed hereunder against any other Borrower or any Guarantor, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition to proceeding against, such Borrower. It is agreed among each Borrower, Agent and Lenders that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Loan Documents and that, but for the provisions of this Section 2.13 and such waivers, Agent and Lenders would decline to enter into this Agreement. Notwithstanding anything to the contrary set forth in this Section 2.13, it is the intent of the parties hereto that the liability incurred by each Borrower in respect of the Obligations of the other Borrowers (and any Lien granted by each Borrower to secure such Obligations), not constitute a fraudulent conveyance under Section 548 of the United States Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the provisions of any applicable law of any state or other governmental unit ("Fraudulent Conveyance"). Consequently, each Borrower, Agent and each Lender hereby agree that if a court of competent jurisdiction determines that the incurrence of liability by any Borrower in respect of the Obligations of any other Borrower (or any Liens granted by such Borrower to secure such Obligations) would, but for the application of this sentence, constitute a Fraudulent Conveyance, such liability (and such Liens) shall be valid and enforceable only to the maximum extent that would not cause the same to constitute a Fraudulent Conveyance, and this Agreement and the other Loan Documents shall automatically be deemed to have been amended accordingly. SECTION 3. LOAN ADMINISTRATION. 3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option. Borrowings under the credit facility established pursuant to Section 1 hereof shall be as follows: 3.1.1 Loan Requests. A request for a Revolving Credit Loan shall be made, or shall be deemed to be made, in the following manner: (a) subject to the terms of Section 1.4, a Borrower may give Agent notice of its intention to borrow, in which notice such Borrower shall specify the amount of the proposed borrowing of a Revolving Credit Loan and the proposed borrowing date, which shall be a Business Day, no later than 11:00 a.m. (Chicago, Illinois time) on the proposed borrowing date (or in accordance with subsection 3.1.7, 3.1.8 or 3.1.9, as applicable, in the case of a request for a LIBOR 13 Revolving Portion); and (b) the becoming due and payable of any amount required to be paid under this Agreement, or the Notes, whether as interest or for any other Obligation, shall be deemed irrevocably to be a request by a Borrower for a Revolving Credit Loan on the due date in the amount required to pay such interest or other Obligation in accordance with subsection 3.1.4. 3.1.2 Disbursement. Each Borrower hereby irrevocably authorizes Agent to disburse the proceeds of each Loan requested, or deemed to be requested, pursuant to subsection 3.1.1 as follows: (i) the proceeds of each Revolving Credit Loan requested under subsection 3.1.1(a) shall be disbursed by Agent in lawful money of the United States of America in immediately available funds, in the case of the initial borrowing, in accordance with the terms of the written disbursement letter from Borrowers, and in the case of each subsequent borrowing, by wire transfer to such bank account as may be agreed upon by Borrowers and Agent from time to time (it being agreed and understood that such bank account may be any operating account of Borrowers, with no requirement that such amount that is disbursed to an operating account be deposited in a Dominion Account) or elsewhere if pursuant to a written direction from a Borrower and (ii) the proceeds of each Revolving Credit Loan deemed requested under subsection 3.1.1 (b) shall be disbursed by Agent by way of direct payment of the relevant interest or other Obligation. If at any time any Loan is funded by Agent or Lenders in excess of the amount requested or deemed requested by a Borrower, such Borrower agrees to repay the excess to Agent immediately upon the earlier to occur of (a) such Borrower's discovery of the error and (b) notice thereof to such Borrower from Agent or any Lender. 3.1.3 Payment by Lenders. Promptly, and in no event later than 12:00 p.m. (Chicago time) on a proposed borrowing date, Agent shall give to each Lender written notice by facsimile, telex or cable of the receipt by Agent from a Borrower of any request for a Revolving Credit Loan. Each such notice shall specify the requested date and amount of such Revolving Credit Loan, whether such Revolving Credit Loan shall be subject to the LIBOR Option, and the amount of each Lender's advance thereunder (in accordance with its applicable Revolving Loan Percentage). Each Lender shall, not later than 2:00 p.m. (Chicago time) on such requested date, wire to a bank designated by Agent the amount of that Lender's Revolving Loan Percentage of the requested Revolving Credit Loan. The failure of any Lender to make the Revolving Credit Loans to be made by it shall not release any other Lender of its obligations hereunder to make its Revolving Credit Loan. Neither Agent nor any other Lender shall be responsible for the failure of any other Lender to make the Revolving Credit Loan to be made by such other Lender. The foregoing notwithstanding, Agent, in its sole discretion, may from its own funds make a Revolving Credit Loan on behalf of any Lender. In such event, the Lender on behalf of whom Agent made the Revolving Credit Loan shall reimburse Agent for the amount of such Revolving Credit Loan made on its behalf, on a weekly (or more frequent, as determined by Agent in its sole discretion) basis. In addition, Agent shall notify Lenders on a weekly (or more frequent, as determined by Agent in its sole discretion) basis regarding settlement of the Swingline Loans, and promptly following such notice, each Lender shall reimburse Agent (in accordance with its applicable Revolving Loan Percentage) for the amount of the Swingline Loans outstanding. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, 14 subject to the terms of subsection 1.1.2 and subsection 1.1.5 no Lender shall be required to reimburse Agent for any Revolving Credit Loans or Swingline Loans that are made on behalf of such Lender after such Lender has delivered a written notice of the type provided for under subsection 10.2.2 for so long as such written notice remains in effect. On each such settlement date, Agent will pay to each Lender the net amount owing to such Lender in connection with such settlement, including without limitation amounts relating to Loans, fees, interest and other amounts payable hereunder. The entire amount of interest attributable to such Revolving Credit Loan for the period from the date on which such Revolving Credit Loan was made by Agent on such Lender's behalf until Agent is reimbursed by such Lender, shall be paid to Agent for its own account. 3.1.4 Authorization. Each Borrower hereby irrevocably authorizes Agent, in Agent's sole discretion, to advance to Neenah or another Borrower, and to charge to the appropriate Borrower's Loan Account hereunder as a Revolving Credit Loan (which shall be a Base Rate Portion), a sum sufficient to pay all interest accrued on the Obligations during the immediately preceding month, to pay all regularly scheduled payments of principal and mandatory prepayments of principal due and payable at any time and to pay all fees, costs and expenses and other Obligations due and payable at any time by Borrowers to Agent or any Lender hereunder. 3.1.5 Letter of Credit and LC Guaranty Requests. A request for a Letter of Credit or LC Guaranty shall be made in the following manner: a Borrower shall give Agent and Bank (or, if the same is to be issued by a Letter of Credit Issuer, Agent and such Letter of Credit Issuer) a written notice of its request for the issuance of a Letter of Credit or LC Guaranty, not later than 11:00 a.m. (Chicago, Illinois time), at least one Business Day before the proposed issuance date thereof, in which notice such Borrower shall specify the proposed issuer, issuance date and format and wording for the Letter of Credit or LC Guaranty being requested (which shall be satisfactory to Agent and the Person being asked to issue such Letter of Credit or LC Guaranty). Such request shall be accompanied by an executed application and reimbursement agreement in form and substance satisfactory to Agent and the Person being asked to issue the Letter of Credit or LC Guaranty, as well as any required corporate resolutions or other documents reasonably requested by Agent or the Person being asked to issue the Letter of Credit or LC Guaranty. In the event of any inconsistency or conflict between any such application and reimbursement agreement between a Borrower and the Person issuing a Letter of Credit or LC Guaranty, and this Agreement, the terms and provisions of this Agreement shall govern and control. 3.1.6 Method of Making Requests. As an accommodation to Borrowers, unless a Default or an Event of Default is then in existence, (i) Agent shall permit telephonic or electronic requests for Revolving Credit Loans to Agent, (ii) Agent and Bank, or a Letter of Credit Issuer, as applicable, may, in their discretion, permit electronic transmittal of requests for Letters of Credit and LC Guaranties to them, and (iii) Agent may, in Agent's discretion, permit electronic transmittal of instructions, authorizations, agreements or reports to Agent. Unless a Borrower specifically directs Agent, Bank or a Letter of Credit Issuer, as applicable in writing not to accept or act upon telephonic or electronic communications from such Borrower (which direction shall only be applicable to the 15 Persons who have received the same in writing), neither Agent, Bank, any Letter of Credit Issuer, nor any Lender shall have any liability to any Borrower for any loss or damage suffered by any Borrower as a result of Agent's, Bank's or a Letter of Credit Issuer's honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically or electronically and purporting to have been sent to Agent, Bank or a Letter of Credit Issuer by any Borrower (except for any such loss or damage resulting From Agent's, Bank's or any Letter of Credit Issuer's gross negligence or willful misconduct), and neither Agent, Bank nor any Letter of Credit Issuer shall have any duty to verify the origin of any such communication or the authority of the Person sending it. Each telephonic request for a Letter of Credit or LC Guaranty accepted by Agent, Bank or a Letter of Credit Issuer, as applicable, hereunder shall be promptly followed by a written confirmation of such request from the applicable Borrower to Agent and Bank or such Letter of Credit Issuer, if applicable. 3.1.7 LIBOR Portions. In the event a Borrower desires to obtain a LIBOR Portion, such Borrower shall give Agent a LIBOR Request no later than 11:00 a.m. (Chicago, Illinois time) on the third Business Day prior to the requested borrowing date; provided, that neither Agent nor any Lender shall be obligated to honor such request if a Default or Event of Default exists as of the date of the LIBOR Request or as of the first day of the Interest Period for the requested LIBOR Portion. Each LIBOR Request shall be irrevocable and binding on Borrowers. In no event shall Borrowers be permitted to have outstanding at anyone time LIBOR Portions with more than seven (7) different Interest Periods. 3.1.8 Conversion of Base Rate Portions. Provided that as of both the date of the LIBOR Request and the first day of the Interest Period, no Default or Event of Default exists, a Borrower may, on any Business Day, convert any Base Rate Portion of such Borrower into a LIBOR Portion. If a Borrower desires to convert a Base Rate Portion, such Borrower shall give Agent a LIBOR Request no later then 11 :00 a.m. (Chicago, Illinois time) on the third Business Day prior to the requested conversion date. After giving effect to any conversion of Base Rate Portions to LIBOR Portions, Borrowers shall not be permitted to have outstanding at anyone time LIBOR Portions with more than seven (7) different Interest Periods. 3.1.9 Continuation of LIBOR Portions. Provided that as of both the date of the LIBOR Request and the first day of the Interest Period, no Default or Event of Default exists, a Borrower may, on any Business Day, continue any LIBOR Portions of such Borrower into a subsequent Interest Period of the same or a different permitted duration. If a Borrower desires to continue a LIBOR Portion, such Borrower shall give Agent a LIBOR Request no later than 11:00 a.m. (Chicago, Illinois time) on the second Business Day prior to the requested continuation date. After giving effect to any continuation of LIBOR Portions, Borrowers shall not be permitted to have outstanding at anyone time LIBOR Portions with more than seven (7) different Interest Periods. If a Borrower shall fail to give timely notice of its election to continue any LIBOR Portion or portion thereof as provided above, or if such continuation shall not be permitted, such LIBOR Portion or portion thereof, unless such LIBOR Portion shall be repaid, shall automatically be 16 converted into a Base Rate Portion at the end of the Interest Period then in effect with respect to such LIBOR Portion. 3.1.10 Inability to Make LIBOR Portions. Notwithstanding any other provision hereof, if any applicable law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection 3.1.10, the term "Lender" shall include the office or branch where such Lender or any corporation or bank then controlling such Lender makes or maintains any LIBOR Portions) to make or maintain its LIBOR Portions, or if with respect to any Interest Period, Agent is unable to determine the LIBOR relating thereto, or adverse or unusual conditions in, or changes in applicable law relating to, the London interbank market make it, in the reasonable judgment of Agent, impracticable to fund therein any of the LIBOR Portions, or make the projected LIBOR unreflective of the actual costs of funds therefor to any Lender, the obligation of Agent and Lenders to make or continue LIBOR Portions or convert Base Rate Portions to LIBOR Portions hereunder shall forthwith be suspended during the pendency of such circumstances and the applicable Borrower shall, if any affected LIBOR Portions are then outstanding, promptly upon request from Agent, convert such affected LIBOR Portions into Base Rate Portions. 3.2 Payments. Except where evidenced by notes or other instruments issued or made by one or more Borrowers to any Lender and accepted by such Lender specifically containing payment instructions that are in conflict with this Section 3.2 (in which case the conflicting provisions of said notes or other instruments shall govern and control), the Obligations shall be payable as follows: 3.2.1 Principal. (i) Revolving Credit Loans. Principal on account of Revolving Credit Loans shall be payable by Borrowers to Agent for the ratable benefit of Lenders immediately upon the earliest of (i) at any time when a Dominion Period is in effect, the receipt by Agent or any Borrower of any proceeds of any of the Collateral (except as otherwise provided herein), including without limitation as required pursuant to subsections 3.3.1 and 6.2.4, to the extent of said proceeds, subject to Borrowers' rights to reborrow such amounts in compliance with subsection 1.1.1 hereof, (ii) the acceleration of the Revolving Credit Loans in accordance with the terms of Section 10.2, (iii) subject to the provisions of subsection 1.1.2 and the proviso to this subsection 3.2.1, at all times that the calculations set forth in subsection 1.1.1 reflect a negative amount, to the extent of such amount on demand by Agent or Majority Lenders therefor, or (iv) termination of this Agreement pursuant to Section 4 hereof; provided, however, that, if an Overadvance shall exist at any time, Borrowers shall, on demand therefor (or, in the case of an Overadvance caused by, and created at the time of, Agent's establishment of a new reserve or a new eligibility criterion, within 5 days of demand therefor), jointly and severally repay the Overadvance. Each payment (including principal prepayment) by a Borrower on account of principal of the 17 Revolving Credit Loans shall be applied first to Base Rate Revolving Portions and then to LIBOR Revolving Portions. (ii) Term Loan. Principal on account of the Term Loan shall be payable jointly and severally by Borrowers as follows: (i) as required pursuant to subsections 3.3.1, 3.3.2 and 3.3.3, (ii) in 20 consecutive quarterly installments on each January 1, April 1, July I and October 1 commencing on January 1, 2004, each in the amount of $788,750, and (iii) a final installment in the amount of the remaining principal balance of the Term Loan on October 8, 2008. Notwithstanding the foregoing, the entire unpaid principal balance of the Term Loan shall be due and payable upon the termination of this Agreement. 3.2.2 Interest. (i) Base Rate Portion. Interest accrued on Base Rate Portions shall be due and payable on the earliest of (1) the first calendar day of each month (for the immediately preceding month), computed through the last calendar day of the preceding month, (2) the acceleration of such Base Rate Portion in accordance with the terms of Section 10.2 or (3) termination of this Agreement pursuant to Section 4 hereof. (ii) LIBOR Portion. Interest accrued on each LIBOR Portion shall be due and payable on each LIBOR Interest Payment Date and on the earlier of (I) the acceleration of such LIBOR Portion in accordance with the terms of Section 10.2 or (2) termination of this Agreement pursuant to Section 4 hereof 3.2.3 Costs, Fees and Charges. Costs, fees and charges payable pursuant to this Agreement shall be jointly and severally payable by Borrowers to Agent, as and when provided in Section 2 or Section 3 hereof, as applicable to Agent or a Lender, as applicable, or to any other Person designated by Agent or such Lender in writing. 3.2.4 Other Obligations. The balance of the Obligations (other than unasserted contingent indemnity obligations) requiring the payment of money, if any, shall be jointly and severally payable by Borrowers to Agent for distribution to Lenders, as appropriate, as and when provided in this Agreement, the Other Agreements or the Security Documents, or on demand, whichever is later. 3.2.5 Prepayment of/Failure to Borrow LIBOR Portions. Borrowers may prepay a LIBOR Portion only upon at least three (3) Business Days prior written notice to Agent (which notice shall be irrevocable). Subject to the terms of subsection 3.3.4, in the event of (i) the payment of any principal of any LIBOR Portion other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (ii) the conversion of any LIBOR Portion other than on the last day of the Interest Period applicable thereto, or (iii) the failure to borrow, convert, continue or prepay any LIBOR Portion on the date specified in any notice delivered pursuant hereto, then, in any such event, Borrowers shall compensate each Lender for the actual loss, cost and expense 18 incurred by such Lender that is attributable to such event, together with any normal, reasonable and customary administrative charges applicable thereto. 3.3 Mandatory and Optional Prepayments. 3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of Collateral. Except for dispositions of assets permitted by subsection 8.2.9(ii) and dispositions in accordance with this Agreement of assets that are subject to a Lien permitted by subsection 8.2.5(iv) (in each case, the proceeds of which shall, at any time when a Dominion Period is in effect, be applied to reduce the outstanding principal balance of the Revolving Credit Loans, but shall not permanently reduce the Revolving Loan Commitments), if any Borrower or any of its Subsidiaries sells any of the Collateral or if any of the Collateral is lost, damaged or destroyed or taken by condemnation (in each case excluding, at any time when a Dominion Period is not in effect, Accounts, Inventory, the Non-Core Fixed Assets described in clauses (iii) through (v) of the definition thereof and Non-Core Fixed Assets consisting of the equity of Belcher or Dalton - Ashland), the applicable Borrower shall, unless otherwise agreed by Majority Lenders, pay to Agent for the ratable benefit of Lenders as and when received by such Borrower or such Subsidiary and as a mandatory prepayment of the Loans, as herein provided, a sum equal to the proceeds (including insurance payments but net of costs and taxes incurred in connection with such sale or event) received by such Borrower or such Subsidiary from such sale, loss, damage, destruction or condemnation. To the extent that such Collateral sold, lost, damaged, destroyed or condemned consists of Equipment, real Property, or other Property other than Accounts, Inventory, the Non-Core Fixed Assets described in clauses (iii) through (v) of the definition thereof and Non-Core Fixed Assets consisting of the equity of Belcher and Dalton - Ashland, the applicable prepayment shall be applied first, to Agent's costs and expenses relating to the relevant transaction, second, to the installments of principal due under the Term Notes ratably, to be applied to future installment payments on a ratable basis (exclusive of the final installment payment that is due on October 8, 2008) until such future installment payments are paid in full, third, to the final installment of principal due under the Term Notes on October 8, 2008 ratably until paid in full, and fourth, to repay outstanding principal of Revolving Credit Loans, but not as a permanent reduction of the Revolving Loan Commitments. To the extent that the Collateral sold, lost, damaged, destroyed or condemned consists of Accounts, Inventory, the Non-Core Fixed Assets described in clauses (iii) through (v) of the definition thereof or Non-Core Fixed Assets consisting of the equity of Belcher or Dalton - Ashland and a Dominion Period is in effect, subject to the third sentence of subsection 3.4.1 the applicable prepayment shall be applied to reduce the outstanding principal balance of the Revolving Credit Loans, but shall not permanently reduce the Revolving Loan Commitments (it being understood that prepayments required to be made pursuant to subsection 3.3.3 shall also be applied as set forth in this sentence). In addition, if the Collateral subject to such sale, loss, damage, destruction or condemnation consists of Eligible Accounts or Eligible Inventory and a Dominion Period 19 is in effect, such prepayment shall be specifically applied against the portion of the Borrowing Base predicated on such Collateral. Notwithstanding the foregoing, if any Borrower or a Subsidiary of a Borrower receives any cash proceeds of insurance (net of costs and taxes incurred) with respect to any loss or destruction of Equipment or real Property, together with the aggregate amount of any other such proceeds during the then current fiscal year of Borrowers, (i) are less than $2,000,000, unless an Event of Default is then in existence, Agent shall remit such proceeds to the applicable Borrower (or its applicable Subsidiary) for use in replacing or repairing the applicable Property, so long as the applicable Borrower (or its applicable Subsidiary) has committed to acquire replacement Property within 180 days of such loss, damage or destruction and has actually acquired replacement Property within 360 days of such loss, damage or destruction, free and clear of Liens other than Permitted Liens that are not Purchase Money Liens (it being agreed and understood that if the applicable Borrower (or its applicable Subsidiary) fails to commit to replace or rebuild the damaged Property within such 180 day period or fails to actually replace or rebuild such damaged Property within such 360 day period, Borrowers shall prepay the Obligations in the manner specified in the second sentence of this subsection 3.3.1), (ii) are greater than or equal to $2,000,000 and less than $5,000,000, unless an Event of Default is then in existence, subject to the third sentence of subsection 3.4.1 such amounts shall be provisionally applied to reduce the outstanding principal balance of the Revolving Credit Loans and a Rebuild Reserve shall be created in the amount of such proceeds, until the earliest of (I) Borrowers' decision not to repair or replace the damaged Property, (2) the expiration of one hundred eighty days (180) days from the receipt of such amount, if the applicable Borrower or Subsidiary has not yet committed to acquire replacement Collateral or (3) the expiration of three hundred sixty (360) days from the receipt of such amount (with such amount being applied to the Obligations in the manner specified in the second sentence of this subsection 3.3.1 until payment thereof in full in the event that the foregoing period ends pursuant to clause (1) or clause (2)), or (iii) are equal to or greater than $5,000,000, and Borrowers have requested that Agent and Majority Lenders agree to permit the applicable Borrower or Subsidiary to repair or replace the damaged Property, subject to the third sentence of subsection 3.4.1 such amounts shall be provisionally applied to reduce the outstanding principal balance of the Revolving Credit Loans and a Rebuild Reserve shall be created in the amount of such proceeds, until the earliest of (1) Agent's and Majority Lenders' decision with respect thereto, (2) the expiration of one hundred eighty (180) days from the date of such request, unless the applicable Borrower or Subsidiary has committed to replace or rebuild the damaged Property, or (3) the expiration of three hundred sixty (360) days from such request. If Borrowers decide and commit to repair or replace the applicable Property as provided in clause (ii) above or if Agent and Majority Lenders agree, in their reasonable judgment, to permit any such repair or replacement under clause (iii) above, the applicable amount shall, unless an Event of Default is in existence, be released from the Rebuild Reserve (with the amount of the Rebuild Reserve being reduced on a dollar-for-dollar basis for each dollar that is so released) to the applicable Borrower or Subsidiary as needed for use in replacing or repairing the damaged Property during such three hundred sixty (360) day period, with any remaining amount at the end of such three hundred sixty (360) day period applied to the Obligations in the manner specified in the second sentence of this subsection 3.3.1 20 until payment thereof in full; and in the case of clause (iii) above, if either Agent or Majority Lenders decline to permit any such repair or replacement or fail to respond to Borrowers within such three hundred sixty (360) day period, or if the applicable Borrower or Subsidiary has failed to commit to replace or rebuild the damaged Property within such one hundred eighty (180) day period, such amount shall be released from the Rebuild Reserve and applied to the Obligations in the manner specified in the second sentence of this subsection 3.3.1 until payment thereof in full. It is acknowledged and agreed that any of the one hundred eighty (180) day or three hundred sixty (360) day periods set forth in this subsection 3.3.1 may be extended with the approval of Majority Lenders. Nothing in this subsection 3.3.1 shall be construed to constitute Agent's or any Lender's consent to the consummation of any disposition or other transaction that is not otherwise permitted by another provision of this Agreement (including, without limitation, subsection 8.2.9 hereof) or another Loan Document. 3.3.2 Proceeds from Issuance of Additional Indebtedness or Equity. If Ultimate Parent, Parent or any Borrower issues any additional Indebtedness or issues any additional equity for cash (other than equity (including stock options) issued to officers and employees in connection with incentive plans, equity resulting in proceeds used to make Capital Expenditures and equity resulting in proceeds used to consummate a Permitted Acquisition, in each case to the extent that the proceeds of such equity are promptly used as consideration for all or a portion of the purchase price for such Capital Expenditure or Permitted Acquisition) in a manner permitted under this Agreement, Borrowers shall pay to Agent for the ratable benefit of Lenders, when and as received by Ultimate Parent, Parent or any Borrower and as a mandatory prepayment of the Obligations, a sum equal to 50% of the net proceeds to Ultimate Parent, Parent or such Borrower of the issuance of such Indebtedness or equity; provided, that the foregoing shall not apply in connection with an issuance of Indebtedness or equity to a Person that is a Related Person of a Borrower. Any such prepayment shall be applied to the Loans in the manner specified in the second sentence of subsection 3.3.1 until payment thereof in full. 3.3.3 Other Mandatory Prepayments. At any time when a Dominion Period is in effect, if any Borrower or any Subsidiary receives any cash proceeds from any tax refunds actually received, indemnity payments or pension plan reversions, Borrowers shall jointly and severally pay to Agent for the benefit of Lenders, when and as received by such Borrower or such Subsidiary, and as a mandatory prepayment of the Obligations, a sum equal to 100% of such proceeds of such tax refund, indemnity payment or pension plan reversions. Any such prepayment shall be applied to the Obligations in the manner specified in the third sentence of subsection 3.3.1 until payment thereof in full. 3.3.4 LIBOR Portions. If the application of any payment made in accordance with the provisions of this Section 3.3 at a time when no Event of Default has occurred and is continuing would result in termination of a LIBOR Portion prior to the last day of the Interest Period for such LIBOR Portion, the amount of such prepayment shall not be applied to such LIBOR Portion, but will, at Borrowers' option, be held by Agent in a non- 21 interest bearing account at a Lender or another bank satisfactory to Agent in its discretion, which account is in the name of Agent and from which account only Agent can make any withdrawal, in each case to be applied as such amount would otherwise have been applied under this Section 3.3 at the earlier to occur of (i) the last day of the relevant Interest Period or (ii) the occurrence of a Default or an Event of Default. 3.3.5 Optional Prepayments. Borrowers may, at their option from time to time upon not less than 3 days prior written notice to Agent, prepay installments of the Term Notes, provided that the amount of any such prepayment is at least $500,000 and in integral multiples of $100,000 above $500,000, and that such prepayments are made ratably with respect to all Term Notes. Each such prepayment shall be applied first, to the future installments of principal due under the Term Notes on a ratable basis (exclusive of the final installment of principal that is due on October 8, 2008) until such future installments of principal are paid in full and second, to the final installment of principal due under the Term Notes on October 8, 2008 until paid in full. Except for charges applicable to prepayments of LIBOR Term Portions and except for charges payable under Section 2.6, such prepayments shall be without premium or penalty. 3.3.6 Optional Reductions of Revolving Loan Commitments. Borrowers may, at their option from time to time upon not less than 3 Business Days' prior written notice to Agent, terminate in whole or permanently reduce ratably in part, the unused portion of the Revolving Loan Commitments, provided however, that (i) each such partial reduction shall be in an amount of $2,000,000 or integral multiples of $1,000,000 in excess thereof and (ii) unless the Agreement is terminated pursuant to subsection 4.2.2, the aggregate of all optional reductions to the Revolving Credit Commitments may not exceed $10,000,000 during any 12 month period or $20,000,000 during the Term. Except for charges under subsection 3.2.5 applicable to prepayments of LIBOR Revolving Portions and except for charges payable under Section 2.6, such prepayments shall be without premium or penalty. 3.4 Application of Payments and Collections. 3.4.1 Collections. All items of payment received by Agent in immediately available funds by 12:00 noon, Chicago, Illinois, time, on any Business Day shall be deemed received on that Business Day. All items of payment received after 12:00 noon, Chicago, Illinois, time, on any Business Day shall be deemed received on the following Business Day. If as the result of collections of Accounts as authorized by subsection 6.2.4 hereof or otherwise (including, without limitation, as authorized under subsection 3.3.3 and under subsection 6.1.2), a credit balance exists in the Loan Account, such credit balance shall not accrue interest in favor of Borrowers, but shall be disbursed to a Borrower or otherwise at a Borrower's direction in the manner set forth in subsection 3.1.2, upon a Borrower's request at any time, so long as no Event of Default then exists (it being acknowledged and agreed that such Borrower may direct the disbursement of such credit balance to an operating account, with no requirement that such amount that is disbursed to such operating account be deposited in a Dominion Account). Agent may at its option, offset such credit balance against any of the Obligations upon and during the continuance of an Event of Default. 22 3.4.2 Apportionment, Application and Reversal of Payments. Principal and interest payments shall be apportioned ratably among Lenders (according to the unpaid principal balance of the Loans to which such payments relate held by each Lender). All payments shall be remitted to Agent and all such payments not relating to principal or interest of specific Loans, or not constituting payment of specific fees, and all proceeds of Accounts, or, except as provided in subsection 3.3.1, other Collateral received by Agent, including without limitation all amounts deposited in a Dominion Account, shall be applied, ratably, subject to the provisions of this Agreement and whether or not an Event of Default exists, first, to pay any fees, indemnities, or expense reimbursements (other than amounts related to Product Obligations) then due to Agent or Lenders from any Borrower; second, to pay interest due from Borrowers in respect of all Loans, including Swingline Loans and Agent Loans; third, to pay or prepay principal of Swingline Loans and Agent Loans; fourth, to pay or prepay principal of the Revolving Credit Loans (other than Swingline Loans and Agent Loans) and unpaid reimbursement obligations in respect of Letters of Credit; fifth, to pay an amount to Agent equal to all outstanding Letter of Credit Obligations to be held as cash Collateral for such Obligations (in an amount of 105% of the aggregate amount thereof); sixth, to payor prepay principal of the Term Loan seventh, to the payment of any other Obligation (other than amounts related to Product Obligations) due to the Agent or any Lender by any Borrower; and eighth, to pay any amounts owing in respect of Product Obligations. As between Agent and Borrowers, after the occurrence and during the continuance of an Event of Default, Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Agent or its agent against the Obligations, in such manner as Agent may deem advisable, notwithstanding any entry by Agent or any Lender upon any of its books and records. 3.5 All Loans to Constitute One Obligation. The Loans, Letters of Credit and LC Guarantees shall constitute one general joint and several Obligation of Borrowers, and shall be secured by Agent's Lien upon all of the Collateral. 3.6 Loan Account. Agent shall enter all Loans as debits to one or more loan accounts (each, a "Loan Account") and shall also record in the Loan Account all payments made by or on behalf of each Borrower on any Obligations and all proceeds of Collateral which are finally paid to Agent, and may record therein, in accordance with customary accounting practice, other debits and credits, including interest and all charges and expenses properly chargeable to each Borrower. 3.7 Statements of Account. Agent will account to Borrowers monthly with a statement of Loans, charges and payments made pursuant to this Agreement during the immediately preceding month, and such account rendered by Agent shall be deemed final, binding and conclusive upon Borrowers absent demonstrable error unless Agent is notified by Borrowers in writing to the contrary within 90 23 days of the date each accounting is received by Borrowers. Such notice shall only be deemed an objection to those items specifically objected to therein. 3.8 Increased Costs. If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law, but if not having the force of law, being a guideline or directive with which such Lender is accustomed to comply) adopted or implemented after the date of this Agreement and having general applicability to all banks or finance companies within the jurisdiction in which any Lender operates (excluding, for the avoidance of doubt, the effect of and phasing in of capital requirements or other regulations or guidelines passed prior to the date of this Agreement), or any interpretation or application thereof by any governmental authority charged with the interpretation or application thereof, or the compliance of such Lender therewith, shall: (i) (I) subject such Lender to any United States taxes with respect to this Agreement (other than (a) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (b) any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee) or (2) change the basis of taxation of payments to such Lender of principal, fees, interest or any other amount payable hereunder or under any Loan Documents (other than in respect of ( a) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (b) any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee; provided, that in either case the Lender shall have complied with the requirements of Section 2.12.2 to the extent applicable to such Lender); (ii) impose, modify or hold applicable any reserve (except any reserve taken into account in the determination of the applicable LIBOR), special deposit, assessment or similar requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended by, any office of such Lender, including (without limitation) pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or (iii) impose on such Lender or the London interbank market any other condition with respect to any Loan Document; and the result of any of the foregoing is to increase the cost to such Lender of making, renewing or maintaining Loans hereunder or the result of any of the foregoing is to reduce the rate of return on such Lender's capital as a consequence of its obligations hereunder, or the result of any 24 of the foregoing is to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of the Loans, then, in any such case, Borrowers shall jointly and severally pay such Lender, upon demand and certification not later than sixty (60) days following its receipt of notice of the imposition of such increased costs, such additional amount as will compensate such Lender for such additional cost or such reduction, as the case may be, to the extent such Lender has not otherwise been compensated, with respect to a particular Loan, for such increased cost as a result of an increase in the Base Rate or the LIBOR. An officer of the applicable Lender shall reasonably determine the amount of such additional cost or reduced amount using reasonable averaging and attribution methods and shall certify the amount of such additional cost or reduced amount to Borrowers, which certification shall include a written explanation of such additional cost or reduction to Borrowers. Such certification shall be conclusive absent manifest error. If a Lender claims any additional cost or reduced amount pursuant to this Section 3.8, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to designate a different lending office (and update the Register, as applicable) or to file any certificate or document reasonably requested by Borrowers, or take any other action requested by Borrowers that is not inconsistent with such Lender's internal policies, if the making of such designation or filing or the taking of such action would avoid the need for, or reduce the amount of, any such additional cost or reduced amount and would not in good faith, in the sole reasonable discretion of such Lender, be otherwise disadvantageous to such Lender. 3.9 Basis for Determining Interest Rate Inadequate. In the event that Agent or any Lender shall have determined that: (i) reasonable means do not exist for ascertaining the LIBOR for any Interest Period; or (ii) Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank market with respect to a proposed LIBOR Portion, or a proposed conversion of a Base Rate Portion into a LIBOR Portion; then Agent or such Lender shall give Borrowers prompt written, telephonic or electronic notice of the determination of such effect. If such notice is given, (i) any such requested LIBOR Portion shall be made as a Base Rate Portion, unless Borrowers shall notify Agent no later than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to the date of such proposed borrowing that the request for such borrowing shall be canceled or made as an unaffected type of LIBOR Portion, and (ii) any Base Rate Portion which was to have been converted to an affected type of LIBOR Portion shall be continued as or converted into a Base Rate Portion, or, if Borrowers shall notify Agent, no later than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of LIBOR Portion. 3.10 Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Loan made by it in excess of 25 its ratable share of payments on account of Loans made by all Lenders, such Lender shall forthwith purchase from each other Lender such participation in such Loan as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each other Lender; provided, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lenders the purchase price to the extent of such recovery, together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section 3.10 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-oft) with respect to such participation as fully as if such Lender were the direct creditor of each Borrower in the amount of such participation. Notwithstanding anything to the contrary contained herein, all purchases and repayments to be made under this Section 3.10 shall be made through Agent. 3.11 Optional Prepayment/Replacement of Lenders. If (a) Borrowers are required to pay increased sums to a particular Lender pursuant to the last sentence of subsection 2.12.1 or Section 3.8, (b) Borrowers are notified that a Lender will not make or maintain LIBOR Portions pursuant to subsection 3.1.10 or Section 3.9, ( c) a particular Lender refuses or fails to execute a waiver of any provision hereof or a consent to any amendment hereto that has been requested by Borrowers and approved by Majority Lenders or (d) a particular Lender has exercised its option to refuse to fund additional Revolving Credit Loans during the existence of a Default or Event of Default pursuant to subsection 10.2.2 at a time when Majority Lenders continue funding Revolving Credit Loans notwithstanding the existence of such Default or Event of Default (any such Lender, an "Affected Lender"), Borrowers may obtain, at Borrowers' expense, a replacement Lender ("Replacement Lender") for such Affected Lender, which Replacement Lender shall be reasonably satisfactory to Agent. In the event Borrowers obtain a Replacement Lender that will refinance all outstanding Obligations owed to such Affected Lender and assume its entire Revolving Loan Commitment hereunder within one hundred twenty (120) days following notice of Borrowers' intention to do so, the Affected Lender shall sell and assign all of its rights and delegate all of its obligations under this Agreement to such Replacement Lender in accordance with the provisions of subsection 11.9.1, provided that Borrowers have reimbursed such Affected Lender for (1) any fees owing by such Affected Lender under subsection 11.9.1 and (2) the amount of fees and expenses as to which such Affected Lender is entitled to reimbursement by Borrowers hereunder through the date of such sale and assignment. SECTION 4. TERM AND TERMINATION 4.1 Term of Agreement. Subject to the right of Lenders to cease making Loans to Borrowers during the continuance of any Default or Event of Default, this Agreement shall be in effect for a period of 5 years from the date hereof, through and including October 8, 2008 (the "Term"), unless terminated as provided in Section 4.2 hereof. 26 4.2 Termination. 4.2.1 Termination by Lenders. Agent may, and at the direction of Majority Lenders shall, terminate this Agreement upon notice during the continuance of an Event of Default. 4.2.2 Termination by Borrowers. Upon at least 10 days prior written notice to Agent and Lenders, Borrowers may, at their option, terminate this Agreement; provided, however, no such termination shall be effective until Borrowers have paid or collateralized to Agent's reasonable satisfaction all of the Obligations (other than unasserted contingent indemnity obligations) in immediately available funds, all Letters of Credit and LC Guaranties have expired, terminated or have been cash collateralized (in an amount equal to 105% of the LC Amount) to Agent's reasonable satisfaction and Borrowers have complied with subsection 3.2.5. Without limiting Borrowers' right to reduce the amount of the Revolving Loan Commitments pursuant to subsection 3.3.6, Borrowers may elect to terminate this Agreement in its entirety only. No section of this Agreement or type of Loan available hereunder may be terminated singly. 4.2.3 Effect of Termination. All of the Obligations shall be immediately due and payable upon the termination date stated in any notice of termination of this Agreement. All undertakings, agreements, covenants, warranties and representations of Borrowers contained in the Loan Documents shall survive any such termination and Agent shall retain its Liens in the Collateral and Agent and each Lender shall retain all of its rights and remedies under the Loan Documents notwithstanding such termination until Borrowers have paid or collateralized to Agent's reasonable satisfaction all of the Obligations (other than unasserted contingent indemnity obligations) in immediately available funds, all Letters of Credit and LC Guaranties have expired, terminated or have been cash collateralized (in an amount equal to 105% of the LC Amount) to Agent's reasonable satisfaction and Borrowers have complied with subsection 3.2.5; and, upon such payments and other events having occurred, Agent's Liens on the Collateral shall terminate (other than Collateral specifically retained to collateralize outstanding Obligations) and Agent shall, at the expense of Borrowers, execute and deliver any and all termination statements, releases and other documents reasonably requested by Borrowers to evidence such termination. Notwithstanding the foregoing, Agent shall not be required to terminate its Liens in the Collateral unless, solely to the extent necessary to protect against any loss or damage Agent may incur as a result of dishonored checks or other returned items of payment received by Agent from any Borrower or any Account Debtor and applied to the Obligations, Agent shall, at its option, (i) have received a written agreement reasonably satisfactory to Agent, executed by Borrowers and by any Person whose loans or other advances to any Borrower are used in whole or in part to satisfy the Obligations, indemnifying Agent and each Lender from any such loss or damage or (ii) have retained cash Collateral or other Collateral for such period of time as Agent, in its reasonable discretion, may deem necessary to protect Agent and each Lender from any such loss or damage. 27 SECTION 5. SECURITY INTERESTS 5.1 Security Interest in Collateral. To secure the prompt payment and performance to Agent and each Lender of the Obligations, each Borrower hereby grants to Agent for the benefit of itself and each Lender a continuing Lien upon all of such Borrower's assets, including all of the following Property and interests in Property of such Borrower, whether now owned or existing or hereafter created, acquired or arising and wheresoever located: (i) Accounts; (ii) Certificated Securities; (iii) Chattel Paper; (iv) Computer Hardware and Software and all rights with respect thereto, including, any and all licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing; (v) Contract Rights; (vi) Deposit Accounts; (vii) Documents; (viii) Equipment; (ix) Financial Assets; (x) Fixtures; (xi) General Intangibles, including Payment Intangibles and Software; (xii) Goods (including all of its Equipment, Fixtures and Inventory), and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor; (xiii) Instruments; (xiv) Intellectual Property; (xv) Inventory; (xvi) Investment Property; (xvii) money (of every jurisdiction whatsoever); 28 (xviii) Letter-of-Credit Rights; (xix) Payment Intangibles; (xx) Security Entitlements; (xxi) Software; (xxii) Supporting Obligations; (xxiii) Uncertificated Securities; and (xxiv) to the extent not included in the foregoing, all other personal property of any kind or description; together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all Proceeds, products, offspring, rents, issues, profits and returns of and from any of the foregoing; provided, that to the extent that the provisions of any lease, license, contract, permit, Document or Instrument expressly prohibit (which prohibition is enforceable under applicable law) any assignment thereof (unless such prohibition specifically excludes from its scope an assignment for collateral security purposes) or the grant of a Lien therein, (i) Agent will not enforce its Lien in the applicable Borrower's rights under such lease, license, contract, permit, Document or Instrument (other than in respect of the Proceeds thereof) for so long as such prohibition continues, and (ii) to the extent a violation of any such prohibition caused by the Lien under this Section 5.1 would allow the counterparty to any such lease, license, contract, permit, Document or Instrument to terminate the same under applicable law, then such lease, license, contract, permit, Document or Instrument (other than in respect of the Proceeds thereof) shall not constitute Collateral for so long as such prohibition continues; it being understood that upon request of Agent, such Borrower will in good faith use reasonable efforts to obtain consent for the creation of a Lien in favor of Agent (and to Agent's enforcement of such Lien) in any lease, license, contract, permit, Document or Instrument that prohibits any assignment thereof or the grant of a Lien therein; and provided, further, that no Lien is granted in any "intent to use" trademark applications until such time as a verified statement of use is filed. 5.2 Other Collateral. 5.2.1 Commercial Tort Claims. The applicable Borrower shall promptly notify Agent in writing upon having a Commercial Tort Claim that arises after the Closing Date against any third party and, upon request of Agent, promptly enter into an amendment to this Agreement and take such other action reasonably deemed necessary by Agent to give Agent a security interest in any such Commercial Tort Claim. Each Borrower represents and warrants that as of the date of this Agreement, to its knowledge, it does not have any Commercial Tort Claims. 5.2.2 Other Collateral. The applicable Borrower shall promptly notify Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of Deposit Accounts, Investment Property or Letter-of-Credit Rights in (or 29 relating to) an amount in excess of $250,000 or Electronic Chattel Paper in (or relating to) an amount in excess of $1,000,000 and, upon the request of Agent, promptly execute such other documents, and do such other acts or things deemed appropriate by Agent to deliver to Agent control with respect to such Collateral; promptly notify Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of Documents or Instruments in (or relating to) an amount in excess of $250,000 and, upon the request of Agent, will promptly execute such other documents, and take such other action deemed appropriate by Agent to deliver to Agent possession of such Documents which are negotiable and Instruments, and, with respect to nonnegotiable Documents, to have such nonnegotiable Documents issued in the name of Agent; and with respect to Collateral having a value in excess of $250,000 that is in the possession of a third party, other than Certificated Securities and Goods covered by a Document, obtain an acknowledgement from the third party that it is holding the Collateral for the benefit of Agent. 5.3 Lien Perfection; Further Assurances. Each Borrower shall execute such instruments, assignments or documents as are necessary to perfect Agent's Lien upon any of the Collateral and shall take such other action as may be required to perfect or to continue the perfection of Agent's Lien upon the Collateral. Unless prohibited by applicable law, each Borrower hereby authorizes Agent to execute and file any such financing statement, including, without limitation, financing statements that indicate the Collateral (i) as all assets of such Borrower or words of similar effect, or (ii) as being of an equal or lesser scope, or with greater or lesser detail, than as set forth in Section 5.1, on such Borrower's behalf. Each Borrower also hereby ratifies its authorization for Agent to have filed in any jurisdiction any like financing statements or amendments thereto if filed prior to the date hereof. The parties agree that a carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu thereof. At Agent's request, each Borrower shall also promptly execute or cause to be executed and shall deliver to Agent any and all documents, instruments and agreements reasonably deemed necessary by Agent to give effect to or carry out the terms of the Loan Documents. 5.4 Lien on Realty. The due and punctual payment and performance of the Obligations shall also be secured by the Lien created by Mortgages upon all real Property of each Borrower now or hereafter owned (it being agreed and understood that Belcher will not execute and deliver a Mortgage with respect to the Belcher Parcel unless and until it has title to the Belcher Parcel sufficient to allow Belcher to provide such a Mortgage). Each Mortgage shall be executed by the applicable Borrower in favor of Agent. Each Mortgage shall be duly recorded, at Borrowers' joint and several expense, in each office where such recording is required to constitute a fully perfected first Lien on the real Property covered thereby. If so requested by Agent or Majority Lenders, the applicable Borrower shall deliver to Agent, at Borrowers' joint and several expense, mortgagee title insurance policies issued by a title insurance company that is selected by Borrowers and reasonably satisfactory to Agent, which policies shall be in form and substance reasonably satisfactory to Agent and shall insure a valid first Lien in favor of Agent, for the benefit of itself and the Lenders, on the Property covered by each Mortgage (other than with 30 respect to the Belcher Parcel, the Ashland Parcel and the real Property of Neenah located at 500 Winneconne Avenue in Neenah, Wisconsin), subject only to those exceptions reasonably acceptable to Agent and its counsel. The applicable Borrower shall deliver to Agent such other documents, including, without limitation, as-built survey prints of the real Property, as Agent and its counsel may reasonably request relating to the real Property subject to the Mortgages, other than with respect to the Belcher Parcel, the Ashland Parcel and the real Property of Neenah located at 500 Winneconne Avenue in Neenah, Wisconsin. SECTION 6. COLLATERAL ADMINISTRATION 6.1 General. 6.1.1 Location of Collateral. All Collateral, other than Goods in transit, motor vehicles, Goods (other than Eligible Inventory) in the possession of employees in the ordinary course of business and other miscellaneous immaterial items of Collateral not having a value that exceeds $250,000 in the aggregate, will at all times be kept by a Borrower or one of its Subsidiaries, or a bailee, distributor, consignee, warehousemen or similar party of a Borrower or one of its Subsidiaries, at one or more of the business locations set forth in Exhibit 6.1.1 hereto, as updated by Borrowers providing prior written notice to Agent of any new location. 6.1.2 Insurance of Collateral. Borrowers shall maintain and pay for insurance upon all Collateral wherever located and with respect to the business of each Borrower and each of its Subsidiaries, covering casualty, hazard, public liability, workers' compensation, business interruption and such other risks in such amounts and with such insurance companies as are reasonably satisfactory to Agent. Borrowers shall deliver certified copies of such policies to Agent as promptly as practicable, with satisfactory lender's loss payable endorsements, naming Agent (on behalf of the Lenders) as a loss payee, assignee or additional insured, as appropriate, as its interest may appear, showing only such other loss payees, assignees and additional insureds as are satisfactory to Agent and with respect to business interruption insurance, an executed collateral assignment thereof. Each policy of insurance or endorsement shall contain a clause requiring the insurer to give not less than 10 days' prior written notice to Agent in the event of cancellation of the policy for nonpayment of premium and not less than 30 days' prior written notice to Agent in the event of cancellation of the policy for any other reason whatsoever and a clause specifying that the interest of Agent shall not be impaired or invalidated by any act or neglect of any Borrower, any of its Subsidiaries or the owner of the Property or by the occupation of the premises for purposes more hazardous than are permitted by said policy. Borrowers agree to deliver to Agent, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies. At any time when a Dominion Period is in effect, all net proceeds of business interruption insurance (if any) of each Borrower and its Subsidiaries shall be remitted to Agent for application to the outstanding balance of the Revolving Credit Loans (subject to the third sentence of subsection 3.4.1). 31 By its execution of this Agreement, Agent acknowledges that, as of the date hereof, the insurance coverages of Borrowers and its Subsidiaries and the insurance companies providing such coverages are satisfactory to Agent in its reasonable judgment. Unless Borrowers provide Agent with evidence of the insurance coverage required by this Agreement, Agent may purchase insurance at Borrowers' joint and several expense to protect Agent's interests in the Properties of each Borrower and its Subsidiaries. This insurance may, but need not, protect the interests of each Borrower and its Subsidiaries. The coverage that Agent purchases may not pay any claim that a Borrower or any Subsidiary of such Borrower makes or any claim that is made against a Borrower or any such Subsidiary in connection with said Property. Borrowers may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that Borrowers and their Subsidiaries have obtained insurance as required by this Agreement If Agent purchases insurance, Borrowers will be jointly and severally responsible for the costs of that insurance, including interest and any other charges Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance may be more than the cost of insurance that Borrowers and the Subsidiaries may be able to obtain on their own. 6.1.3 Protection of Collateral. Neither Agent nor any Lender shall be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is in Agent's or any Lender's actual possession) or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, or other person whomsoever, but the same shall be at Borrowers' sole risk. 6.2 Administration of Accounts. 6.2.1 Records, Schedules and Assignments of Accounts. Each Borrower shall keep accurate and complete records in all material respects of its Accounts and all payments and collections thereon and shall submit to Agent on such periodic basis as Agent shall reasonably request a sales and collections report for the preceding period, in form consistent with the reports currently prepared by such Borrower with respect to such information. Concurrently with the delivery of each Borrowing Base Certificate described in subsection 8.1.4, or more frequently as reasonably requested by Agent, from and after the date hereof, each Borrower shall deliver to Agent a detailed aged trial balance of all of its Accounts, specifying the names, addresses, face values, dates of invoices and due dates for each Account Debtor obligated on an Account so listed ("Schedule of Accounts"), and upon Agent's request therefor, copies of proof of delivery and the original copy of all documents, including, without limitation, repayment histories and present status reports relating to the Accounts so scheduled and such other matters and information relating to the status of then existing Accounts as Agent shall reasonably request. During the continuance of an Event of Default, if requested by Agent, each Borrower shall execute and deliver to Agent formal written assignments of all of its Accounts weekly, which shall include all Accounts that have been created since the date 32 of the last assignment, together with copies of invoices or invoice registers related thereto. 6.2.2 Discounts, Allowances, Disputes. If a Borrower grants any discounts, allowances or credits that are not shown on the face of the invoice for the Account involved, such Borrower shall report such discounts, allowances or credits, as the case may be, to Agent as part of the next required Schedule of Accounts. 6.2.3 Account Verification. Any of Agent's officers, employees or agents shall have the right, at any time or times hereafter, in the name of Agent, any designee of Agent or a Borrower, to verify the validity and amount of any Accounts by mail, telephone, electronic communication or otherwise; provided, that Agent shall conduct Account verifications with appropriate discretion in accordance with its customary practices and procedures solely to verify the validity and amounts of Accounts and, so long as no Event of Default has occurred and is continuing, (a) Agent shall provide Borrowers with at least 1 Business Day's prior notice that Agent will be conducting Account verifications pursuant to this subsection 6.2.3 (it being understood that Agent shall have no duty to identify any of the specific Account Debtors to be contacted by Agent in connection therewith) and (b) Agent shall afford Borrowers the opportunity to have an observational role with respect to any Account verifications conducted pursuant to this subsection 6.2.3 (it being understood that Borrowers shall have no right to be an active participant with respect to any such Account verifications). Each Borrower shall cooperate with all reasonable requests of Agent in an effort to facilitate and promptly conclude any such verification process. 6.2.4 Maintenance of Dominion Account. Each Borrower shall maintain a Dominion Account or Accounts pursuant to lockbox and blocked account arrangements acceptable to Agent with such banks as may be selected by such Borrower and be acceptable to Agent. Each Borrower shall issue to any such banks an irrevocable letter of instruction directing such banks to deposit all payments or other remittances received in the lockbox and blocked accounts to the Dominion Account. Each Borrower shall obtain the agreement by the applicable banks in favor of Agent to waive any recoupment, setoff rights, and any security interest in, or against, the funds so deposited. All funds deposited in the Dominion Account shall be available to Borrowers at their discretion unless a Dominion Period is in effect. If a Dominion Period (including, without limitation, the Initial Dominion Period) is in effect, all funds in the Dominion Account shall (i) immediately become the property of Agent, for the ratable benefit of Lenders and (ii) be applied on account of the Obligations as provided in subsection 3.2.1. If a Dominion Event occurs at any time after the Initial Dominion Period, Agent may, and at the direction of Majority Lenders Agent shall, send the appropriate notice to Borrowers to commence a new Dominion Period. 6.2.5 Collection of Accounts, Proceeds of Collateral. Each Borrower agrees that all invoices rendered and other requests made by such Borrower for payment in respect of Accounts shall contain a written statement directing payment in respect of such Accounts to be paid to a lockbox or a blocked account established pursuant to subsection 6.2.4. To expedite collection, each Borrower shall endeavor in the first instance to make 33 collection of its Accounts for Agent in a manner that is consistent with the ordinary course of its business. All remittances received by each Borrower on account of Accounts, together with the proceeds of any other Collateral, shall be immediately deposited in kind in the Dominion Account and shall, at any time when a Dominion Period is in effect, be held by such Borrower until such deposit has occurred as trustee of an express trust on behalf of Agent (for its benefit and the benefit of the Lenders). Agent retains the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors that each Borrower's Accounts have been assigned to Agent and to collect each Borrower's Accounts directly in its own name, or in the name of Agent's agent, and to charge the collection costs and expenses, including attorneys' fees, jointly and severally to Borrowers. 6.2.6 Taxes. If an Account includes a charge for any tax payable to any governmental taxing authority, Agent is authorized, in its sole discretion, to pay the amount thereof to the proper taxing authority for the account of any Borrower and to charge that Borrower for such tax, except for taxes that (i) are being actively contested in good faith and by appropriate proceedings and for which the applicable Borrower maintains reasonable reserves on its books and (ii) would not reasonably be expected to result in any Lien other than a Permitted Lien. In no event shall Agent or any Lender be liable for any taxes of any Borrower due and payable to any governmental taxing authority. 6.3 Administration of Inventory. Each Borrower shall keep records of its Inventory which records shall be complete and accurate in all material respects. Each Borrower shall furnish to Agent Inventory reports concurrently with the delivery of each Borrowing Base Certificate described in subsection 8.1.4 or more frequently as reasonably requested by Agent, which reports will be in such other format and detail as Agent shall reasonably request and shall include a current list of all locations of such Borrower's Inventory. Each Borrower shall conduct a physical inventory no less frequently than annually and shall provide to Agent a report based on each such physical inventory promptly thereafter, together with such supporting information as Agent shall reasonably request. 6.4 Administration of Equipment. Each Borrower shall keep records of its Equipment which shall be complete and accurate in all material respects itemizing and describing the kind, type, quality, quantity and book value of its Equipment and all dispositions made in accordance with subsection 8.2.9 hereof, and each Borrower shall, and shall cause each of its Subsidiaries to, furnish Agent with a current schedule containing the foregoing information on at least an annual basis and more often during the continuance of an Event of Default if reasonably requested by Agent. Promptly after the request therefor by Agent, each Borrower shall deliver to Agent any and all evidence of ownership, if any, of any of its Equipment. 34 6.5 Payment of Charges. All amounts chargeable to any Borrower under Section 6 hereof shall be Obligations secured by all of the Collateral, shall be payable on demand and shall bear interest from the date such advance was made until paid in full at the rate applicable to Base Rate Revolving Portions from time to time. SECTION 7. REPRESENTATIONS AND WARRANTIES 7.1 General Representations and Warranties. To induce Agent and each Lender to enter into this Agreement and to make advances hereunder, each Borrower warrants, represents and covenants to Agent and each Lender that: 7.1.1 Qualification. Each Borrower and each of its Subsidiaries is a corporation, limited partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. Each Borrower and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign limited liability company, limited partnership or corporation, as applicable, in (a) as of the date hereof, each state or jurisdiction listed on Exhibit 7.1.1 hereto and (b) all states and jurisdictions in which the failure of such Borrower or any of its Subsidiaries to be so qualified would reasonably be expected to have a Material Adverse Effect. 7.1.2 Power and Authority. Each Borrower and each of its Subsidiaries is duly authorized and empowered to enter into, execute, deliver and perform this Agreement and each of the other Loan Documents to which it is a party. The execution, delivery and performance of this Agreement and each of the other Loan Documents have been duly authorized by all necessary corporate or other relevant action and do not and will not (i) require any consent or approval of the shareholders of such Borrower or any of the shareholders, partners or members, as the case may be, of any Subsidiary of such Borrower; (ii) contravene such Borrower's or any of its Subsidiaries' charter, articles or certificate of incorporation, partnership agreement, certificate of formation, by-laws, limited liability agreement, operating agreement or other organizational documents (as the case may be); (iii) violate, or cause such Borrower or any of its Subsidiaries to be in default under, any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award in effect having applicability to such Borrower or any of its Subsidiaries, the violation of which would reasonably be expected to have a Material Adverse Effect; (iv) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Borrower or any of its Subsidiaries is a party or by which it or its Property may be bound or affected, the breach of or default under which could reasonably be expected to have a Material Adverse Effect; or (v) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Property now owned or hereafter acquired by such Borrower or any of its Subsidiaries. 35 7.1.3 Legally Enforceable Agreement. This Agreement is, and each of the other Loan Documents when delivered under this Agreement will be, a legal, valid and binding obligation of each Borrower and each of its Subsidiaries party thereto, enforceable against it in accordance with its respective terms, subject to the effects of applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally and equitable principles of general applicability (regardless of whether such enforceability is considered in a proceeding at law or in equity). 7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of the date hereof, (i) the correct name of each of the Subsidiaries of each Borrower, its jurisdiction of incorporation or organization and the percentage of its Voting Stock owned by such Borrower, (ii) the name of each Borrower's and each of its Subsidiaries' corporate or joint venture relationships and the nature of the relationship, (iii) the number, nature and holder of all outstanding Securities of each Borrower and the holder of Securities of each Subsidiary of such Borrower and (iv) the number of authorized, issued and treasury Securities of each Borrower. Each Borrower has good title to all of the Securities it purports to own of each of such Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such Securities have been duly issued and are fully paid and non-assessable. As of the date hereof, there are no outstanding options to purchase, or any rights or warrants to subscribe for, or any commitments or agreements to issue or sell any Securities or obligations convertible into, or any powers of attorney relating to any Securities of any Borrower or any of its Subsidiaries. Except as set forth on Exhibit 7.1.4, as of the date hereof, there are no outstanding agreements or instruments binding upon any of any Borrower's or any of its Subsidiaries' partners, members or shareholders, as the case may be, relating to the ownership of its Securities. 7.1.5 Names; Organization. As of the date hereof, within the last five years neither any Borrower nor any of its Subsidiaries has been known as or has used any legal, fictitious or trade names except those listed on Exhibit 7.1.5 hereto. Except as set forth on Exhibit 7.1.5, during the last 5 years neither any Borrower nor any of its Subsidiaries has been the surviving entity of a merger or consolidation or has acquired all or substantially all of the assets of any Person. As of the date hereof, each Borrower's and each of its Subsidiaries' state(s) of incorporation or organization, Type of Organization and Organizational I.D. Number is set forth on Exhibit 7.1.5. As of the date hereof, the exact legal name of each Borrower and each of its Subsidiaries is set forth on Exhibit 7.1.5. 7.1.6 Business Locations; Agent for Process. Each Borrower's and each of its Subsidiary's chief executive office, location of books and records and other places of business are as listed on Exhibit 6.1.1 hereto, as updated from time to time by Borrowers in accordance with the provisions of subsection 6.1.1. During the preceding six-month period, neither any Borrower nor any of its Subsidiaries has had a principal place of business, chief executive office or location of tangible Collateral (except for miscellaneous immaterial items of Collateral not having a value that exceeds $250,000 in the aggregate), other than as listed on Exhibit 6.1.1. All tangible Collateral is kept by a Borrower and its Subsidiaries in accordance with subsection 6.1.1. Except for miscellaneous immaterial items of Collateral not having a value that exceeds $250,000 in 36 the aggregate or as shown on Exhibit 6.1.1, as of the date hereof, no Inventory is stored with a bailee, distributor, warehouseman or similar party, nor is any Inventory consigned to any Person. 7.1.7 Title to Properties: Priority of Liens. Each Borrower and each of its Subsidiaries has good, indefeasible and marketable title to and fee simple ownership of, or, to the extent relating to the leased location at 135 Church Street in Wheatland, Pennsylvania or at any leased property that involves rental payments exceeding $50,000 in the aggregate per fiscal year, valid leasehold interests in, all of its real Property, and good title to all of the Collateral and all of its other Property, in each case, free and clear of all Liens except Permitted Liens. Each Borrower and each of its Subsidiaries has paid or discharged all lawful claims that are due and payable which, if unpaid, would reasonably be expected to become a Lien against any of such Borrower's or such Subsidiary's Properties that is not a Permitted Lien. The Liens granted to Agent under Section 5 hereof are first priority Liens, subject only to Permitted Liens. 7.1.8 Accounts. Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by each Borrower with respect to any Account or Accounts. With respect to each of each Borrower's Eligible Accounts, unless otherwise disclosed to Agent in writing: (i) It is genuine and in all respects what it purports to be, and it is not evidenced by a judgment; (ii) It arises out of a completed, bona fide sale and delivery of goods or rendition of services by such Borrower, in the ordinary course of its business and in accordance with the material terms and conditions of all purchase orders, contracts or other documents relating thereto and forming a part of the contract between such Borrower and the Account Debtor; (iii) It is for a liquidated amount maturing as stated in the duplicate invoice covering such sale or rendition of services, a copy of which has been furnished or is available to Agent; (iv) There are no facts, events or occurrences which in any material way impair the validity or enforceability of any Eligible Accounts or tend to reduce the amount payable thereunder from the face amount of the invoice and statements delivered or made available to Agent with respect thereto; (v) To the best of such Borrower's knowledge, the Account Debtor thereunder (1) had the capacity to contract at the time any contract or other document giving rise to the Eligible Account was executed and (2) such Account Debtor is Solvent; and (vi) To the best of such Borrower's knowledge, there are no proceedings or actions which are threatened or pending against the Account Debtor thereunder which would reasonably be expected to result in any material 37 adverse change in such Account Debtor's financial condition or the collectibility of such Account. 7.1.9 [INTENTIONALLY OMITTED]. 7.1.10 Financial Statements; Fiscal Year. The Consolidated and consolidating balance sheets of Borrowers and Borrowers' Subsidiaries (including the accounts of all Subsidiaries of Borrowers and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of April 30, 2003, and the related statements of income, changes in shareholder's equity, and changes in financial position for the period ended on such date, have been prepared in accordance with GAAP, and present fairly in all material respects the financial positions of Borrowers and such Subsidiaries, taken as a whole, at such date and the results of Borrowers' and such Subsidiaries' operations, taken as a whole, for such period. As of the date hereof, since April 30, 2003, there has been no material adverse change in the financial position of Borrowers and such Subsidiaries, taken as a whole, as reflected in the balance sheets as of such date, it being understood that (i) changes, events of effects primarily attributable to (a) the bankruptcy filing of the Chapter 11 Debtors or (b) the public announcement of such filing or the transactions contemplated thereby, and (ii) changes or events affecting general economic conditions, but not otherwise materially and adversely affecting the business, assets or financial condition of Borrowers' and Borrowers' Subsidiaries, shall not be considered material adverse changes for purposes of the foregoing. As of the date hereof, the fiscal year of Parent and each of its Subsidiaries ends on September 30 of each year. 7.1.11 Full Disclosure. The financial statements referred to in subsection 7.1.10 hereof do not, nor does this Agreement, the Plan of Reorganization, the Disclosure Statement, or any other written statement of any Borrower to Agent or any Lender contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading in light of the circumstances in which they were made. To the best of Borrowers' knowledge after reasonable inquiry, there is no fact which any Borrower has failed to disclose to Agent or any Lender in writing which would reasonably be expected to have a Material Adverse Effect. 7.1.12 Solvent Financial Condition. After giving effect to the initial Loans to be made and the initial Letters of Credit and LC Guaranties to be issued hereunder, the issuance of the Secured Bonds and the Subordinated Bonds and the consummation of the other transactions contemplated hereby, each of Ultimate Parent, Parent, Borrowers and the Subsidiaries of Borrowers will be Solvent on a consolidated basis (after giving effect to all rights of contribution and the like). 7.1.13 Surety Obligations. Except as set forth on Exhibit 7.1.13, as of the date hereof, neither any Borrower nor any of its Subsidiaries is obligated as surety or indenmitor under any surety or similar bond or other contract issued for the benefit of any Person (including without limitation a Borrower or a Subsidiary of a Borrower) that in any case involves an amount exceeding $50,000, or has issued or entered into any agreement to assure payment, performance or completion of performance of any 38 undertaking or obligation of any Person (including, without limitation, a Borrower or a Subsidiary of a Borrower) that in any case involves an amount exceeding $50,000, except as otherwise expressly permitted hereunder. 7.1.14 Taxes. Each Borrower and each of its Subsidiaries has filed all applicable federal, state and local tax returns and other reports relating to taxes it is required by law to file, other than such returns and reports where the amounts due and payable as shown do not exceed $100,000 individually or $250,000 in the aggregate, and each Borrower and each of its Subsidiaries has paid when due and payable, or made provision for the payment of when due and payable, all taxes shown on its returns and all assessments, fees, levies and other governmental charges shown thereon or therein, other than taxes, assessments, fees, levies and other governmental charges that do not exceed $100,000 individually or $250,000 in the aggregate, unless and to the extent any thereof are being actively contested in good faith and by appropriate proceedings and each Borrower and each of its Subsidiaries maintains reasonable reserves on its books therefor. The provision for taxes on the books of each Borrower and its Subsidiaries is adequate for the current fiscal year. 7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto, there are no claims for brokerage commissions, finder's fees or investment banking fees payable by any Borrower or any of its Subsidiaries in connection with the transactions contemplated by this Agreement, including, without limitation, the issuance of the Secured Bonds and the Subordinated Bonds. 7.1.16 Patents, Trademarks, Copyrights and Licenses. Each Borrower and each of its Subsidiaries owns, possesses or licenses or has the right to use all the patents, trademarks, service marks, trade names, copyrights, licenses and other Intellectual Property necessary for the present and planned future conduct of its business without any known conflict with the rights of others, except for such conflicts as could not reasonably be expected to have a Material Adverse Effect. All patents, U.S. federally registered trademarks, U.S. federally registered service marks, U.S. federally registered trade names, U.S. federally registered copyrights, material licenses, and other material similar rights owned by a Borrower or a Subsidiary of a Borrower as of the date hereof (and not abandoned) are listed on Exhibit 7.1.16 hereto, as updated from time to time by notice to Agent. As of the date hereof, no claim has been asserted to any Borrower or any of its Subsidiaries which is currently pending that their use of their Intellectual Property or the conduct of their business does or may infringe upon the Intellectual Property rights of any third party. To the knowledge of each Borrower and except as set forth on Exhibit 7.1.16 hereto, as of the date hereof, no Person is engaging in any activity that infringes in any material respect upon any Borrower's or any of its Subsidiaries material Intellectual Property. Except as set forth on Exhibit 7.1.16, each Borrower's and each of its Subsidiaries' (i) material trademarks, service marks, and copyrights are registered with the US. Patent and Trademark Office or in the U.S. Copyright Office, as applicable and (ii) neither any Borrower nor any of its Subsidiaries has any material license agreements. The consummation and performance of the transactions and actions contemplated by this Agreement and the other Loan Document, including without limitation, the exercise by Agent of any of its rights or remedies under Section 10, will not result in the termination 39 or impairment of any of any Borrower's or any of its Subsidiaries ownership or rights relating to its Intellectual Property, except for such Intellectual Property rights the loss or impairment of which could not reasonably be expected to have a Material Adverse Effect. 7.1.17 Governmental Consents. Except as disclosed on Exhibit 7.1.17, each Borrower and each of its Subsidiaries has, and is in good standing with respect to, all governmental consents, approvals, licenses, authorizations, permits, certificates, inspections and franchises necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its Property as now owned or leased by it, except where the failure to obtain, possess or so maintain such rights, consents, approvals, licenses, authorizations, permits, certificates, inspections and franchises would not reasonably be expected to have a Material Adverse Effect. 7.1.18 Compliance with Laws. Each Borrower and each of its Subsidiaries has duly complied, and its Property, business operations and leaseholds are in compliance with, the provisions of all federal, state and local laws, rules and regulations applicable to such Borrower or such Subsidiary, as applicable, its Property or the conduct of its business, except for such non-compliance as would not reasonably be expected to have a Material Adverse Effect, and there have been no citations, notices or orders of noncompliance issued to any Borrower or any of its Subsidiaries under any such law, rule or regulation, except where such noncompliance would not reasonably be expected to have a Material Adverse Effect or as disclosed on Exhibit 7.1.18. No Inventory has been produced in violation of the Fair Labor Standards Act (29 U.S.C. Section 201 et seq.), as amended. 7.1.19 Restrictions. Neither any Borrower nor any of its Subsidiaries is a party or subject to any contract or agreement which by its terms limits the right or ability of such Borrower or such Subsidiary to incur Indebtedness, other than as set forth on Exhibit 7.1.19 hereto, none of which prohibit the execution of or compliance with this Agreement or the other Loan Documents by any Borrower or any of its Subsidiaries, as applicable. 7.1.20 Litigation. Except as set forth on Exhibit 7.1.20 hereto, there are no actions, suits, proceedings or investigations pending, or to the knowledge of each Borrower, threatened, against or affecting any Borrower or any of its Subsidiaries, or the business, operations, Property, prospects, profits or condition of any Borrower or any of its Subsidiaries which, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Neither any Borrower nor any of its Subsidiaries is in default with respect to any order, writ, injunction, judgment, decree or rule of any court, governmental authority or arbitration board or tribunal, which, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect, except as disclosed on Exhibit 7.1.20. 7.1.21 No Defaults. No event has occurred and no condition exists which would, upon or after the execution and delivery of this Agreement or any Borrower's performance hereunder, constitute a Default or an Event of Default. Neither any Borrower nor any of its Subsidiaries is in default in (and no event has occurred and no condition exists which constitutes, or which the passage of time or the giving of notice or 40 both would constitute, a default in) the payment of any Indebtedness to any Person in excess of $500,000. 7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing as of the date hereof of all capitalized and operating personal property leases of each Borrower and its Subsidiaries and all real property leases of each Borrower and its Subsidiaries, in each case having annual lease payments in excess of $150,000. Each Borrower and each of its Subsidiaries is not in breach or default under any of its respective capitalized and operating leases, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect or except as disclosed on Exhibit 7.1.22. 7.1.23 Pension Plans. As of the date hereof, except as disclosed on Exhibit 7.1.23 hereto, neither any Borrower nor any of its Subsidiaries has any Plan. Each Borrower and each of its Subsidiaries is in compliance with the requirements of ERISA with respect to each Plan, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. No fact or situation that could reasonably be expected to result in a Material Adverse Effect exists in connection with any Plan. Except as disclosed on Exhibit 7.1.23 hereto, neither any Borrower nor any of its Subsidiaries has any withdrawal liability in connection with a Multiemployer Plan. 7.1.24 Trade Relations. There exists no actual or, to each Borrower's knowledge, threatened termination, cancellation or limitation of, or any modification or change in, the business relationship between any Borrower or any of its Subsidiaries and any customer or any group of customers whose purchases individually or in the aggregate are material to the business of such Borrower and its Subsidiaries, or with any material supplier, except in each case, where the same could not reasonably be expected to have a Material Adverse Effect, and there exists no present condition or state of facts or circumstances which would prevent any Borrower or any of its Subsidiaries from conducting such business after the consummation of the transactions contemplated by this Agreement in substantially the same manner in which it has heretofore been conducted. 7.1.25 Labor Relations. Except as described on Exhibit 7.1.25 hereto, as of the date hereof, neither any Borrower nor any of its Subsidiaries is a party to any collective bargaining agreement. Except as described on Exhibit 7.1.25 hereto, there are no material grievances, disputes or controversies with any union or any other organization of any Borrower's or any of its Subsidiaries' employees, or, to the best of Borrowers' knowledge after reasonable inquiry, threats of strikes, work stoppages or any asserted pending demands for collective bargaining by any union or organization, except those that would not reasonably be expected to have a Material Adverse Effect. 7.1.26 Plan of Reorganization. Borrowers have delivered to Agent a true and correct copy of the Plan of Reorganization (as amended) and the Plan of Reorganization delivered has not been amended or modified. The Plan of Reorganization has been confirmed pursuant to the Confirmation Order, Borrowers have delivered to Agent a true and correct copy of the Confirmation Order, the Confirmation Order has not been amended or modified, no objections to the Plan of Reorganization were raised at the 41 confirmation hearing before the Bankruptcy Court at which the Confirmation Order was issued, and the Plan of Reorganization has become effective in accordance with its terms. 7.1.27 Business Activity. As of the date hereof, neither Ultimate Parent, Parent nor any Inactive Subsidiary is engaged in any active operating business or incurs any Indebtedness other than the ownership of the equity interests of Parent (in the case of Ultimate Parent) and Neenah (in the case of Parent), the ownership of the Belcher Parcel (in the case of Belcher), the ownership of the Ashland Parcel (in the case of Dalton - Ashland), the performance of the Obligations, the performance of the Indebtedness evidenced by the Secured Bonds and the Subordinated Bonds, the guaranty of Indebtedness incurred by a Borrower or an active Subsidiary, and the performance of its obligations under intercompany agreements and agreements with its shareholders that have been disclosed to Agent in writing. 7.1.28 MACT Standards. Borrowers have furnished (or have caused to be furnished) or made available to Agent all relevant material reports and related materials that Borrowers and their consultants and advisors have produced in respect of Borrowers' implementation of programs for compliance with MACT Standards and the potential costs thereof (and such reports comprehensively detail all material potential costs associated with Borrowers' implementation of such programs for compliance with MACT Standards). 7.2 Continuous Nature of Representations and Warranties. Each representation and warranty contained in this Agreement and the other Loan Documents shall be deemed to have been remade at the time of each request for a Loan, Letter of Credit or LC Guaranty hereunder and at the time that any Loan is deemed to have been made under subsection 3.1.1. Each such request for a Loan, Letter of Credit or LC Guaranty (and the making of any Loan deemed to have been made under subsection 3.1.1) shall constitute a representation by Borrowers that such representations and warranties remain accurate, complete and not misleading at such time, except to the extent that such representations and warranties relate solely to an earlier date and except for changes in the nature of a Borrower's or one of such Borrower's Subsidiary's business or operations that would render the information in any exhibit attached hereto or to any other Loan Document either inaccurate, incomplete or misleading, so long as Majority Lenders have consented to such changes, such changes are expressly permitted by this Agreement, or such changes have been indicated in an update to an Exhibit that has been made in accordance with subsection 8.1.12. 7.3 Survival of Representations and Warranties. All representations and warranties of each Borrower contained in this Agreement or any of the other Loan Documents shall survive the execution, delivery and acceptance thereof by Agent and each Lender and the parties thereto and the closing of the transactions described therein or related thereto. 42 SECTION 8. COVENANTS AND CONTINUING AGREEMENTS 8.1 Affirmative Covenants. During the Term, and thereafter for so long as there are any Obligations (other than unasserted contingent indemnity obligations) outstanding, Borrowers jointly and severally covenant that they shall: 8.1.1 Visits and Inspections; Lender Meeting; Permit. (i) representatives of Agent, and during the continuation of any Event of Default, any Lender, from time to time, as often as may be reasonably requested, but only during normal business hours, to visit and inspect the Properties of each Borrower and each of its Subsidiaries, inspect, audit and make extracts from its books and records, and discuss with its officers and its independent accountants, each Borrower's and each of its Subsidiaries' business, assets, liabilities, financial condition, business prospects and results of operations; provided that (a) unless an Event of Default is in existence, Borrowers shall not have a reimbursement obligation with respect to more than three such visits and inspections during any fiscal year, (b) Neenah shall be afforded the reasonable opportunity to be involved in any such discussions or communications with such independent accountants and (c) Agent and, to the extent applicable, Lenders, shall use their respective best efforts not to interfere with the business of any Borrower or any Subsidiary of a Borrower in conducting any such visits, inspections or discussions and (ii) appraisers engaged pursuant to Section 2.10 (whether or not personnel of Agent), from time to time, but only during normal business hours, to visit and inspect the Properties of each Borrower and each of its Subsidiaries, to the extent necessary to complete the appraisals that are specifically provided for under Section 2.10. Agent, if no Event of Default then exists, shall give the applicable Borrower reasonable prior notice of any such inspection or audit. Without limiting the foregoing, Borrowers will participate and will cause their key management personnel to participate in a meeting with Agent and Lenders once during each fiscal year (except that during the continuation of an Event of Default such meetings may be held more frequently as requested by Agent or Majority Lenders), which meeting(s) shall be held at such times at Neenah's principal place of business as may be reasonably requested by Agent. It is agreed and understood that so long as no Event of Default has occurred and is continuing, a failure by Borrowers to comply with any reasonable request made pursuant to the terms of this subsection 8.1.1 shall not constitute a breach of this subsection 8.1.1 unless such failure has continued for more than 1 Business Day. 8.1.2 Notices. Promptly notify Agent, any Letter of Credit Issuers and Lenders in writing of the occurrence of a Default or an Event of Default. 8.1.3 Financial Statements. Keep, and cause each of its Subsidiaries, Ultimate Parent and Parent to keep, adequate records and books of account with respect to its business activities in which proper entries are made in accordance with customary accounting practices reflecting all its material financial transactions; and cause to be prepared and furnished to Agent (with Agent then promptly furnishing the same to the Lenders), the following, all to be prepared in accordance with GAAP applied on a 43 consistent basis, unless Parent's certified public accountants concur in any change therein and such change is disclosed to Agent and is consistent with GAAP: (i) not later than 90 days after the close of each fiscal year of Parent, unqualified (except for a qualification for a change in accounting principles with which the accountant concurs) audited financial statements of Parent, Borrowers and Borrowers' Subsidiaries as of the end of such year, on a Consolidated and consolidating basis, certified by a firm of independent certified public accountants of recognized standing selected by Parent but acceptable to Agent and, within a reasonable time thereafter a copy of any management letter issued in connection therewith; (ii) not later than 30 days after the end of each month hereafter, including the last month of each fiscal year of Parent, unaudited interim financial statements of Parent, Borrowers and Borrowers' Subsidiaries as of the end of such month and of the portion of the fiscal year then elapsed, on a Consolidated and consolidating basis, certified by the chief financial officer of Parent as prepared in accordance with GAAP and fairly presenting in all material respects the financial position and results of operations of Parent, Borrowers and Borrowers' Subsidiaries for such month and period subject only to changes from audit and year-end adjustments and except that such statements need not contain notes; (iii) together with each delivery of financial statements pursuant to clause (i) of this subsection 8.1.3, a management report (1) setting forth in comparative form the corresponding figures for the corresponding periods of the previous fiscal year and the corresponding figures from the most recent Projections for the current fiscal year delivered pursuant to subsection 8.1.7 and (2) identifying the reasons for any significant variations. The information above shall be presented in reasonable detail and shall be certified by the chief financial officer of Parent to the effect that such information fairly presents in all material respects the financial position and the results of operation of Parent, Borrowers and Borrowers' Subsidiaries as of the dates and for the periods indicated; (iv) promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports and copies of any regular, periodic and special reports or registration statements which Ultimate Parent, Parent, any Borrower or any Subsidiary of such Borrower files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or any national securities exchange; (v) upon request of Agent, copies of any annual report to be filed pursuant to ERISA in connection with each Plan; and (vi) within a reasonably prompt time after request therefor, such other data and information (financial and otherwise) as Agent or any Lender, from time to time, may reasonably request, bearing upon or related to the Collateral or 44 Ultimate Parent's, Parent's, any Borrower's or any of its Subsidiaries' financial position or results of operations. Concurrently with the delivery of the financial statements described in paragraph (i) and (ii) (but solely for the last month of each fiscal quarter of Borrowers) of this subsection 8.1.3, or more frequently if reasonably requested by Agent, Borrowers shall cause to be prepared and furnished to Agent a Compliance Certificate in the form of Exhibit 8.1.3 hereto executed by the Chief Financial Officer of Parent (a "Compliance Certificate") in such Person's capacity as such. 8.1.4 Borrowing Base Certificates. On or before the 15th day of each month from and after the date hereof, Borrowers shall deliver to Agent, in form acceptable to Agent, a Borrowing Base Certificate as of the last day of the immediately preceding month, with such supporting materials as Agent shall reasonably request which shall include, without limitation, a report of Eligible Inventory on a category-by-category basis and a location-by-location basis. If Borrowers deem it advisable, or if Agent or Majority Lenders so request at any time that Availability (as determined by Agent in its reasonable credit judgment) is less than $10,000,000, Borrowers shall execute and deliver to Agent Borrowing Base Certificates more frequently than monthly. Such Borrowing Base Certificates shall reflect all information for each Borrower on a Consolidated and consolidating basis. 8.1.5 Landlord, Processor and Storage Agreements. Provide Agent with copies of all agreements between any Borrower or any of its Subsidiaries and any landlord, processor, distributor, warehouseman or consignee which owns any premises at which any Collateral having a value in excess of $250,000 may, from time to time, be kept. 8.1.6 Guarantor Financial Statements. Deliver or cause to be delivered to Agent financial statements, if any, for each Guarantor (to the extent not consolidated with the financial statements delivered to Agent under subsection 8.1.3) in form and substance satisfactory to Agent at such intervals and covering such time periods as Agent may request. 8.1.7 Projections. No later than the last day of each fiscal year of Borrowers, deliver to Agent (with Agent then promptly furnishing the same to the Lenders) Projections of Parent, Borrowers and Borrowers' Subsidiaries for the forthcoming fiscal year, on a month-by-month basis and for the remaining portion of the Term, on a year-by-year basis (provided, that a Default (but not an Event of Default) arising solely due a breach of this subsection 8.1.7 shall not be used as a basis by Agent or any Lender to refuse to honor a request for a Loan hereunder that otherwise complies with the terms and conditions hereof). 8.1.8 Subsidiaries. Cause each of its newly created domestic Subsidiaries, promptly upon Agent's request therefor, to execute and deliver to Agent a Guaranty Agreement and a security agreement pursuant to which such domestic Subsidiary guaranties the payment of all Obligations and grants to Agent a first priority Lien (subject only to Permitted Liens) on all of its Properties (of the types, and subject to the 45 exclusions, described in Section 5). Additionally, each Borrower and Parent shall execute and deliver to Agent a Pledge Agreement pursuant to which such Person grants to Agent a first priority Lien (subject only to Permitted Liens) with respect to all of the issued and outstanding Securities of each Subsidiary of such Person. In connection with the foregoing documentation, Borrowers shall also cause Agent to be provided with such legal opinions, certificates and corporate authority materials that Agent may reasonably request. 8.1.9 Deposit and Brokerage Accounts. For each deposit account (other than payroll and trust accounts) or brokerage account that any Borrower at any time opens or maintains, such Borrower shall, pursuant to an agreement in form and substance reasonably satisfactory to Agent, cause the depository bank or securities intermediary, as applicable, to agree to comply at any time that an Event of Default has occurred and is continuing with instructions from Agent to such depository bank or securities intermediary, as applicable, directing the disposition of funds from time to time credited to such deposit or brokerage account to the Dominion Account (with respect to accounts covered by subsection 6.2.4) or to such other accounts as Agent may direct, without further consent of such Borrower. 8.1.10 Compliance with Plan of Reorganization. Each Borrower, each of its Subsidiaries, Ultimate Parent and Parent shall consummate the Plan of Reorganization in accordance with its respective terms. 8.1.11 Intercompany Loans. Upon request by Agent from time to time, Borrowers shall provide Agent with written statements, with reasonable detail, of the current balances of the Intercompany Loans. At all times, Borrowers shall cause the Intercompany Loans to be evidenced by revolving promissory notes, in form and substance reasonably satisfactory to Agent, which notes are assigned to Agent as security for the Obligations. 8.1.12 Updated Information. Promptly notify Agent in writing of (a) each state or jurisdiction in which any Borrower or any Subsidiary qualifies to do business after the date hereof, (b) the use by any Borrower or any Subsidiary of a legal, fictitious or trade name not listed on Exhibit 7.1.5 hereto, (c) any change after the date hereof in the tax identification number of any Borrower or any of its Subsidiaries, (d) any change after the date hereof in the list of surety obligations listed on Exhibit 7.1.13, (e) on a quarterly basis, the ownership by any Borrower or any Subsidiary of any registered patent, registered trademark, registered service mark, registered trade name, registered copyright, material license or other similar material rights not listed on Exhibit 7.1.16, (f) the assertion by any Person in writing of a claim against any Borrower or any Subsidiary that its use of its Intellectual Property or the conduct of its business does or may infringe upon the Intellectual Property rights of any third party, (g) any change after the date hereof in the list of capitalized and operating personal property leases and real property leases of any Borrower or any Subsidiary listed on Exhibit 7.1.22 hereto, (h) any change after the date hereof in the list of Plans listed on Exhibit 7.1.23 hereto and (i) any change after the date hereof in the list of collective bargaining agreements listed on Exhibit 7.1.25 hereto. 46 8.1.13 Equipment. Keep the Equipment of each Borrower and each Subsidiary of a Borrower in good operating condition and repair, reasonable wear and tear excepted; prevent any material Equipment of a Borrower or a Subsidiary of a Borrower from becoming affixed to any real Property leased to such Borrower or such Subsidiary such that an interest arises therein under the real estate laws of the applicable jurisdiction, unless the landlord of such real Property has executed a landlord waiver or leasehold mortgage in favor of and in form reasonably acceptable to Agent; and prevent any material Equipment of a Borrower or a Subsidiary of a Borrower from becoming an accession to any personal Property other than Equipment that is subject to first priority (except for Permitted Liens) Liens in favor of Agent. 8.1.14 Utilization of Bank. With respect to its primary collection and disbursement accounts, consider transferring such accounts to Bank if such Borrower determines that it is commercially reasonable to do so. 8.2 Negative Covenants. During the Term, and thereafter for so long as there are any Obligations (other than unasserted contingent indemnity obligations) outstanding, Borrowers jointly and severally covenant that they shall not: 8.2.1 Mergers; Consolidations; Acquisitions; Structural Changes. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any Person; nor change its or any of its Subsidiaries' state of incorporation or organization, Type of Organization or Organizational I.D. Number; nor change its or any of its Subsidiaries' legal name; nor acquire, nor permit any of its Subsidiaries to acquire, all or any substantial part of the Properties of any Person, except for: (i) mergers of any wholly-owned Subsidiary of a Borrower into such Borrower or another wholly-owned Subsidiary of such Borrower; (ii) acquisitions of assets consisting of fixed assets or real property that constitute Capital Expenditures permitted under subsection 8.2.8; (iii) liquidations or dissolutions of Subsidiary Guarantors, so long as Agent has received prior written notice of any such liquidation or dissolution and any assets of any such Subsidiary Guarantor to be liquidated or dissolved have been transferred to a Borrower or to another Subsidiary Guarantor; (iv) Permitted Acquisitions; and (v) mergers and consolidations permitted under subsection 8.2.9(iv)(B). 8.2.2 Loans. Make, or permit any of its Subsidiaries to make, any loans or other advances of money to any Person, other than (i) for salary, travel advances, entertainment, relocation, advances against commissions and other similar advances to employees in the ordinary course of business, (ii) extensions of trade credit in the 47 ordinary course of business, (iii) deposits with financial institutions permitted under this Agreement, (iv) prepaid expenses, (v) extensions of credit consisting of Investments not prohibited by subsection 8.2.12, (vi) non-cash loans made to managers to enable such managers to acquire stock issued in connection with incentive plans and (vii) loans by a Borrower to another Borrower or to any domestic wholly-owned Subsidiary (other than any Inactive Subsidiary) of a Borrower ("Intercompany Loans"). 8.2.3 Total Indebtedness. Create, incur, assume, or suffer to exist, or permit any of its Subsidiaries to create, incur or suffer to exist, any Indebtedness, except: (i) Obligations owing to Agent or any Lender under this Agreement or any of the other Loan Documents; (ii) Indebtedness evidenced by the Subordinated Bonds and the other Subordinated Bond Documents (each as in effect as of the date hereof), so long as such Indebtedness remains subordinated to the Obligations pursuant to the subordination provisions included in Article XI of the Subordinated Bond Indenture (as amended in accordance with the terms of such Article XI); (iii) Indebtedness evidenced by the Secured Bonds and the other Secured Bond Documents (each as in effect as of the date hereof subject to clause (xiii) below); (iv) Indebtedness, including without limitation Subordinated Debt and intercompany indebtedness, existing as of the date of this Agreement and listed on Exhibit 8.2.3; (v) Capitalized Lease Obligations and Permitted Purchase Money Indebtedness not to exceed $7,500,000 in the aggregate at any time outstanding; (vi) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business; (vii) guaranties of any Indebtedness permitted under this subsection 8.2.3; (viii) Indebtedness in respect of Intercompany Loans; (ix) unsecured Derivative Obligations incurred in the ordinary course of business in respect of the Loans hereunder; (x) unsecured Subordinated Debt not otherwise permitted under this subsection 8.2.3 which does not exceed at any time, in the aggregate, $5,000,000; (xi) Indebtedness incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds and other similar obligations not to exceed $2,000,000 in the aggregate at any time outstanding; 48 (xii) Indebtedness not included in paragraphs (i) through (xi) above which does not exceed at any time, in the aggregate, $2,000,000; and (xiii) Subject to the limitations set forth in subsection 8.2.6, refinancing of any Indebtedness permitted under this subsection 8.2.3, so long as (a) such refinancing Indebtedness has a maximum principal amount not in excess of the sum of the principal amount of, and accrued interest in respect of, the Indebtedness is secured only by Liens on assets, if any, that secured the Indebtedness being refinanced, (c) the average weighted average life to maturity of the refinancing Indebtedness is not shorter than that of the Indebtedness being refinanced, (d) the refinancing Indebtedness has terms that are not more adverse in any material respect to Agent, Lenders or the applicable Borrower or Subsidiary of a Borrower than the Indebtedness being refinanced (it being understood that the foregoing restriction shall not prohibit refinancing Indebtedness from having (1) a term that is longer, or that ends later, than the term of the Indebtedness being refinanced or (2) a then current market rate of interest that is not more than 200 basis points higher than the interest rate applicable to the Indebtedness being refinanced; provided, that a then current market rate of interest that is more than 200 basis points higher than the interest rate applicable to the Indebtedness being refinanced shall also be permitted if, on a pro forma basis after giving effect to such refinancing Indebtedness and the interest rate applicable thereto, Borrowers would be in compliance with the Fixed Charge Coverage Ratio as of the last day of the most recently completed fiscal quarter)and (e) if such Indebtedness being refinanced (it being understood that the foregoing restriction shall not prohibit refinancing Indebtedness from having (1) a term that is longer, or that ends later, than the term of the Indebtedness being refinanced or (2) a then current market rate of interest that is not more than 200 basis points higher than the interest rate applicable to the Indebtedness being refinanced; provided, that a then current market rate of interest that is more than 200 basis points higher than the interest rate applicable to the Indebtedness being refinanced shall also be permitted if, on a pro forma basis after giving effect to such refinancing Indebtedness and the interest rate applicable thereto, Borrowers would be in compliance with the Fixed Charge Coverage Ratio as of the last day of the most recently completed fiscal quarter)and (e) if such Indebtedness being refinanced is Subordinated Debt, any such refinancing Indebtedness includes subordination terms that are at least as beneficial to Agent and Lenders as the subordination terms associated with such Subordinated Debt being refinanced. 8.2.4 Affiliate Transactions. Enter into, or be a party to, or permit any of its Subsidiaries to enter into or be a party to, any transaction with any Affiliate of any Borrower or any holder of any Securities of any Borrower or any of its Subsidiaries, including without limitation any management, consulting or similar fees, except (i) in the ordinary course of and pursuant to the reasonable requirements of such Borrower's or such Subsidiary's business and upon fair and reasonable terms which are fully disclosed to Agent and are no less favorable to such Borrower or such Subsidiary than would be obtained in a comparable arms-length transaction with a Person not an Affiliate or Security holder of such Borrower or such Subsidiary, as determined and certified by the 49 applicable Borrower's or Subsidiary's board of directors in good faith (provided, that with respect to any transaction involving aggregate payments exceeding $20,000,000, except for any such transaction that results in the repayment of the Obligations (other than unasserted contingent indemnity obligations) in full, Agent shall have received an opinion as to the fairness to the applicable Borrower or Subsidiary from a financial point of view issued by a nationally recognized independent financial advisor), (ii) employment agreements and other incentive compensation with management shareholders approved from time to time by the board of directors of such Borrower and employee arrangements and related incentive compensation arrangements entered into with other full time employees of such Borrower or such Subsidiary in the ordinary course of business, (iii) reasonable directors' fees and expenses approved from time to time by the board of directors of such Borrower, (iv) with respect to Intercompany Loans, (v) with respect to the Secured Bonds and the Subordinated Bonds, (vi) non-exclusive intercompany licenses of Intellectual Property, (vii) with respect to Indebtedness permitted hereunder that is provided by an Affiliate, (viii) with respect to equity issued in compliance with the terms hereof that is issued to an Affiliate and (ix) the agreements listed on Exhibit 8.2.4. 8.2.5 Limitation on Liens. Create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien upon any of its Property, income or profits, whether now owned or hereafter acquired, except: (i) Liens at any time granted in favor of Agent for the benefit of Agent and Lenders; (ii) Liens for taxes, assessments or governmental charges (excluding any Lien imposed pursuant to any of the provisions of ERISA, but including, without limitation, those for non-delinquent taxes or assessments in respect of real Property) not yet due, or being contested in the manner described in subsection 7.1.14 hereto; (iii) Liens arising in the ordinary course of the business of such Borrower or any of its Subsidiaries by operation of law or regulation (including, without limitation, mechanic's liens, materialmen's liens, warehousemen's liens and the like) but only if (a) payment in respect of any such Lien is not at the time required or is being contested in good faith by appropriate proceedings (with appropriate reserves established in respect thereof in accordance with GAAP) and (b) such Liens do not, in the aggregate, materially detract from the value of the Property of such Borrower or any of its Subsidiaries or materially impair the use thereof in the operation of the business of such Borrower or any of its Subsidiaries; (iv) Purchase Money Liens securing Permitted Purchase Money Indebtedness and Liens securing Capitalized Lease Obligations permitted to be incurred under subsection 8.2.3 so long as such Liens are confined to the assets that are the subject of such Capitalized Lease Obligations; (v) such other Liens as appear on Exhibit 8.2.5 hereto; 50 (vi) Liens incurred or deposits or pledges made in the ordinary course of business in connection with (1) worker's compensation, social security, unemployment insurance and other like laws or (2) sales contracts, leases, statutory obligations, work in progress advances and other similar obligations not incurred in connection with the borrowing of money or the payment of the deferred purchase price of property; (vii) reservations, easements, covenants, zoning and other land use regulations, title exceptions or encumbrances that are granted in the ordinary course of business or shown on surveys or inspections that have been required by, delivered to and accepted by Agent (or, if not required by Agent, that would be disclosed by an accurate surveyor inspection), affecting real Property owned or leased by a Borrower or any of its Subsidiaries; provided that such exceptions do not or would not in the aggregate materially interfere with the use of such Property in the ordinary course of such Borrower's or such Subsidiary's business; (viii) judgment Liens that do not give rise to an Event of Default under subsection 10.1.15; (ix) Liens created under the Secured Bond Documents on the Collateral and on the Securities of Neenah and the Subsidiaries of Neenah, so long as such Liens remain subordinated to the Liens securing the Obligations pursuant to the terms of the Secured Bond Lien Subordination Agreement; (x) Liens in favor of customs and revenues authorities which secure payment of customs duties in connection with the importation of Inventory; (xi) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto; (xii) Liens consisting of rights of set-off of a customary nature or banker's liens on amounts on deposit in accounts of such Borrower or any of its Subsidiaries (other than in a Dominion Account), whether arising by contract or operation of law, incurred in the ordinary course of business; (xiii) Liens on fixed assets acquired in compliance with the terms of this Agreement to the extent that such Liens existed prior to such acquisition; (xiv) Liens incurred or deposits made to secure the performance of bids, tenders, leases, trade contracts (other than Indebtedness), public or statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (xv) Leases or subleases and licenses and sublicenses granted to others in the ordinary course of such Borrower's or such Subsidiary's business which do not interfere in any material respect with the business of such Borrower or such Subsidiary, and any interest or title of a lessor, licensor, sublessor or sublicensor under a lease or license; 51 (xvi) Liens arising from the filing of UCC financing statements for precautionary purposes relating solely to operating leases under which such Borrower or any of its Subsidiaries is a lessee; and (xvii) such other Liens as Majority Lenders may hereafter approve in writing. 8.2.6 Payments and Amendments of Certain Debt. (i) make or permit any of its Subsidiaries to make any payment of any part or all of the Subordinated Debt evidenced by the Subordinated Bonds and the other Subordinated Bond Documents (including, without limitation, any mandatory or voluntary prepayment, purchase or redemption), except (a) payments of Deferrable Interest that are satisfied by deferring the amount thereof until the maturity date of the Subordinated Bonds, (b) regularly scheduled cash payments of interest pursuant to the Subordinated Bond Documents (each as in effect as of the date hereof) at a rate of 5% per annum and the regularly scheduled payment of principal on the maturity date of the Subordinated Bonds, so long as any such payment of interest is made in accordance with the subordination terms included in Article XI of the Subordinated Bond Indenture, (c) cash payments of Deferrable Interest on each "Interest Payment Date" under and as defined in the Subordinated Bond Indenture (as in effect as of the date hereof) accrued for the six month period ended thereon (or, in the case of the payment scheduled for January 1, 2004, accrued for the period beginning on the Closing Date and ending on January 1, 2004) pursuant to the Subordinated Bond Documents (each as in effect as of the date hereof), so long as both immediately prior to and after giving effect to any such payment of Deferrable Interest, (1) no Event of Default exists, (2) average Availability (as determined by Agent in its reasonable credit judgment) for the thirty (30) day period ending on the date of any such payment (giving effect to such payment of Deferrable Interest for each day in such thirty (30) day period) is not less than $17,500,000 and (3) actual Availability (as determined by Agent in its reasonable credit judgment) on the date of any such payment is not less than $17,500,000 and (d) repayments or prepayments of principal amounts owing under the Subordinated Bond Documents, redemptions or repurchases of Subordinated Bonds in open market transactions or otherwise or payments of Deferrable Interest (excluding payments of Deferrable Interest made pursuant to the foregoing clause ( c)), so long as both immediately prior to and after giving effect to any such repayment, prepayment, redemption or repurchase, (1) no more than $15,000,000 in the aggregate has been applied toward such repayments, prepayments, redemptions and repurchases and payments of Deferrable Interest (excluding payments of Deferrable Interest made pursuant to the foregoing clause (c) during the Term, (2) no Event of Default exists, (3) average Availability (as determined by Agent in its reasonable credit judgment) for the thirty (30) day period ending on the date of any such repayment, prepayment, redemption or repurchase (giving effect to such repayment, prepayment, redemption, repurchase or payment of Deferrable Interest for each day in such thirty (30) day period) is not less than $17,500,000 and (4) actual 52 Availability (as determined by Agent in its reasonable credit judgment) on the date of any such repayment, prepayment, redemption, repurchase or payment of Deferrable Interest is not less than $17,500,000; (ii) fail to defer until the maturity date of the Subordinated Bonds any Deferrable Interest (other than current payments of Deferrable Interest that are permitted to be made in cash under sub-clause (c) or sub-clause (d) of the foregoing clause (i) of this subsection 8.2.6); (iii) make or permit any of its Subsidiaries to make any payment of any part or all of the Indebtedness evidenced by the Secured Bonds and the other Secured Bond Documents (including, without limitation, any mandatory or voluntary prepayment, purchase or redemption), except regularly scheduled cash payments of interest pursuant to the Secured Bond Documents (each as in effect as of the date hereof) at a rate of 11% per annum and the regularly scheduled payment of principal on the maturity date of the Secured Bonds; (iv) with respect to any Subordinated Debt other than that evidenced by the Subordinated Bonds and the other Subordinated Bond Documents, make or permit any of its Subsidiaries to make any payment of any part or all of any Subordinated Debt or take any other action or omit to take any other action in respect of any Subordinated Debt, except in accordance with the subordination agreement relative thereto or the subordination provisions thereof; or (v) amend or modify any Secured Bond Document or amend or modify any Subordinated Bond Document or any agreement, instrument or document evidencing or relating to any other Subordinated Debt, in each case to the extent that any such amendment or modification would (a) increase the interest rate on such Indebtedness or the principal amount of such Indebtedness; provided, that satisfying payments of Deferrable Interest by deferring the amount thereof until the maturity date of the Subordinated Bonds shall not be considered an increase in the principal amount of the Indebtedness under the Subordinated Bond Documents for this purpose; (b) move forward the dates upon which any payments of principal or interest on such Indebtedness are due; (c) add any event of default or make more restrictive any existing event of default with respect to such Indebtedness; (d) add or make more restrictive any covenant with respect to such Indebtedness; (e) move forward any redemption or prepayment dates with respect to such Indebtedness or increase any redemption or prepayment amounts; (f) change the subordination provisions applicable to such Indebtedness; (g) change or amend any other term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in a manner adverse to any Borrower or Lenders; or (h) require to be paid in cash any Deferrable Interest (other than on the maturity date of the Subordinated Bonds) or any interest which may be paid in kind instead of cash. 53 8.2.7 Distributions. Declare or make, or permit any of its Subsidiaries to declare or make, any Distributions, except for: (i) Distributions by any Subsidiary of a Borrower (including any such Subsidiary that is a Borrower) to such Borrower; (ii) Distributions paid solely in Securities of a Borrower or any of its Subsidiaries; (iii) Distributions by each Borrower in amounts necessary to permit such Borrower to repurchase Securities of such Borrower from employees of such Borrower or any of its Subsidiaries upon the termination of their employment, so long as no Default or Event of Default exists at the time of or would be caused by the making of such Distributions and the aggregate cash amount of all such Distributions by all Borrowers, measured at the time when made, does not exceed $250,000 in any fiscal year of Borrowers; (iv) Distributions by each Borrower in an amount sufficient to permit Ultimate Parent to pay its consolidated combined unitary U.S. federal, state or local tax liabilities relating to the business of Borrowers and Borrowers' Subsidiaries; provided that Ultimate Parent applies the amount of such Distributions for such purpose at such time; and (v) Distributions by Borrowers to the extent necessary to permit Parent and Ultimate Parent to (a) pay administrative costs and expenses related to the business of Borrowers and Borrowers' Subsidiaries, (b) make payments in respect of its indemnification obligations owing to directors and officers and (c) make payments in respect of indemnification obligations and cost and expenses incurred by Ultimate Parent in connection with any offering of common stock of Ultimate Parent, in all cases not to exceed $350,000 in the aggregate in any fiscal year of Borrowers, so long as Parent or Ultimate Parent, as applicable, applies the amount of such Distributions for such purposes. 8.2.8 Capital Expenditures. Make Capital Expenditures (including, without limitation, by way of capitalized leases, but excluding (i) MACT Capital Expenditures, (ii) Capital Expenditures made using the proceeds of equity securities issued in compliance with the terms hereof and (iii) the principal portion of Capitalized Lease Obligations incurred in compliance with the terms hereof) which, in the aggregate, as to all Borrowers and all of Borrowers' Subsidiaries, exceed $25,000,000 during the fiscal year of Borrowers ending on September 30, 2004 or $20,000,000 during any fiscal year of Borrowers thereafter, except that 75% of the unused portion of the Capital Expenditure allowance for any fiscal year may be carried over to the immediately succeeding fiscal year only, to be used in such succeeding fiscal year after all of the Capital Expenditure allowance for that year has been used. 8.2.9 Disposition of Assets. Sell, lease or otherwise dispose of any of, or permit any of its Subsidiaries to sell, lease or otherwise dispose of any of, its Properties, 54 including any disposition of Property as part of a sale and leaseback transaction, to or in favor of any Person, except for: (i) sales of Inventory and collections of Accounts in the ordinary course of business; (ii) transfers of Property to a Borrower by another Borrower or by a wholly-owned Subsidiary of such Borrower; (iii) dispositions of investments described in paragraphs (iv), (v), (vi) and (vii) of the definition of the term "Restricted Investments"; (iv) (A) sales, leases, transfers and other dispositions of Non-Core Fixed Assets, (B) the merger or consolidation of any Inactive Subsidiary or any Person that does not own any assets other than Non-Core Fixed Assets with any other Person that is a Borrower or a Subsidiary Guarantor (provided that such other Person that is a Borrower or Subsidiary Guarantor is the Person surviving such merger or consolidation) and (C) the liquidation, dissolution or winding up of any Inactive Subsidiary; (v) sales, leases and other dispositions of Property with a fair market value of up to $2,500,000 in the aggregate in any fiscal year, in each case so long as (a) no Event of Default is in existence or would result therefrom and (b) the consideration received in respect thereof is all cash and is equal to the fair market value thereof; (vi) so long as no Event of Default exists, sales, leases or other dispositions of Equipment or other fixed assets that are worn, excess, damaged or obsolete or consist of scrap and that (other than in the case of scrap) are replaced with Equipment or other fixed assets that are usable in the ordinary course of business of the applicable Borrower or Subsidiary of a Borrower; and (vii) licenses of Intellectual Property in the ordinary course of business. 8.2.10 Securities of Subsidiaries. Permit any of its Subsidiaries to issue any additional Securities except to such Borrower and except for director's qualifying Securities. 8.2.11 Bill-and-Hold Sales, Etc. Except for sales to customers in the ordinary course of Borrowers' business consistent with past practice, make, or permit any of its Subsidiaries to make, a sale to any customer on a bill-and-hold, guaranteed sale, sale and return, sale on approval, repurchase or return or consignment basis. 8.2.12 Restricted Investment. Make or have, or permit any of its Subsidiaries of such Borrower to make or have, any Restricted Investment. 8.2.13 Subsidiaries and Joint Ventures. Create, acquire or otherwise suffer to exist, or permit any Subsidiary of such Borrower to create, acquire or otherwise suffer to 55 exist, any Subsidiary or joint venture arrangement not in existence as of the date hereof, except in connection with a Permitted Acquisition. 8.2.14 Tax Consolidation. File or consent to the filing of any consolidated income tax return with any Person other than Ultimate Parent, Parent, Borrowers and Borrowers' Subsidiaries. 8.2.15 Organizational Documents. Agree to, or suffer to occur, any amendment, supplement or addition to its or any of its Subsidiaries' charter, articles or certificate of incorporation, certificate of formation, limited partnership agreement, bylaws, limited liability agreement, operating agreement or other organizational documents (as the case may be), that would reasonably be expected to have a Material Adverse Effect. 8.2.16 Fiscal Year End. Change, or permit any of its Subsidiaries, Ultimate Parent or Parent to change, its fiscal year end. 8.2.17 Negative Pledges. Enter into any agreement (other than the Loan Documents, the Secured Bond Documents and the Subordinated Bond Documents) limiting the ability of such Borrower or any of its Subsidiaries to (i) voluntarily create Liens upon any of its Property, (ii) pay dividends or make any other Distributions on its Securities; (iii) make loans or advances to any Borrower or any Subsidiary; (iv) pay any Indebtedness owed to any Borrower or any Subsidiary of a Borrower; or ( v) transfer any of its Property to any Borrower or any Subsidiary. 8.2.18 Plan of Reorganization. Agree to, or suffer to occur, any amendment, supplement or addition to, or any other modification of, the Plan of Reorganization or the Confirmation Order, unless otherwise agreed to by Agent in writing. 8.2.19 Leases. Become, or permit any of its Subsidiaries to become, a lessee under any operating lease (other than a lease under which such Borrower or such Subsidiary is lessor) of Property if the aggregate Rentals payable during any current or future period of twelve (12) consecutive months under the lease in question and an other leases under which any Borrowers or any of its Subsidiaries is then lessee would exceed $3,000,000. The term "Rentals" means, as of the date of determination, all payments which the lessee is required to make by the terms of any lease. 8.2.20 Business Activity. Permit Ultimate Parent, Parent or any Inactive Subsidiary to engage in any business activity or incur any Indebtedness other than the ownership of the equity interests of Parent (in the case of Ultimate Parent) and Neenah (in the case of Parent), having an interest in the Belcher Parcel (in the case of Belcher), the performance of such Person's obligations under the Loan Documents to which it is a party (in the case of Parent and the Inactive Subsidiaries), the performance of the Obligations, the performance of the Indebtedness evidenced by the Secured Bonds and the Subordinated Bonds, the guaranty of Indebtedness incurred by a Borrower or an active Subsidiary in compliance with the terms hereof and the performance of its obligations under intercompany agreements and agreements with its shareholders that are permitted hereunder and have been disclosed to Agent in writing (with Agent disclosing 56 to Lenders any such agreements that are disclosed to Agent in writing and, if requested by a Lender, providing to such Lender copies of any documents evidencing any such agreements that have been furnished to Agent). 8.3 Specific Financial Covenants. During the Term, and thereafter for so long as there are any Obligations (other than unasserted contingent indemnity obligations) outstanding, each Borrower covenants that it shall comply with all of the financial covenants set forth in Exhibit 8.3 hereto. If GAAP changes from the basis used in preparing the audited financial statements delivered to Agent by Borrowers on or before the Closing Date, Borrowers will provide Agent with certificates demonstrating compliance with such financial covenants and will include, at the election of Borrowers or upon the request of Agent, calculations setting forth the adjustments necessary to establish Borrowers' compliance with such financial covenants based upon GAAP as in effect on the Closing Date. SECTION 9. CONDITIONS PRECEDENT 9.1 Conditions Precedent to Initial Loans and Other Initial Credit Accommodations. Notwithstanding any other provision of this Agreement or any of the other Loan Documents, and without affecting in any manner the rights of Agent or any Lender under the other sections of this Agreement, no Lender shall be required to make any Loan on the Closing Date, nor shall Agent or any Letter of Credit Issuer be required to or issue or procure any Letter of Credit or LC Guaranty on the Closing Date unless and until each of the following conditions has been and continues to be satisfied: 9.1.1 Documentation. Agent and the Lenders shall have received, in form and substance satisfactory to Agent and its counsel and the Lenders, a duly executed copy of this Agreement and the other Loan Documents, together with such additional documents, instruments, opinions and certificates as Agent and its counsel shall reasonably require in connection therewith from time to time (including, without limitation, the Secured Bond Documents, the Subordinated Bond Documents, the Plan of Reorganization, the Disclosure Statement, the Confirmation Order and the lockbox and blocked account documentation to be executed on the Closing Date in connection with the requirements of subsection 6.2.4), all in form and substance satisfactory to Agent and its counsel and the Lenders. 9.1.2 No Default. No Default or Event of Default shall exist. 9.1.3 Availability. Agent shall have determined in its reasonable credit judgment that immediately after Lenders have made the initial Loans and after Agent (or Letter of Credit Issuer, as applicable) has issued or procured the initial Letters of Credit and LC Guaranties contemplated hereby, and Borrowers have paid (or, if accrued, treated as paid), all closing costs incurred in connection with the transactions contemplated hereby (including, without limitation, the issuance of the Secured Bonds and the Subordinated Bonds), and have reserved an amount sufficient to pay all trade payables 57 greater than 60 days past due, Availability shall not be less than $20,000,000 (or such lesser amount of not less than $17,500,000 that Agent in its sole discretion may approve). 9.1.4 No Litigation. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is materially adversely related to or arises out of this Agreement, the Secured Bond Documents, the Subordinated Bond Documents or the Plan of Reorganization or the consummation of the transactions contemplated hereby or thereby. 9.1.5 Secured Bonds. Neenah shall have received not less than $110,000,000 in net cash proceeds from the issuance of the Secured Bonds in accordance with the terms of the Secured Bond Documents and in compliance with the Plan of Reorganization and all applicable laws; the net cash proceeds from such issuance of the Secured Bonds shall have been used by Neenah to satisfy certain existing Indebtedness of Borrowers, as more particularly set forth in the Plan Of Reorganization; and a Secured Bond Lien Subordination Agreement applicable to the Liens created under the Secured Bond Documents shall have been executed and delivered by the Secured Bond Trustee in favor of Agent (for its benefit and the benefit of Lenders). 9.1.6 Subordinated Bonds. Neenah shall have issued the Subordinated Bonds in accordance with the terms of the Subordinated Bond Documents and in compliance with the Plan of Reorganization and all applicable laws. 9.1.7 Confirmation Order; Plan of Reorganization. Agent shall have received the final Confirmation Order confirming the Plan or Reorganization; such final Confirmation Order shall be in form and substance satisfactory to Agent and its counsel; the Confirmation shall have occurred; and the Plan of Reorganization shall have become effective in accordance with its terms. 9.1.8 Material Adverse Effect. As of the Closing Date, since July 31,2003, there has not been any material adverse change in the business, assets or financial condition of Borrowers (taken as a whole), it being understood that (i) the bankruptcy filing of the Chapter 11 Debtors, (ii) the public announcement of such filing or the transactions contemplated thereby and (iii) changes or events affecting general economic conditions, but not otherwise materially and adversely affecting the business, assets or financial condition of Borrowers' and Borrowers' Subsidiaries, shall not be considered material adverse changes for purposes of the foregoing. 9.1.9 Audits, Appraisals and Environmental Reports. All of the appraisals and audits of the real and personal Property and business of Borrowers being conducted by Agent (or a third party designated by Agent) prior to the Closing Date, and all of the Phase I environmental assessments of the real Property of Borrowers being conducted by Agent (or a third party designated by Agent) prior to the Closing Date, shall have been completed to Agent's reasonable satisfaction. 58 9.2 Conditions Precedent to all Loans and other Credit Accommodations. Notwithstanding any other provision of this Agreement or any other Loan Documents, and without affecting in any manner the rights of any Agent or any Lender under the other sections of this Agreement, no Lender shall be required to make any Loan, nor shall Agent or any Letter of Credit Issuer be required to issue or procure any Letter of Credit or LC Guaranty unless and until each of the following conditions has been and continues to be satisfied: 9.2.1 No Default. No Default or Event of Default shall exist; provided, that if Borrowers have disclosed to Agent, any Letter of Credit Issuers and Lenders the existence of a Default or an Event of Default in accordance with subsection 8.1.2, (i) each Lender shall continue to make Revolving Credit Loans until such Lender has delivered the written notice described in subsection 10.2.2 in respect of such Default or Event of Default, which notice pursuant to subsection 10.2.2 may be given at any time prior to the deadline for honoring a request for a Revolving Credit Loan and (ii) each Letter of Credit Issuer and Agent, as applicable, shall continue to issue and procure Letters of Credit and LC Guaranties until such Person has delivered the written notice described in subsection 10.2.2 in respect of such Default or Event of Default, which notice pursuant to subsection 10.2.2 may be given at any time prior to the deadline for honoring a request for a Letter of Credit or LC Guaranty. 9.2.2 No Litigation. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is materially adversely related to or arises out of, any of the Loan Documents. SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT 10.1 Events of Default. The occurrence of one or more of the following events shall constitute an "Event of Default": 10.1.1 Payment of Obligations. Borrowers shall (i) fail to pay any of the Obligations hereunder (other than the Obligations described in the following clause (ii)) or under any Note on the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise) or (ii) fail to pay any audit fees required to be paid by Borrowers pursuant to Section 2.7 or satisfy any expenses required to be satisfied by Borrowers pursuant to subsection 2.8 within five days following receipt by Borrowers of written notice of such failure. 10.1.2 Misrepresentations. Any representation, warranty or other statement made or furnished to Agent or any Lender by or on behalf of any Borrower, any of its Subsidiaries or any Guarantor in this Agreement, any of the other Loan Documents or any instrument, certificate or financial statement furnished in compliance with or in reference thereto proves to have been false or misleading in any material respect when made, furnished or reaffirmed pursuant to Section 7.2 hereof; provided, that no breach of 59 a representation or warranty occurring solely in respect of an Inactive Subsidiary (other than a breach of the representation and warranty contained in subsection 7.1.27) shall result in an Event of Default unless such event would reasonably be expected to have a Material Adverse Effect. 10.1.3 Breach of Specific Covenants. Borrowers shall fail or neglect to perform, keep or observe any covenant contained in Section or subsection 6.2.4, 6.2.5, 8.1.1, 8.1.2, 8.1.3(vi), 8.1.4 (at a time when Borrowing Base Certificates are required to be delivered more frequently than monthly), 8.1.10, 8.2 (other than subsection 8.2.20) or 8.3 hereof on the date that Borrowers are required to perform, keep or observe such covenant, shall fail or neglect to perform, keep or observe any covenant contained in Section 8.1.4 hereof (at a time when Borrowing Base Certificates are required to be delivered on a monthly basis) within 1 Business Day following the date on which Borrowers are required to perform, keep or observe such covenant, or shall fail or neglect to perform, keep or observe any covenant contained in subsection 8.1.3(ii) or 8.1.3(iv) hereof within 5 days following the date on which Borrowers are required to perform, keep or observe such covenant. 10.1.4 Breach of Other Covenants. Borrowers shall fail or neglect to perform, keep or observe any covenant contained in this Agreement (other than a covenant which is dealt with specifically elsewhere in Section 10.1 hereof) and the breach of such other covenant is not cured to Agent's reasonable satisfaction within 30 days after the sooner to occur of Borrowers' receipt of notice of such breach from Agent or the date on which such failure or neglect first becomes known to any officer of any Borrower. 10.1.5 Default Under Security Documents or Other Agreements. Any event of default shall occur under, or any Borrower, any of its Subsidiaries or any Guarantor shall default in the performance or observance of any term, covenant, condition or agreement applicable to such Person contained in, any of the Security Documents or the Other Agreements (excluding any representations and warranties set forth in such Security Documents and Other Agreements) and such default shall continue, after the sooner to occur of such Person's receipt of notice of such default from Agent or the date on which such default first becomes known to any officer of such Person, beyond any applicable grace period; provided, that no event covered by this subsection 10.1.5 and occurring solely in respect of an Inactive Subsidiary shall result in an Event of Default unless such event would reasonably be expected to have a Material Adverse Effect. 10.1.6 Other Defaults. There shall occur any event of default on the part of any Borrower, any of its Subsidiaries or any Guarantor under any agreement, document or instrument to which such Borrower, such Subsidiary or such Guarantor is a party or by which such Borrower, such Subsidiary or such Guarantor or any of its Property is bound, evidencing or relating to any Indebtedness (other than the Obligations) with an outstanding principal balance in excess of $1,000,000, if the payment or maturity of such Indebtedness is or could be accelerated in consequence of such event of default or demand for payment of such Indebtedness is made or could be made in accordance with the terms thereof; or there shall occur any event which permits the holders of the Indebtedness under any such agreement, document or instrument to require the repurchase or redemption of such Indebtedness. 60 10.1.7 Uninsured Losses. Any material loss, theft, damage or destruction of any portion of the Collateral having a fair market value of $2,000,000, in the aggregate, if not fully covered (subject to such deductibles and self-insurance retentions as Agent shall have permitted) by insurance. 10.1.8 Insolvency and Related Proceedings. Ultimate Parent, Parent, any Borrower, any of its Subsidiaries or any Guarantor shall cease to be Solvent or shall suffer the appointment of a receiver, trustee, custodian or similar fiduciary, or shall make an assignment for the benefit of creditors, or any petition for an order for relief shall be filed by or against Parent, any Borrower, any of its Subsidiaries or any Guarantor under U.S. federal bankruptcy laws (if against Parent, any Borrower, any of its Subsidiaries or any Guarantor the continuation of such proceeding for more than 60 days), or Parent, any Borrower, any of its Subsidiaries or any Guarantor shall make any offer of settlement, extension or composition to their respective unsecured creditors generally; provided, that no event covered by this subsection 10.1.8 and occurring solely in respect of an Inactive Subsidiary shall result in an Event of Default unless such event would reasonably be expected to have a Material Adverse Effect. 10.1.9 Business Disruption; Condemnation. There shall occur a cessation of a substantial part of the business of Borrowers and their Subsidiaries (taken as a whole) for a period which materially adversely affects the capacity of Borrowers and their Subsidiaries to continue their business on a profitable basis; or any Borrower, any of its Subsidiaries or any Guarantor shall suffer the loss or revocation of any material license or permit now held or hereafter acquired by such Borrower, such Subsidiary or such Guarantor which is necessary to the continued or lawful operation of a material portion of the business of Borrowers and their Subsidiaries (taken as a whole); or any Borrower, any of its Subsidiaries or any Guarantor shall be enjoined, restrained or in any way prevented by court, governmental or administrative order from conducting all or any material part of the business affairs of Borrowers and their Subsidiaries (taken as a whole); or any material lease or agreement pursuant to which any Borrower, any of its Subsidiaries or any Guarantor leases, uses or occupies any Property shall be canceled or terminated prior to the expiration of its stated term, except any such lease or agreement the cancellation or termination of which could not reasonably be expected to have a Material Adverse Effect; or any material portion of the Collateral shall be taken through condemnation or the value of such Property shall be materially impaired through condemnation, except for any such condemnation that would not reasonably be expected to have a Material Adverse Effect. 10.1.10 Change of Ownership. (a) any transaction is consummated the result of which is that any Person other than the Permitted Holders becomes the beneficial owner, directly or indirectly, of, in the aggregate, more than 50% of the total Voting Stock of Ultimate Parent, whether as a result of the purchase of Securities of Ultimate Parent then outstanding, the issuance of Securities of Ultimate Parent, any merger, consolidation, liquidation or dissolution of Ultimate Parent or otherwise; (b) Continuing Directors no longer constitute a majority of the members of the board of directors of any of Neenah, Parent or Ultimate Parent; (c) Ultimate Parent shall cease to own and control, beneficially and of record (directly or indirectly), 100% of the issued and outstanding Securities of 61 Parent; (d) Parent shall cease to own and control, beneficially and of record (directly or indirectly), 100% of the issued and outstanding Securities of Neenah; (e) Neenah shall cease to own and control, beneficially and of record (directly or indirectly), 100% of the issued and outstanding Securities of each other Borrower and each of its other Subsidiaries; (f) any "Change of Control" under and as defined in the Secured Bond Indenture shall occur; or (g) any "Change of Control" under and as defined in the Subordinated Bond Indenture shall occur. 10.1.11 ERISA. A Reportable Event shall occur which constitutes grounds for the termination by the Pension Benefit Guaranty Corporation of any Plan or for the appointment by the appropriate United States district court of a trustee for any Plan under Section 4042 of ERISA, or if any Plan shall be terminated or any such trustee shall be requested or appointed, or any Borrower or any of its Subsidiaries is in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from such Borrower's or such Subsidiary's complete or partial withdrawal from such Plan and any such event could reasonably be expected to have a Material Adverse Effect. 10.1.12 Challenge to Agreement. Parent, any Borrower, any Subsidiary of any Borrower (other than an Inactive Subsidiary) or any Guarantor (other than an Inactive Subsidiary), or any Affiliate of any of them, shall challenge or contest in any action, suit or proceeding the validity or enforceability of this Agreement or any of the other Loan Documents, the legality or enforceability of any of the Obligations or the perfection or priority of any Lien granted to Agent. 10.1.13 Repudiation of or Default Under Guaranty Agreement. Any Guarantor (other than an Inactive Subsidiary) shall revoke or attempt to revoke the Guaranty Agreement signed by such Guarantor, or shall repudiate such Guarantor's liability thereunder or shall be in default under the terms thereof. 10.1.14 Criminal Forfeiture. Any Borrower or any of its Subsidiaries shall be criminally indicted or convicted under any law that could lead to a forfeiture of any Property of such Borrower or such Subsidiary, except for any Property the forfeiture of which would not reasonably be expected to have a Material Adverse Effect. 10.1.15 Judgments. Any money judgments, writ of attachment or similar processes (collectively, "Judgments") are issued or rendered against any Borrower, any of its Subsidiaries or any Guarantor, or any of their respective Property (i) in the case of money judgments, in an amount of $1,000,000 or more for any single judgment, attachment or process or $2,000,000 or more for all such judgments, attachments or processes in the aggregate, in each case in excess of any applicable insurance (or indemnity from a creditworthy source that is reasonably acceptable to Agent) with respect to which the insurer (or the indemnifying party, if applicable) has admitted liability, and (ii) in the case of non-monetary Judgments, such Judgment or Judgments (in the aggregate) could reasonably be expected to have a Material Adverse Effect, in each case which Judgment is not stayed, released or discharged within 60 days; provided, that no event covered by this subsection 10.1.15 and occurring solely in respect of an Inactive 62 Subsidiary shall result in an Event of Default unless such event would reasonably be expected to have a Material Adverse Effect. 10.2 Acceleration of the Obligations. 10.2.1 Upon or at any time after the occurrence and during the continuance of an Event of Default, (i) the Revolving Loan Commitments shall, at the option of Agent or Majority Lenders be terminated and/or (ii) Agent or Majority Lenders may declare all or any portion of the Obligations at once due and payable without presentment, demand protest or further notice by Agent or any Lender, and Borrowers shall forthwith pay to Agent, the full amount of such Obligations, provided, that upon the occurrence of an Event of Default specified in subsection 10.1.8 hereof, the Revolving Loan Commitments shall automatically be terminated and all of the Obligations shall become automatically due and payable, in each case without declaration, notice or demand by Agent or any Lender. 10.2.2 If a Default or Event of Default has occurred and is continuing, a Lender (in the case of Revolving Credit Loans) or Agent or a Letter of Credit Issuer (in the case of Letters of Credit and LC Guaranties) may, with written notice to Borrowers and Agent, suspend for so long as such Default or Event of Default is continuing, its Revolving Loan Commitment with respect to additional Revolving Credit Loans and/or the issuance of additional Letters of Credit and the execution of additional LC Guaranties, as applicable, whereupon any additional Revolving Credit Loans or Letters of Credit or LC Guaranties, as applicable, From such Person shall be made, issued or executed in such Person's sole discretion. Agent shall provide Lenders with prompt notice of having received a written notice from a Lender of the type provided for under this subsection 10.2.2. 10.3 Other Remedies. Upon the occurrence and during the continuance of an Event of Default, Agent shall have and may exercise from time to time the following other rights and remedies: 10.3.1 All of the rights and remedies of a secured party under the UCC or under other applicable law, and all other legal and equitable rights to which Agent or Lenders may be entitled, all of which rights and remedies shall be cumulative and shall be in addition to any other rights or remedies contained in this Agreement or any of the other Loan Documents, and none of which shall be exclusive. 10.3.2 The right to take immediate possession of the Collateral, and to (i) require each Borrower and each of its Subsidiaries to assemble the Collateral, at Borrower's joint and several expense, and make it available to Agent at a place designated by Agent which is reasonably convenient to both parties, and (ii) enter any premises where any of the Collateral shall be located and to keep and store the Collateral on said premises until sold (and if said premises be the Property of any Borrower or any of its Subsidiaries, such Borrower agrees not to charge, or permit such Subsidiary to charge, Agent for storage thereof). 63 10.3.3 The right to sell or otherwise dispose of all or any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale or sales, with such notice as may be required by law, in lots or in bulk, for cash or on credit, all as Agent, in its sole discretion, may deem advisable. Agent may, at Agent's option, disclaim any and all warranties regarding the Collateral in connection with any such sale. Each Borrower agrees that 10 days' written notice to such Borrower or any of its Subsidiaries of any public or private sale or other disposition of Collateral shall be reasonable notice thereof, and such sale shall be at such locations as Agent may designate in said notice. Agent shall have the right to conduct such sales on any Borrower's or any of its Subsidiaries' premises, without charge therefor, and such sales may be adjourned from time to time in accordance with applicable law. Agent shall have the right to sell, lease or otherwise dispose of the Collateral, or any part thereof, for cash, credit or any combination thereof, and Agent, on behalf of Lenders, may purchase all or any part of the Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of such purchase price, may set off the amount of such price against the Obligations. The proceeds realized from the sale of any Collateral shall be applied in the manner provided for in subsection 3.4.2. If any deficiency shall arise, each Borrower and each Guarantor shall remain jointly and severally liable to Agent and Lenders therefore. Any surplus shall be remitted to whomsoever shall be legally entitled to the same. 10.3.4 Agent is hereby granted a non-exclusive license or other right to use, without charge, effective upon the occurrence and continuance of an Event of Default, each Borrower's and each of its Subsidiaries' labels, patents, copyrights, licenses, rights of use of any name, trade secrets, tradenames, trademarks and advertising matter, or any Property of a similar nature, as it pertains to the Collateral, in completing, advertising for sale and selling any Collateral and each Borrower's and each of its Subsidiaries' rights under all licenses and all franchise agreements shall inure to Agent's benefit. 10.3.5 Agent may, at its option, require Borrowers to deposit with Agent funds equal to 105% of the LC Amount and, if Borrowers fail to promptly make such deposit, Agent may advance such amount as a Revolving Credit Loan (whether or not an Overadvance is created thereby). Each such Revolving Credit Loan shall be secured by all of the Collateral and shall constitute a Base Rate Portion. Any such deposit or advance shall be held by Agent as a reserve to fund future payments on such LC Guaranties and future drawings against such Letters of Credit. At such time as all LC Guaranties have been paid or terminated and all Letters of Credit have been drawn upon or expired, any amounts remaining in such reserve shall be applied against any outstanding Obligations, or, if all Obligations have been indefeasibly paid in full, returned to Borrowers. 10.4 Set Off and Sharing of Payments. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, during the continuance of any Event of Default, each Lender is hereby authorized by each Borrower at any time or from time to time, with prior written consent of Agent and with reasonably prompt subsequent notice to such Borrower (any prior or contemporaneous notice to such Borrower being hereby expressly waived) to set off and 64 to appropriate and to apply any and all (i) balances held by such Lender at any of its offices for the account of such Borrower or any of its Subsidiaries (regardless of whether such balances are then due to such Borrower or its Subsidiaries), and (ii) other property at any time held or owing by such Lender to or for the credit or for the account of such Borrower or any of its Subsidiaries, against and on account of any of the Obligations. Any Lender exercising a right to set off shall, to the extent the amount of any such set off exceeds its Revolving Loan Percentage of the amount set off, purchase for cash (and the other Lenders shall sell) interests in each such other Lender's pro rata share of the Obligations as would be necessary to cause such Lender to share such excess with each other Lender in accordance with their respective Revolving Loan Percentages. Each Borrower agrees, to the fullest extent permitted by law, that any Lender may exercise its right to set off with respect to amounts in excess of its pro rata share of the Obligations and upon doing so shall deliver such excess to Agent for the benefit of all Lenders in accordance with the Revolving Loan Percentages. 10.5 Remedies Cumulative; No Waiver. All covenants, conditions, provisions, warranties, guaranties, indemnities, and other undertakings of each Borrower contained in this Agreement and the other Loan Documents, or in any document referred to herein or contained in any agreement supplementary hereto or in any schedule or in any Guaranty Agreement given to Agent or any Lender or contained in any other agreement between any Lender and such Borrower or between Agent and such Borrower heretofore, concurrently, or hereafter entered into, shall be deemed cumulative to and not in derogation or substitution of any of the terms, covenants, conditions, or agreements of such Borrower herein contained. The failure or delay of Agent or any Lender to require strict performance by any Borrower of any provision of this Agreement or to exercise or enforce any rights, Liens, powers, or remedies hereunder or under any of the aforesaid agreements or other documents or security or Collateral shall not operate as a waiver of such performance, Liens, rights, powers and remedies, but all such requirements, Liens, rights, powers, and remedies shall continue in full force and effect until all Loans and other Obligations owing or to become owing from such Borrower to Agent and each Lender have been fully satisfied. None of the undertakings, agreements, warranties, covenants and representations of any Borrower contained in this Agreement or any of the other Loan Documents and no Default or Event of Default by any Borrower under this Agreement or any other Loan Documents shall be deemed to have been suspended or waived by Lenders, unless such suspension or waiver is by an instrument in writing specifying such suspension or waiver and is signed by a duly authorized representative of Agent and directed to Borrowers. SECTION 11. THE AGENT 11.1 Authorization and Action. Each Lender hereby appoints and authorizes Agent to take such action on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Each Lender hereby acknowledges that Agent shall not have by reason of this Agreement assumed a fiduciary relationship in respect of any Lender. In performing its functions and duties under this Agreement, Agent shall act solely as agent of Lenders and shall 65 not in its capacity as such assume, or be deemed to have assumed, any obligation toward, or relationship of agency or trust with or for, any Borrower. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including without limitation enforcement and collection of the Notes), Agent may, but shall not be required to, exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, whenever such instruction shall be requested by Agent or required hereunder, or a greater or lesser number of Lenders if so required hereunder, and such instructions shall be binding upon all Lenders; provided, that Agent shall be fully justified in failing or refusing to take any action which exposes Agent to any liability or which is contrary to this Agreement, the other Loan Documents or applicable law, unless Agent is indemnified to its satisfaction by the other Lenders against any and an liability and expense which it may incur by reason of taking or continuing to take any such action. If Agent seeks the consent or approval of the Majority Lenders (or a greater or lesser number of Lenders as required in this Agreement), with respect to any action hereunder, Agent shall send notice thereof to each Lender and shall notify each Lender at any time that the Majority Lenders (or such greater or lesser number of Lenders) have instructed Agent to act or refrain from acting pursuant hereto. 11.2 Agent's Reliance, Etc. Neither Agent, any Affiliate of Agent, nor any of their respective directors, officers, agents or employees shall be liable in their capacity as such for any action taken or omitted to be taken by it or them under or in connection with this Agreement or the other Loan Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, Agent: (i) may treat each Lender party hereto as the holder of Obligations until Agent receives written notice of the assignment or transfer of such Lender's portion of the Obligations signed by such Lender and in form reasonably satisfactory to Agent; (ii) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iii) makes no warranties or representations to any Lender and shall not be responsible to any Lender for any recitals, statements, warranties or representations made in or in connection with this Agreement or any other Loan Documents; (iv) shall not have any duty beyond Agent's customary practices in respect of loans in which Agent is the only lender, to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Borrower, to inspect the property (including the books and records) of any Borrower, to monitor the financial condition of any Borrower or to ascertain the existence or possible existence or continuation of any Default or Event of Default; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (vi) shall not be liable to any Lender for any action taken, or inaction, by Agent upon the instructions of Majority Lenders pursuant to Section 11.1 hereof or refraining to take any action pending such instructions; (vii) shall not be liable for any apportionment or distributions of payments made by it in good faith pursuant to Section 3 hereof; (viii) shall incur no liability under or in respect of this Agreement or the other Loan Documents by acting upon any notice, consent, certificate, message or other instrument or writing (which may be by telephone, facsimile, telegram, cable or telex) believed 66 in good faith by it to be genuine and signed or sent by the proper party or parties; and (ix) may assume that no Event of Default has occurred and is continuing, unless Agent has actual knowledge of the Event of Default, has received notice from a Borrower or a Borrower's independent certified public accountants stating the nature of the Event of Default, or has received notice from a Lender stating the nature of the Event of Default and that such Lender considers the Event of Default to have occurred and to be continuing. In the event any apportionment or distribution described in clause (vii) above is determined to have been made in error, the sole recourse of any Person to whom payment was due but not made shall be to recover from the recipients of such payments any payment in excess of the amount to which they are determined to have been entitled. 11.3 Fleet and Affiliates. With respect to its commitment hereunder to make Loans, Fleet shall have the same rights and powers under this Agreement and the other Loan Documents as any other Lender and may exercise the same as though it were not Agent; and the terms "Lender," "Lenders" or "Majority Lenders" shall, unless otherwise expressly indicated, include Fleet in its individual capacity as a Lender. Fleet and its Affiliates may lend money to, and generally engage in any kind of business with, each Borrower, and any Person who may do business with or own Securities of each Borrower all as if Fleet were not Agent and without any duty to account therefor to any other Lender. 11.4 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon Agent or any other Lender and based on the financial statements referred to herein and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Agent shall not have any duty or responsibility, either initially or on an ongoing basis, to provide any Lender with any credit or other similar information regarding any Borrower. 11.5 Indemnification. Lenders agree to indemnify Agent and Arranger (to the extent not reimbursed by Borrowers), in accordance with their respective Aggregate Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against Agent or Arranger in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by Agent or Arranger under this Agreement; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse Agent and Arranger promptly upon demand for its ratable share, as set forth above, of any out-of-pocket expenses (including reasonable attorneys' fees) incurred by 67 Agent or Arranger in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiation, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and each other Loan Document, to the extent that Agent or Arranger, as applicable, is not reimbursed for such expenses by Borrowers. The obligations of Lenders under this Section 11.5 shall survive the payment in full of all Obligations and the termination of this Agreement. If after payment and distribution of any amount by Agent to Lenders, any Lender or any other Person, including any Borrower, any creditor of any Borrower, a liquidator, administrator or trustee in bankruptcy, recovers from Agent or Arranger any amount found to have been wrongfully paid to Agent or Arranger or disbursed by Agent or Arranger to Lenders, then Lenders, in accordance with their respective Aggregate Percentages, shall reimburse Agent or Arranger, as applicable, for all such amounts. 11.6 Rights and Remedies to be Exercised by Agent Only. Each Lender agrees that, except as set forth in Section 10.4, no Lender shall have any right individually (i) to realize upon the security created by this Agreement or any other Loan Document, (ii) to enforce any provision of this Agreement or any other Loan Document, or (iii) to make demand for payment by Borrower or any Guarantor under this Agreement or any other Loan Document. 11.7 Agency Provisions Relating to Collateral. Each Lender authorizes and ratifies Agent's entry into this Agreement and the Security Documents for the benefit of Lenders. Each Lender agrees that any action taken by Agent with respect to the Collateral in accordance with the provisions of this Agreement or the Security Documents, and the exercise by Agent of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders. Agent is hereby authorized on behalf of all Lenders, without the necessity of any notice to or further consent From any Lender to take any action with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected Agent's Liens upon the Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby irrevocably authorize Agent, at its option and in its discretion, to release any Lien granted to or held by Agent upon any Collateral (i) upon termination of the Agreement and payment and satisfaction of all Obligations; it being understood that Agent shall release its Lien on the Collateral upon termination of the Agreement pursuant to release documentation that is reasonably requested by Borrowers (and Agent agrees with Borrowers to provide such release); or (ii) constituting property being sold or disposed of if the sale or disposition is made in compliance with subsection 8.2.9, as it may be amended From time to time in accordance with the provisions of Section 12.3; it being understood that Agent shall release its Lien on any Collateral that is sold or otherwise disposed of in compliance with subsection 8.2.9 pursuant to release documentation that is reasonably requested by Borrowers (and Agent agrees with Borrowers to provide such releases); or (iii) constituting property in which no Borrower owned any interest at the time the Lien was granted or at any time thereafter; or (iv) in connection with any foreclosure sale or other enforcement action with respect to Collateral or in connection with the other exercise by Agent of remedies hereunder or under another Loan Document, in each case after the occurrence and during the continuation of an Event of Default or (v) if approved, 68 authorized or ratified in writing by Agent at the direction of all Lenders. Upon request by Agent at any time, Lenders will confirm in writing Agent's authority to release particular types or items of Collateral pursuant hereto. Agent shall have no obligation whatsoever to any Lender or to any other Person to assure that the Collateral exists or is owned by any Borrower or is cared for, protected or insured or has been encumbered or that the Liens granted to Agent herein or pursuant to the Security Documents have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of its rights, authorities and powers granted or available to Agent in this Section 11.7 or in any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, Agent may act in any manner it may deem appropriate, in its sole discretion, but consistent with the provisions of this Agreement, including given Agent's own interest in the Collateral as a Lender and that Agent shall have no duty or liability whatsoever to any Lender. 11.8 Agent's Right to Purchase Commitments. Agent shall have the right, but shall not be obligated, at any time upon written notice to any Lender and with the consent of such Lender, which may be granted or withheld in such Lender's sole discretion, to purchase for Agent's own account all of such Lender's interests in this Agreement, the other Loan Documents and the Obligations, for the face amount of the outstanding Obligations owed to such Lender, including without limitation all accrued and unpaid interest and fees. 11.9 Right of Sale; Assignment; Participations. Each Borrower hereby consents to any Lender's participation, sale, assignment, transfer or other disposition, at any time or times hereafter, of this Agreement and any of the other Loan Documents, or of any portion hereof or thereof, including, without limitation, such Lender's rights, title, interests, remedies, powers, and duties hereunder or thereunder subject to the terms and conditions set forth below: 11.9.1 Sales Assignments. Each Lender hereby agrees that, with respect to any sale or assignment (i) no such sale or assignment shall be for an amount of less than $5,000,000 or any integral multiple of $1,000,000 in excess thereof (or, if less, the aggregate amount of the Loans and Loan Commitments of such Lender), (ii) Agent and, in the absence of a Default or Event of Default, Borrowers, must consent, such consent not to be unreasonably withheld, to each such assignment to a Person that is not an original signatory to this Agreement, (iii) the assigning Lender shall pay to Agent a processing and recordation fee of $3,500 and any out-of-pocket attorneys' fees and expenses incurred by Agent in connection with any such sale or assignment and (iv) Agent, the assigning Lender and the assignee Lender shall each have executed and delivered an Assignment and Acceptance Agreement. After such sale or assignment has been consummated and the Register is updated (x) the assignee Lender thereupon shall become a "Lender" for all purposes of this Agreement and (y) the assigning Lender shall have no further liability for funding the portion of Revolving Loan Commitments assumed by such other Lender. 69 11.9.2 Participations. Upon the consent of Agent and, in the absence of an Event of Default, Borrowers (such consent not to be unreasonably withheld), any Lender may grant participations in its extensions of credit hereunder to any other Lender or other lending institution (a "Participant"), provided that (i) no such participation shall be for an amount of less than $5,000,000 or any integral multiple of $1,000,000 in excess thereof (or, if less, the aggregate amount of the Loans and Loan Commitments of such Lender), (ii) no Participant shall thereby acquire any direct rights under this Agreement, (iii) no Participant shall be granted any right to consent to any amendment, except to the extent any of the same pertain to (1) reducing the aggregate principal amount of, or interest rate on, or fees applicable to, any Loan or (2) extending the final stated maturity of any Loan or the stated maturity of any portion of any payment of principal of, or interest or fees applicable to, any of the Loans; provided, that the rights described in this subclause (2) shall not be deemed to include the right to consent to any amendment with respect to or which has the effect of requiring any mandatory prepayment of any portion of any Loan or any amendment or waiver of any Default or Event of Default, (iv) no sale of a participation in extensions of credit shall in any manner relieve the originating Lender of its obligations hereunder, (v) the originating Lender shall remain solely responsible for the performance of such obligations, (vi) Borrowers and Agent shall continue to deal solely and directly with the originating Lender in connection with the originating Lender's rights and obligations under this Agreement and the other Loan Documents, (vii) in no event shall any financial institution purchasing the participation grant a participation in its participation interest in the Loans without the prior written consent of Agent, and, in the absence of a Default or an Event of Default, Borrowers, which consents shall not unreasonably be withheld and (viii) all amounts payable by Borrowers hereunder shall be determined as if the originating Lender had not sold any such participation. 11.9.3 Certain Agreements of Borrowers. Each Borrower agrees that (i) it will use its commercially reasonable efforts to cooperate with each Lender to effect the sale of participation in or assignments of any of the Loan Documents or any portion thereof or interest therein, including, without limitation, assisting in the preparation of appropriate disclosure documents and making members of management available at reasonable times to meet with and answer questions of potential assignees and Participants; and (ii) subject to the provisions of Section 12.15 hereof, such Lender may disclose credit information regarding each Borrower to any potential Participant or assignee. 11.9.4 Non U.S. Resident Transferees. If, pursuant to this Section 11.9, any interest in this Agreement or any Loans is transferred to any transferee which is organized under the laws of any jurisdiction other than the United States or any state thereof, the transferor Lender shall cause such transferee (other than any Participant), and may cause any Participant, concurrently with and as a condition precedent to the effectiveness of such transfer, to (i) represent to the transferor Lender (for the benefit of the transferor Lender, Agent, and Borrowers) that under applicable law and treaties no taxes will be required to be withheld and paid by Agent, Borrowers or the transferor Lender with respect to any payments to be made to such transferee in respect of the interest so transferred and (ii) comply with the provisions of Section 2.12(b). 70 11.9.5 Register. Pursuant to this subsection 11.9.5, Borrowers hereby designate Agent to serve as agent for the purposes of this subsection 11.9.5, and Agent agrees, to maintain, or cause to be maintained at its offices, a listing of the name and address of each Lender and the Revolving Loan Commitment of, the principal balance of and stated interest on the Loans owing to, each Lender (the "Register"). The entries in such listing shall be conclusive and binding for all purposes, absent manifest error, and Borrowers, Agent and Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. Loans and Commitments may be assigned or sold in whole or in part only by recordation of such assignment or sale in the Register. The Register shall be available for inspection by Borrowers and any Lender at any reasonable time upon reasonable prior notice. 11.10 [INTENTIONALLY OMITTED]. 11.11 Resignation of Agent: Appointment of Successor. Agent may resign as Agent by giving not less than thirty (30) days' prior written notice to Lenders and Borrowers. If Agent shall resign under this Agreement, then, (i) subject to the consent of Borrowers (which consent shall not be unreasonably withheld and which consent shall not be required during any period in which a Default or an Event of Default exists), Majority Lenders shall appoint from among Lenders a successor agent for Lenders or (ii) if a successor agent shall not be so appointed and approved within the thirty (30) day period following Agent's notice to Lenders and Borrowers of its resignation, then Agent shall appoint a successor agent who shall serve as Agent until such time as Majority Lenders appoint a successor agent, subject to Borrowers' consent as set forth above. Upon its appointment, such successor agent shall succeed to the rights, powers and duties of Agent and the term "Agent" shall mean such successor effective upon its appointment, and the former Agent's rights, powers and duties as Agent shall be terminated without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement. After the resignation of any Agent hereunder, the provisions of this Section 11 shall inure to the benefit of such former Agent and such former Agent shall not by reason of such resignation be deemed to be released from liability for any actions taken or not taken by it while it was an Agent under this Agreement. 11.12 Audit and Examination Reports: Disclaimer by Lenders. By signing this Agreement, each Lender: (a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each audit or examination report (each a "Report" and collectively, "Reports") prepared by or on behalf of Agent; (b) expressly agrees and acknowledges that Agent (i) does not make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report; (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding each 71 Borrower and will rely significantly upon each Borrower's books and records, as well as on representations of each Borrower's personnel; (d) agrees to keep all Reports confidential and strictly for its internal use, and not to distribute except to its assignees or participants, or use any Report in any other manner, in accordance with the provisions of Section 12.15; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to any Borrower, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of any Borrower; and (ii) to pay and protect, and indemnify, defend and hold Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses and other amounts (including attorney's fees and expenses) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. 11.13 Syndication Agent, Documentation Agent and Arranger. None of the Syndication Agent, the Documentation Agent or the Arranger identified in the introductory paragraph of this Agreement, in its capacity as such, shall have any rights, powers, duties or responsibilities, and no rights, powers, duties or responsibilities shall be read into this Agreement or any other Loan Document or otherwise exist on behalf of or against such entity, in its capacity as such. If any of the Syndication Agent, the Documentation Agent or the Arranger resigns, in its capacity as such, no successor Syndication Agent, Documentation Agent or Arranger (as applicable) shall be appointed. 11.14 Real Property Collateral. Notwithstanding any provision of this Agreement or any other Loan Document to the contrary, Agent shall not take any action to foreclose upon, acquire or take possession of or occupy, or exercise any remedies by which it will take title or otherwise come into ownership in respect of Collateral consisting of real Property (the "Affected Collateral") or purchase or otherwise acquire (including in lieu of actual payment of a purchase price) any stock or other equity interest in any Borrower or other Person that owns the Affected Collateral unless and until (i) Lenders have obtained, at Borrowers' joint and several expense, a Phase II environmental site assessment with respect to the Affected Collateral, prepared by an environmental consultant reasonably acceptable to Lenders and (ii) each Lender has confirmed that no remediation is required by such Lender or that any remediation has been completed to the satisfaction of such Lender with respect to the Affected Collateral. 72 SECTION 12. MISCELLANEOUS 12.1 Power of Attorney. Each Borrower hereby irrevocably designates, makes, constitutes and appoints Agent (and all Persons designated by Agent) as such Borrower's true and lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this Section 12.1, and Agent, or Agent's agent, may, without notice to any Borrower and in such Borrower's or Agent's name, but at the cost and expense of such Borrower: 12.1.1 Subject to the third sentence of subsection 3.4.1 to the extent that the taking of any action pursuant to this subsection 12.1.1 causes a credit balance to exist in the Loan Account, at such time or times as Agent or said agent, in its sole discretion, may determine, endorse such Borrower's name on any checks, notes, acceptances, drafts, money orders or any other evidence of payment or proceeds of the Collateral which come into the possession of Agent or under Agent's control. 12.1.2 At such time or times after the occurrence and during the continuance of an Event of Default (provided that the occurrence of an Event of Default shall not be required with respect to clauses (iv), (vi)(except as set forth below in such clause (vi>>, (viii) and (ix) below), as Agent or its agent in its sole discretion may determine: (i) demand payment of the Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and generally exercise all of such Borrower's rights and remedies with respect to the collection of the Accounts; (ii) settle, adjust, compromise, discharge or release any of the Accounts or other Collateral or any legal proceedings brought to collect any of the Accounts or other Collateral; (iii) sell or assign any of the Accounts and other Collateral upon such terms, for such amounts and at such time or times as Agent deems advisable, and at Agent's option, with all warranties regarding the Collateral disclaimed; (iv) take control, in any manner, of any item of payment or proceeds relating to any Collateral at any time when a Dominion Period is in effect; (v) prepare, file and sign such Borrower's name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of lien, assignment or satisfaction of lien or similar document in connection with any of the Collateral; (i) receive, open and dispose of all mail addressed to such Borrower and, if an Event of Default has occurred and is continuing, notify postal authorities to change the address for delivery thereof to such address as Agent may designate until such time as no Event of Default exists; provided, that any contents of such mail other than any checks, notes, acceptances, drafts, money orders or other evidence of payment or proceeds of the Collateral shall be furnished by Agent to such Borrower in accordance with written instructions provided by such Borrower; (vii) endorse the name of such Borrower upon any of the items of payment or proceeds relating to any Collateral and deposit the same to the account of Agent on account of the Obligations; (viii) endorse the name of such Borrower upon any chattel paper, document, instrument, invoice, freight bill, bill of lading or similar document or agreement relating to any Collateral; (ix) use such Borrower's stationery and sign the name of such Borrower to verifications of 73 the Accounts and notices thereof to Account Debtors (provided that Agent shall deliver drafts of any such written communication to such Borrower prior to the delivery thereof to any Account Debtors); (x) use the information recorded on or contained in any data processing equipment and Computer Hardware and Software relating to the Accounts, Inventory, Equipment and any other Collateral; (xi) make and adjust claims under policies of insurance to the extent related to the Collateral; and (xii) do all other acts and things necessary, in Agent's determination, to fulfill such Borrower's obligations under this Agreement. The power of attorney granted hereby shall constitute a power coupled with an interest and shall be irrevocable. 12.2 Indemnity. Each Borrower hereby agrees to jointly and severally indemnify Agent, Arranger and each Lender (and each of their Affiliates) and hold Agent, Arranger and each Lender (and each of their Affiliates) harmless from and against any liability, loss, damage, suit, action or proceeding suffered or incurred by any such Person (including reasonable documented attorneys fees and legal expenses) as the result of such Borrower's failure to observe, perform or discharge such Borrower's duties hereunder (subject to subsection 2.12) or arising From or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby, except those determined by a court of competent jurisdiction in a final nonappealable judgment to have arisen out of the bad faith, gross negligence or willful misconduct of, or breach of the terms of this Agreement or any other Loan Document by, Agent, Arranger or such Lender. In addition, each Borrower shall defend Agent, Arranger and each Lender (and each of their Affiliates) against and hold it harmless from all claims of any Person with respect to the Collateral (except those determined by a court of competent jurisdiction in a final nonappealable judgment to have resulted from the bad faith, gross negligence or intentional misconduct of, or breach of the terms of this Agreement or any other Loan Document by, any such Person seeking indemnity). Without limiting the generality of the foregoing, each Borrower shall indemnify and hold harmless Agent, Arranger and each Lender (and each of their Affiliates) from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or under the Environmental Laws, or attributable to the use, generation, storage, release, threatened release, discharge, disposal or presence of any pollutants, flammables, explosives, petroleum (including crude oil) or any fraction thereof, radioactive materials, hazardous wastes, toxic substances or related materials, including, without limitation, any substances defined as or included in the definition of toxic or hazardous substances, wastes, or materials under any Environmental Law, except for those losses, damages, costs, expenses or liabilities determined by a court of competent jurisdiction in a final nonappealable judgment to have arisen out of the bad faith, gross negligence or willful misconduct of Agent, Arranger or such Lender. Notwithstanding any contrary provision in this Agreement, the obligation of each Borrower under this Section 12.2 shall survive the payment in full of the non-indemnity Obligations and the termination of this Agreement. 74 12.3 Amendments. No amendment or waiver of any provision of this Agreement or any other Loan Document (including without limitation any Note), nor consent to any departure by any Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and Borrowers, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that no amendment, waiver or consent shall be effective, unless (i) in writing and signed by each Lender, if it does any of the following: (1) increase or decrease the aggregate Loan Commitments, or any Lender's Revolving Loan Commitment or Term Loan Commitment, (2) reduce the principal of, or interest on, any amount payable on any date hereunder or under any Note, other than those payable only to Fleet in its capacity as Agent, which may be reduced by Fleet unilaterally, (3) decrease any interest rate payable hereunder, the Unused Line Fee or any other fee payable to Lenders (as opposed to Agent or Arranger), (4) postpone any date fixed for any payment of principal of, or interest on, any amounts payable hereunder or under any Note, other than those payable only to Fleet in its capacity as Agent, which may be postponed by Fleet unilaterally; provided, that notwithstanding the foregoing or any other provision of this Section 12.3 to the contrary, the extension of a due date for a mandatory prepayment of the Obligations required under subsection 3.3.1, 3.3.2 or 3.3.3 or a modification of the manner in which any such prepayment is applied to the Obligations shall be subject to the approval of the Majority Lenders and Borrowers, (5) modify the definitions of any of the terms Borrowing Base (including, without limitation, the percentages set forth in the definition of such term), Eligible Account, Eligible Inventory, Eligible Adjusted Municipal Accounts, Availability Block, if the effect of such modification is to increase the amount available to be borrowed in respect of the Revolving Loans, or decrease the amount of the Availability Block, or modify the definitions of any of the terms Dominion Event, Dominion Period and Non-Core Fixed Assets, (6) reduce the number of Lenders that shall be required for Lenders or any of them to take any action hereunder, (7) release or discharge any Person (other than an Inactive Subsidiary) liable for the performance of any obligations of any Borrower hereunder or under any of the Loan Documents, (8) amend any provision of this Agreement that requires the consent of all Lenders or consent to or waive any breach thereof, (9) amend the definition of the term "Majority Lenders", (10) amend this Section 12.3, subsection 1.1.2, subsection 1.1.4(i) or subsection 1.1.5, (11) release Collateral having a fair market value that exceeds $5,000,000 in the aggregate, unless otherwise permitted pursuant to Section 11.7 hereof or (12) subordinate the Obligations to any other Indebtedness or subordinate any of the Liens on the Collateral securing the Obligations to any other Liens, except in the case of subordination of Agent's Liens on assets subject to permitted Capitalized Lease Obligations or Permitted Purchase Money Indebtedness (which Agent shall be permitted to effect without the consent of any other Lender), or amend the terms of the Subordinated Bond Lien Subordination Agreement; or (ii) in writing and signed by Agent in addition to the Lenders required above to affect the rights or duties of Agent under this Agreement, any Note or any other Loan Document. If a fee is to be paid by Borrowers in connection with any waiver or amendment hereunder, the agreement evidencing such amendment or waiver may, at the discretion of Agent (but shall not be required to), provide that only Lenders executing such agreement by a specified date may share in such fee (and in such case, such fee shall be divided among the applicable Lenders on a pro rata basis without including the interests of any Lenders who have not timely executed such agreement). 75 12.4 Sale of Interest. No Borrower may sell, assign or transfer any interest in this Agreement, any of the other Loan Documents, or any of the Obligations, or any portion thereof, including, without limitation, such Borrower's rights, title, interests, remedies, powers, and duties hereunder or thereunder, without the prior written consent of Agent and each Lender. 12.5 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall 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 such provision or the remaining provisions of this Agreement. 12.6 Successors and Assigns. This Agreement, the Other Agreements and the Security Documents shall be binding upon and inure to the benefit of the successors and assigns of Borrowers, Agent and each Lender permitted under Section 11.9 hereof. 12.7 Cumulative Effect; Conflict of Terms. The provisions of the Other Agreements and the Security Documents are hereby made cumulative with the provisions of this Agreement. Except as otherwise provided in any of the other Loan Documents by specific reference to the applicable provision of this Agreement, if any provision contained in this Agreement is in direct conflict with, or inconsistent with, any provision in any of the other Loan Documents, the provision contained in this Agreement shall govern and control. 12.8 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. 12.9 Notice. Except as otherwise provided herein, all notices, requests and demands to or upon a party hereto, to be effective, shall be in writing, return receipt requested, by personal delivery against receipt, by overnight courier or by facsimile and, unless otherwise expressly provided herein, shall be deemed to have been validly served, given, delivered or received, as applicable, immediately when delivered against receipt, one Business Day after deposit with an overnight courier or, in the case of facsimile notice, when sent, addressed as follows: 76 If to Agent: Fleet Capital Corporation One South Wacker Drive Suite 1400 Chicago, Illinois 60606 Attention: Loan Administration Manager Facsimile No.: (312) 827-4222 With a copy to: Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd. 55 East Monroe Street Suite 3700 Chicago, Illinois 60603 Attention: David L. Dranoff, Esq. Facsimile No.: (312) 332-2196 If to any Borrower: c/o Neenah Foundry Company 2121 Brooks Avenue Neenah, Wisconsin 54956 Attention: Mr. Gary LaChey Facsimile No.: (920) 729-3633 With a copy to: Kirkland & Ellis LLP Citigroup Center 153 E. 53rd Street New York, New York 10022 Attention: Geoffrey W. Levin, Esq. Facsimile No.: (212) 446-4900 or to such other address as each party may designate for itself by notice given in accordance with this Section 12.9; provided, however, that any notice, request or demand to or upon Agent or a Lender pursuant to subsection 3.1.1 or 4.2.2 hereof shall not be effective until received by Agent or such Lender. 12.10 Consent. Whenever Agent's, Majority Lenders' or all Lenders' consent is required to be obtained under this Agreement, any of the Other Agreements or any of the Security Documents as a condition to any action, inaction, condition or event, except as otherwise specifically provided herein, Agent, Majority Lenders or all Lenders, as applicable, shall be authorized to give or withhold such consent in their sole and absolute discretion and to condition its consent upon the giving of additional Collateral security for the Obligations, the payment of money or any other matter. 12.11 Credit Inquiries. Each Borrower hereby authorizes and permits Agent and each Lender to respond to usual and customary credit inquiries from third parties concerning such Borrower or any of its Subsidiaries, subject to the provisions of Section 12.15. 77 12.12 Time of Essence. Time is of the essence of this Agreement, the Other Agreements and the Security Documents. 12.13 Entire Agreement. This Agreement and the other Loan Documents, together with all other instruments, agreements and certificates executed by the parties in connection therewith or with reference thereto, embody the entire understanding and agreement between the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written. 12.14 Interpretation. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision. 12.15 Confidentiality. Agent and each Lender shall keep confidential (and shall use best efforts to cause its respective agents to keep confidential) all nonpublic information obtained pursuant to the requirements of this Agreement in accordance with Agent's and such Lender's customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure reasonably required by a prospective participant or assignee in connection with the contemplated participation or assignment or as required or requested by any governmental authority or representative thereof or pursuant to legal process and shall require any such participant or assignee to agree to comply with this Section 12.15. In any event, however, Agent, each Lender, Borrowers and their Affiliates (and any agent or representative thereof) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated hereby and by the other Loan Documents and all materials of any kind (including opinions or other tax analyses) that are provided to Agent, any Lender, any Borrower or their Affiliates relating to such tax treatment and tax structure; it being agreed and understood that (i) this authorization is retroactively effective to the commencement of the first discussions between or among any of the parties regarding the transactions contemplated hereby and by the other Loan Documents and (ii) this authorization is not intended to permit disclosure of any other information not relevant to the tax treatment or tax structure of the transactions contemplated hereby, including, without limitation, (a) any portion of any materials to the extent not related to the tax treatment or tax structure of the transactions contemplated hereby, (b) the identities of participants or potential participants in the transactions contemplated hereby or (c) any other term or detail not relevant to the tax treatment or the tax structure of the transactions. The provisions of this Section 12.15 shall remain operative and in full force and effect regardless of the expiration or termination of this Agreement. 78 12.16 GOVERNING LAW: CONSENT TO FORUM. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS); PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY BORROWER, AGENT OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND AGREES THAT THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR, AT AGENT'S OPTION, THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWERS ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE CONFIRMATION ORDER (OR IN ANY AGREEMENT TO WHICH ANY BORROWER IS A PARTY) TO THE CONTRARY, EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT OR OTHERWISE PROVIDED TO AGENT AS A NEW NOTICE ADDRESS IN ACCORDANCE WITH THE TERMS HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH BORROWER'S ACTUAL RECEIPT THEREOF OR 5 BUSINESS DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREP AID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION. 79 12.17 WAIVERS. EACH BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (II) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT OR ANY LENDER ON WHICH SUCH BORROWER MAY IN ANY WAY BE LIABLE; (III) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (IV) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (V) NOTICE OF ACCEPTANCE HEREOF AND (VI) EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES (SUCH DAMAGES BEING WAIVED BY BORROWERS ALSO BEING WAIVED BY AGENT AND EACH LENDER). EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH SUCH BORROWER. EACH BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 12.18 Advertisement. Each Borrower hereby authorizes Agent to publish the name of such Borrower and the amount of the credit facility provided hereunder in any "tombstone" or comparable advertisement which Agent elects to publish. In addition, each Borrower agrees that, notwithstanding the provisions of Section 12.15, Agent may provide lending industry trade organizations with information necessary and customary for inclusion in league table measurements after the Closing Date. 12.19 Non-Applicability of Exculpation Provisions in Confirmation Order. With respect to the Confirmation Order, Borrowers hereby agree and confirm that the exculpation and limitation of liability provisions set forth in Section 11 (c) thereof do not 80 apply to Agent or any Lender with respect to this Agreement, any other Loan Document or the Loans contemplated to be made hereunder. 81 IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specified at the beginning of this Agreement. BORROWERS: NEENAH FOUNDRY COMPANY By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ DEETER FOUNDRY, INC. By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO _________________________________________ MERCER FORGE CORPORATION By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO _________________________________________ DALTON CORPORATION By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO _________________________________________ DALTON CORPORATION, STRYKER MACHINING FACILITY CO. By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO _________________________________________ 82 DALTON CORPORATION, WARSAW MANUFACTURING FACILITY By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ ADVANCED CAST PRODUCTS, INC. By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ GREGG INDUSTRIES, INC. By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ A & M SPECIALTIES, INC. By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ NEENAH TRANSPORT, INC. By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ DALTON CORPORATION, KENDALL VILLE MANUFACTURING FACILITY By /s/ Gary La Chey __________________________________________ Its VP Finance, Treasurer, Secty. & CEO __________________________________________ 83 AGENT, LENDERS AND LETTER OF CREDIT ISSUERS: FLEET CAPITAL CORPORATION, as Agent and as a Lender By /s/ Jayne M. Weinjart __________________________________________ Its Vice President _________________________________________ Revolving Loan Commitment: $22,109,464.08 Term Loan Commitment: $6,975,535.92 84 CONGRESS FINANCIAL CORPORATION (CENTRAL), as Syndication Agent and as a Lender By /s/ Jayne M. Weinjart --------------------------------- Its Vice President --------------------------------- Revolving Loan Commitment: $18.244,013,68 Term Loan Commitment: $5,755,986.32 85 GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent and as a Lender By /s/ Jill Johnston --------------------------------- Its Duly Authorized Signatory --------------------------------- Revolving Loan Commitment: $18,244,013.68 Term Loan Commitment: $5,755,986.32 THE CIT GROUP/BUSINESS CREDIT, INC., as a Lender By [Illegible] --------------------------------- Its SVP --------------------------------- Revolving Loan Commitment: $11,402,508.55 Term Loan Commitment: $3,597,491.45 86 APPENDIX A GENERAL DEFINITIONS When used in the Loan and Security Agreement dated as of October 8, 2003, by and among FLEET CAPITAL CORPORATION, individually as a Lender and as Agent for Lenders, CONGRESS FINANCIAL CORPORATION (CENTRAL), individually as a Lender and as Syndication Agent for Lenders, GENERAL ELECTRIC CAPITAL CORPORATION, individually as a Lender and as Documentation Agent for Lenders, FLEET SECURITIES, INC., as Arranger, the other financial institutions which are or become parties thereto as Lenders and NEENAH FOUNDRY COMPANY AND EACH SUBSIDIARY OF NEENAH FOUNDRY COMPANY IDENTIFIED ON THE SIGNATURES PAGES THERETO AS A BORROWER, (a) the terms Account, Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document, Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit Rights, Payment Intangibles, Proceeds, Security Entitlement, Software, Supporting Obligations, Tangible Chattel Paper and Uncertificated Security have the respective meanings assigned thereto under the UCC; (b) all terms reflecting Collateral having the meanings assigned thereto under the UCC shall be deemed to mean such Property, whether now owned or hereafter created or acquired by a Borrower or in which such Borrower now has or hereafter acquires any interest; ( c) capitalized terms which are not otherwise defined have the respective meanings assigned thereto in said Loan and Security Agreement; and (d) the following terms shall have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa): Account Debtor - any Person who is or may become obligated under or on account of any Account, Contract Right, Chattel Paper or General Intangible. Advanced Cast - Advanced Cast Products, Inc., a Delaware corporation. Affected Collateral - as defined in subsection 11.14 of the Agreement. Affiliate - a Person (other than a Subsidiary): (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, a Person; (ii) which beneficially owns or holds 10% or more of any class of the Voting Stock of a Person; or (iii) 10% or more of the Voting Stock (or in the case of a Person which is not a corporation, 10% or more of the equity interest) of which is beneficially owned or held by a Person or a Subsidiary of a Person. Agent - Fleet Capital Corporation in its capacity as agent for the Lenders under the Agreement and any successor in that capacity appointed pursuant to subsection 11.11 of the Agreement. Agent Loans - as defined in subsection 1.1.5 of the Agreement. Aggregate Percentage - with respect to each Lender, the percentage equal to the quotient of (i) such Lender's Loan Commitment divided by (ii) the aggregate of all Loan Commitments. Agreement - the Loan and Security Agreement referred to in the first sentence of this Appendix A, all Exhibits and Schedules thereto and this Appendix A, as each of the same may be amended from time to time. Applicable Margin - from the Closing Date to, but not including, the first Adjustment Date (as hereinafter defined) the percentages set forth below with respect to the Base Rate Revolving Portion, the Base Rate Term Portion, the LIBOR Revolving Portion, the LIBOR Term Portion and the Unused Line Fee: Base Rate Revolving Portion 1.25% Base Rate Term Portion 1.75% LIBOR Revolving Portion 2.75% LIBOR Term Portion 3.25% Unused Line Fee 0.500%
The percentages set forth above will be adjusted on the first day of the month following delivery by Borrowers to Agent of the financial statements required to be delivered pursuant to subsection 8.1.3(ii) of the Agreement for each March 31, June 30, September 30 and December 31 during the Term, commencing with the financial statements required to be delivered for the month ending March 31, 2004 (each such date, an "Adjustment Date"), effective prospectively, by reference to the applicable "Financial Measurement" (as defined below) for the four quarters most recently ending in accordance with the following: For Adjustment Dates through and including September 30, 2004:
Base Rate Base Rate LIBOR LIBOR Revolving Term Revolving Term Unused Financial Measurement Portion Portion Portion Portion Line Fee - ---------------------------- ------- ------- ------- ------- -------- Less than 1.15 to 1.00 1.50% 2.00% 3.00% 3.50% 0.500% Greater than or equal to 1.25% 1.75% 2.75% 3.25% 0.500% 1.15 to 1.00 and less than 1.40 to 1.00 Greater than or equal to 1.00% 1.50% 2.50% 3.00% 0.375% 1.40 to 1.00 and less than 1.65 to 1.00 Greater than or equal to 0.75% 1.25% 2.25% 2.75% 0.375% 1.65 to 1.00
A-2 For Adjustment Dates on and after December 31, 2004:
Base Rate LIBOR Revolving Base Rate Revolving LIBOR Unused Financial Measurement Portion Portion Portion Portion Line Fee - --------------------------- ------- ------- ------- ------- -------- Less than 1.20 to 1.00 1.50% 2.00% 3.00% 3.50% 0.500% Greater than or equal to 1.25% 1.75% 2.75% 3.25% 0.500% 1.20 to 1.00 and less than 1.40 to 1.00 Greater than or equal to 1.00% 1.50% 2.50% 3.00% 0.375% 1.40 to 1.00 and less than 1.65 to 1.00 Greater than or equal to 0.75% 1.25% 2.25% 2.75% 0.375% 1.65 to 1.00
provided that, (i) if Borrowers' audited financial statements for any fiscal year delivered pursuant to subsection 8.1.3(i) of the Agreement reflect a Financial Measurement that yields a different Applicable Margin than that yielded by the monthly financial statements previously delivered pursuant to subsection 8.1.3(ii) of the Agreement for the last month of such fiscal year, the Applicable Margin shall be readjusted retroactively for the period that was incorrectly calculated, (ii) if Borrowers fail to deliver the financial statements required to be delivered pursuant to subsection 8.1.3(i) or subsection 8.1.3(ii) of the Agreement on or before the due date thereof, the Applicable Margin shall automatically adjust to the highest pricing tier set forth above, effective prospectively from such due date until the date such financial statements have been delivered and (iii) if the average daily sum of the outstanding principal balance of the Revolving Credit Loans plus the LC Amount is less than 50% of the Revolving Credit Maximum Amount for the most recently completed monthly period, the Applicable Margin as it relates to the Unused Line Fee shall automatically adjust to be 0.50%, effective retroactively for such monthly period. For purposes hereof, "Financial Measurement" shall mean the Fixed Charge Coverage Ratio. Arranger - Fleet Securities, Inc., in its capacity as Arranger under the Agreement. Ashland Parcel - the real Property of Dalton - Ashland located at 1681 Orange Road, Ashland, Ohio. Assignment and Acceptance Agreement - an assignment and acceptance agreement in the form attached hereto as Exhibit A-1 pursuant to which a Lender assigns to another Lender all or any portion of any of such Lender's Revolving Loan Commitment or Term Loan Commitment, as permitted pursuant to the terms of this Agreement. Availability Block - $5,000,000. Bank - Fleet National Bank. Bankruptcy Court - the United States Bankruptcy Court for the District of Delaware. A-3 Base Rate - the higher of (i) the rate of interest announced or quoted by Bank from time to time as its prime rate for commercial loans, whether or not such rate is the lowest rate charged by Bank to its most preferred borrowers (and, if such prime rate for commercial loans is discontinued by Bank as a standard, a comparable reference rate designated by Bank as a substitute therefor) or (ii) the Federal Funds Rate plus 50 basis points per annum. Base Rate Portion - a Base Rate Term Portion or a Base Rate Revolving Portion. Base Rate Revolving Portion - that portion of the Revolving Credit Loans that is not subject to a LIBOR Option. Base Rate Term Portion - that portion of the Term Loan that is not subject to a LIBOR Option. Belcher - Belcher Corporation, a Delaware corporation. Belcher Parcel - the real Property in which Belcher bas an interest that is located at 558 Foundry Street, Easton, Massachusetts. Borrowing Base - as at any date of determination thereof, an amount equal to the lesser of: 1. the Revolving Credit Maximum Amount; or 2. an amount equal to the sum of 1. 85% of the net amount of Eligible Accounts outstanding at such date; plus 2. the lesser of (1) $3,000,000 or (2) 50% of the net amount of Eligible Adjusted Municipal Accounts outstanding at such date; plus 3. the least of (i) $27,000,000, (ii) 85% of the net orderly liquidation percentage of each category or type of Eligible Inventory at such date or (iii) the sum of (A) 65% of the book value of Eligible Inventory consisting of work in process or finished goods at such date plus (B) 50% of the book value of Eligible Inventory consisting of raw materials or supplies at such date; minus 4. the Availability Block. During the occurrence and continuance of an Event of Default, the limitations set forth in the immediately preceding sentence may be adjusted downward by Agent and the requirements in the definitions of Eligible Accounts, Eligible Adjusted Municipal Accounts and Eligible Inventory may be supplemented by Agent, as Agent shall deem necessary or appropriate in its reasonable credit judgment (with Agent agreeing to provide Borrowers with reasonably prompt notice of the making of any such adjustment or the establishment of any such supplement). For purposes hereof, (1) the net amount of Eligible Accounts at any time shall be the face amount of such Eligible Accounts less any and all returns, rebates, discounts (which may, at Agent's option, be calculated on shortest terms), credits, allowances or excise taxes of A-4 any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with such Accounts at such time, (2) the amount of Eligible Inventory shall be determined on a first-in, first-out, lower of cost or market basis in accordance with GAAP and (3) the net orderly liquidation percentage of each category or type of Eligible Inventory shall be determined by a third party appraiser reasonably acceptable to Agent and shall be as reflected in the most recent Inventory appraisal delivered to Agent under this Agreement. Borrowing Base Certificate - a certificate by a responsible officer of Neenah, substantially in the form of Exhibit 8.1.4 (or another form reasonably acceptable to Agent) setting forth the calculation of the Borrowing Base, including a calculation of each component thereof, all in such detail as shall be reasonably satisfactory to Agent. All calculations of the Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall originally be made by Neenah and certified to Agent. Business Day - any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Wisconsin, the State of Connecticut or the State of Illinois or is a day on which banking institutions located in any of such states are closed. Capital Expenditures - expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, that are required to be capitalized under GAAP. Capitalized Lease Obligation - any Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP. Cast Alloys - Cast Alloys, Inc., a California corporation. Chapter 11 Debtors - Each of the Debtors-in-Possession identified in the Plan of Reorganization. Closing Date - the date on which all of the conditions precedent in Section 9 of the Agreement are satisfied or waived and the initial Loan is made or the initial Letter of Credit or LC Guaranty is issued under the Agreement. Collateral - all of the Property and interests in Property described in Section 5 of the Agreement, and all other Property and interests in Property that now or hereafter secure the payment and performance of any of the Obligations. Compliance Certificate - as defined in subsection 8.1.3 of the Agreement. Computer Hardware and Software - all of each Borrower's rights (including rights as licensee and lessee) with respect to (i) computer and other electronic data processing hardware, including all integrated computer systems, central processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (ii) all Software and all software programs A-5 designed for use on the computers and electronic data processing hardware described in clause (i) above, including all operating system software, utilities and application programs in any form (source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (iii) any firmware associated with any of the foregoing; and (iv) any documentation for hardware, Software and firmware described in clauses (i), (ii) and (iii) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes. Confirmation Order - the order of the Bankruptcy Court confirming the Plan of Reorganization pursuant to Section 1129 of the United States Bankruptcy Code. Consolidated - the consolidation in accordance with GAAP of the accounts or other items as to which such term applies. Continuing Director - as of any date of determination, any member of the board of directors of Neenah, Parent or Ultimate Parent who (i) was a member of such board of directors as of the date of the Agreement, (ii) was nominated for election or elected to such board of directors with the affirmative vote of a majority of the Continuing Directors who were members of such board of directors at the time of such nomination or election or (iii) was selected by MacKay Shields LLC, Citicorp Mezzanine III, LP. or the Trust Company of the West. Contract Right - any right of each Borrower to payment under a contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance. Current Assets - at any date means all of the current assets of a Person would be properly classified as current assets shown on a balance sheet at such date in accordance with GAAP. Dalton - Dalton Corporation, an Indiana corporation. Dalton - Ashland - Dalton Corporation, Ashland Manufacturing Facility, an Ohio corporation. Deeter - Deeter Foundry, Inc., a Nebraska corporation. Default - an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default. Default Rate - as defined in subsection 2.1.2 of the Agreement. Deferrable Interest - interest accruing on the Subordinated Bonds, the payment of which Neenah may elect to defer until the maturity date of the Subordinated Bonds pursuant to the Subordinated Bond Documents (each as in effect as of the date hereof) Derivative Obligations - every obligation of a Person under any forward contract, futures contract, exchange contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreement), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices. A-6 Disclosure Statement - the Disclosure Statement of Chapter 11 Debtors relating to the Plan of Reorganization and dated as of July 1, 2003. Distribution - in respect of any Person means and includes: (i) the payment of any dividends or other distributions on Securities (except distributions in such Securities) and (ii) the redemption or acquisition of Securities of such Person, as the case may be, unless made contemporaneously from the net proceeds of the sale of Securities. Documentation Agent - General Electric Capital Corporation, in its capacity as Documentation Agent under the Agreement. Dominion Account - a special bank account or accounts of Agent established by a Borrower pursuant to subsection 6.2.4 of the Agreement at banks selected by such Borrower, but acceptable to Agent in its reasonable discretion, and over which Agent shall have sole and exclusive access and control for withdrawal purposes. Dominion Event - the occurrence of either one of the following events on any date after the end of the Initial Dominion Period: (a) average Availability (as determined by Agent in its reasonable credit judgment) for the thirty (30) day period ending on such date is less than $30,000,000 or (b) an Event of Default occurs. Dominion Period - (i) the Initial Dominion Period and (ii) at any time after the Initial Dominion Period has ended, the period commencing with prior written notice by Agent to Borrowers of the occurrence of a Dominion Event and ending (a) no less than 60 days thereafter and (b) only after such Dominion Event is no longer in existence or has been waived by Majority Lenders for a period of at least 60 consecutive days, provided, that no other Dominion Event has been in existence during such 60 consecutive day period. Eligible Account - an Account arising in the ordinary course of the business of a Borrower from the sale of goods or rendition of services; provided, that no Account shall be an Eligible Account if: 5. it arises out of a sale made or services rendered by a Borrower to a Subsidiary of a Borrower or an Affiliate of a Borrower or to a Person controlled by an Affiliate of a Borrower (unless it is an Account arising out of an arms-length transaction with a Person that is an Affiliate of a Borrower, or a Person controlled by an Affiliate of a Borrower, solely by virtue of being a portfolio company of a Permitted Holder); or 6. (1) it is not a Municipal Account and it remains unpaid more than 90 days after the original invoice date shown on the invoice or more than 60 days after the original due date shown on the invoice; or (2) it is a Municipal Account and it remains unpaid more than 120 days after the original invoice date shown on the invoice or more than 90 days after the original due date shown on the invoice; or 7. the total Accounts of the Account Debtor exceed 20% of the net amount of all Eligible Accounts, but only to the extent of such excess; or A-7 8. any covenant, representation or warranty contained in the Agreement with respect to such Account has been breached; or 9. the Account Debtor is also a creditor or supplier of a Borrower or any Subsidiary of a Borrower, or the Account Debtor has disputed liability with respect to such Account, or the Account Debtor has made any claim with respect to any other Account due from such Account Debtor to a Borrower or any Subsidiary of a Borrower, or the Account otherwise is subject to right of setoff by the Account Debtor, provided, that in each case any such Account shall be eligible to the extent such amount thereof exceeds such contract, dispute, claim, setoff or similar right; or 10. the Account Debtor has commenced a voluntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors, or a decree or order for relief has been entered by a court having jurisdiction in the premises in respect of the Account Debtor in an involuntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or any other petition or other application for relief under the federal bankruptcy laws, as now constituted or hereafter amended, has been filed against the Account Debtor, or if the Account Debtor has suspended business or consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a significant portion of its assets or affairs; or 11. it arises from a sale made or services rendered to an Account Debtor outside the United States, unless the sale is either (1) to an Account Debtor located in Ontario or any other province of Canada in which the Personal Property Security Act has been adopted in substantially the same form as currently in effect in Ontario or (2) on letter of credit, guaranty or acceptance terms (with the rights thereunder having been assigned to Agent), in each case acceptable to Agent in its reasonable credit judgment; or 12. (1) it arises from a sale to the Account Debtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment, or any other repurchase or return basis, except to the extent that (a) the sale has been completed, (b) an invoice has been generated, (c) such goods are no longer subject to return and (d) payment of the invoice is unconditionally due from the Account Debtor; or (2) it is subject to a reserve established by a Borrower for potential returns or refunds, to the extent of such reserve; or 13. the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless the applicable Borrower assigns its right to payment of such Account to Agent, in a manner satisfactory to Agent, in its reasonable credit judgment, so as to comply with the Assignment of Claims Act of 1940 (31 U.S.C. Section 203 et seq., as amended); or A-8 14. it is not subject to Agent's duly perfected, first priority security interest or is subject to a Lien that is not a Permitted Lien (but only to the extent of the underlying obligation which such Lien secures); or 15. the goods giving rise to such Account have not been delivered to and accepted by the Account Debtor or the services giving rise to such Account have not been performed by the applicable Borrower and accepted by the Account Debtor or the Account otherwise does not represent a final sale; or 16. the Account is evidenced by chattel paper or an instrument of any kind, or has been reduced to judgment; or 17. a Borrower or a Subsidiary of a Borrower has made any agreement with the Account Debtor for any extension, compromise, settlement or modification of the Account or deduction therefrom, except for volume discounts and discounts or allowances which are made in the ordinary course of business (in each case which discounts or allowances are reflected in the calculation of the face value of each invoice related to such Account); or 18. 25% or more of the Accounts owing from the Account Debtor are not Eligible Accounts hereunder; or 19. it represents service charges, late fees or similar charges. Eligible Adjusted Municipal Account - a Municipal Account that (a) would constitute an "Eligible Account" without the application of the requirements in clause (ii) of the definition thereof and (b) does not remain unpaid more than 180 days after the original invoice date shown on the invoice or more 150 days after the original due date shown on the invoice. Eligible Inventory - Inventory of a Borrower (other than packaging materials, tooling, patterns, samples and literature); provided, that no Inventory shall be Eligible Inventory if: 1. it is not raw materials, supplies, work in process that is, in Agent's opinion, readily marketable in its current form or finished goods which meet the specifications of the purchase order or contract for such Inventory, if any; or 2. it is not in good, new and saleable condition; or 3. it is slow-moving, obsolete or unmerchantable; or 4. it does not meet all standards imposed by any governmental agency or authority; or 5. it does not conform in all respects to any covenants, warranties and representations set forth in the Agreement; or A-9 6. it is not subject to Agent's duly perfected, first priority security interest or is subject to a Lien that is not a Permitted Lien; or 7. it is not situated at a location in compliance with the Agreement, provided that Inventory situated at a location not owned by a Borrower will be Eligible Inventory only if Agent has received a satisfactory landlord's agreement or bailee's letter, as applicable, with respect to such location or if it is a leased location and Agent has established a Rent Reserve with respect to such location; or 8. it has been consigned to a Borrower's customer, unless (a) it is has been delivered to a customer location in respect of which a satisfactory access agreement has been received by Agent, (b) it is segregated or otherwise separately identifiable from any goods of any other Person at the applicable customer location, (c) a UCC-l financing statement has been filed in the jurisdiction of the applicable customer's organization, which names such customer as debtor, the applicable Borrower as secured party and Agent as assignee of secured party and which identifies the Inventory in the possession of such customer as the collateral and (d) a notice that complies with the terms of Section 9-324 of the UCC has been delivered to the secured creditors, if any, of the applicable customer that have a perfected lien in the Inventory of such customer; provided, that in no event shall the amount of Eligible Inventory that consists of consigned Inventory exceed $5,000,000 in the aggregate; or 9. it is located outside of the continental United States of America; or 10. it represents capitalization of freight charges. Environmental Laws - all federal, state and local laws, rules, regulations, ordinances, orders and consent decrees relating to health, safety and environmental matters. ERISA - the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, and all rules and regulations from time to time promulgated thereunder. Event of Default - as defined in Section 10.1 of the Agreement. Federal Funds Rate means, for any day, a floating rate equal to the weighted average of the rates on overnight federal funds transactions among members of the Federal Reserve System, as determined by Agent in its sole discretion, which determination shall be final, binding and conclusive (absent manifest error). Fee Letter - as defined in Section 2.3 of the Agreement. Fixed Charge Coverage Ratio - as deified in Exhibit 8.3 to the Agreement. GAAP - generally accepted accounting principles in the United States of America in effect from time to time. A-10 Gregg - Gregg Industries, Inc., a California corporation. Guarantors - Parent, each Subsidiary Guarantor and each other Person who now or hereafter guarantees payment or performance of the whole or any part of the Obligations. Guaranty Agreements - the Continuing Guaranty Agreement which is to be executed on the Closing Date by each of Parent and each Subsidiary Guarantor, in form and substance satisfactory to Agent, together with each other guaranty hereafter executed by any Guarantor. Inactive Subsidiaries - each of Cast Alloys; Belcher; Peerless Corporation; Dalton - Ashland; and International Golf, S.A. de C.V. Indebtedness - as applied to a Person means, without duplication: 1. indebtedness arising from the lending of money by any Person to any Borrower or any of its Subsidiaries; 2. indebtedness, whether or not in any such case arising from the lending by any Person of money to any Borrower or any of its Subsidiaries, (1) which is represented by notes payable or drafts accepted that evidence extensions of credit, (2) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (3) upon which interest charges are customarily paid (other than accounts payable) or that was issued or assumed as full or partial payment for Property; 3. Capitalized Lease Obligations and Purchase Money Indebtedness; 4. reimbursement obligations with respect to letters of credit or guaranties of letters of credit, 5. Derivative Obligations; and 6. indebtedness of any Borrower or any of its Subsidiaries under any guaranty of obligations that would constitute Indebtedness under clauses (i) through (iii) hereof, if owed directly by a Borrower or any of its Subsidiaries. Indebtedness shall not include trade payables or accrued expenses. For the avoidance of doubt, the foregoing definition of "Indebtedness" shall not include preferred stock of any Person. Initial Dominion Period - the period beginning on the Closing Date and ending on the date that is at least one year thereafter when (i) no Event of Default is in existence and (ii) average Availability (as determined by Agent in its reasonable credit judgment) for the thirty (30) day period ending on such date is not less than $30,000,000. Intellectual Property - all past, present and future: trade secrets, know-how and other proprietary information; trademarks, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, A-11 derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights, unpatented inventions (whether or not patentable); patent applications and patents; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all past, present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing. Notwithstanding the foregoing, Intellectual Property shall not include any trademarks, trade names, business names or service marks that incorporate the word "Peerless". Intercompany Loans - as defined in subsection 8.2.2 of the Agreement. Interest Period - as applicable to any LIBOR Portion, a period commencing on the date such LIBOR Portion is advanced, continued or converted, and ending on the date which is one (1) month, two (2) months, three (3) months, or six (6) months later, as may then be requested by Borrowers; provided that unless Agent notifies Borrowers that the initial syndication of the Loan commitments have been completed, each Interest Period commencing (a) within the first 60 days after the Closing Date shall be a period of 1 month and (b) thereafter shall be a period of 7 days; and provided further that (i) any Interest Period which would otherwise end on a day which is not a Business Day shall end in the next preceding or succeeding Business Day as is Agent's custom in the market to which such LIBOR Portion relates; (ii) there remains a minimum of one (1) month, two (2) months, three (3) months or six (6) months (depending upon which Interest Period a Borrower selects) in the Term, unless Borrowers and Lenders have agreed to an extension of the Term beyond the expiration of the Interest Period in question; (iii) all Interest Periods of the same duration which commence on the same date shall end on the same date; and (iv) with respect to any LIBOR Term Portion, no applicable Interest Period shall extend beyond the scheduled installment payment date for such LIBOR Term Portion. LC Amount - at any time, the aggregate undrawn face amount of all Letters of Credit and LC Guaranties then outstanding. LC Guaranty - any guaranty pursuant to which Agent, a Letter of Credit Issuer or any Affiliate of Agent shall guaranty the payment or performance by a Borrower of its reimbursement obligation under any letter of credit. LC Obligations - Any Obligations that arise from any draw against any Letter of Credit or against any letter of credit supported by an LC Guaranty. Letter of Credit - any standby or documentary letter of credit issued by Agent, a Letter of Credit Issuer or any Affiliate of Agent for the account of a Borrower. A-12 Letter of Credit Issuer - as defined in Section 1.2 of the Agreement. LIBOR - as applicable to any LIBOR Portion, for the applicable Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/8 of one percent) as determined on the basis of the offered rates for deposits in U.S. dollars, for a period of time comparable to such Interest Period which appears on the Telerate page 3750 as of 11:00 a.m. (London time) on the day that is two (2) London Banking Days preceding the first day of such Interest Period; provided, however, if the rate described above does not appear on the Telerate System on any applicable interest determination date, the LIBOR shall be the rate (rounded upwards as described above, if necessary) for deposits in U.S. dollars for a period substantially equal to the Interest Period on the Reuters Page "LIBO" (or such other page as may replace the LIBO Page on that service for the purpose of displaying such rates), as of 11:00 a.m. (London Time), on the day that is two (2) London Banking Days prior to the first day of such Interest Period. If both the Telerate and Reuters systems are unavailable, then the rate for that date will be determined on the basis of the offered rates for deposits in U.S. dollars for a period of time comparable to such Interest Period which are offered by four (4) major banks in the London interbank market at approximately 11:00 a.m. (London time), on the day that is two (2) London Banking Days preceding the first day of such Interest Period as selected by Agent. The principal London office of each of the major London banks so selected will be requested to provide a quotation of its U.S. dollar deposit offered rate. If at least two (2) such quotations are provided, the rate for that date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in U.S. dollars to leading European banks for a period of time comparable to such Interest Period offered by major banks in New York City at approximately 11:00 a.m. (New York City time), on the day that is two (2) London Banking Days preceding the first day of such Interest Period. In the event that Agent is unable to obtain any such quotation as provided above, it will be determined that LIBOR pursuant to a Interest Period cannot be determined. In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of Bank then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage. LIBOR Interest Payment Date - the first day of each calendar month during the applicable Interest Period and the last day of the applicable Interest Period. LIBOR Option - the option granted pursuant to Section 3.1 of the Agreement to have the interest on all or any portion of the principal amount of the Revolving Credit Loans or the Term Loan based on the LIBOR. LIBOR Portion - a LIBOR Revolving Portion or a LIBOR Term Portion. LIBOR Request - a notice in writing (or by telephone confirmed electronically or by telecopy or other facsimile transmission on the same day as the telephone request) from a Borrower to Agent requesting that interest on a Revolving Credit Loan or all or any portion of the Term Loan be based on the LIBOR, specifying: (i) the first day of the Interest Period (which shall be a Business Day); (ii) the length of the Interest Period; (iii) whether the LIBOR Portion is a new Loan, a conversion of a Base Rate Portion, or a continuation of a LIBOR Portion, and (iv) A-13 the dollar amount of the LIBOR Portion, which shall be in an amount not less than $1,000,000 or an integral multiple of $100,000 in excess thereof. LIBOR Revolving Portion - that portion of the Revolving Credit Loans specified in a LIBOR Request (including any portion of Revolving Credit Loans which is being borrowed by a Borrower concurrently with such LIBOR Request) which, as of the date of the LIBOR Request specifying such LIBOR Revolving Portion, has met the conditions for basing interest on the LIBOR in Section 3.1 of the Agreement and the Interest Period of which has not terminated. LIBOR Term Portion - that portion of the Term Loan specified in a LIBOR Request which, as of the date of the LIBOR Request specifying such LIBOR Term Portion, has met the conditions for basing interest on the LIBOR in Section 3.1 of the Agreement and the Interest Period of which has not terminated. Lien - any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on common law, statute or contract. The term "Lien" shall also include rights of seller under conditional sales contracts or title retention agreements, reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting Property. For the purpose of this definition, any Property which a Borrower has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes shall be deemed to be subject to a Lien. Loan Account - each loan account established on the books of Agent pursuant to Section 3.6 of the Agreement. Loan Commitment - with respect to any Lender, the amount of such Lender's Revolving Loan Commitment plus such Lender's Term Loan Commitment. Loan Documents - the Agreement, the Other Agreements and the Security Documents. Loans - all loans and advances of any kind made by Agent, any Lender, or any Affiliate of Agent or any Lender, pursuant to the Agreement. London Banking Day - any date on which commercial banks are open for business in London, England. MACT Capital Expenditures - capital expenditures made by Borrowers for the purpose of causing Borrowers to be in material compliance with effective and applicable MACT Standards prior to the MACT Deadline. MACT Deadline - the deadline by which Borrowers are required to be in compliance with the [mal MACT Standards that have become effective and applicable to Borrowers. A-14 MACT Reserve Amount - at any time, an amount equal to 50% of the most recent commercially reasonable estimate, which has been prepared by Borrowers and approved by Agent in its reasonable discretion (which discretion may be exercised on the basis of advice from consultants hired by Agent at Borrowers' expense), of the total amount of capital expenditures necessary to cause Borrowers to be in material compliance with all effective and applicable MACT Standards prior to the MACT Deadline. MACT Standards - Maximum Achievable Control Technology standards under the Federal Clean Air Act Amendments of 1990, as enacted by final regulations promulgated by the United States Environmental Protection Agency. Majority Lenders - as of any date, Lenders holding 51% of the Term Loan and Revolving Loan Commitments determined on a combined basis and following the termination of the Revolving Loan Commitments, Lenders holding 51% or more of the outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by a Borrower or funded with a Revolving Credit Loan; provided, that (i) in each case, if there are 2 or more Lenders with outstanding Loans, LC Amounts, unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least 2 Lenders shall be required to constitute Majority Lenders; and (ii) prior to termination of the Revolving Loan Commitments, if any Lender breaches its obligation to fund any requested Revolving Credit Loan, for so long as such breach exists, its voting rights hereunder shall be calculated with reference to its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations, rather than its Revolving Loan Commitment. Material Adverse Effect - (i) a material adverse effect on the business, condition (financial or otherwise), operation, performance or properties of Borrowers and their Subsidiaries taken as a whole, (ii) a material adverse effect on the rights and remedies of Agent or Lenders under the Loan Documents, or (iii) the material impairment of the ability of Borrowers and Borrowers' Subsidiaries (taken as a whole) to perform their obligations hereunder or under any Loan Document. Mercer - Mercer Forge Corporation, a Delaware corporation. Mortgages - (i) the deed of trust executed by Gregg on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Gregg has granted to Agent, as security for the Obligations, a Lien upon the real Property of Gregg located at 10460 Hickson Street, El Monte, California, (ii) the mortgage executed by Mercer on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Mercer has granted to Agent, as security for the Obligations, a Lien upon the real Property of Mercer located at 200 Brown Street, Mercer, Pennsylvania, (iii) the mortgage executed by Dalton - Ashland on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Dalton - Ashland has granted to Agent, as security for the Obligations, a Lien upon the Ashland Parcel; (iv) the mortgage executed by Dalton Corporation, Stryker Machining Facility Co. on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Dalton Corporation, Stryker Machining Facility Co. has granted to Agent, as security for the Obligations, a Lien upon the real Property of Dalton Corporation, Stryker Machining Facility Co. located at 310 Ellis Street, Stryker, Ohio; (v) the mortgage executed by Advanced Cast on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which A-15 Advanced Cast has granted to Agent, as security for the Obligations, a Lien upon the real Property of Advanced Cast located at 18700 Mill Street, Meadville, Pennsylvania; (vi) the mortgage executed by Dalton Corporation, Kendallville Manufacturing Facility on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Dalton Corporation, Kendallville Manufacturing Facility has granted to Agent, as security for the Obligations, a Lien upon the real Property of Dalton Corporation, Kendallville Manufacturing Facility located at 200 West Ohio Street, Kendallville, Indiana; (vii) the mortgages executed by Dalton and Dalton Corporation, Warsaw Manufacturing Facility on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Dalton and Dalton Corporation, Warsaw Manufacturing Facility have granted to Agent, as security for the Obligations, a Lien upon the real Property of Dalton and Dalton Corporation, Warsaw Manufacturing Facility located at 1900 East Jefferson Street, Warsaw, Indiana; (viii) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 2121 Brooks Street, Neenah, Wisconsin 54956; (ix) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 500 Winneconne Ave., Neenah, Wisconsin 54956; (x) the deed of trust executed by Deeter on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Deeter has granted to Agent, as security for the Obligations, a Lien upon the real Property of Deeter located at 5945 North 70th Street, Lincoln, Nebraska; (xi) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 545 Kimberly Drive, Carol Stream, Illinois, (xii) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 3831 Zane Trace Drive, Columbus, Ohio, (xiii) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 5950 West 82nd Street, Indianapolis, Indiana, (xiv) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 5075 28th Avenue, Rockford, Illinois, (xv) the deed of trust executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 55 Cherokee Drive, St. Peters, Missouri, (xvi) the mortgage executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien upon the real Property of Neenah located at 701 Industrial Circle S., Shakopee, Minnesota and (xvii) all other mortgages, deeds of trust and comparable documents creating a Lien on real property (or any leasehold or other interest in real property) now or at any time hereafter securing the whole or any part of the Obligations. Multiemployer Plan - has the meaning set forth in Section 4001 (a)(3) of ERISA. A-16 Municipal Account - an Account of Neenah or Deeter that arises out of a sale of any castings that Neenah or Deeter categorize as municipal castings in a manner that is consistent with the practices of Neenah and Deeter in effect as of the Closing Date. Neenah Transport - Neenah Transport, Inc., a Wisconsin corporation. Non-Core Fixed Assets - (i) the fixed assets of Dalton Corporation, Kendallville Manufacturing Facility located on or at its facility at 200 West Ohio Street in Kendallville, Indiana, (ii) the fixed assets of Gregg located on or at its facility at 10460 Hickson Street in El Monte, California, (iii) the fixed assets of Dalton - Ashland located on or at its facility at 1681 Orange Road in Ashland, Ohio, (iv) Belcher's interest in the fixed asset consisting of the Belcher Parcel, (v) the fixed asset of Neenah consisting of its owned real Property located at 500 Winneconne Avenue in Neenah, Wisconsin and (vi) the equity of any Person that does not own any assets other than Non-Core Fixed Assets. Notes - the Revolving Notes and the Term Notes. Obligations - all Loans, all LC Obligations and all other advances, debts, liabilities, obligations, covenants and duties, together with all interest, fees and other charges thereon, owing, arising, due or payable from each Borrower to Agent, for its own benefit, from each Borrower to Agent for the benefit of any Lender, from each Borrower to any Lender, :from each Borrower to any Letter of Credit Issuer and from each Borrower to Bank or any other Affiliate of Agent, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether arising under the Agreement, any of the other Loan Documents or any agreements evidencing the Product Obligations, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising and however acquired, and including, without limitation, any Product Obligations. Organizational I.D. Number - with respect to any Person, the organizational identification number assigned to such Person by the applicable governmental unit or agency of the jurisdiction of organization of such Person. Other Agreements - any and all agreements, instruments and documents (other than the Agreement and the Security Documents), heretofore, now or hereafter executed by any Borrower, any of its Subsidiaries, any Guarantor or any other third party and delivered to Agent or any Lender in respect of the transactions contemplated by the Agreement. Overadvance - as defined in subsection 1.1.2 of the Agreement. Parent - NFC Castings, Inc., a Delaware corporation. Permitted Acquisition - any acquisition after the Closing Date by any Borrower or any Subsidiary formed by such Borrower for such purpose (a "New Subsidiary"), by any means, of all or substantially all of the assets or capital stock, an operating division or a business unit, of any Person that is a going concern, that has been incorporated or organized under the laws of a State within the United States and that is in a similar or related field of business to a Borrower as of the date hereof, and so long as Agent and Lenders shall have received evidence at least 3 A-17 Business Days prior to the closing date of such acquisition that such acquisition satisfies the following conditions: 1. no Default or Event of Default is in existence at the time of such acquisition or would be caused thereby after giving effect thereto; 2. after giving effect to the proposed acquisition, Borrowers are in compliance with each of the financial covenants set forth in Section 8.3 of the Agreement on a pro forma, but unadjusted, basis; 3. the Person or business to be acquired has shown an unadjusted positive EBITDA (calculated in accordance with GAAP) for the twelve month period ended immediately prior to the date of acquisition, as determined by Agent; 4. the Board of Directors and/or owners of the entity whose business is to be acquired have provided all requisite authorization of the proposed transaction; 5. Agent has received at least ten (10) days' prior written notice of such Acquisition and, as soon as available, copies of all agreements delivered in connection therewith; 6. subsection 8.1.8 of the Agreement has been satisfied with respect to such assets, Person or New Subsidiary and, as a result thereof, Agent has obtained a first priority Lien (subject only to Permitted Liens) on the applicable stock and assets; 7. Agent has received a certificate from Neenah's chief financial officer (in such Person's capacity as such) certifying that all of the applicable conditions contained herein to treating such acquisition as a Permitted Acquisition have been satisfied; 8. if the total consideration (including cash, notes and other debt, maximum amounts, consulting and non-compete payments and the like) for such acquisition, together with all other acquisitions completed since the Closing Date, exceeds $5,000,000, Agent and Majority Lenders have consented in writing to such acquisition; 9. immediately after giving effect to the consummation of such acquisition, average Availability (as determined by Agent in its reasonable credit judgment) for the thirty (30) day period ending on the date of such acquisition is not less than $17,500,000 and actual Availability (as determined by Agent in its reasonable credit judgment) on the date of such acquisition is not less than $17,500,000; provided, that the foregoing test shall not apply if the consideration for such acquisition is paid solely in equity of a Borrower having terms reasonably acceptable to Agent; and A-18 10. consents have been obtained in favor of Agent to the collateral assignment of rights and indemnities under the related acquisition documents. In no event shall any Accounts or Inventory acquired in connection with a Permitted Acquisition be deemed eligible for advance hereunder unless and until Agent has completed (at Borrowers' expense) a Collateral audit and appraisal of such Property so acquired or to be acquired (which audit and appraisal shall be conducted in a manner that is consistent with the audits and appraisals conducted pursuant to subsection 2.7 and subsection 2.10, respectively, of the Loan Agreement). Permitted Holders - each of MacKay Shields LLC, Citicorp Mezzanine III, LP., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd., TCW Shared Opportunity Fund II, LP., Shared Opportunity Fund IIB LLC, TCW Shared Opportunity Fund IV, LP., TCW Shared Opportunity Fund IVB, LP., AIMCO CDO, Series 2000-A, TCW High Income Partners, Ltd. and TCW High Income Partners II, Ltd., together with the Related Persons and the Affiliates of each of such Persons. Permitted Liens - any Lien of a kind specified in subsection 8.2.5 of the Agreement. Permitted Purchase Money Indebtedness - Purchase Money Indebtedness of any Borrower incurred after the date hereof which is secured by a Purchase Money Lien and the principal amount of which, when aggregated with the principal amount of all other such Indebtedness and Capitalized Lease Obligations of Borrowers and the Borrowers' Subsidiaries at the time outstanding, does not exceed $7,500,000. For the purposes of this definition, the principal amount of any Purchase Money Indebtedness consisting of capitalized leases (as opposed to operating leases) shall be computed as a Capitalized Lease Obligation. Person - an individual, partnership, corporation, limited liability company, joint stock company, land trust, business trust, or unincorporated organization, or a government or agency or political subdivision thereof. Plan - an employee benefit plan now or hereafter maintained for employees of any Borrower or any of its Subsidiaries that is covered by Title IV of ERISA. Plan of Reorganization - the Amended Prepackaged Joint Plan of Reorganization of Chapter 11 Debtors under Chapter 11 of the United States Bankruptcy Code filed with the Bankruptcy Court on September 17, 2003. Pledge Agreements - collectively, (i) the Pledge Agreement executed by Parent on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Parent has granted to Agent, as security for the Obligations, a Lien on the 100% of the Securities of Neenah, (ii) the Pledge Agreement executed by Neenah on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah has granted to Agent, as security for the Obligations, a Lien on the 100% of the Securities of Neenah Transport, Deeter, Mercer, Dalton, Advanced Cast, Cast Alloys and Gregg, (iii) the Pledge Agreement executed by Mercer on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Mercer has granted to Agent, as security for the Obligations, a Lien on the 100% of the A-19 Securities of its Subsidiaries, (iv) the Pledge Agreement executed by Dalton on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Dalton has granted to Agent, as security for the Obligations, a Lien on the 100% of the Securities of its Subsidiaries, (v) the Pledge Agreement executed by Advanced Cast on or about the Closing Date in favor of Agent, for the benefit of itself and Lenders, by which Advanced Cast has granted to Agent, as security for the Obligations, a Lien on the 100% of the Securities of its Subsidiaries and (vi) all other pledge agreements and comparable documents now or at any time hereafter securing the whole or any part of the Obligations. Product Obligations - every obligation of Borrowers owing to Bank, Agent or any Affiliate of Bank or Agent under and in respect of anyone or more of the following types of services or facilities extended to any Borrower by Bank, Agent or any Affiliate of Bank or Agent: (i) credit cards, (ii) cash management or related services including the automatic clearing house transfer of funds for the account of any Borrower pursuant to agreement or overdraft, (iii) controlled disbursement services and (iv) Derivative Obligations. Projections - Parent's forecasted Consolidated and consolidating (i) balance sheets, (ii) profit and loss statements, (ii) cash flow statements, and (iv) capitalization statements, all prepared on a consistent basis with the historical financial statements of Parent, Borrowers and Borrowers' Subsidiaries, together with appropriate supporting details and a statement of underlying assumptions. Property - any interest of Borrower or any Subsidiary in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. Purchase Money Indebtedness - means and includes (i) indebtedness (other than the Obligations) for the payment of all or any part of the purchase price of any fixed assets, (ii) any indebtedness (other than the Obligations) incurred at the time of or within 10 days prior to or after the acquisition of any fixed assets for the purpose of financing all or any part of the purchase price thereof, and (iii) any renewals, extensions or refinancings thereof, but not any increases in the principal amounts thereof outstanding at the time. Purchase Money Lien - a Lien upon fixed assets which secures Purchase Money Indebtedness, but only if such Lien shall at all times be confined solely to the fixed assets the purchase price of which was financed through the incurrence of the Purchase Money Indebtedness secured by such Lien. Rebuild Reserve - a reserve created under subsection 1.1.1 of the Agreement in the amount of all proceeds of insured losses or destruction to Equipment or real Property being held by Agent pursuant to subsection 3.3.1(a) pending possible repair or replacement of such Property subject to the original loss or destruction. Register - as defined in subsection 11.9.5 of the Agreement. Related Person - of any Person means any other Person directly or indirectly owning (a) 5% or more of the outstanding common stock of such Person (or, in the case of a Person that is not a corporation, 5% or more of the equity interests in such Person) or (b) 5% or more of the combined voting power of the Voting Stock of such Person. A-20 Rent Reserve - means, with respect to any location leased by a Borrower where Eligible Inventory is located and a satisfactory landlord's agreement has not been provided, a reserve in an amount equal to the sum of all rental payments scheduled to come due in the next 3 months for such location. Rentals - as defined in subsection 8.2.19 of the Agreement. Reportable Event - any of the events set forth in Section 4043(c) of ERlSA. Reserves - reserves against the amount of Revolving Credit Loans which Borrowers may otherwise request under the Agreement that have been established by Agent in such amounts and with respect to such matters as Agent shall reasonably deem necessary or appropriate in its reasonable credit judgment exercised in good faith. Reserve Percentage - the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against "Euro-currency Liabilities" as defined in Regulation D. Restricted Investment - any investment made in cash or by delivery of Property to any Person, whether by acquisition of stock, Indebtedness or other obligation or Security, or by loan, advance or capital contribution, or otherwise, or in any Property except the following: 1. investments by a Borrower, to the extent existing on the Closing Date, in one or more Subsidiaries of such Borrower; 2. Property to be used in the ordinary course of business; 3. Current Assets arising from the sale of goods and services in the ordinary course of business of any Borrower or any of its Subsidiaries; 4. investments in direct obligations of the United States of America, or any agency thereof or obligations guaranteed by the United States of America, provided that such obligations mature within one year from the date of acquisition thereof; 5. investments in certificates of deposit maturing within one year from the date of acquisition and fully insured by the Federal Deposit Insurance Corporation; 6. investments in commercial paper given the highest rating by a national credit rating agency and maturing not more than 270 days from the date of creation thereof; 7. investments in money market, mutual or similar funds having assets in excess of $100,000,000 and the investments of which are limited to investment grade securities; 8. Intercompany Loans; A-21 9. investments made in exchange for Accounts arising in the ordinary course of business which have not been collected for 120 days and which are, in the good faith judgment of such Borrower or one of its Subsidiaries, substantially uncollectable, provided that the instrument evidencing such investment is delivered to Agent to be held as security for the Obligations pursuant to the terms of the Agreement; 10. investments in evidence of Indebtedness, securities or other Property received from another Person by such Borrower or any of its Subsidiaries in connection with any bankruptcy case or by reason of a composition or a readjustment of debt or reorganization of such Person as a result of foreclosure, perfection or enforcement of any Lien in exchange for evidence of Indebtedness, securities or other Property of such Person; 11. repurchase agreements with respect to securities described in clause (iv) above entered into with an office of a bank or trust company which is organized under the laws of the United States or any State thereof and has capital, surplus and undivided profits aggregating at least $500,000,000; 12. investments consisting of loans for salary, travel advances, entertainment, relocation, advances against commissions and other similar advances to employees in the ordinary course of business. 13. investments existing on the date hereof and listed on Exhibit 8.2.12 hereto; and 14. investments otherwise expressly permitted pursuant to the Agreement. Revolving Credit Loan - a Loan made by any Lender pursuant to Section 1.1 of the Agreement. Revolving Credit Maximum Amount - $70,000,000, as such amount may be reduced from time to time pursuant to the terms of the Agreement. Revolving Loan Commitment - with respect to any Lender, the amount of such Lender's Revolving Loan Commitment pursuant to subsection 1.1.1 of the Agreement, as set forth below such Lender's name on the signature page hereof or any Assignment and Acceptance Agreement executed by such Lender. Revolving Loan Percentage - with respect to each Lender, the percentage equal to the quotient of such Lender's Revolving Loan Commitment divided by the aggregate of all Revolving Loan Commitments. Revolving Notes - the Secured Promissory Notes to be jointly and severally executed by Borrowers on or about the Closing Date in favor of each Lender to evidence the Revolving Credit Loans, which shall be in the form of Exhibit 1.1 to the Agreement, together with any replacement or successor notes therefor. A-22 Secured Bonds - the 11% Senior Secured Notes due 2010 of Neenah issued as of the date of the Agreement pursuant to the Secured Bond Documents in the original principal amount of $133,130,000. Secured Bond Documents - the Secured Bond Indenture, the Secured Bonds, any guaranty, mortgage, security agreement or other collateral document securing the Secured Bonds and all other documents, agreements and instruments now existing or hereinafter entered into in connection with the foregoing, in each case as amended from time to time. Secured Bond Indenture - that certain Indenture providing for the issuance of the Secured Bonds among Neenah, as issuer, the Subsidiaries of Neenah party thereto as subsidiary guarantors and the Secured Bond Trustee, dated as of the date of the Agreement, as amended from time to time in compliance with its terms and in compliance with any applicable terms of the Secured Bond Lien Subordination Agreement. Secured Bond Lien Subordination Agreement - that certain Lien Subordination Agreement dated as of the date of the Agreement by and among Agent and the Secured Bond Trustee, as amended from time to time in accordance with its terms. Secured Bond Trustee - The Bank of New York, a New York banking corporation. Security - all shares of stock, partnership interests, membership interests, membership units or other ownership interests in any other Person and all warrants, options or other rights to acquire the same. Security Documents - the Guaranty Agreements, the Mortgages, the Pledge Agreements, and all other instruments and agreements now or at any time hereafter securing the whole or any part of the Obligations. Solvent - as to any Person, that such Person (i) owns Property whose fair saleable value as a going concern is greater than the amount required to pay all of such Person's debts (including contingent debts), (ii) is able to pay all of its debts as such debts mature and (iii) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage. Subordinated Bonds - the 13% Senior Subordinated Notes due 2013 of Neenah issued as of the date of the Agreement pursuant to the Subordinated Bond Documents in the original principal amount of $100,000,000 (as increased by amounts added to the principal balance of the Subordinated Bonds in satisfaction of interest payments owing in respect of the Subordinated Bonds). Subordinated Bond Documents - the Subordinated Bond Indenture, the Subordinated Bonds, any guaranty of the Subordinated Bonds and all other documents, agreements and instruments now existing or hereinafter entered into in connection with the foregoing, in each case as amended from time to time. A-23 Subordinated Bond Indenture - that certain Indenture providing for the issuance of the Subordinated Bonds among Neenah, as issuer, the Subsidiaries of Neenah party thereto as subsidiary guarantors and The Bank of New York, as trustee, dated as of the date of the Agreement. Subordinated Debt - Indebtedness of any Borrower or any of its Subsidiaries permitted under the Agreement that is subordinated to the Obligations in a manner reasonably satisfactory to Agent, and contains terms, including without limitation, payment terms, satisfactory to Agent (including, without limitation, the Indebtedness evidenced by the Subordinated Bonds and the other Subordinated Bond Documents, but excluding the Indebtedness evidenced by the Secured Bonds and the other Secured Bond Documents). Subsidiary - any Person of which another Person owns, directly or indirectly through one or more intermediaries, more than 50% of the Voting Stock at the time of determination. Subsidiary Guarantors - each of Cast Alloys; Belcher; Peerless Corporation; Dalton - Ashland; and each other Subsidiary of Ultimate Parent that now or hereafter executes a Guaranty Agreement. Swingline Loans - as defined in subsection 1.1.4 of the Agreement. Syndication Agent - Congress Financial Corporation (Central), in its capacity as Syndication Agent under the Agreement. Term - as defined in Section 4.1 of the Agreement. Term Loan - the Loan described in Section 1.3 of the Agreement. Term Loan Commitment - with respect to any Lender, the amount of such Lender's Term Loan Commitment pursuant to Section 1.3 of the Agreement, as set forth below such Lender's name on the signature pages hereof or any Assignment and Acceptance Agreement executed by such Lender, minus all Term Loan payments paid to such Lender. Term Notes - the Secured Promissory Notes to be executed by Borrower on or about the Closing Date in favor of each applicable Lender to evidence its Term Loan, which shall be in the form of Exhibit 1.3 to the Agreement, together with any replacement or successor notes therefor. Total Credit Facility - $92,085,000, as such amount may be reduced from time to time pursuant to the terms of the Agreement. Type of Organization - with respect to any Person, the kind or type of entity by which such Person is organized, such as a corporation or limited liability company. UCC - the Uniform Commercial Code as in effect in the State of Illinois on the date of this Agreement, as it may be amended or otherwise modified. A-24 Ultimate Parent - ACP Holding Company, a Delaware corporation. Unused Line Fee - as defined in Section 2.5 of the Agreement. Voting Stock - Securities of any class or classes of a corporation, limited partnership or limited liability company or any other entity the holders of which are ordinarily, in the absence of contingencies, entitled to vote with respect to the election of corporate directors (or Persons performing similar functions). Other Terms. All other terms contained in the Agreement shall have, when the context so indicates, the meanings provided for by the UCC to the extent the same are used or defined therein. Certain Matters of Construction. The terms "herein", "hereof' and "hereunder" and other words of similar import refer to the Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. The section titles, table of contents and list of exhibits appear as a matter of convenience only and shall not affect the interpretation of the Agreement. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. All references to any of the Loan Documents shall include any and all modifications thereto and any and all extensions or renewals thereof A-25 LIST OF EXHIBITS Exhibit 1.1 Form of Revolving Note Exhibit 1.3 Form of Term Note Exhibit 6.1.1 Business Locations Exhibit 7.1.1 Jurisdictions in which each Borrower and each of its Subsidiaries is Authorized to do Business Exhibit 7.1.4 Capital Structure of each Borrower and each of its Subsidiaries Exhibit 7.1.5 Names; Organization Exhibit 7.1.13 Surety Obligations Exhibit 7.1.15 Brokers' Fees Exhibit 7.1.16 Patents, Trademarks, Copyrights and Licenses Exhibit 7.1.17 Governmental Consents Exhibit 7.1.18 Compliance with Laws Exhibit 7.1.19 Contracts Restricting Right to Incur Debts Exhibit 7.1.20 Litigation Exhibit 7.1.22 Capitalized and Operating Leases Exhibit 7.1.23 Pension Plans Exhibit 7.1.25 Labor Relations Exhibit 8.1.3 Form of Compliance Certificate Exhibit 8.1.4 Form of Borrowing Base Certificate Exhibit 8.2.3 Existing Indebtedness Exhibit 8.2.4 Affiliate Transactions Exhibit 8.2.5 Permitted Liens Exhibit 8.2.12 Permitted Investments Exhibit 8.3 Financial Covenants Exhibit A-1 Form of Assignment and Acceptance Agreement List of Exhibits and Schedules EXHIBIT 1.1 FORM OF REVOLVING NOTE List of Exhibits and Schedules SECURED PROMISSORY NOTE REVOLVING CREDIT LOAN $ October 8, 2003 ----------- Chicago, Illinois FOR VALUE RECEIVED, the undersigned (hereinafter "Borrowers"), hereby jointly and severally promise to pay to the order of _________________________ (hereinafter "Lender"), in such coin or currency of the United States which shall be legal tender in payment of all debts and dues, public and private, at the time of payment, the principal sum of ____________ Million and 00/100 Dollars ($____________________) or such other amount of Revolving Credit Loans advanced by Lender and outstanding under the "Loan Agreement" (defined below), together with interest from and after the date hereof at the rate from time to time applicable as provided in Section 2.1 of the Loan Agreement. This Secured Promissory Note Revolving Credit Loan (the "Note") is issued pursuant to that certain Loan and Security Agreement by and among Borrowers, Fleet Capital Corporation, as Agent for itself and the other Lenders, Fleet Securities, Inc., as Arranger, the Co-Documentation Agents party thereto, and the Lenders, dated the date hereof (hereinafter, as amended from time to time, the "Loan Agreement"), and is entitled to all of the benefits and security of the Loan Agreement. All of the terms, covenants and conditions of the Loan Agreement and the other Loan Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms used herein, unless otherwise specifically defined in this Note, shall have the meanings ascribed to them in the Loan Agreement. All interest shall be computed in the manner provided in Section 2 of the Loan Agreement. The principal amount evidenced by this Note may be repaid and reborrowed in accordance with the terms and conditions of the Loan Agreement. The principal amount and accrued interest of this Note shall be due and payable on the dates and in the manner set forth in the Loan Agreement. The entire remaining principal amount then outstanding, together with accrued interest and any and all other amounts due hereunder, shall be due and payable on October 8, 2008. Notwithstanding the foregoing, the entire unpaid principal balance and accrued interest on this Note shall be due and payable immediately upon any termination of the Loan Agreement pursuant to Section 4 thereof. Upon the occurrence and during the continuance of an Event of Default, Lender shall have all of the rights and remedies set forth in Section 10 of the Loan Agreement. Time is of the essence of this Note. To the fullest extent permitted by applicable law, each Borrower, for itself and its legal representatives, successors and assigns, expressly waives presentment, demand, protest, notice of dishonor, notice of nonpayment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, diligence in collection, and the benefit of any exemption or insolvency laws. Wherever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note shall be prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or remaining provisions of this Note. No delay or failure on the part of Lender or Agent in the exercise of any right or remedy hereunder or under the Loan Agreement shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise by Lender or Agent of any right or remedy preclude any other right or remedy. Each Borrower agrees that, without releasing or impairing such Borrower's liability hereunder, Lender or Agent may at any time release, surrender, substitute or exchange any collateral securing this Note and may at any time release any party primarily or secondarily liable for the indebtedness evidenced by this Note. This Note shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Illinois without regard to any principles of conflicts of law. -2- IN WITNESS WHEREOF, each Borrower has caused this Note to be duly executed and delivered on the date first above written. NEENAH FOUNDRY COMPANY By ------------------------------------- Its ------------------------------------ DEETER FOUNDRY, INC. By ------------------------------------- Its ------------------------------------ MERCER FORGE CORPORATION By ------------------------------------- Its ------------------------------------ DALTON CORPORATION By ------------------------------------- Its ------------------------------------ DALTON CORPORATION, STRYKER MACHINING FACILITY CO. By ------------------------------------- Its ------------------------------------ -3- DALTON CORPORATION, WARSAW MANUFACTURING FACILITY By ------------------------------------- Its ------------------------------------ ADVANCED CAST PRODUCTS, INC. By ------------------------------------- Its ------------------------------------ GREGG INDUSTRIES, INC. By ------------------------------------- Its ------------------------------------ -4- EXHIBIT 1.3 FORM OF TERM NOTE Exhibit 7.1.25 - Page 1 SECURED PROMISSORY NOTE TERM LOAN $ October 8, 2003 ----------- Chicago, Illinois FOR VALUE RECEIVED, the undersigned (hereinafter "Borrower"), hereby promises to pay to the order of _____________________ (hereinafter, "Lender"), in such coin or currency of the United States which shall be legal tender in payment of all debts and dues, public and private, at the time of payment, the principal sum of _________________________ Million and 00/100 Dollars ($___________________), together with interest from and after the date hereof at the rate from time to time applicable as provided in Section 2.1 of the Loan Agreement. This Secured Promissory Note Term Loan (this "Note") is issued pursuant to, that certain Loan and Security Agreement among Borrower, Fleet Capital Corporation, as Agent for itself and the other Lenders, Fleet Securities, Inc., as Arranger, the Co-Documentation Agents party thereto, and the Lenders from time to time party thereto, of even date herewith (hereinafter, as amended from time to time, the "Loan Agreement"), and is entitled to all of the benefits and security of the Loan Agreement. All of the terms, covenants and conditions of the Loan Agreement and the Loan Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms used herein, unless otherwise specifically defined in this Note, shall have the meanings ascribed to them in the Loan Agreement. All interest shall be computed in the manner provided in Section 2 of the Loan Agreement. The principal amount and accrued interest of this Note shall be due and payable on the dates and in the manner set forth in the Loan Agreement: The entire remaining principal amount then outstanding, together with accrued interest and any and all other amounts due hereunder, shall be due and payable on October 8, 2008. Notwithstanding the foregoing, the entire unpaid principal balance and accrued interest on this Note shall be due and payable immediately upon any termination of the Loan Agreement pursuant to Section 4 thereof This Note shall also be subject to mandatory and optional prepayment in accordance with the provisions of Section 3.3 of the Loan Agreement. Upon the occurrence and during the continuance of an Event of Default, Lender shall have all of the rights and remedies set forth in Section 10 of the Loan Agreement. Time is of the essence of this Note. To the fullest extent permitted by applicable law, Borrower, for itself and its legal representatives, successors and assigns, expressly waives presentment, demand, protest, notice of dishonor, notice of non-payment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, diligence in collection, and the benefit of any exemption or insolvency laws. Wherever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note shall be prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or remaining provisions of this Note. No delay or failure on the part of Lender or Agent in the exercise of any right or remedy hereunder or under the Loan Agreement shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise by Lender or Agent of any right or remedy preclude any other right or remedy. Lender or Agent, at its option, may enforce its rights against any collateral securing this Note without enforcing its rights against Borrower, any guarantor of the indebtedness evidenced hereby or any other property or indebtedness due or to become due to Borrowers. Borrower agrees that, without releasing or impairing Borrower's liability hereunder, Lender or Agent may at any time release, surrender, substitute or exchange any collateral securing this Note and may at any time release any party primarily or secondarily liable for the indebtedness evidenced by this Note. This Note shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Illinois without regard to any principles of conflicts of law. -2- IN WITNESS WHEREOF, each Borrower has caused this Note to be duly executed and delivered on the date first above written. NEENAH FOUNDRY COMPANY By ------------------------------------- Its ------------------------------------ DEETER FOUNDRY, INC. By ------------------------------------- Its ------------------------------------ MERCER FORGE CORPORATION By ------------------------------------- Its ------------------------------------ DALTON CORPORATION By ------------------------------------- Its ------------------------------------ DALTON CORPORATION, STRYKER MACHINING FACILITY CO. By ------------------------------------- Its ------------------------------------ -3- DALTON CORPORATION, WARSAW MANUFACTURING FACILITY By ------------------------------------- Its ------------------------------------ ADVANCED CAST PRODUCTS, INC. By ------------------------------------- Its ------------------------------------ GREGG INDUSTRIES, INC. By ------------------------------------- Its ------------------------------------ -4- EXHIBIT 7.1.4 CAPITAL STRUCTURE 1. The classes and the number of authorized and issued Securities of each Borrower and each of its Subsidiaries and the record owner of such Securities are as follows: Borrowers:
- ---------------------------------------------------------------------------------------------------------------------- Number of Number of Securities Securities Class of Issued and Authorized but Record Entity Securities Outstanding Unissued Owners - ---------------------------------------------------------------------------------------------------------------------- A & M Specialties, Inc. Common 1,000 shares 99,000 shares Mercer Voting Stock issued of Common Forge Voting Stock Corporation - ---------------------------------------------------------------------------------------------------------------------- Advanced Cast Common Stock 100 shares of None Neenah Products, Inc. Common Stock Foundry issued Company - ---------------------------------------------------------------------------------------------------------------------- Dalton Corporation Common Stock 2,371,342.8776 6,378,657.1224 Neenah shares of shares of Foundry Common Stock Common Stock Company issued - ---------------------------------------------------------------------------------------------------------------------- Dalton Corporation, Common Stock 100 shares of 9,900 shares of Dalton Kendallville Common Stock Common Stock Corporation Manufacturing Facility issued - ---------------------------------------------------------------------------------------------------------------------- Dalton Corporation, Common Stock 1,000 shares of None Dalton Stryker Machining Common Stock Corporation Facility Co. issued - ---------------------------------------------------------------------------------------------------------------------- Dalton Corporation, Common Stock 100 shares of 900 shares of Dalton Warsaw Manufacturing Common Stock Common of Corporation Facility issued Stock - ---------------------------------------------------------------------------------------------------------------------- Deeter Foundry, Inc. Common Stock 1,000 shares of 99,000 shares Neenah Common Stock of Common Foundry issued Stock Company - ---------------------------------------------------------------------------------------------------------------------- Gregg Industries, Inc. Common Stock 1,049,742.5 950,257.5 Neenah shares of shares of Foundry Common Stock Common Stock Company issued - ---------------------------------------------------------------------------------------------------------------------- Mercer Forge Common Stock 625 shares of 375 shares of Neenah Corporation Common Stock Common Stock Foundry issued Company - ----------------------------------------------------------------------------------------------------------------------
Exhibit 7.1.4 - Page 1
- ---------------------------------------------------------------------------------------------------------------------- Number of Number of Securities Securities Class of Issued and Authorized but Record Entity Securities Outstanding Unissued Owners - ---------------------------------------------------------------------------------------------------------------------- Neenah Foundry Class A 1,000 shares of None NFC Company Common Stock Class A Castings, Common Stock Inc. issued - ---------------------------------------------------------------------------------------------------------------------- 100 shares of Neenah Neenah Transport, Inc. Common Stock Common Stock 460 shares of Foundry issued Common Stock Company - ----------------------------------------------------------------------------------------------------------------------
Subsidiaries:
- ---------------------------------------------------------------------------------------------------------------------- Number of Number of Securities Securities Class of Issued and Authorized but Record Entity Securities Outstanding Unissued Owners - ---------------------------------------------------------------------------------------------------------------------- Belcher Corporation Common Stock 100 shares of None Advanced Common Stock Cast issued Products, Inc. - ---------------------------------------------------------------------------------------------------------------------- Cast Alloys, Inc. Common Stock 1,000 shares of 2,449,000 Neenah Common Stock shares of Foundry issued Common Stock Company - ---------------------------------------------------------------------------------------------------------------------- Dalton Corporation, Common Stock 100 shares of 750 shares of Dalton Ashland Common Stock Common Stock Corporation Manufacturing Facility issued - ---------------------------------------------------------------------------------------------------------------------- Peerless Corporation Common Stock 100 shares of 650 shares of Advanced Common Stock Common Stock Cast issued Products, Inc. - ----------------------------------------------------------------------------------------------------------------------
2. The number, nature and holder of all other outstanding Securities of each Borrower and each of its Subsidiaries are as follows: None. Exhibit 7.1.4 - Page 2 3. The correct name and jurisdiction of incorporation or organization of each Subsidiary of each Borrower and the percentage of its issued and outstanding Voting Stock owned by such Borrower are as follows:
- ---------------------------------------------------------------------------------------------------------------------- Jurisdiction of Incorporation / Percentage of Voting Name Organization Stock Owned by a Borrower - ---------------------------------------------------------------------------------------------------------------------- Belcher Corporation Delaware 100% owned by Advanced Cast Products, Inc. - ---------------------------------------------------------------------------------------------------------------------- Cast Alloys, Inc. California 100% owned by Neenah Foundry Company - ---------------------------------------------------------------------------------------------------------------------- Dalton Corporation, Ashland Ohio 100% owned by Dalton Manufacturing Facility Corporation - ---------------------------------------------------------------------------------------------------------------------- Peerless Corporation Ohio 100% owned by Advanced Cast Products, Inc. - ----------------------------------------------------------------------------------------------------------------------
4. The name of each Borrower's and each of its Subsidiaries' corporate or joint venture relationships and the nature of the relationships are as follows: None. 5. The agreements or instruments binding upon the partners, members or shareholders of each Borrower and each of its Subsidiaries and relating to the ownership of its Securities, are as follows: None. Exhibit 7.1.4 - Page 3 EXHIBIT 7.1.5 NAMES; ORGANIZATION 1. Each Borrower's exact legal name and state of incorporation are:
- ------------------------------------------------------------------------------------------------------------- Borrowers: State of Incorporation: - ------------------------------------------------------------------------------------------------------------- A & M Specialties, Inc. Pennsylvania - ------------------------------------------------------------------------------------------------------------- Advanced Cast Products, Inc. Delaware - ------------------------------------------------------------------------------------------------------------- Dalton Corporation Indiana - ------------------------------------------------------------------------------------------------------------- Dalton Corporation, Kendallville Manufacturing Facility Indiana - ------------------------------------------------------------------------------------------------------------- Dalton Corporation, Stryker Machining Facility Co. Ohio - ------------------------------------------------------------------------------------------------------------- Dalton Corporation, Warsaw Manufacturing Facility Indiana - ------------------------------------------------------------------------------------------------------------- Deeter Foundry, Inc. Nebraska - ------------------------------------------------------------------------------------------------------------- Gregg Industries, Inc. California - ------------------------------------------------------------------------------------------------------------- Mercer Forge Corporation Delaware - ------------------------------------------------------------------------------------------------------------- Neenah Foundry Company Wisconsin - ------------------------------------------------------------------------------------------------------------- Neenah Transport, Inc. Wisconsin - -------------------------------------------------------------------------------------------------------------
2. Other than set forth above, in the conduct of its business, the following Borrowers have used the following legal, fictitious or trade names within the last five years: Advanced Cast Products, Inc. has used the name Meadville Cast Products. 3. The exact legal name and state of incorporation of each Subsidiary of each Borrower are:
- ------------------------------------------------------------------------------------------------------------- Subsidiaries: State of Incorporation: - ------------------------------------------------------------------------------------------------------------- Belcher Corporation Delaware - ------------------------------------------------------------------------------------------------------------- Cast Alloys, Inc. California - ------------------------------------------------------------------------------------------------------------- Dalton Corporation, Ashland Manufacturing Facility Ohio - ------------------------------------------------------------------------------------------------------------- Peerless Corporation Ohio - -------------------------------------------------------------------------------------------------------------
Exhibit 7.1.5 - Page 1 4. Other than as set forth above, in the conduct of its business, the following Subsidiaries of each Borrower have used the following legal, fictitious or trade names within the last five years: Cast Alloys, Inc. was formerly known as Niemin Porter & Co. 5. Each Borrower's Organizational LD. Number is:
- ------------------------------------------------------------------------------------------------------------ Borrowers: Organizational ID Number: - ------------------------------------------------------------------------------------------------------------ A & M Specialties, Inc. 002575141 - ------------------------------------------------------------------------------------------------------------ Advanced Cast Products, Inc. 2202982 - ------------------------------------------------------------------------------------------------------------ Dalton Corporation 194258-113 - ------------------------------------------------------------------------------------------------------------ Dalton Corporation, Kendallville Manufacturing Facility 198701-286 - ------------------------------------------------------------------------------------------------------------ Dalton Corporation, Stryker Machining Facility Co. 738408 - ------------------------------------------------------------------------------------------------------------ Dalton Corporation, Warsaw Manufacturing Facility 1997010259 - ------------------------------------------------------------------------------------------------------------ Deeter Foundry, Inc. 0034729 - ------------------------------------------------------------------------------------------------------------ Gregg Industries, Inc. CO202437 - ------------------------------------------------------------------------------------------------------------ Mercer Forge Corporation 2074220 - ------------------------------------------------------------------------------------------------------------ Neenah Foundry Company N020480 - ------------------------------------------------------------------------------------------------------------ Neenah Transport, Inc. N08621 - ------------------------------------------------------------------------------------------------------------
6. The Organizational I.D. Number of each Subsidiary of each Borrower is:
- ----------------------------------------------------------------------------------------------------------- Subsidiaries: Organizational ID Number: - ----------------------------------------------------------------------------------------------------------- Belcher Corporation 2204798 - ----------------------------------------------------------------------------------------------------------- Cast Alloys, Inc. C1321928 - ----------------------------------------------------------------------------------------------------------- Dalton Corporation, Ashland Manufacturing Facility 907962 - ----------------------------------------------------------------------------------------------------------- Peerless Corporation 755551 - -----------------------------------------------------------------------------------------------------------
7. Each Borrower's Type of Organization is:
- ----------------------------------------------------------------------------------------------------------- Borrowers: Type of Organization: - ----------------------------------------------------------------------------------------------------------- A & M Specialties, Inc. Corporation - -----------------------------------------------------------------------------------------------------------
Exhibit 7.1.5 - Page 2
- ----------------------------------------------------------------------------------------------------------- Borrowers: Type of Organization: - ----------------------------------------------------------------------------------------------------------- Advanced Cast Products, Inc. Corporation - ----------------------------------------------------------------------------------------------------------- Dalton Corporation Corporation - ----------------------------------------------------------------------------------------------------------- Dalton Corporation, Kendallville Manufacturing Facility Corporation - ----------------------------------------------------------------------------------------------------------- Dalton Corporation, Stryker Machining Facility Co. Corporation - ----------------------------------------------------------------------------------------------------------- Dalton Corporation, Warsaw Manufacturing Facility Corporation - ----------------------------------------------------------------------------------------------------------- Deeter Foundry, Inc. Corporation - ----------------------------------------------------------------------------------------------------------- Gregg Industries, Inc. Corporation - ----------------------------------------------------------------------------------------------------------- Mercer Forge Corporation Corporation - ----------------------------------------------------------------------------------------------------------- Neenah Foundry Company Corporation - ----------------------------------------------------------------------------------------------------------- Neenah Transport, Inc. Corporation - -----------------------------------------------------------------------------------------------------------
8. The Type of Organization of each Subsidiary of each Borrower is:
- ----------------------------------------------------------------------------------------------------------- Subsidiaries: Type of Organization: - ----------------------------------------------------------------------------------------------------------- Belcher Corporation Corporation - ----------------------------------------------------------------------------------------------------------- Cast Alloys, Inc. Corporation - ----------------------------------------------------------------------------------------------------------- Dalton Corporation, Ashland Manufacturing Facility Corporation - ----------------------------------------------------------------------------------------------------------- Peerless Corporation Corporation - -----------------------------------------------------------------------------------------------------------
9. Other than has been disclosed through filings with the Securities and Exchange Commission, each of the following Borrowers have been the surviving entity of a merger or consolidation or has acquired substantially all the assets of any person within the last five years: None. 10. Other than has been disclosed through filings with the Securities and Exchange Commission, each of the following Subsidiaries of any Borrower has been the surviving entity of a merger or consolidation or has it acquired substantially all the assets of any person within the last five years: None. Exhibit 7.1.5 - Page 3 EXHIBIT 8.1.3 COMPLIANCE CERTIFICATE [______________________________] _________________, ____ Fleet Capital Corporation, as Agent One South Wacker Drive Suite 1400 Chicago, Illinois 60606 The undersigned, the chief financial officer of NFC Castings, Inc. ("Parent"), gives this certificate on behalf of Ultimate Parent to Fleet Capital Corporation, in its capacity as Agent ("Agent") in accordance with the requirements of subsection 8.1.3 of that certain Loan and Security Agreement dated as of October __, 2003 among Neenah Foundry Company, as a Borrower, the Subsidiaries of Neenah Foundry Company party thereto as Borrowers, General Electric Capital Corporation, Congress Financing Corporation (Central), Agent, Fleet Securities, Inc., as Arranger, and the Lenders party thereto ("Loan Agreement"). Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement. 1. Based upon my review of the balance sheets and statements of income of Parent, Borrowers and Borrowers' Subsidiaries for the [____________] period ending _________________, ___, copies of which are attached hereto, the undersigned hereby certifies on behalf of Ultimate Parent that: (i) Capital Expenditures during the period and for the fiscal year to date total $ ________ and $ _________, respectively. (ii) The Fixed Charge Coverage Ratio as of the last day of the period is _________: 1.00. 2. No Default exists on the date hereof, other than _____________________ ___________________________________________________ [IF NONE, SO STATE]; and Exhibit 8.1.3 - Page 1 3. No Event of Default exists on the date hereof, other than ____________ ___________________________________________________ [IF NONE, SO STATE]. Very truly yours, NFC CASTINGS, INC. -------------------------------------- Chief Financial Officer Exhibit 8.1.3 - Page 1 EXHIBIT 8.1.4 FORM OF BORROWING BASE CERTIFICATE Exhibit 8.1.4 - Page 1 EXHIBIT 8.3 FINANCIAL COVENANTS DEFINITIONS EBITDA - with respect to any period, the sum of net earnings (or loss) before interest expense, income taxes, depreciation and amortization for such period (but excluding any extraordinary gains for such period), all as determined for Parent, Borrowers and the Borrowers' Subsidiaries on a Consolidated basis and in accordance with GAAP; plus amounts deducted in determining net earnings (or loss) in respect of: (a) the fees, costs and expenses actually incurred in connection with the consummation of the Plan of Reorganization, and the closing of the Agreement and the transactions contemplated thereby, in the actual amounts and during the actual fiscal periods incurred, (b) non-recurring, non-cash items and (c) one-time cash expenses relating to the closing of the facility of Dalton Corporation, Kendallville Manufacturing Facility located at 200 West Ohio Street, Kendallville, Indiana of up to a maximum aggregate amount of $4,000,000; and minus the amount of any cash items not otherwise deducted in determining net income (or loss) to the extent that such items were previously added back to EBITDA as non-recurring, non-cash items on a prior measurement date. Notwithstanding the foregoing, it is acknowledged and agreed that (i) for purposes of the December 31, 2003 measurement date, EBITDA for the portion of the measurement period beginning on January 1, 2003 and ending on September 30, 2003 shall be deemed to be $41,981,000, (ii) for purposes of the March 31, 2004 measurement date, EBITDA for the portion of the measurement period beginning on April 1, 2003 and ending on September 30, 2003 shall be deemed to be $33,928,000 and (iii) for purposes of the June 30, 2004 measurement date, EBITDA for the portion of the measurement period beginning on July 1, 2003 and ending on September 30, 2003 shall be deemed to be $17,765,000. FIXED CHARGE COVERAGE RATIO - with respect to any period, the ratio of (i) EBITDA for such period minus the sum of (a) income taxes payable in cash during such period plus (b) non-financed Capital Expenditures (other than MACT Capital Expenditures) during such period plus (c) the positive difference, if any, between (1) non-financed MACT Capital Expenditures during such period minus (2) the aggregate amount of the quarterly accretions that have occurred during such period pursuant to the third sentence of subsection 1.1.1 of the Loan Agreement in respect of the MACT Reserve Amount plus (d) Distributions made in cash pursuant to subsection 8.2.7(iii) of the Loan Agreement during such period, to (ii) Fixed Charges for such period, all as determined for Parent, Borrowers and the Borrowers' Subsidiaries on a Consolidated basis and in accordance with GAAP. FIXED CHARGES - with respect to any period, the sum of: (i) scheduled principal payments required to be made during such period in respect to Indebtedness (including the principal portion of Capitalized Lease Obligations), plus (ii) Interest Expense for such period, all as determined for Parent, Borrowers and the Borrowers' Subsidiaries on a Consolidated basis and in accordance with GAAP, plus (iii) the amount of any repayments, prepayments, redemptions or repurchases with respect to principal made during such period in respect of the Exhibit 8.3 - Page 1 Subordinated Bonds pursuant to subsection 8.2.6(i)( d) of the Loan Agreement Notwithstanding the foregoing, it is acknowledged and agreed that for purposes of each of the December 31, 2003, March 31, 2004, June 30, 2004 and September 30, 2004 measurement dates, scheduled principal payments in respect of the Term Loan shall be deemed to be $3,155,000 for each of the twelve (12) month periods ending on such dates. INTEREST EXPENSE - with respect to any period, (a) interest expense paid or accrued to be paid for such period, including without limitation the interest portion of Capitalized Lease Obligations, plus the Letter of Credit and LC Guaranty fees owing for such period (but excluding Deferrable Interest for such period and excluding non-cash amortization of deferred financing costs and original issue discount), all as determined for Parent, Borrowers and Borrowers' Subsidiaries on a Consolidated basis and in accordance with GAAP plus (b) Deferrable Interest actually paid in cash during such period. Notwithstanding the foregoing, it is acknowledged and agreed that (i) for purposes of the December 31, 2003 measurement date, Interest Expense for the portion of the measurement period beginning on January 1, 2003 and ending on September 30, 2003 shall be deemed to be $16,832,000, (ii) for purposes of the March 31, 2004 measurement date, Interest Expense for the portion of the measurement period beginning on April 1, 2003 and ending on September 30, 2003 shall be deemed to be $11,222,000 and (iii) for purposes of the June 30, 2004 measurement date, Interest Expense for the portion of the measurement period beginning on July 1, 2003 and ending on September 30, 2003 shall be deemed to be $5,611,000. Exhibit 8.3 - Page 2 COVENANT FIXED CHARGE COVERAGE RATIO. Borrowers shall not permit the Fixed Charge Coverage Ratio for any period set forth below to be less than the ratio set forth below opposite such period (in each case measured as of the last day of such period):
PERIOD RATIO ------ ----- Twelve (12) month period ending on December 31, 2003 1.10 to 1.0 Twelve (12) month period ending on March 31,2004 1.10 to 1.0 Twelve (12) month period ending on June 30, 2004 1.10 to 1.0 Twelve (12) month period ending on September 30, 2004 1.10 to 1.0 Twelve (12) month period ending on December 31, 2004 and each 1.15 to 1.0 March 31, June 30, September 30 and December 31 thereafter
Exhibit 8.3 - Page 3 EXHIBIT A-1 FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT Exhibit A-1 - Page 1 EXHIBIT A-1 ASSIGNMENT AND ACCEPTANCE ASSIGNMENT AND ACCEPTANCE (the "Assignment and Acceptance") dated as of ___________, 2003 among _____________________ ("Assignor"), ___________________ ("Assignee"), and FLEET CAPITAL CORPORATION, as agent (the "Agent") [AND] FLEET SECURITIES, INC., as Arranger (the "Arranger") [AND NEENAH FOUNDRY COMPANY AND CERTAIN OF ITS SUBSIDIARIES (COLLECTIVELY, "BORROWERS")] under the Loan Agreement referred to below. WITNESSETH: WHEREAS, Assignor is a party to a Loan and Security Agreement dated September __' 2003 (as the same may be amended, restated, modified or supplemented from time to time, the "Loan Agreement"; unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Loan Agreement), among [BORROWERS/NEENAH FOUNDRY COMPANY AND CERTAIN OF ITS SUBSIDIARIES PARTY THERETO ("BORROWERS")], the Persons (including Assignor) identified as lenders thereto (collectively, the "Lenders" and each individually, a "Lender"), the Agent, the Arranger, a certain Syndication Agent and certain Documentation Agents; WHEREAS, from and after the Assignment Effective Date (as defined below), Assignee shall be a "Lender" for all purposes under the Loan Agreement and shall benefit from all of the rights and obligations of a "Lender" under the Loan Agreement and under any mortgages and other security documents in favor of the Agent and the Lenders in connection therewith, whether now existing or hereafter executed and delivered by any Borrower or any other Person (the Loan Agreement, together with such mortgages and other security agreements, in each case, as the same may be amended from time to time, the "Security Documents"); WHEREAS, pursuant to the Loan Agreement, Assignor has made and may from time to time be required to make, Loans or other extensions of credit to or for the account of the Borrowers; WHEREAS, Assignor desires to assign to Assignee and Assignee desires to assume from Assignor the rights of Assignor under the Loan Agreement with respect to a portion of Assignor's Loan Commitment; and NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: 1. Assignment. Assignor hereby assigns to Assignee, without recourse, representation or warranty (other than expressly provided herein), that percentage listed on Annex I hereto as the "Assignee's Share" ("Assignee's Share") of all of Assignor's rights, title and interest arising under the Loan Agreement and the other Loan Documents relating to Assignor's Loan Commitment, including, without limitation, all rights with respect to Assignee's Share of the Revolving Credit Loans heretofore made by, and the Term Loan owing to, Assignor and all rights with respect to Assignee's Share of all Letters of Credit and LC Guaranties (collectively, "LCs") heretofore issued under the Loan Agreement and in which Assignor has purchased a participating interest (in each case without giving effect to any assignments or participations thereof by Assignor). The dollar amount of Assignee's Share of Assignor's Loan Commitment is listed on Annex I hereto, together with interest rates payable on Assignee's Share of the Loans and other fees (if any) payable to Assignee (collectively, the "Fees"). The respective Revolving Loan Percentages and the respective pro rata shares of the Term Loan of each of Assignor and Assignee from and after the Assignment Effective Date are listed on Annex I hereto. 2. Assumption. Assignee hereby assumes from Assignor all of Assignor's obligations arising under the Loan Agreement and the other Loan Documents relating to Assignee's Share of Assignor's Loan Commitment, the outstanding Revolving Credit Loans, LCs and the Term Loan. It is the intent of the parties hereto that Assignor shall be released from all of its obligations under the Loan Agreement and the other Loan Documents relating to Assignee's Share of Assignor's Loan Commitment, Revolving Credit Loans, LCs and the Term Loan pursuant to the terms of the Loan Agreement. 3. Payment of Interest and Fees to Assignee. (a) Assignor hereby advises the Agent of the assignment of Assignee's Share of Assignor's Loan Commitment and the outstanding Loans and LCs and directs the Agent to pay Assignee (i) on any payment of interest on any Loans paid by, or on behalf of, any Borrower pursuant to the Loan Agreement and attributable to Assignee's Share of such Loans those rates of interest, as applicable, specified in Annex I hereto, and (ii) any fees paid by, or on behalf, of any Borrower and attributable to Assignee's Share of the Loan Commitment, Loans and LCs which are Fees specified in Annex I hereto. To the extent the amount of any interest or fees paid by, or on behalf of, any Borrower under the Loan Agreement in respect of the Assignee's Share is greater than such amount payable to Assignee under this Assignment and Acceptance, Assignee hereby directs the Agent to pay the difference directly to Assignor as an administrative fee. Notwithstanding anything to the contrary contained in this Assignment and Acceptance, the Agent shall have no liability or obligation to pay any amounts to Assignee except as provided in the Loan Agreement and subject to the Agent's receipt of monies paid by, or on behalf of, the Borrowers for the account of Assignee. (b) If the Loan Agreement shall be amended after the date hereof so as to raise or reduce the rate or rates of interest payable on any Loan during any period or the rate at which the Fees are payable or if an Event of Default shall raise the rate of interest payable on any Loan or the rate at which any Fee is payable for any period, then the rate or rates at which -2- interest or Fees, as the case may be, shall be distributable to Assignee hereunder for such period shall be raised or reduced to the same extent. (c) Notwithstanding anything to the contrary contained in this Assignment and Acceptance, if and when Assignor receives or collects any payment of interest on any Loan attributable to Assignee's Share or any payment of Fees attributable to Assignee's Share which, in any such case, are required to be paid to Assignee pursuant to clause (a) above, Assignor shall distribute to Assignee such payments but only to the extent of such interest or Fees accrued after the Assignment Effective Date. (d) Notwithstanding anything to the contrary contained in this Assignment and Acceptance, if and when Assignee receives or collects any payment of interest on any Loan or any payment of Fees which in any such case are required to be paid to Assignor pursuant to clause (a) above, Assignee shall distribute to Assignor such payment. (e) The Agent by its execution hereof, consents to the assignments described above and agrees to make payments in respect of interest and Fees as described in said clause (a) above. The Arranger by its execution hereof, consent to the assignments described above. 4. Payments on Assignment Effective Date. In consideration of the assignment by Assignor to Assignee of Assignee's Share of Assignor's Loan Commitment, Loans and LCs as set forth above, (a) Assignee agrees to pay to Assignor on or prior to the Assignment Effective Date an amount specified by Assignor in writing on or prior to the Assignment Effective Date which represents Assignee's Share of the principal amount of Loans made by Assignor pursuant to the Loan Agreement and outstanding on the Assignment Effective Date and (b) Assignor agrees to pay to Assignee the Closing Fee (if any) specified in Annex I hereto on the date specified in Annex I hereto. 5. Effectiveness. (a) This Assignment and Acceptance shall become effective as of the date listed on Annex I as the Assignment Effective Date (the "Assignment Effective Date") upon (i) execution of this Assignment and Acceptance by Assignor, Assignee, the Agent, the Arranger [AND THE BORROWERS] (whether the same or different copies), (ii) payment by Assignee to Assignor of the amount described in clause (a) of Section 4 above and (iii) payment by the Assignor to the Agent of the $3,500 processing and recordation fee specified in subsection 11.9.1 of the Loan Agreement. (b) It is agreed that all interest on any Loans attributable to Assignee's Share and all Fees attributable to Assignee's Share, which, in each case, accrues on and after the Assignment Effective Date shall be paid directly to Assignee in the manner set forth in Section 3 above. -3- 6. Representations and Warranties. (a) Each of Assignor and Assignee represents and warrants to the other party as follows: (1) it has full power and authority and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to fulfill its obligations under, and to consummate the transactions contemplated by, this Assignment and Acceptance; (2) the making and performance by it of this Assignment and Acceptance and all documents required to be executed and delivered by it hereunder do not and will not violate any law or regulation of the jurisdiction of its incorporation or organization or any other law or regulation applicable to it; (3) this Assignment and Acceptance has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms; and (4) all approvals, authorizations, or other actions by, or filing with, any governmental authority necessary for the validity or enforceability of its obligations under this Assignment and Acceptance have been obtained. (b) Assignor represents and warrants to Assignee that Assignee's Share of Assignor's Loan Commitment, Loans and LCs being assigned hereunder are subject to no liens or security interests created by Assignor. 7. Miscellaneous. (a) Assignor shall not be responsible to Assignee for the execution (by any party other than Assignor), effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of the Loan Agreement, the other Loan Documents or any of the agreements, documents or instruments executed and/or delivered in connection therewith (collectively, the "Financing Documents") or for any representations, warranties, recitals or statements made therein or in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents made or furnished or made available by Assignor to Assignee or by or on behalf of any Borrower or any other person obligated under the Financing Documents (collectively, the "Credit Parties") to Assignor or Assignee in connection with the Financing Documents and the transactions contemplated thereby. Assignor shall not be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or LCs as to the existence or possible existence of any default (matured or unmatured) under the Loan Documents. -4- (b) Assignee represents and warrants that it has made its own independent investigation of the financial condition and affairs of the Credit Parties in connection with the making of the Loans and the assignment of Assignee's Share of Assignor's Loan Commitment, Loans and LCs to Assignee hereunder and has made and shall continue to make its own appraisal of the creditworthiness of the Credit Parties. Assignor shall have no duty or responsibility either initially or on a continuing basis to make any such investigation or any such appraisal on behalf of Assignee or to provide Assignee with any credit or other information with respect thereto, whether coming into its possession before the making of Loans or at any time or times thereafter and shall further have no responsibility with respect to the accuracy of, or the completeness of, any information provided to Assignee, whether by Assignor or by or on behalf of any Credit Party. (c) Assignee represents to Assignor, Agent and Borrower that it is either (i) organized under the laws of the United States or a state thereof (a "US Bank") or (ii) if Assignee is not a US Bank, under applicable law and treaties, no withholding or other Taxes will be required to be withheld by Agent, Borrower or Assignor with respect to any payments to be made to Assignee in respect of the interests transferred hereunder. If Assignee is not a US Bank, Assignee agrees to furnish to each of Assignor, Agent and Borrower (A) either United States Internal Revenue Service Form W-8BEN or Form W-8ECI (wherein Assignee claims entitlement to complete exemption from the United States federal withholding tax on all interest payments hereunder) and (B) a new Form W-8BEN or Form W-8ECI upon the obsolescence of any previously delivered form and comparable statements in accordance with applicable United States laws and regulations and amendments duly executed and completed by Assignee and to comply from time to time with all applicable United Stated laws and regulations with regard to such withholding tax exemption. (d) ANY DISPUTE AMONG AGENT, ASSIGNOR AND ASSIGNEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE STATE OF ILLINOIS. (e) No term or provision of this Assignment and Acceptance may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the parties to this Assignment and Acceptance. (f) This Assignment and Acceptance may be executed in one or more counterparts, each of which shall be an original but all of which, taken together, shall constitute one and the same instrument. (g) Assignor may at any time or from time to time grant to others assignments or participations in its Loan Commitment, Revolving Loans, LCs and the Term -5- Loan in accordance with the terms of the Loan Agreement, but not in the portions thereof assigned to Assignee pursuant to this Assignment and Acceptance. (h) All payments hereunder or in connection herewith shall, unless otherwise specified in Annex I hereto, be made in dollars and in immediately available funds, if payable to Assignor, to the account of Assignor at its office as designated in Annex I hereto, and if payable to Assignee, to the account of Assignee, as designated in Annex I hereto. The address of Assignee for notice purposes under the Loan Agreement shall be as set forth below its signature on the signature pages hereof. (i) This Assignment and Acceptance shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Neither of the parties hereto may assign or transfer any of its rights or obligations under this Assignment and Acceptance without the prior consent of the other party. The preceding sentence shall not limit the right of Assignee to assign all or part of Assignee's Share of Assignor's Loan Commitment and any outstanding Loans and LCs assigned under this Assignment and Acceptance in the manner contemplated by the Loan Agreement. (j) All representations and warranties made herein and indemnities provided for herein shall survive the consummation of the transactions contemplated hereby. -6- IN WITNESS WHEREOF, the parties hereto have executed this Assignment and Acceptance as the date first above written. Assignor: ------------------------------------ By --------------------------------- Title ------------------------------ Assignee: ------------------------------------ By --------------------------------- Title ------------------------------ Address for notices: ------------------------------------ ------------------------------------ Attention: -------------------------- Facsimile No.: ( ) - Acknowledged and consented to as of ____________, 20__ FLEET CAPITAL CORPORATION, as Agent By ------------------------------ Title --------------------------- Acknowledged and consented to as of , 20 FLEET SECURITIES, INC., as Arranger By ------------------------------ Title ---------------------------
-7- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 NEENAH FOUNDRY COMPANY BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DEETER FOUNDRY, INC. BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 MERCER FORGE CORPORATION BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION, STRYKER MACHINING FACILITY CO. BY ------------------------------
-8- TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION, WARSAW MANUFACTURING FACILITY BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 ADVANCED CAST PRODUCTS, INC. BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 GREGG INDUSTRIES, INC. BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 NEENAH TRANSPORT, INC. BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION, KENDALL VILLE MANUFACTURING
-9- FACILITY BY ------------------------------ TITLE ] --------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 A & M SPECIALTIES, INC. BY ------------------------------ TITLE ] ---------------------------
-10- Annex I to Assignment and Acceptance 1. Borrower: Neenah Foundry Company Deeter Foundry, Inc. Mercer Forge Corporation Dalton Corporation Dalton Corporation, Stryker Machining Facility Dalton Corporation, Warsaw Manufacturing Facility Advanced Cast Products, Inc. Gregg Industries, Inc. Neenah Transport, Inc. Dalton Corporation, Kendallville Manufacturing Facility A & M Specialties, Inc. 2. Date of Loan Agreement: October , 2003 3. Assignor: -------------------------------- 4. Assignee: -------------------------------- 5. Date of Assignment and Acceptance: , 20 ------------- -- 6. Assignment Effective Date: , 20 ---------------- -- 7. Assignee's Share: % of Assignor's Loan Commitment ----- 8. Amounts: a. Assignor's Loan Commitment $ ------------- b. Assignee's Share of Assignor's Loan Commitment % ------------- c. Assignee's Loan Commitment $ ------------- d. Revolving Loans made by Assignor to Borrower outstanding as of Assignment Effective Date $ ------------- e. Amount of Outstanding Revolving Loans Assigned to Assignee $ ------------- f. Assignor's Participation in LCs as of Assignment Effective Date $ ------------- g. Amount of Participation in LCs Assigned to Assignee $ ------------- h. Amount of Outstanding Term Loan $ -------------
i. Amount of Outstanding Term Loan Assigned to Assignee $ -------------
9. Percentages (from and after Assignment Effective Date): a. Assignor's Revolving Loan Percentage % ------------- b. Assignee's Revolving Loan Percentage % ------------- c. Assignor's Pro Rata Share of Term Loan % ------------- d. Assignee's Pro Rata Share of Term Loan % ------------- 10. Interest Rates: [PER SECTION 2 OF LOAN AGREEMENT] 11. Fees: a. Letter of Credit and LC Guaranty Fees [PER SECTION 2.4 OF LOAN AGREEMENT] b. Unused Line Fee [PER SECTION 2.5 OF LOAN AGREEMENT] 12. Closing Fee Payable by Assignor to Assignee: $ , payable on , 20
13. Payment Instructions: Assignor: ------------------------------------- ------------------------------------- ABA #: ------------------------------- Account #: --------------------------- Account Title: ----------------------- Reference: --------------------------- Assignee: ------------------------------------- ------------------------------------- ABA #: ------------------------------- Account #: --------------------------- Account Title: ----------------------- Reference: --------------------------- Assignee: Assignor: - --------------------------------------- ------------------------------------ By: By: ------------------------------------ --------------------------------- Title: Title: --------------------------------- ------------------------------ Agent: FLEET CAPITAL CORPORATION By ------------------------------------ Title --------------------------------- Arranger: FLEET SECURITIES, INC. By ------------------------------------ Title --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 NEENAH FOUNDRY COMPANY
BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DEETER FOUNDRY, INC. BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 MERCER FORGE CORPORATION BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION, STRYKER MACHINING FACILITY CO. BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION, WARSAW MANUFACTURING FACILITY
BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 ADVANCED CAST PRODUCTS, INC. BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 GREGG INDUSTRIES, INC. BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 NEENAH TRANSPORT, INC. BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20 DALTON CORPORATION, KENDALL VILLE MANUFACTURING FACILITY BY ------------------------------------ TITLE ] --------------------------------- [ACKNOWLEDGED AND CONSENTED TO AS OF , 20
A & M SPECIALTIES, INC. BY ------------------------------------ TITLE ] ---------------------------------
EX-10.4 32 y92210a1exv10w4.txt WARRANT REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.4 EXECUTION VERSION REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October 8, 2003, by and among ACP Holding Company, a Delaware corporation (the "Company"), and the Persons identified on Schedule I hereto (the "Initial Holders"). RECITALS WHEREAS, pursuant to the Company's Plan of Reorganization dated as of July 1, 2003 (the "Plan"), upon satisfaction of certain conditions, the Company will issue New Common Stock and New Warrants (both as defined below) to the Initial Holders in the amounts set forth on Schedule I hereto. WHEREAS, in order to induce the Initial Holders to consent to the Plan and enter into the Subscription Agreement, dated October 7, 2003, among the Initial Holders, the Company, Neenah Foundry Company and the Subsidiary Guarantors party thereto (the "Subscription Agreement"), the Company has agreed to grant registration rights to the Initial Holders as set forth herein. WHEREAS, this Agreement shall become effective upon the consummation of the Plan. NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Certain Definitions and General Interpretive Principles. In addition to the capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the following meanings when used in this Agreement: "Adverse Disclosure" means public disclosure of material non-public information, which disclosure in the good faith judgment of the board of directors of the Company (i) would be required to be made in any registration statement filed with the Commission by the Company so that such registration statement would not be materially misleading; (ii) would not be required to be made at such time but for the filing of such registration statement; and (iii) would adversely interfere with any previously announced business combination transaction involving the Company pursuant to which the Company would issue, in connection with such transaction, shares of Common Stock to some or all of the equity owners of the counter-party to such business combination transaction, or result in the premature disclosure of any pending financing, acquisition, corporate reorganization or any other corporate development involving the Company or any of its subsidiaries. "Allocation Percentage" has the meaning set forth in Section 2(e). "Commission" means the U.S. Securities and Exchange Commission and any agency succeeding to its functions. "Demand Registration" has the meaning set forth in Section 2(a). "Demand Suspension" has the meaning set forth in Section 2(c). "Holder" means an Initial Holder or a successor, assignee or transferee of an Initial Holder as contemplated by Section 10 hereof, in each case for so long as such Initial Holder, successor, assignee or transferee holds Registrable Securities. "Included Registrable Securities" has the meaning set forth in Section 3(a). "Indemnified Party" has the meaning set forth in Section 6(c). "Indemnifying Party" has the meaning set forth in Section 6(c). "Majority Holders" means Holders holding the majority of the outstanding Registrable Securities. "NASD" means the National Association of Securities Dealers, Inc. "New Common Stock" means the common stock, $.01 par value per share, of the Company. "New Warrant Stock" means any New Common Stock or other security of the Company or any successor entity issued or issuable upon exercise of any New Warrant. "New Warrants" means the warrants to purchase shares of New Common Stock pursuant to the Warrant Agreement, dated as of the date hereof, between the Company and the warrant agent thereunder. "Person" means a natural person, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or other entity, or a governmental entity or any department, agency or political subdivision thereof. "Piggyback Registration" has the meaning set forth in Section 3(a). "Registrable Securities" means (i) the New Common Stock and (ii) the New Warrant Stock issuable upon exercise of the New Warrants, in each case including any securities of the Company or any successor entity that may be issued or distributed in respect thereof by way of stock dividend, stock split or other distribution, consolidation, reclassification or any similar transaction; provided, however, that the foregoing securities shall cease to be "Registrable Securities" to the extent that (i) a registration statement with respect to the sale of such securities has been declared effective under the 2 Securities Act and such securities have been disposed of pursuant to such registration statement, (ii) such securities have been disposed of (A) pursuant to and in accordance with Rule 144 (or any similar provision then in force) under the Securities Act or (B) pursuant to another exemption from the registration requirements of the Securities Act pursuant to which the securities are thereafter freely tradable without restriction under the Securities Act, (iii) such securities may be disposed of by the Holder thereof pursuant to Rule 144 (or any similar provision then in force) within the volume limitations thereunder within a 90 day period or pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act, (iv) such securities shall be sold by the applicable Holder to the public pursuant to Section 1145 of Title 11 of the United States Code, as amended, or (iv) such securities cease to be outstanding. For purposes of this Agreement, any reference to a percentage (or a majority in number) of Registrable Securities shall mean that percentage of Registrable Securities, collectively, computed based on the assumption that all such New Warrants were exercised. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. "Shelf Registration Statement" means a registration statement of the Company filed with the Commission on Form S-1 or, if available, Form S-2 or S-3 (or any successors thereto) for an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the Commission) covering all of the Registrable Securities requested to be included by the Initial Holders. "Stockholders Agreement" means the Stockholders Agreement, dated the date hereof, among the Company and the stockholders party thereto. "Subscription Agreement" has the meaning set forth in the Recitals hereto. "Trust Company of the West" means TCW Shared Opportunity Fund II, L.P., Shared Opportunity Fund IIB LLC, TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., AIMCO CDO, Series 2000-A, TCW High Income Partners, Ltd. and TCW High Income Partners II, Ltd. "Underwritten Offering" means an offering registered under the Securities Act in which securities of the Company are sold to an underwriter on a firm commitment basis for reoffering to the public. Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. The name assigned this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms "hereof," "herein," "hereunder" and similar terms refer to 3 this Agreement as a whole, and references herein to Sections refer to Sections of this Agreement. 2. Demand Registrations. (a) Demand by Holders. (i) The Majority Holders may make a written request to the Company for registration of all or any part of the Registrable Securities held by such requesting Holders. Notwithstanding the foregoing, (i) if the Majority Holders do not request the registration of their Registrable Securities as aforesaid within two years of the date hereof, then each of MacKay Shields LLC, Trust Company of the West, Citicorp Mezzanine III, L.P. and the Majority Holders will have the right to one (1) Demand Registration in lieu of the Demand Registration rights of the Majority Holders as provided in the preceding sentence, or (ii) if the Majority Holders request the registration of their Registrable Securities and the number of Registrable Securities of the Initial Holders included in such registration does not exceed 90% of the number of Registrable Securities requested thereby to be included in such registration statement, then following the effectiveness of such registration statement, each of MacKay Shields LLC, Trust Company of the West and Citicorp Mezzanine III, L.P. shall have the right to one Demand Registration in lieu of the Demand Registration rights of the Majority Holders as provided in the preceding sentence. Any such requested registration shall hereinafter be referred to as a "Demand Registration." Each request for a Demand Registration shall specify the aggregate amount of Registrable Securities to be registered and the intended methods of disposition thereof. Any Demand Registration hereunder shall be required to be effected only if the estimated market value of the Registrable Securities to be so registered exceeds $10 million in the aggregate. (ii) Within ten (10) days following receipt of any request for a Demand Registration, the Company shall deliver written notice of such request to all other Holders of Registrable Securities. Thereafter, subject to Section 2(e), the Company shall include in such Demand Registration any additional Registrable Securities which the Holder or Holders thereof have requested in writing be included in such Demand Registration, provided that all requests therefor have been received by the Company within ten (10) days of the receipt of the Company's notice by such Holder or Holders. All such requests shall specify the aggregate amount of Registrable Securities to be registered and the intended method or methods of distribution of the same. The Company also may elect to include in such registration additional securities of the Company to be registered thereunder, including securities to be sold for the Company's own account or for the account of Persons who are not Holders. (iii) As promptly as practicable following receipt of a request for a Demand Registration in accordance with Section 2(a)(i), the Company shall, subject to the terms hereof and applicable law, use its commercially reasonable efforts to file a registration statement relating to such Demand Registration no more than sixty (60) days following the initial request of a Demand Registration and shall use its commercially reasonable efforts to cause such registration statement to be declared effective under the 4 Securities Act as soon as practicable thereafter and to keep such registration statement effective for not less than ninety (90) days (or such shorter period during which a prospectus is required to be delivered under the Securities Act). (b) Limitations on Demand Registration; Effective Registration. The Company shall not be required to file a registration statement for a Demand Registration (i) at any time during the 120-day period following the effective date of another such registration statement, or (ii) during the period commencing on the seventh day prior to the effective date of an offering by the Company that is registered under the Securities Act and ending on the ninetieth day after such offering is completed. The Company shall not be required to effect more than one Demand Registration in any 12-month period or four (4) Demand Registrations in the aggregate, of any Registrable Securities pursuant to this Section 2 unless the Company shall be eligible at any time to file a registration statement on Form S-2 or S-3 (or other comparable short form) under the Securities Act, in which event there shall be no limit at such time on the number of such registrations pursuant to this Section 2. Notwithstanding anything herein to the contrary, the Company shall not be required to effect more than one registration pursuant to this Section 2 (whether pursuant to a Demand Registration or a registration statement with respect to Common Stock or Common Stock equivalents on Form S-2 or S-3 (or other comparable short form)) in any 6-month period; however, any registration statement filed by the Company for the benefit of any holder of the Common Stock or Common Stock equivalents other than the Holders shall be ignored for purposes of the foregoing restriction and shall not restrict the number of registration statements that may be effected for the Holders pursuant to this Agreement. A registration will not count as a Demand Registration under this Agreement until the related registration statement becomes effective and has remained effective for the period of time specified in Section 2(a)(iii). (c) Suspension of Registration. If the filing, initial effectiveness or continued use of a registration statement in respect of a Demand Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such registration statement of audited financial statements that are unavailable to the Company for reasons beyond the Company's reasonable control, the Company may, upon giving written notice of such action to the Holders holding Registrable Securities included or proposed to be included in such Demand Registration, delay the filing or initial effectiveness of, or suspend use of, such registration statement for the shortest period of time determined in good faith by the Company to be necessary for such purpose (a "Demand Suspension"); provided, however, that the Company shall not be permitted to exercise a Demand Suspension (i) more than one time during any twelve (12) month period, or (ii) for a period exceeding ninety (90) days on any one occasion. In the event of a Demand Suspension, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, any sale or offer to sell the Registrable Securities, and the use of the prospectus related to the Demand Registration in connection with any such sale or offer to sell Registrable Securities, and agree not to disclose to any other Person the fact that the Company has exercised a Demand Suspension or any related facts. The Company shall promptly notify the Holders holding Registrable Securities affected by any Demand Suspension upon the termination of such Demand Suspension. 5 (d) Underwritten Offering. If the Holders holding not less than a majority of the Registrable Securities included in any offering pursuant to a Demand Registration so elect by written request to the Company, such offering shall be in the form of an Underwritten Offering. Holders holding a majority of the Registrable Securities included in such Underwritten Offering shall have the right to select the managing underwriter or underwriters for the offering, subject to the right of the Company to approve such managing underwriter or underwriters (which approval shall not be unreasonably withheld). (e) Priority of Securities Registered Pursuant to Demand Registrations. If the managing underwriter or underwriters of a proposed offering of Registrable Securities included in a Demand Registration inform the Holders of such Registrable Securities and the Company in writing that, in its or their opinion, the number of securities requested to be included in such Demand Registration (including securities of the Company for its own account or for the account of other Persons which are not Holders) exceeds the number of securities which can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the Company will include in such registration securities requested to be included therein in accordance with the following priorities: (i) first, all of the Registrable Securities sought to be registered in such Demand Registration by the Holders; (ii) second, and only if the securities referenced in clause (i) above have been included, all securities requested to be included for the account of the Company, or such lesser number of securities as shall not in the opinion of the managing underwriter or underwriters, be likely to have such an adverse effect; and (iii) third, and only if all the securities referenced in clause (i) and (ii) above have been included, only such lesser number of securities requested to be included for the account of other Persons which are not Holders as shall not, in the opinion of the managing underwriter or underwriters, be likely to have such an adverse effect; provided, that, the number of such securities to be included for the account of other Persons which are not Holders shall be allocated pro rata among such Persons which are not Holders that have requested participation in the Demand Registration (based, for each such Person which is not a Holder, on the percentage derived by dividing (i) the number of securities which such Person which is not a Holder has requested to include in such Demand Registration by (ii) the aggregate number of securities which all such Persons which are not Holders have requested to include in such Demand Registration). In the event that, despite the reduction in the number of securities to be offered for the account of the Company or for the account of Persons which are not Holders in such registration pursuant to the immediately preceding sentence, the number of Registrable Securities to be included in such registration exceeds the number which, in the written opinion of the managing underwriter or underwriters, can be sold without having the adverse effect referred to above, the number of Registrable Securities that can 6 be included without having such an adverse effect shall be allocated pro rata among the Holders which have requested participation in the Demand Registration (based, for each such Holder, on the percentage (such Holder's "Allocation Percentage") derived by dividing (i) the number of Registrable Securities which such Holder has requested to include in such Demand Registration by (ii) the aggregate number of Registrable Securities which all such Holders have requested to include in such Demand Registration). (f) Registration Statement Form. Registrations under this Section 2 shall be on such appropriate registration form of the Commission (i) as shall be selected by the Company and as shall be reasonably acceptable to the Holders holding a majority of Registrable Securities requesting participation in the Demand Registration and (ii) as shall permit the disposition of the Registrable Securities in accordance with the intended method or methods of disposition specified in the applicable Holders' requests for such registration. 3. Piggyback Registration. (a) Participation. (i) If the Company at any time proposes to file a registration statement with respect to any offering of equity securities for its own account or for the account of any holders of its securities on Form S-l, S-2 or S-3 or any successor or similar form(s) (other than (A) a registration under Section 2 hereof, (B) a registration solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan or a merger or consolidation or incidental to an issuance of securities under Rule 144A under the Securities Act or (C) a registration on any registration form which does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities (other than information as to the selling stockholders and their intended method or methods of disposition)), then, as soon as practicable (but in no event less than fifteen (15) days prior to the proposed date of filing such registration statement with the Commission), the Company shall give written notice of such proposed filing to all Holders of Registrable Securities and such notice shall offer the Holders the opportunity to register such number of Registrable Securities as each such Holder may request in writing (a "Piggyback Registration"). Subject to Section 3(b), the Company shall include in such registration statement all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the Company's notice has been given ("Included Registrable Securities"). If at any time after giving written notice of its intention to register any equity securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such equity securities, the Company may, at its election, give written notice of such determination to each Holder holding Included Registrable Securities and, (x) in the case of a determination not to register, shall be relieved of its obligation to register any Included Registrable Securities in connection with such registration, and (y) in the case of a determination to delay registering, shall be 7 permitted to delay registering any Included Registrable Securities for the same period as the delay in registering such other equity securities. The Holders agree not to disclose to any other Person the fact that such determination of the Company not to register or to delay registration of equity securities or any related facts. (ii) If the offering pursuant to a Piggyback Registration is to be an Underwritten Offering, then (i) the Company shall have the right to designate the managing underwriter or underwriters of the offering and (ii) each Holder making a request for its Registrable Securities to be included therein must, and the Company shall use its reasonable best efforts to make such arrangements with the underwriters so that each such Holder may, participate in such Underwritten Offering on the same terms as other Persons selling securities in such Underwritten Offering. If the offering pursuant to such registration is to be on any other basis, then each Holder making a request for a Piggyback Registration pursuant to this Section 3(a) must participate in such offering on such basis. Notwithstanding any provision in this Agreement to the contrary, any Holder participating through a Piggyback Registration shall have no right to change the intended method or methods of disposition otherwise applicable. (b) Priority of Piggyback Registration. If the managing underwriter or underwriters of any proposed offering of securities included in a Piggyback Registration informs the Holders holding Included Registrable Securities in writing that, in its or their opinion, the total number of securities which such Holders and any other Persons intend to include in such offering exceeds the number which can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the Company will include in such registration securities requested to be included therein in accordance with the following priorities: (i) first. 100% of the securities that the Company proposed to sell for its own account shall be included therein; (ii) second, and only if all the securities referenced in clause (i) have been included, the number of Included Registrable Securities that, in the opinion of such underwriter or underwriters, can be sold without having such adverse effect shall be included therein, with such number to be allocated pro rate among the Holders of Included Registrable Securities (based, for each such Holder, on such Holder's Allocation Percentage); provided, however, that if as a result of the provisions of this Section 3(b), any Holder shall not be entitled to include at least 50% of such Holder's Included Registrable Securities, such Holder may withdraw such Holder's request to include all, or any number of such Registrable Securities in such registration statement no later than 20 days prior to its effectiveness; and (iii) third, and only if all of securities and the Registrable Securities referenced in clauses (i) and (ii), respectively, have been included, any other equity securities eligible for inclusion in such registration which, in the opinion of such underwriters, can be sold without having such adverse effect shall be included therein. 8 4. Registration Procedures. (a) In connection with the Company's registration obligations pursuant to this Agreement, the Company shall, subject to the limitations set forth herein, use its commercially reasonable efforts to effect any such registration so as to permit the sale of the applicable Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as practicable and, in any event, in conformity with any required time period set forth herein, and in connection therewith the Company shall: (i) before filing a registration statement or prospectus with the Commission, or any amendments or supplements thereto, furnish to the underwriter or underwriters, if any, and to the Holders holding Registrable Securities included in such registration statement, copies of all documents prepared to be filed, which documents shall be subject to the reasonable review and comment of such Holders, such underwriters, if any, and their respective counsel; (ii) prepare and file with the Commission a registration statement relating to the registration of the Registrable Securities on any appropriate form under the Securities Act, which form shall be available for the sale of the Registrable Securities and thereafter cause such registration statement to become and remain effective; (iii) prepare and file with the Commission such amendments or supplements to the applicable registration statement and the prospectus used in connection therewith as may be (A) reasonably requested by any participating Holder (to the extent such request relates to information relating to such Holder), (B) necessary to keep such registration effective for the period of time required by this Agreement or (C) necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement; (iv) notify the selling Holders and the managing underwriter or underwriters, if any, as soon as reasonably practicable after notice thereof is received by the Company (A) when the applicable registration statement or any amendment thereto has been filed or becomes effective and when the applicable prospectus or any amendment or supplement thereto has been filed, (B) of any written comments by the Commission or any request by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or any order preventing or suspending the use of any preliminary or final prospectus or the initiation or threat of any proceedings for such purposes and (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threat of any proceeding for such purpose; 9 (v) promptly notify each selling Holder and the managing underwriter or underwriters, if any, when the Company becomes aware of the occurrence of any event as a result of which the applicable registration statement or prospectus (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus and any preliminary prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary to amend or supplement such registration statement or prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the Commission a post-effective amendment or supplement to such registration statement or prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Registrable Securities, the prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; (vi) use its commercially reasonable efforts to prevent or obtain as promptly as practicable the withdrawal of any stop order with respect to the applicable registration statement or other order suspending the use of any preliminary or final prospectus; (vii) promptly incorporate in a prospectus supplement or post-effective amendment to the applicable registration statement such information as the managing underwriter or underwriters, if any, or the Holders holding a majority of the Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities, the amount of Registrable Securities being distributed and the purchase price being paid therefor; and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; (viii) furnish to each selling Holder and each managing underwriter, if any, without charge, as many conformed copies as such Holder or managing underwriter may reasonably request of the applicable registration statement, including all documents incorporated by reference therein or exhibits to such registration statement; (ix) deliver to each selling Holder and each managing underwriter, if any, without charge, as many copies of the applicable prospectus (including each preliminary prospectus) as such Holder or managing underwriter may reasonably request (it being understood that the Company consents to the use of the prospectus by each of the selling Holders and the underwriter or underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the prospectus); (x) on or prior to the date on which the applicable registration statement is declared effective, use its commercially reasonable efforts to register or qualify such Registrable Securities for offer and sale under the securities or "Blue Sky" 10 laws of each state and other jurisdiction of the United States, as any such selling Holder or underwriter, if any, or their respective counsel reasonably and timely requests in writing, and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect so as to permit the commencement and continuance of sales and dealings in such jurisdictions for as long as may be necessary to complete the distribution of the Registrable Securities covered by the registration statement; provided, that the Company shall not be required (A) to qualify generally to do business in any jurisdiction where it is not then so qualified, or (B) to take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject; (xi) cooperate with the selling Holders and the managing underwriter, underwriters or agent, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; (xii) not later than the effective date of the applicable registration statement, provide a CUSIP number for all Registrable Securities included in such registration statement and provide the applicable transfer agent with printed certificates for the Registrable Securities, which certificates shall be in a form eligible for deposit with The Depository Trust Company; (xiii) furnish to the Holders a signed counterpart, addressed to each Holder and the underwriters, if any, of (x) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration includes an underwritten public offering, an opinion dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to the Holders and the underwriters, and (y) a "comfort" letter (or, in the case of any such Person which does not satisfy the conditions for receipt of a "comfort" letter specified in Statement on Auditing Standards No. 72, an "agreed upon procedures" letter), dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter of like kind dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to the underwriters in underwritten public offerings of securities (with, in the case of an "agreed upon procedures" letter, such modifications or deletions as may be required under Statement on Auditing Standards No. 35) and, in the case of the accountants' letter, such other financial matters, and, in the case of the legal opinion, such other legal matters, as the Holders (or the underwriters, if any) may reasonably request; (xiv) use its commercially reasonable efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to 11 enable the seller or sellers thereof to consummate the disposition of such Registrable Securities; (xv) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first day of the Company's first full calendar quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 1l(a) of the Securities Act and Rule 158 thereunder, and will furnish to each Holder at least five business days prior to the filing thereof a copy of any amendment or supplement to such registration statement or prospectus and shall not file any thereof to which any Holder shall have reasonably objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or of the rules or regulations thereunder; (xvi) reasonably cooperate with each selling Holder of Registrable Securities and each underwriter or agent, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD; (xvii) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable registration statement from and after a date not later than the effective date of such registration statement; (xviii) use its commercially reasonable efforts to cause all Registrable Securities covered by the applicable registration statement to be listed on each securities, exchange on which any of the Company's securities of such class are then listed or quoted and on each inter-dealer quotation system on which any of the Company's securities of such class are then quoted; (xix) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by each Initial Holder and a representative appointed by the Holders holding a majority of the Registrable Securities covered by the applicable registration statement, by any managing underwriter or underwriters participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by such Holders or any such managing underwriter, all pertinent financial and other records, pertinent corporate documents and properties and officers and employees of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement as shall be reasonably necessary to enable them to exercise their due diligence responsibility (subject to the entry by each party referred to in this clause (xviii) into a customary confidentiality agreement in a form reasonably acceptable to the Company); and 12 (xx) enter into such agreements and take such other actions as the Holders shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (b) The Company may require each selling Holder as to which any registration is being effected to furnish to the Company such information regarding itself, the Registrable Securities held by it, the distribution of such Holder's Registrable Securities and such other information relating to such Holder and its ownership of the applicable Registrable Securities as the Company may from time to time reasonably request, including without limitation information required under Item 507 of Regulation S-K. Each Holder agrees to furnish such information to the Company and to cooperate with the Company as necessary to enable the Company to comply with the provisions of this Agreement. The Company shall have the right to exclude any Holder that does not comply with the preceding sentence from the applicable registration. (c) Each Holder agrees by acquisition of its Registrable Securities that, upon receipt of any notice from the Company of the occurrence of any event of the kind described in Section 4(a)(v), such Holder shall discontinue disposition of its Registrable Securities pursuant to such registration statement until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 4(a)(v) and of any additional or supplemental filings that are incorporated by reference in the prospectus, or until such Holder is advised in writing by the Company that the use of the prospectus may be resumed, and has received copies and, if so directed by the Company, such Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Securities which are current at the time of the receipt of such notice. (d) The Company shall be deemed to have satisfied its obligations under Section 3 at any time that the Company maintains the effectiveness of a Shelf Registration Statement with respect to such Registrable Securities. 5. Registration Expenses. The Company shall pay all expenses incident to its performance or compliance with its obligations under this Agreement, including without limitation: (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the Commission or the NASD, (ii) all fees and expenses of compliance with federal and state securities or "Blue Sky" laws, (iii) all of its printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants of the Company, (v) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or the quotation of the Registrable Securities on any inter-dealer quotation system, and (vi) the reasonable fees and expenses of not more than one counsel for all Holders (selected by the Holders of a majority of the Registrable Securities included in a registration). In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees 13 performing legal or accounting duties), the expense of any audit and the fees and expenses of any Person, including underwriters and special experts, retained by the Company. Notwithstanding the foregoing, the Holders requesting registration of Registrable Securities under Section 2 of this Agreement shall be required to reimburse the Company for any expense incurred in connection with such registration if such registration is withdrawn at the request of such Holders. The Company shall not be required to pay, (x) any expenses incurred by the Holders (except as provided in clauses (i), (ii) and (vi) of the preceding sentence), (y) any underwriting discounts or commissions or transfer taxes attributable to the sale of Registrable Securities or (z) any fees and expenses of counsel to the underwriters incurred in connection with a Demand Registration. 6. Indemnification. (a) Indemnification by the Company. In the event of any registration of any securities of the Company under the Securities Act, the Company will, and hereby does agree to, indemnify and hold harmless each selling Holder, its directors and officers, each other Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls such Holder or any such underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Holder or any such director or officer or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse such Holder and each such director, officer, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, provided that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such Holder specifically stating that it is for use in the preparation thereof and, provided further that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of Registrable Securities or to any other Person who controls such underwriter within the meaning of the Securities Act, in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of such Person's failure to send or give a copy of the final prospectus, as the same may be then supplemented or amended, within the time required by the Securities Act to the Person asserting the existence of an untrue statement or 14 alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or any such director, officer, underwriter or controlling person and shall survive the transfer of such securities by such Holder. (b) Indemnification by the Holders. The Company may require, as a condition to including any Registrable Securities in any registration statement, that the Company shall have received an undertaking satisfactory to it from each Holder, to indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this Section 6) the Company, each director of the Company, each officer of the Company and each other person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such Holder specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. Any such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such Holder. (c) Indemnification Proceedings. Any Person entitled to indemnification hereunder (an "Indemnified Party") shall (i) give prompt written notice to the Person from whom such indemnification may be sought (the "Indemnifying Party") of any claim with respect to which it seeks indemnification, provided, however, that the failure to so notify the Indemnifying Party shall not relieve it of any obligation or liability which it may have hereunder or otherwise except to the extent it is materially prejudiced by such failure, and (ii) permit such Indemnifying Party to assume the defense of such claim with counsel reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnified Party shall have the right to select and employ separate counsel and to participate in the defense of such claim, and the fees and expenses of such counsel shall be at the expense of the Indemnified Party unless (A) the Indemnifying Party has agreed in writing to pay such fees or expenses, (B) the Indemnifying Party shall have failed to assume the defense of such claim within a reasonable time after having received notice of such claim from the Indemnified Party and to employ counsel reasonably satisfactory to the Indemnified Party, (C) in the reasonable judgment of the Indemnified Party, based upon advice of its counsel, a conflict of interest exists between the Indemnified Party and the Indemnifying Party with respect to such claims or (D) the Indemnified Party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those available to the Indemnifying Party (in which case, if the Indemnified Party notifies the Indemnifying Party in writing that the Indemnified Party elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying 15 Party shall not have the right to assume the defense of such claim on behalf of the Indemnified Party). If such defense is assumed by the Indemnifying Party, or if such defense is not assumed by the Indemnifying Party but the Indemnifying Party acknowledges that the Indemnified Party is entitled to indemnification hereunder, the Indemnifying Party shall not be subject to any liability for any settlement made without its consent, which consent shall not be unreasonably withheld; provided, that an Indemnifying Party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any material obligations on such Indemnifying Party other than financial obligations for which such Indemnified Party will be indemnified hereunder. If the Indemnifying Party assumes the defense, the Indemnifying Party shall have the right to settle such action without the consent of the Indemnified Party; provided, that the Indemnifying Party shall be required to obtain the consent of the Indemnified Party (which consent shall not be unreasonably withheld) if the settlement includes any admission of wrongdoing on the part of the Indemnified Party or any equitable remedies or restriction on the Indemnified Party or its officers, directors or employees. No Indemnifying Party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each Indemnified Party of an unconditional release from all liability in respect of such claim or litigation. An Indemnifying Party (or, as the case may be, Indemnifying Parties) shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time from all Indemnified Parties collectively unless (x) the employment of more than one counsel has been authorized in writing by such Indemnifying Party (or Indemnifying Parties) or (y) a conflict exists or may exist (based on advice of counsel to an Indemnified Party) between such Indemnified Party and other Indemnified Parties, in each of which cases the Indemnifying party (or Indemnifying Parties) shall be obligated to pay the reasonable fees and expenses of such additional counselor counsels. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party or any officer, director or controlling Person of such Indemnified Party and shall survive the transfer of Registrable Securities. (d) Contribution. If for any reason the indemnification provided for in paragraphs (a) and (b) of this Section 6 is unavailable to an Indemnified Party or is insufficient to hold it harmless as contemplated by paragraphs (a) and (b) of this Section 6, then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. Notwithstanding anything in this Section 6(d) to the contrary, no Indemnifying Party (other than the Company) shall be required pursuant to this Section 6(d) to contribute any amount in excess of the amount by which the proceeds (less 16 underwriting fees and discounts) received by such Indemnifying Party from the sale of Registrable Securities in the offering to which the loss, claim, damage or liability of the Indemnified Parties relate exceeds the amount of any damages which such Indemnifying Party has otherwise been required to pay by reason of such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the preceding sentences. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. If indemnification is available under this Section 6, the Indemnifying Parties shall indemnify each Indemnified Party to the fullest extent provided in Sections 6(a) and 6(b) hereof without regard to the relative fault of said Indemnifying Parties or Indemnified Party. 7. Compliance with Rule 144. The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Securities Exchange Act so long as the Company is obligated to file such reports, and it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time or (b) any similar rules or regulations hereafter adopted by the Commission. Upon the written request of any Holder, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. 8. Underwriting Agreements. If requested by the underwriters for any Underwritten Offering requested by Holders pursuant to Section 2, the Company and the Holders of Registrable Securities to be included therein shall enter into an underwriting agreement with such underwriters, such agreement to be reasonably satisfactory in substance and form to the Company, the Holders holding a majority of the Registrable Securities to be included in such Underwritten Offering and the underwriters, and to contain such terms and conditions as are generally prevailing in agreements of that type. The Holders holding any Registrable Securities to be included in any Underwritten Offering pursuant to Section 3 shall enter into such an underwriting agreement at the request of the Company. 9. Amendments and Waivers. The provisions of this Agreement may be amended or waived at any time only by the written agreement of the Company and the Holders holding a majority of the Registrable Securities. Any amendment or waiver on the part of any such Holders of any provision or condition of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in writing. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder and the Company. Each Holder acknowledges that by operation of this paragraph the Holders holding a majority of the Registrable Securities, acting in conjunction with the Company, will have the right and power to diminish or eliminate all rights pursuant to this Agreement. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to 17 the rights of some Holders whose Registrable Securities (the "affected Securities") are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Holders representing the majority of the affected Securities, voting together as a single class. 10. Successors, Assigns and Transferees. (a) The registration rights of any Holder under this Agreement with respect to any Registrable Securities may be transferred and assigned; provided, however, that registration rights pursuant to this Agreement may be transferred and assigned by an Initial Holder in connection with the transfer and assignment of any of such Initial Holder's Registrable Securities effected in accordance with the applicable provisions of the Stockholders Agreement; and provided further, however, that no such transfer or assignment of any registration rights under this Agreement shall be binding upon or obligate the Company under this Agreement to any such transferee or assignee unless and until (i) the Company shall have received notice of such transfer or assignment as herein provided and a written agreement of the transferee or assignee to be bound by the provisions of this Agreement and (ii) such transferee or assignee holds Registrable Securities. Any transfer or assignment of the rights and obligations under this Agreement made other than as provided in the first sentence of this Section 10 shall be null and void. (b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns. 11. Final Agreement. This Agreement constitutes the final agreement of the parties concerning the matters referred to herein, and supersedes all prior agreements and understandings. 12. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. 13. Notices. All notices, demands or other communications or documents to be given or delivered under or by reason of the provisions of this Agreement shall be made in writing and shall be deemed to have been received (a) when delivered personally to the recipient; (b) when sent to the recipient by telecopy (receipt electronically confirmed by sender's telecopy machine) if during normal business hours of the recipient, otherwise on the next business day; one business day after the date when sent to the recipient by reputable express courier service (charges prepaid), or (c) seven business days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the parties at the addresses indicated below, or to such other address as any party hereto may, from time to time, designate in writing delivered pursuant to the terms of this Section 13: 18 If to the Initial Holders, to the addresses set forth on Schedule I hereto. If to Holders other than the Initial Holders, to the addresses set forth on the stock record books of the Company. If to the Company, to: ACP Holding Company 2121 Brooks Street Neenah, Wisconsin 54956 Attention: William M. Barrett Fax: (920)729-3633 With a copy, which shall not constitute notice, to: Kirkland & Ellis LLP 153 East 53rd Street New York, New York 10022-4611 Attention: Geoffrey W. Levin Fax: (212)446-4900 14. Governing Law; Service of Process; Consent to Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE WITHOUT REGARD TO ANY CHOICE OF LAW OR CONFLICT OF LAW PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF THE INTERNAL LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK. (b) To the fullest extent permitted by applicable law, each party hereto (i) agrees that any claim, action or proceeding by such party seeking any relief whatsoever arising out of, or in connection with, this Agreement or the transactions contemplated hereby shall be brought only in the U.S. District Court for the Southern District of New York and in any New York State court located in the Borough of Manhattan and not in any other State or Federal court in the United States of America or any court in any other country, (ii) agrees to submit to the exclusive jurisdiction of such courts located in the State of New York for purposes of all legal proceedings arising out of, or in connection with, this Agreement or the transactions contemplated hereby and (iii) irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. 15. Counterparts and Facsimile Execution. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument. This agreement may be executed by the exchange of signatures by facsimile transmission. Each party shall receive a duplicate original of the counterpart copy or copies executed by it and the Company. 19 16. Specific Performance. Without limiting or waiving in any respect any rights or remedies of the parties under this Agreement now or hereinafter existing at law or in equity or by statute, each of the parties hereto shall be entitled to seek specific performance of the obligations to be performed by the other(s) in accordance with the provisions of this Agreement. 17. No Inconsistent Agreements. The Company shall not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders pursuant to this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any other agreement in effect on the date hereof. 18. Third Party Beneficiaries. Holders of Registrable Securities and the Indemnified Parties are intended third party beneficiaries of this Agreement, and this Agreement shall inure to the benefit of and may be enforced by, such Persons. Other than as set forth in the preceding sentence, this Agreement shall be binding upon and inure solely to the benefit of each party hereto. 19. Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its direct or indirect subsidiaries shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 20. Subsequent Registration Rights. The Company shall not grant at any time after the date hereof any registration rights (the "Subsequent Registration Rights") to any person unless (i) such Subsequent Registration Rights are subordinated to, and are less favorable than, the registration rights granted to the Holders under this Agreement or (ii) such Subsequent Registration Rights are approved by the majority of the Company's Board of Directors (which majority shall include the affirmative vote of each of the directors designated by each of MacKay Shields LLC, Citicorp Mezzanine III, L.P. and Trust Company of the West). [Remainder of page intentionally left blank] 20 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above. ACP HOLDING COMPANY By: /s/ Gary LaChey -------------------------------------- Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO MACKAY SHIELDS LLC By: /s/ Don Morgan III -------------------------------------- Name: Don Morgan III Title: Senior Managing Director CITICORP MEZZANINE III, L.P. By: Citicorp Capital Investors Limited, its General Partner By: /s/ Byron Knief -------------------------------------- Name: Byron Knief Title: Senior Vice President TCW Shared Opportunity Fund II, L.P. By: TCW Investment Management Company Its Investment Manager By: /s/ Nicholas W. Tell, Jr. -------------------------------------- Name: Nicholas W. Tell, Jr. Title: Managing Director By: /s/ Gary A. Hobart -------------------------------------- Name: Gary A. Hobart Title: Vice President [SIGNATURE PAGE TO WARRANT REGISTRATION RIGHTS AGREEMENT] Shared Opportunity Fund IIB LLC By: TCW Asset Management Company as its Investment Advisor By: /s/ Nicholas W. Tell, Jr. -------------------------------------- Name: Nicholas W. Tell, Jr. Title: Managing Director By: /s/ Gary A. Hobart -------------------------------------- Name: Gary A. Hobart Title: Vice President TCW Shared Opportunity Fund IV, L.P. and TCW Shared Opportunity Fund IVB, L.P. By: TCW Asset Management Company Its Investment Advisor By: /s/ Nicholas W. Tell, Jr. -------------------------------------- Name: Nicholas W. Tell, Jr. Title: Managing Director By: /s/ Gary A. Hobart -------------------------------------- Name: Gary A. Hobart Title: Vice President [SIGNATURE PAGE TO WARRANT REGISTRATION RIGHTS AGREEMENT] AIMCO CDO, Series 2000-A By: Allstate Investment Management Company Its Collateral Manager By: TCW Asset Management Company Its Investment Advisor By: /s/ Nicholas W. Tell, Jr. -------------------------------------- Name: Nicholas W. Tell, Jr. Title: Managing Director By: /s/ Gary A. Hobart -------------------------------------- Name: Gary A. Hobart Title: Vice President TCW High Income Partners, Ltd. By: TCW Asset Management Company, its Investment Advisor By: /s/ Nicholas W. Tell, Jr. -------------------------------------- Name: Nicholas W. Tell, Jr. Title: Managing Director TCW High Income Partners II, Ltd. By: TCW Asset Management Company, its Investment Advisor By: /s/ Gary A. Hobart -------------------------------------- Name: Gary A. Hobart Title: Vice President [SIGNATURE PAGE TO WARRANT REGISTRATION RIGHTS AGREEMENT] METROPOLITAN LIFE INSURANCE COMPANY By: /s/ Jacqueline D. Jenkins -------------------------------------- Name: Jacqueline D. Jenkins Title: Managing Director EXIS DIFFERENTIAL HOLDINGS, LTD. By: /s/ Chris Kane -------------------------------------- Name: Chris Kane Title: PM [SIGNATURE PAGE TO WARRANT REGISTRATION RIGHTS AGREEMENT] SCHEDULE I Initial Holders MACKAY SHIELDS LLC 9 West 57th Street, 33rd Floor New York, NY 10019 Attention: Neal G. Goldman Fax: (212)754-9187 CITICORP MEZZANINE III, L.P. 399 Park Avenue, 14th Floor New York, NY 10043 Attention: Richard E. Mayberry, Jr. Fax: (212)888-2940 TCW Shared Opportunity Fund II, L.P. c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 Shared Opportunity Fund IIB LLC c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 TCW Shared Opportunity Fund IV, L.P. c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 TCW Shared Opportunity Fund IVB, L.P. c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 25 AIMCO CDO, Series 2000-A c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 TCW High Income Partners, Ltd. c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 TCW High Income Partners II, Ltd. c/o Trust Company of the West 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jamison J. Van Niel Fax: (310)235-5965 METROPOLITAN LIFE INSURANCE COMPANY 10 Park Avenue Morristown, NJ 07962 Attention: Lisa Glass, Esq. Fax: (212)251-1563 EXIS DIFFERENTIAL HOLDINGS, LTD. 767 Third Avenue New York, NY 10017 Attention: Christopher P. Kane Fax: (212)688-6010 26 EX-10.9 33 y92210a1exv10w9.txt FORM OF EMPLOYMENT AGREEMENT: JOHN ANDREWS Exhibit 10.9 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Wisconsin corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and John Andrews ("Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 - Manufacturing, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $180,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 1.88 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. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 25%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 147,059 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 two-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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 5 any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C.Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 36,764.75 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 110,294.25 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: John Andrews 6591 Lansley Shore Drive Winneconne, Wisconsin 54986 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ John Andrews ---------------------------------------- John Andrews NEENAH FOUNDRY COMPANY By: /s/ Gary LaChey ------------------------------------ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO ACP HOLDING COMPANY By: /s/ Gary LaChey ------------------------------------ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-10.10 34 y92210a1exv10w10.txt FORM OF EMPLOYMENT AGREEMENT: WM BARRETT EXHIBIT 10.10 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Wisconsin corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and William M. Barrett ("Executive"). WITNESSETH: ----------- WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 President and Chief Executive Officer, 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. So long as Executive continues to be employed by Employer in the foregoing capacity, he shall also serve as a member of the boards of directors of ACP and each of its subsidiaries and any committee thereof to which Executive is appointed. 1.02 Term. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $350,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 2.70 and "Severance Multiple" will be 2.70, and for purposes of Section 4(b) of the Severance Plan, "Change of Control Multiple" will be 3.38. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 35%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 1,250,000 shares of Common Stock. The shares of Common Stock being 2 granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP 3 within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 4 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 Agreement. 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 third-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group as such businesses exist or are in process on the date of the termination of 5 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 or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 6 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. ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C.Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own 7 directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. 8 "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits, (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location or (iii) the failure of the Company to nominate Mr. Barrett to the boards of directors of ACP and each of its Subsidiaries. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. 9 "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. 10 "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 312,500 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 937,500 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 11 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 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: To Executive: William M. Barrett 998 Prairie View Neenah, Wisconsin 54956 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ William Barrett ---------------------------------------- William M. Barrett NEENAH FOUNDRY COMPANY By: /s/ Gary LaChey ------------------------------------ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO ACP HOLDING COMPANY By: /s/ Gary LaChey ------------------------------------ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-10.11 35 y92210a1exv10w11.txt FORM OF EMPLOYMENT AGREEMENT: JOSEPH L. DERITA Exhibit 10.11 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Dalton Corporation, an Indiana corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and Joseph L. DeRita ("Executive"). W I T N E S S E T H: WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 Division President, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $235,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 2.03 and "Severance Multiple" will be 2.03, and for purposes of Section 4(b) of the Severance Plan, "Change of Control Multiple" will be 2.03. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 35%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 404,412 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 second 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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, 5 securities of any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C.Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 101,103 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 303,309 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: Joseph L. DeRita 11228 Cabriolet Run Fort Wayne, Indiana 46845 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Dalton Corporation c/o Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ Joseph L. DeRita -------------------------------------- Joseph L. DeRita DALTON CORPORATION By: /s/ Gary LaChey ------------------------------------ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CFO ACP HOLDING COMPANY By: /s/ Gary LaChey ---------------------------------- Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CFO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-10.12 36 y92210a1exv10w12.txt FORM OF EMPLOYMENT AGREEMENT: FRANK C. HEADINGTON EXHIBIT 10.12 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Wisconsin corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and Frank C. Headington ("Executive"). W I T N E S S E T H: WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 - Marketing/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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $132,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 1.88 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. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 25%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 294,118 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 two-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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 5 any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 73,529.5 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 220,588.5 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: Frank C. Headington 130 Woodside Court Neenah, Wisconsin 54956 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ Frank C. Headington ------------------------------------ Frank C. Headington NEENAH FOUNDRY COMPANY By: /s/ Gary LaChey -------------------------------- Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CFO ACP HOLDING COMPANY By: /s/ Gary LaChey -------------------------------- Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CFO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(b) ELECTION EX-10.13 37 y92210a1exv10w13.txt FORM OF EMPLOYMENT AGREEMENT: TIMOTHY KOLLER Exhibit 10.13 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Wisconsin corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and Timothy Koller ("Executive"). W I T N E S S E T H: WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 Vice President - Construction Product Sales, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $132,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 1.88 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. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 25%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 294,118 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 two-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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 5 any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 73,529.5 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 220,588.5 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: Timothy Koller 7107 Clarks Point Road Winneconne, Wisconsin 54986 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ Timothy Koller ____________________________________ Timothy Koller NEENAH FOUNDRY COMPANY By: /s/ Gary LaChey ________________________________ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO ACP HOLDING COMPANY By: /s/ Gary LaChey ________________________________ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-10.14 38 y92210a1exv10w14.txt FORM OF EMPLOYMENT AGREEMENT: GARY W. LACHEY Exhibit 10.14 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Wisconsin corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and Gary W. LaChey ("Executive"). W I T N E S S E T H: WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 - Finance, Treasurer, Secretary and Chief Financial Officer, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $235,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 2.03 and "Severance Multiple" will be 2.03, and for purposes of Section 4(b) of the Severance Plan, "Change of Control Multiple" will be 2.70. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 35%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 955,882 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 second 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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, 5 securities of any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 238,970.50 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 716,911.50 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: Gary W. LaChey 8560 North Oakwood Avenue Neenah, Wisconsin 54956 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ Gary W. LaChey ____________________________________ Gary W. LaChey NEENAH FOUNDRY COMPANY By: /s/ William Barrett ________________________________ Name: William Barrett Title: ACP HOLDING COMPANY By: /s/ William Barrett ________________________________ Name: William Barrett Title: EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-10.15 39 y92210a1exv10w15.txt FORM OF EMPLOYMENT AGREEMENT: WILLIAM MARTIN Exhibit 10.15 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Wisconsin corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and William Martin ("Executive"). WITNESSETH: WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 Vice President - International Development, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $167,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 1.88 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. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 25%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 286,765 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 two-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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 5 any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C.Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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 Rule13d-5 of the Exchange Act), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 71,691.25 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 215,073.75 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: William Martin 1044 N. Lake Street Neenah, Wisconsin 54986 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ William Martin ---------------------------------------- William Martin NEENAH FOUNDRY COMPANY By: /s/ Gary LaChey ________________________________ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CFO ACP HOLDING COMPANY By: /s/ Gary LaChey ________________________________ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CFO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-10.16 40 y92210a1exv10w16.txt FORM OF EMPLOYMENT AGREEMENT: STEVE SHAFFER Exhibit 10.16 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Dalton Corporation, an Indiana corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and Steve Shaffer ("Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 Vice President - Human Resources, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $131,258 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 1.95 and "Severance Multiple" will be 1.95, and for purposes of Section 4(b) of the Severance Plan, "Change of Control Multiple" will be 1.95. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 30%. 1.08 Equity Incentive Plan Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 147,059 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 two-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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 5 any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 36,764.75 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 110,294.25 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: Steve Shaffer 741 E. Lakewood Avenue Warsaw, Indiana 46580 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Dalton Corporation c/o Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ Steve Shaffer ---------------------------------- Steve Shaffer DALTON CORPORATION By: /s/ Gary LaChey ________________________________ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO ACP HOLDING COMPANY By: /s/ Gary LaChey ________________________________ Name: Gary LaChey Title: VP-Finance, Treasurer, Secty. & CEO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(b) ELECTION EX-10.17 41 y92210a1exv10w17.txt FORM OF EMPLOYMENT AGREEMENT: JOSEPH VARKOLY EXHIBIT 10.17 EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT THIS EMPLOYMENT AGREEMENT AND RESTRICTED STOCK GRANT (the "Agreement" or the "Employment Agreement") is by and among Neenah Foundry Company, a Delaware corporation ("Employer"), ACP Holding Company, a Delaware corporation ("ACP"), and Joseph Varkoly ("Executive"). W I T N E S S E T H: WHEREAS, Executive possesses knowledge and skills that will contribute to the successful operation of Employer's business; WHEREAS, Executive is currently employed by Employer without an employment agreement; and 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 - Industrial Product Sales, 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. Executive's employment hereunder will commence as of the Effective Date. The period from the Effective Date until the date Executive is no longer employed by Employer is referred to herein as the "Employment Period." 1.03 Compensation. During the Employment Period, Executive will receive a minimum base salary of $177,000 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 entitled to receive an annual bonus determined in accordance with the Annual Incentive Plan (as defined below). 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 Company Group shall be, in the aggregate, no less favorable than those provided to Executive immediately prior to the Effective Date. 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. 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 2003 Severance and Change of Control Plan (the "Severance Plan"), a copy of which is attached as Exhibit A hereto and is entering into this Agreement in reliance upon the terms thereof. For purposes of Section 4(a) of the Severance Plan, "Payout Period" will be 2.03 and "Severance Multiple" will be 2.03, and for purposes of Section 4(b) of the Severance Plan, "Change of Control Multiple" will be 2.03. 1.07 Annual Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Annual Incentive Plan (the "Annual Incentive Plan"), a copy of which is attached as Exhibit B hereto and is entering into this Agreement in reliance upon the benefits provided thereunder. For purposes of the Annual Incentive Plan, the "Target Bonus Percentage" (as defined in the Annual Incentive Plan) will be 35%. 1.08 Equity Incentive Plan. Executive represents and certifies that Executive has carefully reviewed the Company's 2003 Management Equity Incentive Plan (the "Equity Incentive Plan"), a copy of which is attached as Exhibit C hereto and is entering into this Agreement in reliance upon the terms thereof. ARTICLE II ISSUANCE OF RESTRICTED STOCK 2.01 Grant of Executive Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Equity Incentive Plan, ACP hereby grants and issues to Executive 220,587 shares of Common Stock. The shares of Common Stock being granted and issued to Executive pursuant to this Section 2.01 (the "Executive Shares") shall be subject to vesting as set forth in Section 2.02 below. In addition to the Executive Shares, Executive shall be entitled to participate in and receive grants under the Equity Incentive Plan. 2 2.02 Vesting. (a) The Vested Executive Shares shall be fully vested as of the date hereof and are not subject to the terms of this Section 2.02. Except as otherwise provided in Section 2.02(b), one-third of the Vesting Executive Shares shall become vested on a cumulative basis on each anniversary of the Effective Date, if as of such date, Executive is still employed by the Company Group. Vesting Executive Shares that have not vested are referred to herein as "Unvested Shares." (b) If Executive's employment is terminated by Employer (or any successor thereto) in connection with a Significant Transaction, or if Executive resigns for Good Reason, in each case, within the six-month period after the date on which a Significant Transaction is consummated or a resignation for Good Reason occurs, all Unvested Shares shall automatically vest upon such termination. (c) On the day of Executive's grant of the Executive Shares hereunder, Executive will make an effective election with the Internal Revenue Service under Section 83(b) of the Code and the regulations promulgated thereunder in the form of Exhibit D attached hereto. (d) Executive shall not Transfer any Unvested Shares except (i) pursuant to applicable laws of descent and distribution or (ii) among Executive's Family Group; provided, that in each case such restrictions shall continue to be applicable to the Executive Shares after any such Transfer, and the transferees of such Executive Shares shall have agreed in writing to be bound by the provisions of this Agreement. 2.03 Acknowledgement of Securities Laws. Executive hereby acknowledges and agrees that the Executive Shares 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. 2.04 Repurchase Option. In the event that Executive is no longer employed by Employer for any reason (a "Termination"), the Unvested Shares granted and issued hereunder to Executive, whether held by Executive or one or more transferees, will be subject to repurchase by ACP (solely at its option), in whole or in part, by delivery of a Repurchase Notice within the time periods set forth in Section 2.04(c), pursuant to the terms and conditions set forth in this Section 2.04 (the "Repurchase Option"). (a) Termination Other than for Cause. If the Termination is (x) for any reason other than for Cause or (y) due to Executive's resignation for Good Reason, then on or after such Termination ACP may elect to purchase all or any portion of the Unvested Shares issued to Executive at a price per share equal to the Fair Value thereof (i) as determined on the Termination Date, if the Repurchase Closing is to be consummated within three months of the Termination Date or (ii) as determined on a date determined by the board of directors of ACP within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase Closing is consummated after the third month following the Termination Date. 3 (b) Termination for Cause or Good Reason. If the Termination is for Cause or due to Executive's resignation other than for Good Reason, then on or after the Termination Date, ACP may elect to cause Executive to surrender (and forfeit) all or any portion of the Unvested Shares to ACP without payment therefor. (c) Repurchase Procedures. Pursuant to the Repurchase Option, ACP may elect to exercise the right to purchase all or any portion of the Unvested Shares by delivering written notice (the "Repurchase Notice") to Executive no later than 90 days after the end of the Employment Period; provided, that such 90-day period may be tolled in accordance with Section 2.04(e) below. The Repurchase Notice will set forth the number of Unvested Shares to be acquired from such holder(s), the aggregate consideration (if any) to be paid for such Unvested Shares and the time and place for the closing of the transaction (the "Repurchase Closing"). In the event that ACP elects to purchase a portion of such Unvested Shares pursuant to the terms of this Section 2.04, if any Unvested Shares are held by transferees of Executive, ACP shall first, purchase the shares elected to be purchased from Executive to the extent of the Unvested Shares then held by Executive and second, purchase any remaining shares elected to be purchased from such other holder(s) of Unvested Shares pro rata according to the number of Unvested Shares held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest share) and the number of shares of each class of Unvested Shares to be purchased will be allocated among such other holders pro rata according to the total number of Unvested Shares to be purchased from such holders. (d) Closing. The closing of the transactions contemplated by this Section 2.04 will take place on the date designated by ACP in the Repurchase Notice which date will not be more than 60 days after the delivery of such notice. ACP will pay for the Unvested Shares (to the extent such payment is required hereunder) to be purchased pursuant to the Repurchase Option by delivery of a certified check payable to the holder(s) of such Executive Shares or a wire transfer of immediate available funds. (e) Restrictions on Repurchase. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Unvested Shares by ACP shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the applicable debt and equity financing agreements of the Company Group. If any such restrictions prohibit the repurchase of Executive Shares hereunder that ACP is otherwise entitled or required to make hereunder, ACP may repurchase such Executive Shares as soon as it is permitted to do so under the Delaware General Corporation Law or such applicable agreement restrictions. 2.05 Excise Payments. If Executive is Terminated other than for Cause or resigns for Good Reason, in each case, in connection with a Significant Event, any payment to such Executive shall be increased to provide for the 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 Agreement. 4 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 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 Company Group that Executive may then possess or have under Executive's control. ARTICLE IV COVENANTS OF THE EXECUTIVE 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. 4.02 Covenant Against Competition. Executive acknowledges that (i) the principal business of the Company Group is the manufacture, distribution and sale of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets (collectively, the "Company Business"); (ii) the Company Business is national in scope; (iii) Executive's work for Employer and the Company Group has given and will continue to give him access to the confidential affairs and proprietary information of the Company Group (collectively, "Confidential Company Information"); (iv) the continued success of the Company Group depends in large part on keeping this information from becoming known to its competitors; and (v) each of ACP 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 two-year 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 or in any business that provides any related services; (ii) in any business that otherwise competes with Employer or any other member of the Company Group 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 5 any such Person that are traded on any national securities exchange or NASDAQ 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) During and after 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 Company Group, 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 Company Group 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 Company Group 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 Company Group to leave the employ of Employer or such member of the Company Group, or in any way interfere with the relationship between Employer or any other member of the Company Group 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 Company Group to cease doing business with Employer or any member of the Company Group, 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 Company Group (including, without limitation, making any disparaging statements or communications about Employer or any other member of the Company Group). (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 Company Group actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive while an employee of, or a consultant to, Employer or any other member of the Company Group (collectively, "Work Product") belong to Employer or any other member of the Company Group. Executive shall promptly disclose such Work Product to the Board and perform all actions 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). 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. 6 ARTICLE V CERTAIN DEFINITIONS "ACP" has the meaning given to such term in the introductory paragraph hereof. "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. "Annual Incentive Plan" has the meaning given to such term in Section 1.07 hereof. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended from time to time. "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 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 or improper disclosure of a confidence of the Company Group or breach of any other 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 Company Group or (2) is reasonably expected to result in Significant Injury. "Change of Control" means, from and after the Effective Date, any transaction or series of related transactions is consummated, the result of which is that: (i) any Person or group (within the meaning of Rule 13d-5 of the Exchange Act), other than the Permitted Holders, shall own directly or indirectly, beneficially or of record, greater than 50% of the equity securities of any member of the Company Group on a fully diluted basis; (ii) a Permitted Holder shall own directly or indirectly, beneficially or of record, 66-2/3% or more of the equity securities of any member of the Company Group on a fully diluted basis; 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), other than the Permitted Holders, shall 7 own directly or indirectly, beneficially or of record, a percentage of the issued and outstanding voting stock of any member of the Company Group on a fully diluted basis, having ordinary voting power in excess of the percentage then owned, directly or indirectly, beneficially and of record, on a fully diluted basis, by the Permitted Holders, or (2) a majority of the seats on the boards of directors of ACP or the Company (except in the case of any vacancy for 30 days or less resulting from the death or resignation of any director) shall at any time be occupied by persons who were neither (A) nominated by the Permitted Holders nor (B) 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. "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. "Common Stock" means ACP's Common Stock, par value $0.01 per share, as adjusted for any stock split, stock dividend, share combination, share exchange, recapitalization, merger, consolidation or other reorganization. "Company" 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. "Company Group" means ACP, the Company and their respective Subsidiaries. "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. "Effective Date" means the effective date of the Plan of Reorganization. "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 1.08 hereof. "Exchange Act" means the Securities Act of 1934, as amended, or any similar federal law then in force. "Excise Taxes" has the meaning given to such term in Section 2.05 hereof. "Executive" has the meaning given to such term in the introductory paragraph hereof. "Executive Shares" has the meaning given to such term in Section 2.01 hereof. 8 "Fair Value" means (i) with respect to Common Stock, if such security is listed on one or more stock exchanges or quoted on the National Market System or Small Cap Market of NASDAQ (in either case, the "NASDAQ Market"), the average of the closing or last reported sales prices of a share of Common Stock, on the primary national or regional stock exchange on which such security is listed or on the NASDAQ Market if quoted thereon or (ii) if the Common Stock is not so listed or quoted but is traded in the over-the-counter market (other than the NASDAQ Market), the average of the closing bid and asked prices of a share of such Common Stock quoted for the 30 Business Days (or such lesser number of Business Days as such Common Stock shall have been so listed, quoted or traded) next preceding the date of measurement; provided, however, that if no such sales price or bid and asked prices have been quoted during the preceding 30-day period or there is otherwise no established trading market for such security, then "Fair Value" means the value of such Common Stock as determined reasonably and in good faith by the board of directors of ACP. "Family Group" means Executive, Executive's spouse and descendants (whether natural or adopted), any trust solely for the benefit of Executive and/or Executive's spouse and/or descendants, and any family partnership, limited liability company, or other entity that is a flow-through entity for U.S. federal income tax purposes owned solely by Executive and/or Executive's spouse and/or descendants and/or any such trust. "Good Reason" means termination by way of a material change in position, authority, duties, responsibilities or status that results in or reflects (i) a material diminution of scope or importance, reduction in base pay or annual bonus target, material reduction in the aggregate level of benefits or (ii) unreasonable relocation of primary employment to a location more than fifty (50) miles from current work location. For avoidance of doubt, a reduction in base pay or annual bonus target and the relocation of primary employment to a location more than fifty (50) miles from current work location, in each case, shall constitute a material change in position, authority, duties, responsibilities or status. "Gross-Up Amount" has the meaning given to such term in Section 2.05 hereof. "Payout Period" has the meaning given to such term in Section 1.06 hereof. "Permitted Holders" means each of MacKay Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance Company, Exis Differential Holdings, Ltd. and Trust Company of the West, together with the Affiliates of each of such Persons. "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. "Plan of Reorganization" means the Joint Prepackaged Plan of Reorganization of ACP, NFC Castings, Inc., the Company and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code, dated July 1, 2003, including the Plan Supplement and other supplements, appendices and schedules to the Plan, in each case, as amended or supplemented on or before the Effective Date. 9 "Repurchase Closing" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Notice" has the meaning given to such term in Section 2.04(c) hereof. "Repurchase Option" has the meaning given to such term in Section 2.04 hereof. "Restricted Period" has the meaning given to such term in Section 4.02(a) hereof. "Sale of the Company" shall have the meaning given to such term in the Stockholders Agreement. "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 Company Group (such determination to be made by the Board in its reasonable judgment). "Significant Transaction" means a Change of Control or Triggering Event. "Stockholders Agreement" means that certain Stockholder Agreement, dated on or about the date hereof, among ACP, the Management Stockholders (as defined therein), MacKay Shields LLC, Citigroup Mezzanine III, L.P., Trust Company of the West, and certain other holders of shares of Common Stock and New Warrants (as defined therein) of the Company party thereto. "Subsidiary" of any Person means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by such Person. "Tag-Along Transaction" shall have the meaning given to such term in the Stockholders Agreement. "Target Bonus Percentage" has the meaning given to such term in Section 1.07 hereof. "Termination" has the meaning given to such term in Section 2.04 hereof. "Termination Date" means the date on which Executive's employment with Employer ceases. "Transfer" means to sell, transfer, assign, pledge, hypothecate or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest. 10 "Triggering Event" means a Sale of the Company or a Tag-Along Transaction. "Unvested Shares" has the meaning given to such term in Section 2.02(a) hereof. "Vested Executive Shares" means 55,146.75 Executive Shares. "Vested Shares" means Vested Executive Shares and any Vesting Executive Shares that have become vested pursuant to Section 2.02 hereof. "Vesting Executive Shares" means 165,440.25 Executive Shares. "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, the Severance Plan, the Annual Incentive Plan and the Equity Incentive 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, the Annual Incentive Plan and Equity Incentive Plan. 6.05 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. 6.06 Recovery of Expenses. Employer agrees to pay the reasonable and documented fees and expenses of one attorney to represent Executive along with the other eight executives executing the employment agreements on the Effective Date under the Plan. Such expenses may accrue prior to, but shall be paid only after, the Effective Date of the Plan. 11 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: To Executive: Joseph Varkoly 819 Rundquist Way Kimberly, Wisconsin 54136 with a copy to (which shall not constitute notice): Quarles & Brady LLP 411 East Wisconsin Avenue, Suite 2040 Milwaukee, Wisconsin 53202-4497 Fax: (414) 271-3552 Attention: David P. Olson To Employer: Neenah Foundry Company 2121 Brooks Street Neenah, Wisconsin 54957 Fax: (920) 729-3633 Attention: William M. Barrett 12 with a copy to (which shall not constitute notice): Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Fax: (212) 446-4900 Attention: Geoffrey Levin * * * * 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed this 8th day of October, 2003. /s/ Joseph Varkoly ---------------------------------- Joseph Varkoly NEENAH FOUNDRY COMPANY By: /s/ Gary LaChey -------------------------------- Name: Gary LaChey Title: VP-Finance, Treasurer, Secty & CFO ACP HOLDING COMPANY By: /s/ Gary LaChey -------------------------------- Name: Gary LaChey Title: VP-Finance, Treasurer, Secty & CFO EXHIBIT A SEVERANCE PLAN EXHIBIT B ANNUAL INCENTIVE PLAN EXHIBIT C EQUITY INCENTIVE PLAN EXHIBIT D 83(B) ELECTION EX-23.1 42 y92210a1exv23w1.txt CONSENT EXHIBIT 23.1 Consent of Ernst & Young LLP, Independent Auditors We consent to the reference to our firm under the caption "Experts" and to the use of our reports dated November 10, 2003, in Amendment No. 1 to the Registration Statement (Form S-4 No. 333-111008) and related Prospectus of Neenah Foundry Company for the registration of $133,130,000 of its 11% Senior Secured Notes. Milwaukee, Wisconsin ERNST & YOUNG LLP January 26, 2004 EX-99.1 43 y92210a1exv99w1.txt LETTER OF ELECTION EXHIBIT 99.1 CUSIP NUMBER: 640071AK2 LETTER OF ELECTION AND INSTRUCTIONS TO BROKER OR BANK WITH RESPECT TO THE EXCHANGE OFFER REGARDING THE 11% SENIOR SECURED NOTES DUE 2010 ISSUED BY NEENAH FOUNDRY COMPANY THE EXCHANGE OFFER WILL EXPIRE AT 5:00 PM, NEW YORK CITY TIME, ON , 2004 To My Broker or Account Representative: I, the undersigned, hereby acknowledge receipt of the Prospectus, dated , 2003 (the "Prospectus") of Neenah Foundry Company, a Wisconsin corporation (the "Company") with respect to the Company's exchange offer set forth therein (the "Exchange Offer"). I understand that the exchange offer must be accepted on or prior to 5:00 PM, New York City Time, on , 2004. This letter instructs you as to action to be taken by you relating to the Exchange Offer with respect to the 11% Senior Secured Notes due 2010 (the "Existing Notes") held by you for the account of the undersigned. The aggregate face amount of the Existing Notes held by you for the account of the undersigned is (FILL IN AMOUNT): $ of the 11% Senior Secured Notes due 2010 With respect to the Exchange Offer, the undersigned hereby instructs you (CHECK APPROPRIATE BOX): [ ] TO TENDER the following Existing Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT AT MATURITY OF EXISTING NOTES TO BE TENDERED, IF ANY): $ - -------------------------------------------------------------------------------- [ ] NOT TO TENDER any Existing Notes held by you for the account of the undersigned. If the undersigned instructs you to tender the Existing Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representation and warranties contained in the Prospectus that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the undersigned's principal residence is in the state of (FILL IN STATE), (ii) the undersigned is acquiring the Exchange Notes in the ordinary course of business of the undersigned, (iii) the undersigned is not participating, does not participate, and has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes, (iv) the undersigned acknowledges that any person participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the "Act") in connection with a secondary resale transaction of the Exchange Notes acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission set forth in no-action letters that are discussed in the section of the Prospectus entitled "The Exchange Offer," and (v) the undersigned is not an "affiliate," as defined in Rule 405 under the Act, of the Company; (b) to agree, on behalf of the undersigned, as set forth in the Prospectus; and (c) to take such other action as necessary under the Prospectus to effect the valid tender of such Existing Notes. Name of beneficial owner(s): - -------------------------------------------------------------------------------- Signatures: - -------------------------------------------------------------------------------- Name (please print): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- Telephone number: - -------------------------------------------------------------------------------- Taxpayer Identification or Social Security Number: - ---------------------------------------------------------- Date: - -------------------------------------------------------------------------------- 2 -----END PRIVACY-ENHANCED MESSAGE-----